The Limitations Of The ‘Public Policy’ Exception To Arbitration Awards

Most collective bargaining agreements contain grievance procedures that end with arbitration. In the parlance of many contracts, arbitration is “final and binding,” meaning that a party cannot appeal an arbitrator’s decision even if the arbitrator made legal or factual mistakes.

There is a limited exception to the finality of arbitration awards, known as the “public policy” exception. Under the exception, an arbitrator’s opinion will be overturned if the decision violates a clearly articulated public policy. As a case involving the Ulster County, New York Sheriff’s Department illustrates, the “public policy” exception is a narrow one indeed.

The case involved a grievance filed by the Ulster County Sheriff’s Employees Association challenging a decision by the County to change the job description for assistant warden to eliminate correction sergeants from the list of eligible personnel who could take the promotional exam for the position. When the County denied the grievance, the Association filed a demand for arbitration.

The parties subsequently entered into a stipulation that the issues to be resolved by the arbitrator were: “Did the County violate the preamble and/or Article 5 of the CBA when it excluded the title of correction sergeant from being eligible to take the 2009 exam for Assistant Warden? If so, what shall be the remedy?” After the hearing, the Arbitrator found that the County violated the CBA when it excluded correction sergeants from the eligible list and directed that the results of the 2009 exam be annulled and a new exam be given for which correction sergeants with 36 months of permanent competitive class status would be eligible.

The County refused to comply with the Arbitrator’s decision, contending it violated public policy. A New York appeals court disagreed, and upheld the award.

The Court held that “an arbitration award may only be vacated on public policy grounds where a court can conclude, without engaging in any extended factfinding or legal analysis that a law prohibits, in an absolute sense, the particular matters to be decided, or that the award itself violates a well-defined constitutional, statutory or common law of this State. Further, judicial restraint under the public policy exception is particularly appropriate where, as here, the case involves arbitration pursuant to a collective bargaining agreement.

“While the County’s personnel officer undoubtedly had the authority to establish minimum qualifications for job titles in county government, it does not follow that such determinations are immune from oversight or review. In that regard, the Arbitrator determined that the change in the eligibility list was made to increase the chances that two correction lieutenants who had been provisionally appointed as assistant wardens would ultimately receive permanent appointments to that position. The Arbitrator concluded – correctly, in our view – that the decision to eliminate correction sergeants from the pool of candidates solely to increase the odds of the provisional candidates runs afoul of the competitive process envisioned by the Civil Service Law and violated the state constitutional provision requiring that civil service positions be filled according to merit and fitness. Also, the Arbitrator’s decision vacating the existing list of eligible candidates and annulling the results of the exam does not violate Civil Service Law.”

In re Ulster County Sheriff’s Employees Ass’n, 2012 WL 5950397 (N.Y.A.D. 3 Dept. 2012).