Court Upholds Arbitrator’s Award Of Interest On Back Pay

The Detroit Fire Fighters Association filed a grievance against the City of Detroit on behalf of one of its members, Brian Kelley. On August 26, 2004, an arbitrator ruled in Kelley’s favor, awarding him $22,616.77 in back pay. The Arbitrator ordered the City to “promptly reimburse” Kelley and retained jurisdiction over the matter for 30 days to assist, if necessary, with the implementation of the award.

When the City failed to pay within this period, the Arbitrator extended her jurisdiction. Although the City paid the award on December 17, 2004, the Arbitrator issued a supplemental opinion and award finding that the City should have paid Kelley within 30 days of the original award. She therefore ordered the City to pay interest on the award for the period of excessive delay between September 26, 2004, and the day of actual payment.

The City sued the Association, asking the Court to overturn the award of interest. The City contended that the Arbitrator exceeded her powers under the parties’ collective bargaining agreement.

The Michigan Court of Appeals rejected the City’s lawsuit. The Court pointed to the fact that “the section of the collective bargaining agreement concerning arbitration grants arbitrators the express authority to award employees back wages. Further, it states that they may act to enforce the collective bargaining agreement. Rather than creating new terms, the Arbitrator ordered the City to pay interest on Kelley’s back pay as a means of enforcing its original order requiring the award to be paid promptly. Such an action falls within the Arbitrator’s broad authority to fashion an appropriate remedy. Consequently, we find that the Arbitrator acted within the scope of her authority under the terms of the collective bargaining agreement.”

City Of Detroit v. Detroit Fire Fighters Association, 2006 WL 2355085 (Mich.App. 2006).

This article appears in the November 2006 issue