Amalgamated Transit Union v. Md. Transit Admin.

Amalgamated Transit Union, Local 1300 v. Maryland Transit Administration, No. 1591, September Term 2017 Opinion by Kehoe, J. ALTERNATIVE DISPUTE RESOLUTION – ARBITRATION – REVIEW, CONCLUSIVENESS AND ENFORCEMENT OF AWARD The scope of judicial review of arbitral awards is very narrow. Courts generally defer to an arbitrator’s findings of fact and her application of the law, even when these are erroneous. The rationale for this general rule of deference is both practical (if arbitral awards were constantly subjected to judicial second-guessing, arbitration would cease to be a simple and inexpensive way to resolve disputes) and conceptual (the parties have bargained for an arbitrator’s—and not a court’s—resolution of the dispute submitted to arbitration). So long as the arbitrator acts within the bounds of her authority, her award conclusively establishes as a matter of contract interpretation the meaning and proper application of the contractual provisions at issue.

ALTERNATIVE DISPUTE RESOLUTION – ARBITRATION – COMMON-LAW GROUNDS FOR VACATUR OF ARBITRAL AWARD In rare instances, courts may decline to defer to the arbitrator and vacate the award. The common-law bases for vacating an arbitral award fall into three categories. First, courts may vacate an award because it is not the result of a legitimate construction of the contract—i.e., the award is the product of the arbitrator’s bias, prejudice, fraud or other misconduct, or the arbitrator exceeded the scope of the issues submitted to arbitration. Second, courts may vacate an award because, on the merits, the award demonstrates a manifest disregard of the law or contains a palpable mistake of fact apparent on the face of the award.

Third, courts may vacate an award because enforcing it would be contrary to an explicit, well-defined and dominant public policy. ALTERNATIVE DISPUTE RESOLUTION – ARBITRATION – GROUNDS FOR VACATUR OF ARBITRAL AWARD – VIOLATION OF PUBLIC POLICY Public-policy challenges put a narrow question before a reviewing court: Accepting the facts as found by the arbitrator as well as the arbitrator’s interpretation of the agreement at issue, can the agreement, as interpreted, be enforced? ALTERNATIVE DISPUTE RESOLUTION – ARBITRATION – GROUNDS FOR VACATUR OF ARBITRAL AWARD – PUBLIC POLICY – PROGRESSIVE DISCIPLINARY POLICIES – WORKPLACE VIOLENCE Insofar as the collective-bargaining agreement at issue has been interpreted to exclude from its definition of “just cause” for termination clearly established serious acts of workplace violence, unless the MTA factors into its termination decision mitigating circumstances from the employee’s work history and considers a range of less serious sanctions, the award cannot be enforced in our courts. Maryland public policy, explicitly set forth in Md. Code State Pers. & Pens. § 11-105, provides that serious acts of workplace violence give a state agency cause for automatic termination of employment.

Circuit Court for Baltimore City Case No. 24-C-17-000103 REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 1591 September Term, 2017 ____________________________________ AMALGAMATED TRANSIT UNION, LOCAL 1300 v. MARYLAND TRANSIT ADMINISTRATION ____________________________________ Meredith, Kehoe, Friedman, JJ. ____________________________________ Opinion by Kehoe, J. ____________________________________ Filed: December 23, 2019 Pursuant to Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic. 2019-12-31 15:23-05:00 Suzanne C. Johnson, Clerk The Maryland Transit Administration (“MTA”) fired Christopher Wilson because of an incident of workplace violence. Wilson challenged this decision. Pursuant to the terms of the collective-bargaining agreement between the MTA and the union representing Wilson, Local 1300 of the Amalgamated Transit Union (“Local 1300”), the matter was submitted to arbitration. The arbitrator ruled in Wilson’s favor, deciding that the MTA did not have just cause to terminate Wilson, and ordered his reinstatement.

The MTA filed a petition to vacate the arbitrator’s award, and Local 1300 countered with a petition to enforce it. The Circuit Court for Baltimore City vacated the arbitration award and upheld Wilson’s termination, concluding that the arbitrator’s decision should not be enforced because it was “clearly against public policy.” Local 1300 has appealed from the court’s judgment and presents two issues, which we have reworded and reordered: 1. Did the trial court err by vacating the arbitration award on public-policy grounds? 2. In reaching its decision, did the trial court err in failing to consider Local 1300’s timely filed response and cross-motion for summary judgment?

For the reasons explained below, we will affirm the circuit court’s judgment. Background The incident This appeal arises out of a fight between Wilson, then an MTA bus driver, and Kenneth Rosebrough, a retired bus driver and Wilson’s estranged stepfather. This fight was captured on MTA security cameras and was described in detail in the arbitrator’s award. We will summarize the key events.

