Opinion
404212/05.
Decided on September 29, 2006.
Michael A. Cardozo, Esq., Corporation Counsel of the City of New York, Joanna R. Helferich, Esq., New York, New York, for Petitioners.
Tabak, Mellusi Shisha, Esqs., Jacob Shisha, Esq., New York, New York, for Respondents.
Petitioners Iris Weinshall, as Commissioner of the New York City Department of Transportation (DOT), and the City of New York (City) bring this Article 75 petition to vacate an arbitration award rendered in favor of respondents Marine Engineers' Beneficial Association (MEBA) and Steven Lupo on the ground that the arbitrator exceeded her power.
BACKGROUND
MEBA, an unincorporated labor union, is the certified bargaining representative of New York City employees in the titles of Assistant Captain, Captain, Chief Marine Engineer, Marine Engineer, and Mate. Lupo, a twenty-four year veteran of the ferry system, served as a First Mate on the Samuel I Newhouse (Newhouse), a Barberi-class ferry of the Staten Island Ferry. In April 2004, Mayor Bloomberg's office received an anonymous letter concerning several unidentified crew members aboard the 3:30 Staten Island ferry from Manhattan. The letter expressed the author's dismay at viewing deckhands and mates: (1) conversing with passengers, (2) sitting during announcements that urged personnel to report to their docking stations, and (3) neglecting their duties. As a result, the City commenced an investigation. On May 21, 25, 26, 27, and June 4, 2004, petitioners dispatched investigators to observe the conduct of the Newhouse's crew members during non-rush hour runs.The investigators obtained video surveillance that allegedly showed Lupo sitting, talking to passengers, eating, and using a cell phone. Lupo was suspended, effective June 11, 2004, without pay, and was barred from entering onto any DOT property without authorization. On June 18, 2004, Lupo was formally served with disciplinary charges [* 2]for allegedly: (1) neglecting his duties, (2) departing an assigned work area without authorization, (3) leaving an assigned post before being properly relieved, (4) refusing to obey a lawful order of a supervisor or superior, (5) failing to report an arrest or conviction in writing to the Inspector General and to the Office of the Advocate, (6) engaging in conduct that was prejudicial to the good order and discipline of the DOT, and (7) behaving in ways that brought petitioners into disrepute.
In accordance with the applicable procedure of the collective bargaining agreement (CBA) for grievances of disciplinary actions, a Step I hearing was held on June 29, 2004, at the Office of the Advocate. The Step I hearing officer, Conan Freud, found Lupo guilty of all charges, and he recommended the penalty of termination. Accordingly, a Step II hearing was held on July 16, 2004, at the DOT office of labor relations. All parties, along with their respective counsel, were present. Hearing Officer Peter Scavetta presided over the proceeding. Upon review of the testimony and evidence presented, Hearing Officer Scavetta upheld Hearing Officer Freud's recommendation to terminate Lupo. On July 27, 2004, MEBA filed a request for arbitration on Lupo's behalf.
On October 13, 2005, Arbitrator Tia Schneider Denenberg (Arbitrator) issued a decision which determined that there was insufficient evidence in the record to sustain the charges against Lupo (Exhibit 1 to Petition). Lupo was reinstated to his former position with back pay ( id.). Subsequently, petitioners commenced this proceeding pursuant to CPLR 7511 to vacate the Arbitrator's determination.
Petitioners argue that the arbitration award should be vacated, alleging that the Arbitrator exceeded her power when she: (1) determined that Lupo's conduct was not in violation of DOT's standard operating procedures (SOPs) or code of conduct, (2) in effect re-wrote DOT's rules to find that it is not a punishable offense for a DOT employee to violate rules that were later amended, and (3) ignored DOT's rule requiring employees to report arrests. Moreover, petitioners contend that the Arbitrator violated public policy by disregarding and minimizing DOT's safety policies for the Staten Island Ferry service and by substituting her judgment for DOT's expertise regarding the operation of its vessels.
Respondents argue that petitioners are not entitled to vacatur of the arbitration award because the award was rational and based upon clear and convincing evidence. Respondents further argue that Lupo's alleged misconduct was not sustained by the evidence presented at the hearing and, absent any evidence which demonstrates that Lupo's conduct was subject to any applicable limitations of law, the Arbitrator's decision should be upheld.
I.
Collective bargaining agreements commonly provide for binding arbitration to settle contractual disputes, including grievances and disciplinary determinations, between employees and management ( Matter of New York State Correctional Officers and Police Benevolent Assn. v. State of New York, 94 NY2d 321, 326). Where the parties to a collective bargaining agreement agree to submit their disputes to an arbitrator, courts generally play a limited role ( id.).
