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Only the union or the employer may demand that an issue be submitted to arbitration

Only the union or the employer may demand that an issue be submitted to arbitration
New York City Tr. Auth. v Gorrick, 2010 NY Slip Op 03044, Decided on April 15, 2010, Appellate Division, First Department

The New York City Transit Authority sued Philbert Gorrick, its former employee, in connection with Gorrick?s ?admittedly fraudulent misrepresentation of earnings in an affidavit executed for the express purpose of inducing the Transit Authority to pay him more than $100,000 in back pay after he was successful in obtaining an arbitration award in a disability discrimination action.?

Gorrick filed an Article 75 petition to compel arbitration of the Authority?s claim rather than have it litigated in the courts.

Although a Supreme Court judge granted Gorrick's motion to stay the Transit Authority?s lawsuit and compel arbitration, the Appellate Division unanimously reversed the lower court?s ruling ?on the law.?

The Appellate Division said that the Supreme Court was incorrect when it granted Gorrick?s motion to compel arbitration pursuant to a collective bargaining agreement between the Authority and Gorrick?s former union.*

The sole issue in to be determined, said the court, is whether Gorrick's admittedly fraudulent misrepresentation of earnings in an affidavit executed for the express purpose of inducing plaintiff to pay over $100,000 in back pay constitutes actionable fraud, ?an issue which does not require interpretation or application of the collective bargaining agreement.?

Further, said the court, Gorrick, as an employee, has no rights under the collective bargaining agreement, to which only his former employer and union are parties, to unilaterally bring the issue to arbitration.

* The union was not a party in this action.

Randall Comments: Although it is generally held that only the Union or the Employer have the power to go to arbitration in connection with a contract grievance procedure, employees unhappy with their union's decision not to go to arbitration may turn to the courts for an order to permit their proceeding against the employer directly.

In Matter of Hoffman [Board of Education of the City of New York], 84 AD2d 840, the Appellate Division ruled that the Union (United Federation of Teachers) was not required to seek arbitration after having processed the employee's grievance through the initial stages of the grievance procedure and received unfavorable results.

The Court also said that if an employee wished to proceed directly against an employer when the Union refused to arbitrate, the employee would first have to show that the Union breached its duty of fair representation (i.e.: bad faith, arbitrariness or discriminatory conduct).

In Hoffman, the employee had sought a benefit from an earlier arbitration award that provided redress for an "interrupted" sabbatical leave. The employer refused to apply the arbitration award decision claiming that the employee's application for the benefit was untimely. The Union refused to arbitrate the question of timeliness after losing at all previous steps of the grievance procedure.

The Gorrick decision is posted on the Internet at: http://www.nycourts.gov/reporter/3dseries/2010/2010_03044.htm

Full post as published by New York Public Personnel Law on April 20, 2010 (boomark / email).