New York Courts Conflict On Binding Arbitration Law

In New York, impasses in the collective bargaining process are broken through the binding arbitration process. Like most binding arbitration laws, the New York statute requires an arbitrator to consider a list of enumerated factors, including the employer’s ability to pay, the total compensation in comparable jurisdictions, and other factors. The New York law states that an arbitration panel “shall specify the basis for its findings, taking into consideration, in addition to any other relevant factors,” the list of enumerated criteria.

In July 2005, an arbitration panel issued an award on wages and health insurance for the contract involving the City of Buffalo and the Buffalo Professional Firefighters Association. The award granted firefighters a general wage increase of 2.1 percent in the first year and 3.4 percent in the second year, but did not award any retroactivity. In making its decision, the Panel noted that the evidence presented by the parties “was considered against the criteria set forth in the interest arbitration statute, including, but not limited to a comparison of the wages, hours and conditions of employment of other employees performing similar services or requiring similar skills under similar working conditions; the interest and welfare of the public and the financial ability of the public employer to pay; the peculiarities in regard to other professions such as hazards, educational qualifications, training, and skills; and the terms of collective bargaining agreements negotiated between the parties in the past providing for compensation and fringe benefits.”

The Association challenged the arbitration award on the grounds that the Panel majority failed to specify a specific basis for its findings and therefore exceeded its authority. The Association cited the opinion of an intermediate Court of Appeals in New York that had interpreted the collective bargaining statute as requiring an arbitration panel to discuss separately each of the statutory factors for each of its awards in order for the award to be upheld.

A different intermediate Court of Appeals sided with the City, upheld the Arbitration Panel’s wage award, and specifically disagreed with the first court’s interpretation. In the eyes of the Court, “the statute simply requires, as it expressly states, that the Panel consider the statutory factors that specify the basis for its findings. Certainly, the Legislature could have chosen language that would require public arbitration panels to make express findings with respect to each of the statutory factors, or even each factor put in issue by the parties, but it did not. Thus, the Legislature has not required arbitration panels to engage in unnecessary discussion in their awards of factors not raised by the parties or thought to be relevant by either the parties or the panel. Judicial review of public arbitration awards otherwise would devolve into mere mechanical checklists, despite the fact that an award may appear on its face to be reasonable and have a rational basis.”

Buffalo Professional Firefighters, 850 N.Y.S.2d 744 (App.Div. 2008).

NOTE: The conflict between two different New York Courts of Appeal on a critical issue such as the structure of arbitration awards almost certainly means that New York’s highest court – the Court of Appeals – will resolve the dispute.

This article appears in the April 2008 issue