A court is bound by an arbitrator's factual findings and may not substitute its view for that of an arbitrator absent statutory authority ( Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v. Board of Educ. of the City School Dist. of the City of New York, 1 NY3d 72, 80). As stated by the Court of Appeals:
"[a] court cannot examine the merits of an arbitration award and substitute its judgment for that of the arbitrator simply because it believes its interpretation would be the better one.
Indeed, even in circumstances where an arbitrator makes errors of law or fact, courts will not assume the role of overseers to conform the award to their sense of justice"
(emphasis in original)
( id. at 83, quoting Matter of New York State Correctional Officers v. State of New York, 94 NY2d 321, supra). Thus, vacatur is statutorily limited to occasions involving fraud, corruption, bias, and instances where the arbitrator exceeds his or her power; it also includes occasions where an arbitrator fails to follow the procedures outlined in the statute (CPLR 7511 [b] [1]).
The record here reveals that, pursuant to Article XVI of the parties' CBA, Lupo requested a hearing following his disciplinary charges (Verified Petition, ¶¶ 25-29). All parties consented to an arbitration of their dispute ( id.). The parties concede that the grievance procedure here was the proper subject of arbitration and do not question the power of the Arbitrator to decide the issue and reinstate Lupo. The parties stipulated that the issue before the Arbitrator involved a single question, "Did the City improperly discipline Steven Lupo in violation of the collective bargaining agreement? If so, what shall be the remedy?" (Exhibit 1 to Petition). The Arbitrator concluded that petitioners improperly disciplined Steven Lupo and that his discharge was a wrongful disciplinary action in violation of Article XVI of the parties' CBA.
Petitioners argue that the Arbitrator exceeded her power when she reinstated Lupo despite what petitioners assert is uncontroverted evidence that he violated the DOT's SOPs as well as the Department's official code of conduct. By reinstating Lupo to his position, the Arbitrator did not exceed a specifically enumerated limitation on her power ( Matter of United Fedn. of Teachers, 1 NY3d 72, supra). The parties' CBA does not proscribe the reinstatement of an employee who engaged in conduct as alleged here and who ultimately was found not guilty of the charges as submitted to the Arbitrator ( Matter of New York State Correctional Officers and Benevolent Assn. v. State of New York, 94 NY2d at 328, quoting International Bhd. of Elec. Workers, Local 97 v. Niagara Mohawk Power Corp., 143 F3d 704, 714 [2d Cir 1998]).
An arbitration award must be upheld when the arbitrator offers even a barely colorable justification for the outcome reached ( Wien Malkin LLP v. Helmsley-Spear, Inc., 6 NY3d 471, 479, cert dismissed ___ US ___, 2006 WL 2049756). Here, the Arbitrator's award offers a colorable justification for the outcome reached, and thus it must be upheld.
The record reveals that the Arbitrator inspected all of the surveillance tapes and reports submitted for her review, listened to witness testimony, and examined all of the evidence presented at the hearing. The notice of discipline accused Lupo with violating paragraphs 1, 2, 30, 31, 32, 38 of the DOT's code of conduct, which relate to the conduct and activities of the Department's employees. The allegations charged that Lupo: (1) improperly performed his assigned duties, (2) neglected his assigned duties, (3) departed from an assigned work area without authorization, (4) left an assigned post prior to being relieved, (5) neglected to obey a supervisor's lawful order, (6) engaged in conduct prejudicial to the good order and discipline of DOT, and (7) failed to report an arrest in writing to the Inspector General and to the Office of the Advocate. The City contends that Lupo violated new SOPs (implemented after the widely [*4]publicized 2003 ferry accident) by remaining idle during ferry runs despite rules that prohibited such behavior.
The Arbitrator found that, at the time of Lupo's discharge, there were no restrictions as to how long or how often a mate could take a break (Exhibit 1, pages 10-13 to Petition). She also found that it was not until several months after Lupo's discharge that the DOT first issued regulations limiting the mate's breaks to three 10-minute breaks ( id.).
The Arbitrator placed significant weight on the testimony of two vessel captains, Captain George Aswad and Captain Thomas Ecock who attested that none of Lupo's alleged misconduct (as witnessed on the City's surveillance tapes) involved a violation of the Department's SOPs ( id.). Captain Aswad, the Director of Assignments, Licensing, and Training, avowed that the SOPs did not prohibit a crew-member from sitting during a ferry run, conversing with passengers, using a cell phone, or disembarking during a layover. He also declared that Lupo had been given no training following the October ferry accident concerning restrictions on breaks or sitting during runs. Moreover, he submitted that, at the time of Lupo's alleged misconduct, there was no official training protocol to address that issue ( id.).
