Homero Mojica is a firefighter for the City of Laredo, Texas, and is represented by International Association of Fire Fighters Local 1390. In its 2009-2010 budget, the City did not allocate funds for the purchase of all City employees’ accumulated sick leave. Up until that year, the City had regularly bought back unused sick leave from the firefighters. Mojica filed a grievance complaining of the City’s failure to buy back the firefighters’ unused sick leave.
At arbitration, Mojica alleged the City violated the collective bargaining agreement by suspending the sick leave buy-back program. The City claimed the CBA provision regarding the buy-back program was discretionary, and because it was discretionary, the City did not allocate the funds because the cost of purchasing unused sick leave from all City employees would have been financially burdensome during a time of significant financial challenge.
The Arbitrator found the CBA essentially gave the City an option to buy back the firefighters’ sick leave. Even though the City had an option, the Arbitrator also found that “the City’s unvarying practice of exercising its annual option to purchase accumulated sick leave for more than ten years reasonably has led the Union and its members to expect the City to continue to exercise the annual option absent a good faith reason to suspend the program.”
The Arbitrator did not approve of the City’s justification for suspending sick leave buy back, and concluded the City did not act in good faith. The Arbitrator stated the City Manager should have broken out the cost of maintaining the buy-back program solely for the firefighters and not all City employees if it wanted to show good faith based on financial concerns. The Arbitrator then directed the City to purchase the unused sick leave from firefighters who elected to sell their sick leave.
The City challenged the Arbitrator’s opinion in court, contending that he did not have the authority to decide a grievance based solely on a past practice (as opposed to an explicit contract article). The Texas Court of Appeals disagreed, and upheld the Arbitrator’s opinion.
Citing decisions from the U.S. Supreme Court, the Court found that “an arbitrator’s authority is derived from the arbitration agreement and is limited to a decision of the matters submitted, either expressly or by necessary implication. An issue is arbitrable unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. If the allegations underlying the claim touch upon matters covered by the agreement, then the claim is subject to arbitration regardless of the legal label attached to it. Any doubts concerning the scope of what is arbitrable should be resolved in favor of arbitration.
“Here, Mojica’s complaint alleged the City violated the CBA because of the City’s past practice of purchasing unused sick leave. The CBA states that ‘matters involving the interpretation, application, or alleged violation of a specific provision’ would be subject to the specified grievance procedure, and therefore, arbitration. Because Mojica alleged a violation of the CBA due to the City’s past practices, this would affect the interpretation or application of the CBA’s provisions. Therefore, we hold the issue of the City’s past practices of buying back the firefighters’ sick leave was an arbitrable issue.”
City of Laredo v. Mojica, 2012 WL 135280 (Tex.App. San Antonio 2012).