Arbitrator Has Authority To Award Pension Credit To Discharged Deputy

Ted Goldstein is a deputy sheriff with the Oakland County, Michigan Sheriff’s Department. Goldstein was accused of misconduct at work and was terminated by the Department. The Oakland County Deputy Sheriff’s Association challenged the termination in arbitration.

The Arbitrator found that the most serious allegations of misconduct against Goldstein were false, and he concluded that the employer did not have just cause to terminate Goldstein. The Arbitrator ordered that Goldstein “be reinstated forthwith, with no loss of seniority and that his health insurance and benefits be reinstated forthwith.” However, the Arbitrator ordered that Goldstein not receive back pay.

A dispute arose between the Association and the County as to whether Goldstein should be credited seniority for the period of his suspension for purposes of retirement. The parties agreed to submit the dispute to the Arbitrator who heard the merits of the discipline case. The Arbitrator indicated that when he wrote “no loss of seniority,” he meant that Goldstein would be entitled to pension service credits for that period. The County then challenged the Arbitrator’s service-credits decision in court, arguing that only the local pension board, and not an arbitrator, could determine whether service credits existed for the period of suspension.

The Michigan Court of Appeals upheld the Arbitrator’s decision. The Court found that “unless there is express language in the contract indicating otherwise, an arbitrator may fashion a remedy which considers the fault of the party. Here, while the Arbitrator was limited by the express provisions of the contract, nothing in the contract indicates that the Arbitrator could not institute pension-service credits. The Arbitrator specifically found that the County did not have just cause to terminate Goldstein. Based on that conclusion, the Arbitrator ordered that Goldstein be reinstated immediately, with health and other benefits reinstated as well.

“An award is legitimate if it draws from the essence of the contract. As the trial court ruled, the Arbitrator’s award draws its essence from the collective bargaining agreement, because the collective bargaining agreement makes termination a matter of collective bargaining without otherwise restricting the powers of the Arbitrator. Because of the limited scope of judicial review in arbitration cases, the award was within the essence of the contract, and the County has failed to establish that a genuine issue of material fact exists that prevents upholding the Arbitrator’s award.”

Oakland County v. Oakland County Deputy Sheriff’s Ass’n, 2011 WL 3476813 (Mich. App. 2011).

This article appears in the November 2011 issue.