At the end of his run on September 14, 2015, Wilson returned to the Northwest Bus Division, an administrative facility where MTA buses are parked. When Wilson went inside, he found Rosebrough waiting for him in the building’s assembly room. Rosebrough got up and the two men conversed as they walked outside to the MTA’s parking lot. By the time they were outside, their discussion had grown heated and things got physical.

Rosebrough took a step toward Wilson, and Wilson pushed Rosebrough. The two started throwing punches. The men grabbed each other and wrestled themselves onto a nearby car, where two MTA employees broke up the fight. At some point during the brawl, Wilson stabbed Rosebrough in the stomach with a penknife.

Rosebrough left the MTA property in his own car but was stopped by a police officer shortly thereafter. When the officer learned about Rosebrough’s stab wound, he arranged for Rosebrough to be taken by ambulance to a hospital for treatment. At first, Wilson told investigators that Rosebrough brought the knife to the fight. Later, Wilson admitted that it was he who brought the knife—that he had accidentally left it in his pocket after breaking down boxes at home during his break.

Wilson was charged with second-degree assault. On February 24, 2016, he tendered an Alford plea and was given probation before judgment. Wilson also faced consequences at work: on April 6, 2016, after a hearing, he was fired. The arbitration proceeding and the arbitral award The collective-bargaining agreement between the MTA and Local 1300 required that termination of employment be for “just cause.” The agreement also provided that a -2- terminated employee could request review of the MTA’s decision by an arbitrator, and that the arbitrator’s decision would be final and binding upon the parties.

Wilson invoked his right to an arbitral review, and the arbitration proceeding was held on August 22, 2016. As a part of the proceeding, all parties were given a full opportunity to be heard, to present evidence and to examine and cross-examine witnesses. To justify the termination, the MTA pointed to Wilson’s violations of MTA regulations and the MTA’s workplace- violence policy. The MTA regulations subjected employees to “immediate dismissal” for, inter alia, possessing dangerous or deadly weapons on MTA property, for fighting on MTA property or for violating the workplace-violence policy.

The workplace-violence policy prohibited “commit[ting] any violent act against any person” and “[b]ring[ing] weapons of any kind into the workplace”; encouraged employees to seek law-enforcement assistance when confronted with “violent situations” and to avoid confrontation with “verbally abusive or harassing persons”; and subjected employees engaging in prohibited conduct to sanctions, ranging from reprimand and loss of leave to suspension, demotion and termination. The arbitrator was unconvinced. In his written decision, the arbitrator found that Wilson’s conduct on September 14, 2015, violated the clear language of the MTA’s regulations and workplace-violence policy. He also refused to accept Wilson’s defenses for the stabbing—that he acted in self-defense or that the MTA’s lax security was to blame, because this allowed Rosebrough on the MTA’s property in the first place.

The arbitrator nonetheless concluded Wilson’s termination “was not for just cause.” He explained that, -3- in reaching its decision to fire Wilson, the MTA had failed to consider mitigating circumstances surrounding his “respectable work and disciplinary records.” The arbitrator also explained that by failing to “review[] all the facts and circumstances” to determine which among “a range of disciplinary penalties” would be the most proportionate sanction for Wilson’s misconduct, the MTA’s termination decision deviated from the model of progressive discipline called for by the administration’s own policy.1 Because he believed the MTA had improperly short-circuited this system of escalating responses to employee misconduct, the arbitrator ordered Wilson’s reinstatement, although without back pay. Proceedings before the circuit court The MTA filed a petition, later amended, to vacate the arbitration award in the Circuit Court for Baltimore City. The MTA’s position was that enforcement of the arbitrator’s award would violate Maryland’s clear public policy against workplace violence and thus had to be vacated. In response, Local 1300 petitioned to enforce the award.

The parties entered a joint stipulation in which they agreed upon filing deadlines for certain motions and responses. This included an August 30, 2017, deadline for Local 1300’s response to the MTA’s motion for summary judgment and its own cross-motion for 1 Specifically, the arbitrator cited Section 9.1.1 of the MTA’s workplace-violence policy, which states in pertinent part: An employee engaging in conduct prohibited by this policy shall be disciplined. Appropriate sanctions will be determined by the appointing authority after consultation with employee relations and/or legal professionals and may include: reprimand, loss of leave, suspension, demotion, or termination. -4- summary judgment. The circuit court approved the joint stipulation and the parties filed motions for summary judgment and responses according to it.

Specifically, the MTA filed its motion for summary judgment on August 2, 2017, and Local 1300 timely filed a response and its cross-motion for summary judgment on August 29, 2017. On September 1, 2017, the circuit court granted the MTA’s motion for summary judgment. The court ruled that no genuine issues of material fact existed, and that the arbitration award could not be enforced because it violated public policy: [T]he purpose of MTA’s policy against workplace violence and possession of weapons is to ensure public safety . . . . Not only did Mr. Wilson violate the MTA workplace violence policy but he violated Maryland statutory criminal law.