Moreover, Captain William Allen, the senior captain on board the Newhouse, testified that there was no policy against sitting, using a cell phone, and leaving the vessel to obtain supplies or meet with deck officials ( id. at 12-13). Allen stated that he actually encouraged his crew to talk to ferry passengers ( id. at 13).
After inspecting all of the surveillance tapes and reports submitted for her review, listening to witness testimony, and examining all of the evidence presented, the Arbitrator found that the discharge was a wrongful disciplinary action, and that, as a remedy, Lupo "shall be reinstated to his position and made whole for the period since his discharge" ( see Petition, Ex 1 at 19).
An arbitrator's paramount responsibility is to reach an equitable result ( Matter of New York City Tr. Auth. v. Transport Workers' Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336). In this context, the Arbitrator did so by reinstating Lupo to his former post. Courts are obligated to give deference to the decision of the arbitrator ( id.). Accordingly, this Court is bound by the Arbitrator's factual findings, interpretation of the contract and judgment ( Matter of New York State Correctional Officers and Benevolent Assn. v. State of New York, 94 NY2d at 326).
II.
Petitioners argue that the arbitration award should be vacated as violative of public policy. Petitioners contend that the DOT has the authority to: (1) set policies for its ferry service, (2) determine the standards of services to be offered, (3) take disciplinary action, and (4) relieve its employees from duty for failure to adhere to those policies. Petitioners further argue that the Arbitrator's reinstatement of Lupo deprived the DOT of its power to set safety policies for its ferry service.
"Courts shed their cloak of noninterference where specific terms of the arbitration agreement violate a defined and discernible public policy . . . or where the final result creates an explicit conflict with other laws and their attendant policy concerns" ( Matter of New York State Correctional Officers and Benevolent Assn., 94 NY2d at 327 [emphasis in original]). Here, petitioners' allusion to public safety is too generalized and ill-defined to support any intervention in the results of the arbitration process under the parties' CBA ( Matter of New York City Transit Auth. v. Transport Workers Union of Am., Local 100, AFL-CIO, 99 NY2d 1, 12). DOT indisputably has power to adopt safety and employee conduct rules for its Staten Island ferry service, and to discipline workers who violate the rules. However, the City and the Union, by their collective bargaining agreement, chose to arbitrate grievances of disciplinary actions. The Arbitrator's award (i.e. the reinstatement of Lupo) derives its legitimacy from the collective bargaining agreement and the dispute as framed, and submitted, by the parties ( Matter of New York State Correctional Officers and Benevolent Assn., 94 NY2d at 328).
Despite petitioners' arguments, Lupo's reinstatement is not a violation of any direct statutory requirement or standard for disciplining employees who allegedly violate Department safety policies. Neither does it create "an explicit conflict with other laws and their attendant policy concerns" ( id. at 327). "The legislative authority to manage, control and direct' the operation of [DOT's ferry] system for the convenience and safety of the public' does not translate into a statutory prohibition against some relinquishment to arbitrators of the final say in safety matters when they arise in the context of employee discipline" ( see Matter of New York City Transit Auth. v. Transport Workers Union of Am., Local 100, AFL-CIO, 99 NY2d at 9).
Under the circumstances presented, neither the City, nor this Court, may curtail the arbitrator's authority, alter the scope of arbitration, or act in derogation of the collective bargaining agreement. Any change in the current procedure would require negotiation and mutual agreement via collective bargaining. It cannot be effected by one party alone or by judicial fiat.
CONCLUSION
The City's petition to vacate the arbitration award is denied. Pursuant to CPLR 7511 (e), when a petition to vacate an arbitration award is denied, the award must be confirmed. Although the City interprets the award to reinstate Lupo with back pay (Mem. at 2), the arbitration award states that Lupo "shall be reinstated to his position and made whole for the period since his discharge," which does not specifically refer to back pay, and is not necessarily limited to back pay. Accordingly, the Court confirms the award as set forth by the arbitrator, because confirming the award to provide for back pay could be construed as an impermissible modification of the arbitration award ( see CPLR 7511 [c]).
Accordingly, it is
ADJUDGED that the Article 75 petition is denied, and the arbitration award dated October 13, 2005, which reinstated respondent Steven Lupo and directed that he should be "made whole for the period since his discharge," is confirmed.