International Ass'n of Firefighters v. Prince George's County

BISHOP, Judge. The International Association of Firefighters Local 1619 (IAFF) appeals from an Order of the Circuit Court for Prince George’s County which granted the motion for summary judgment filed by appellee Prince George’s County, Maryland (the County), and by which an arbitration award was vacated on the ground that the arbitrator had exceeded his authority. The IAFF argues that: I. The arbitrator acted within his authority. ⁴⁴¹ II. There exists no alternate basis for vacating the arbitrator’s award.

FACTS In the early morning of the first day of his scheduled ten-day vacation, Lieutenant Michael D. Kennedy (Kennedy) of the Prince George’s County Fire Department (the Department) was arrested for driving while intoxicated and possession of marijuana. 1 Subsequently, he was discharged from his employment for “unlawful and unprofessional conduct and violation of the public trust”. The basis of the dismissal was Kennedy’s violation of General Order 86.01 entitled “Substance Abuse Policy”. This order provides in part: Disciplinary Action 1. Personnel shall be made aware that the use, possession or distribution of controlled dangerous substances will not be tolerated by the Department.

In addition the abuse of legal drugs, such as alcohol and other over-the-counter drugs which may affect the performance of one’s duties shall not be acceptable. 2. Possession of, or detection through approved testing and/or observed impairment which results from the use of a controlled dangerous substance may result in disciplinary action. A controlled dangerous substance shall be any substance so defined in the Annotated Code of Maryland, Article 27. The County Fire Department alleged that by violating General Order 86.01, Kennedy had also violated Art. V, Section 5.1, of the collective bargaining agreement (the Agreement) between IAFF and the County.

That section provides: ⁴⁴² Compliance with Regulations. The Union agrees that its members shall comply with all County Fire Department rules and regulations, including those relating to conduct and work performance, unless specifically modified by this Agreement. After he was notified of the termination of his employment, Kennedy instituted a grievance proceeding in which he disputed his discharge pursuant to Art. XI of the Agreement. 2 In accordance with Art. XI, § 11.3, Step Five of the Agreement, the Union requested arbitration, since Kennedy’s grievance had not been resolved under Steps One through Four. 3 The dispute was heard before arbitrator Herbert Fish-gold. Both parties filed post-hearing briefs.

In his award, Fishgold concluded that no just cause existed for Kennedy’s dismissal and conditionally reinstated him with certain restrictions directly relating to his alcohol and substance abuse problem. 4 The Award also limited Kennedy’s back ⁴⁴³ pay, imposed the maximum suspension with an additional 28 day leave without pay, and demoted Kennedy from his position as lieutenant to firefighter. The County filed a Petition to Vacate the Award. Cross-motions for summary judgment were filed. After a hearing, the court granted the County’s petition and vacated the award.

The court found that the arbitrator had no authority under the Agreement to fashion a disciplinary remedy different from that determined by the County Fire Depart ⁴⁴⁴ ment. The court held that in the collective bargaining agreement, the County reserved the right to fashion a proper remedy under its authority to establish “the standards of service offered the public”. 5 From this decision IAFF appeals. Standard of Review of Arbitration Award ' Because the Agreement between the parties did not expressly provide that the Maryland Uniform Arbitration Act, MD.CTS. & JUD.PROC.CODE ANN. §§ 3-201 through 3-234 (1984 Repl.Vol.) should apply, the common law principles governing review of arbitration awards control the case sub judice. 6 Arbitration is a “favored” action. Parr Const.

Co. v. Pomer, 217 Md. 539, 543 , 144 A.2d 69 (1958); O’Ferrall v. De Luxe Sign Co., 158 Md. 544, 552 , 149 A. 290 (1930); O-S Corp. v. Kroll, 29 Md.App. 406, 407 , 348 A.2d 870 (1975). Courts generally refuse to review arbitration awards on the merits, reasoning that the parties are required “to submit to the judgment of the tribunal of their own selection and abide by the award”. Roberts v. Consumers Can. Co., 102 Md. 362, 369 , 62 A. 585 (1905). “[A]s arbitrations are intended to compose disputes in a simple and inexpensive manner, whenever the parties to one have had a full and fair hearing the award of the arbitrators, will be expounded favorably and every reasonable ⁴⁴⁵ intendment made in its support.” Id. at 368 .

As the United States Supreme Court has stated: The refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements. The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards. Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596 , 80 S.Ct. 1358, 1360 , 4 L.Ed.2d 1424 (1960). “As long as the arbitrator’s award ‘draws its essence from the collective bargaining agreement,’ and is not merely ‘his own brand of industrial justice,’ the award is legitimate.” United Paperworkers Int’l Union v. Misco, Inc., — U.S. —, 108 S.Ct. 364, 370 , 98 L.Ed.2d 286 (1987) (quoting Steelworkers, supra, 363 U.S. at 597 , 80 S.Ct. at 1361 ). Based on these general principles is the firmly established common law rule that a court will not ordinarily vacate or refuse to enforce an arbitration award on the basis of “mere errors of law or fact”.

