Court Declines To Overturn Arbitrator’s Health Insurance Decision

The 2007 collective bargaining agreement between the City of Detroit, Michigan and the Detroit Police Officers Association was settled through binding arbitration. An arbitration panel adopted the City’s last best offer with respect to health care benefits, which became Article 21 of the contract. Article 21 includes provisions for cost sharing by the employees and establishes which health plans the City was required to offer to the employees. Article 21 mandated that employees would pay 20% of health care premiums.

Shortly after the panel’s decision, the Association filed a grievance, contending that there should be a new open enrollment period after the arbitration panel’s decision. When an arbitrator sided with the City on the grievance, the Association challenged the Arbitrator’s decision in the Michigan Court of Appeals.

The Court refused to disturb the arbitration decision. The Court commented that “the Association seeks to have us do, and sought to have the circuit court do, precisely that which we are not permitted to do: To substitute our judgment for that of the Arbitrator and engage in contract interpretation. While the interpretation called upon in this case was perhaps not simple, as reflected by the fact that the Arbitrator filed a 48-page opinion in this matter, it was within the authority of the Arbitrator to make and, by extension, outside the scope of the authority of this Court or the circuit court to make. Ultimately, what was at issue was a question of contractual interpretation: Does the term ‘premium’ in Article 21 include the ‘illustrative rate’ for self-funded plans and whether Article 21 required a special open-enrollment period to be offered at the time the CBA went into effect. Ultimately, the Association is merely dissatisfied with the Arbitrator’s interpretation of the contract in this respect, and is seeking a more favorable interpretation from this Court. But that is not our role.

“There is no indication from the Arbitrator’s decision that he reached the decision that he thought fair or just, or imposed what he believed the contract should provide for. Rather, he carefully reviewed the contract and the history leading up to its adoption and reached what he believed was the correct interpretation of the language contained in the contract.”

Detroit Police Officers Ass’n v. City of Detroit, 2011 WL 520847 (Mich. App. 2011).