Suppose you, as an employer, have union-backed employees. The union files a grievance on behalf of three employees alleging that they did not receive "premium" pay on three holidays. Because the dipsute cannot be resolved, the matter is sent to arbitration.
For some employers, defining the issue to be sent to arbitration may not seem that important; after all, the arbitrator will just hear evidence relating to the supposed issue and issue a decision consistent with that issue.
The Court Decision
But a case released by the Connecticut Supreme Court today (to be officially released August 5, 2008) demonstrates the importance of crafting language that specifies what the exact issue is and what remedies the arbitrator will have available to it.
In Office of Labor Relations v. New England Health Care Employees Union, District 1199 (download here), the parties submitted the above factual scenario to an arbitrator with the following issues listed:
Did the [s]tate violate [a]rticle [twenty-one] of the [agreement] in the [s]tate’s application of holiday designation and payment of holiday pay to the [g]rievants? If so, what shall be the appropriate remedy, consistent with the [agreement]?
The arbtirator rendered an award in favor of the union finding that the state did indeed violate the portion of the collective bargaining agreement. In doing so, the arbtrator issued an decision that ordered that the employer had to change its holiday policy to give premium pay to all employees under the collective bargaining agreement on a going forward basis.
The state appealed, first to the trial court, and then ultimately to the Connecticut Supreme Court, on the grounds that the arbtirator exceeded his authority when issuing the "remedy" because the arbitrator’s decision applied to all employees, not the three employees on whose behalf the issue was grieved.
The Connecticut Supreme Court agreed with the state, finding that the question presented should be interpreted like any contract:
As we have stated previously herein, it is well settled that we read contracts of this nature in a way that will give effect to every provision and apply a common sense construction of the words used. Thus, the language of the submission and its internal structure indicate that the question of relief was intended to address the harm to the three individual grievants named in the first question.
In essence, the Supreme Court stated that it was common sense that the remedy could only address the three employees at issue; otherwise, the parties would have structured the request differently.
So what’s the takeaway from this case from an employer perspective (and indeed from a union perspective)? Take time to craft the issues for arbitration in as specific a fashion as possible. While the Connecticut Supreme Court upheld the langauge that was used in this situation, the question presented to the arbitrator could have been more specific and the issue could have been avoided entirely.