Bd. of Educ. v. P.G. Co. Educators’ Ass’n., 309 Md. 85, 99 , 522 A.2d 931 (1987). In Bd. of Educ., the Court said: [WJhenever the parties to [an arbitration] have had a full and fair hearing the award of the arbitrators, will be expounded favorably and every reasonable intendment made in its support____ In such cases it is conceded that the Court will not look into the merits of the matter and review the findings of law or fact made by the arbitrators nor substitute its opinion or judgment for theirs, but will require the parties to submit to the judgment of the tribunal of their own selection and abide by the award. Id. (quoting Roberts, supra, 102 Md. at 368-69 , 62 A. 585 ).

There are certain exceptions which include fraud, misconduct, bias, prejudice, corruption, lack of good faith on the part of the arbitrator, a mistake so gross as to imply bad faith or lack of honest judgment, and where the award is against clear public policy. Also, there may be certain ⁴⁴⁶ procedural deficiencies or mistakes which may require a change in the award. Bd. of Educ., supra, 309 Md. at 100-01 , 522 A.2d 931 and cases cited therein. I. The Arbitrator’s Authority As the trial court stated, the question of the scope of the arbitrators’ authority is “pivotal” to the outcome of this case.

The court erred, however, when it concluded that the Agreement must grant to the arbitrator, by “express terms”, the authority to fashion a proper remedy, and that the absence of such a provision mandated that the arbitrator’s award be vacated. Under Maryland law, “when the arbitration agreement is ‘clear and precise’ ... any controversy arising out of the agreement or breach thereof shall be settled by the arbitration procedure where all issues must be submitted, unless expressly and specifically excluded.” Southern Md. Hosp. v. Edw. M. Crough, Inc., 48 Md.App. 401, 406 , 427 A.2d 1051 (1981) (footnote omitted). In Amalgamated Transit Union v. MTA, 305 Md. 380 , 504 A.2d 1132 (1986), the parties agreed, as they did here, that discharge would be for just cause and that the decision of the arbitrator would be final and binding. 7 The Court upheld the power of the arbitrator to determine a remedy, despite the fact that he did not find just cause for discharge and instead fashioned a less severe remedy of suspension without pay.

The Court referred to “the broad discretion which an arbitrator has in fashioning a sanction appropriate to the facts as found by the arbitrator.” 305 Md. at 390 , 504 A.2d 1132 . In Amalgamated, as here, there was no express provision in the collective bargaining agreement ⁴⁴⁷ which authorized the arbitrator to fashion a different remedy. Nonetheless, the Court found that authority implicit in the agreement, and quoted at length from Local 543, Int'l. Union of Elec.

Workers v. Otis Elevator Co., 314 F.2d 25 , 28, cert. denied, 373 U.S. 949 , 83 S.Ct. 1680 , 10 L.Ed.2d 705 (1963): Having bargained for the decision of the arbitrator on the question of whether Calise’s conduct and criminal conviction constituted “just cause” for 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.” United Steelworkers of America v. Enterprise Wheel & Car Corp, 363 U.S. 593, 599 , 80 S.Ct. 1358, 1362 , 4 L.Ed.2d 1424 [, 1429] (1960). To separate the just causes for discharge from the unjust was precisely what the parties clothed the arbitrator with the authority to do. If the employer wanted the automatic right to discharge an employee for violation of certain company rules or for the commission of certain crimes, whether on or off the company premises, it had the opportunity to seek such an explicit exclusion from the general arbitration clause when the collective agreement was negotiated, as it may do when the collective agreement expires. In the absence of such a clause, the decision of the arbitrator in the present case must be taken as conclusively establishing as a matter of contract interpretation that the discharge of Calise was not for just cause and as foreclosing judicial review of the merits of the question.

Amalgamated, 309 Md. at 388 , 504 A.2d 1132 . The County argues that under the Agreement, the arbitrator had authority to determine only whether just cause existed for the specific sanction it imposed. This very narrow interpretation of just cause would produce either of ⁴⁴⁸ two absurd results. Under the first, the County would be “out of the batter’s box” after only one time at bat, if the arbitrator were to find there was no just cause, and it would thereafter be prohibited from imposing any sanction.

If the arbitrator were to find just cause, but that the remedy was inappropriate, the County would be up at bat indefinitely until it got a “hit”, i.e. imposed a