Mr. Wilson pled guilty to criminal conduct. . . . [T]he Arbitrator’s award reinstating Christopher Wilson as a bus operator is contrary to MTA’s duty to ensure public safety as a common carrier. This Court declines to enforce an arbitration award which is contrary to a clear public policy. (references to docket entries omitted). Accordingly, the court vacated the arbitrator’s award.

The written opinion accompanying the September 1, 2017, order explicitly noted that Local 1300 had not filed a timely response to the MTA’s motion for summary judgment. This was incorrect; Local 1300 had in fact filed a response on August 29. When this was brought to the court’s attention, it reopened the case and scheduled a hearing for September 27, 2017. At that hearing, the court first explained its reasoning for granting the MTA’s motion for summary judgment.

The court then noted that it incorrectly believed that Local 1300 had not filed a response, and it informed counsel for the Local that “we’re here today as if -5- this was a fresh and a new motion.” Still, after hearing argument from counsel, the court again granted the MTA’s motion. In doing so, the court explained that it considered Local 1300’s response to the MTA’s motion for summary judgment to have been untimely filed; that after considering Local 1300’s cross-motion for summary judgment “on its merits,” the motion was nonetheless moot; and that the court’s earlier order granting the MTA’s motion for summary judgment “stands as the law of this case.” The court vacated the arbitrator’s decision reinstating Mr. Wilson on the grounds that it violated public policy. Local 1300 then timely filed this appeal. Analysis To this Court, Local 1300 raises a substantive and a procedural challenge to the circuit court’s decision to grant summary judgment to the MTA and vacate the arbitral award reinstating Wilson.

We will first address Local 1300’s substantive challenge: that the circuit court improperly applied the requirements for vacating an arbitral award on public-policy grounds. In explaining why we disagree with Local 1300, we provide an overview of the general rule of judicial deference to the decisions of arbitrators and explain some of the common-law exceptions to that rule. We then apply the exception at issue here—the public-policy challenge to the enforceability of an arbitral award—to the facts of the case. We conclude that enforcement of this particular award would violate Maryland public policy and therefore affirm the judgment of the circuit court. -6- Second, we will address the procedural challenge: that the circuit court erred in failing to consider Local 1300’s response and cross-motion for summary judgment when ruling on the MTA’s motion for summary judgment.

There was a procedural misstep, but, as we explain, the error was harmless. 1. The standard of review Appellate courts review de novo a circuit court’s decision to grant a motion for summary judgment. See, e.g., Baltimore County v. Kelly, 391 Md. 64, 73 (2006). We employ the same de novo standard when reviewing a circuit court’s ruling on a petition to vacate an arbitrator’s award.

Prince George’s County Civilian Employees Ass’n v. Prince George’s County, 447 Md. 180, 192 (2016) (“An appellate court reviews without deference a trial court’s ruling on a petition to vacate an arbitration award.”). As a general rule, when reviewing a circuit court’s decision to grant summary judgment, we consider “only the grounds upon which the trial court relied.” Greenstein v. Council of Unit Owners of Avalon Court Six Condo., 201 Md. App. 186, 197 (2011) (quoting Property & Casualty Insurance Guaranty Corp. v. Yanni, 397 Md. 474 , 480–81 (2007)). However, if, as in the present case, a motion for summary judgment is based solely upon an issue of law, then “we may affirm on an alternative ground.” Warsham v. James Muscatello, Inc., 189 Md. App. 620 , 635–36 (2009) (quoting Washington Mutual Bank v. Homan, 186 Md. App. 372, 388 (2009)). 2. Vacatur of the arbitration award -7- Local 1300’s first argument is that the circuit court erred in granting summary judgment in favor of the MTA, vacating the arbitration award on public-policy grounds.

The circuit court, citing Maryland statutory criminal law, common-carrier duties to ensure passenger safety, MTA employee rules and regulations, and the MTA’s workplace- violence policy, concluded that the arbitrator’s decision to reinstate Wilson was “clearly against public policy” and thus could not be enforced. Although our analysis differs from that of the circuit court, we ultimately reach the same conclusion. Enforcing the arbitral award in this case would violate Maryland public policy. A. The general rule of judicial deference to arbitral awards The scope of judicial review of arbitral awards is “very narrowly limited.” Prince George’s County Police Civilian Employees Ass’n v. Prince George’s County, 447 Md. 180, 192 (2016) (quoting Downey v. Sharp, 428 Md. 249, 268 (2012)).

Indeed, the standard of review in this context is “among the narrowest known to the law.” Letke Security Contractors, Inc. v. United States Surety Co., 191 Md. App. 462, 472 (2010) (quoting Litvak Packing Co. v. United Food & Commercial Workers, Local Union No. 7, 886 F.2d 275, 276 (10th Cir. 1989)). We generally defer to an arbitrator’s findings of fact and her application of the law, Baltimore County v. Mayor and City Council of Baltimore, 329 Md. 692, 701 (1993), even when these are erroneous, Downey, 428 Md. at 266 . The rationale for this general rule of deference is twofold. The first reason is practical, often cast in terms of a public policy of encouraging arbitration as an efficient means of -8- extrajudicial dispute resolution.

See, e.g., American Union of Baptists, Inc. v. Trustees of the Particular Primitive Baptist Church at Black Rock, Inc., 335 Md. 564, 571 (1994) (“This Court has long held arbitration to be a favored method of dispute resolution; consequently, we have generally deferred to the arbitrator’s findings of fact and applications of law.” (cleaned up)). Maryland courts encourage arbitration because “it provides an informal, expeditious, and inexpensive alternative to conventional litigation.” Prince George’s County Police Civilian Employees Ass’n, 447 Md. at 192 (quoting Amalgamated Transit Union v. Lovelace, 441 Md. 560, 576 (2015) (cleaned up)). If arbitral awards were constantly subjected to judicial second-guessing, arbitration would cease to be a “simple and inexpensive” way to resolve disputes. WSC/2005 LLC v. Trio Ventures Associates, 460 Md. 244, 254 (2018) (cleaned up).

The second reason for deference to the arbitrator is more conceptual: we rarely disturb an arbitral award because the parties have bargained for an arbitrator’s—and not a court’s—resolution of the dispute submitted to arbitration. The arbitrator is the parties’ “jointly designated decider,” there to resolve issues generated by a contract’s open-ended terms. Frank H. Easterbrook, Arbitration, Contract and Public Policy, in Arbitration 1991: The Changing Face of Arbitration in Theory and Practice 65, 69 (Gladys W. Gruenberg ed., 1992). This point was well made by Judge, later Justice, Thurgood Marshall in Local 453, International Union of Electrical Workers v. Otis Elevator Co., 314 F.2d 25 (2d Cir. 1963) (emphasis added): Having bargained for the decision of the arbitrator on the question of whether [an employee’s] conduct and criminal conviction constituted “just cause” for -9- discharge, the parties are bound by it, even if it be regarded as unwise or wrong on the merits; so far as the arbitrator’s decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.

To separate the just causes for discharge from the injust was precisely what the parties clothed the arbitrator with the authority to do. Id. at 28 ; cf. Eastern Associated Coal Corp. v. United Mine Workers of America, District 17, 531 U.S. 57, 61 (2000) (“[W]e must assume that the collective-bargaining agreement itself calls for Smith’s reinstatement. . . . because both employer and union have granted to the arbitrator the authority to interpret the meaning of their contract’s language[.]”). Maryland appellate courts have repeatedly invoked Justice Marshall’s analysis. See Prince George’s County Police Civilian Employees Ass’n, 477 Md. at 193; Amalgamated Transit Union, Division 1300 v. Mass Transit Administration, 305 Md. 380, 388 (1986) (“MTA- Smith”)2; International Association of Firefighters, Local 1619 v. Prince George’s County, 74 Md. App. 438, 447 (1988).

So long as the arbitrator acts within the bounds of her authority, her award “conclusively establish[es] as a matter of contract interpretation” the meaning and proper application of the contractual provisions at issue. Id. This allocation of responsibility leaves little for courts to evaluate when asked to enforce or vacate an arbitral award. B. Exceptions to the general rule of judicial deference 2 To distinguish the decision by the Court of Appeals in Amalgamated Transit Union, Div. 1300 v. Mass Transit Admin., 305 Md. 380 (1986), from the present case, we will refer to it as “MTA-Smith,” as the employee in that case was named Smith. - 10 - Judicial deference to arbitrators’ decisions is not without limit.

Even though the parties have agreed that the arbitrator’s construction of their agreement is definitive, “in rare instances” courts may decline to defer to the arbitrator and may instead vacate the award. Eastern Associated Coal, 531 U.S. at 62 . The Maryland Uniform Arbitration Act provides a list of statutory grounds for vacating arbitral awards. See Md. Code, Cts. & Jud.

Proc. § 3-224(b). But in this case, we are concerned with only common-law grounds for vacatur. This is because Cts. & Jud. Proc. § 3-206(b) expressly states that the act “does not apply to an arbitration agreement between employers and employees or between their respective representatives unless it is expressly provided in the agreement that this subtitle does apply.” Neither party claims that the act is made applicable by any provision in the collective-bargaining agreement.

The common-law bases for vacating an arbitral award fall into three categories. In the first class of challenges, parties may succeed in vacating an arbitral award by showing that the