Participation In Arbitration Hearing Forecloses Later Challenge To Decision

Stacy Keylon worked as a dispatcher for the City of Dos Palos, California Police Department. When disciplinary charges were lodged against her for bringing a loaded firearm to work, Keylon participated in a pre-termination hearing. However, because Keylon was denied the opportunity to provide mitigating facts, this hearing did not comply with the due process requirements outlined by the California Supreme Court in a case known as Skelly v. State Personnel Bd., 15 Cal.3d 194 (1975).

Later, Keylon met with the City Manager, who upheld her termination. Keylon then participated in an arbitration hearing. The Arbitrator upheld the termination. However, the Arbitrator also found that Keylon was denied an effective Skelly hearing. The Arbitrator concluded that Keylon should have been permitted to attempt to justify carrying a concealed weapon to work by explaining “the reasons she feared bodily harm from her husband.” Accordingly, the Arbitrator found Keylon was entitled to back pay. But, because the City allowed Keylon to appeal her case to the City Manager about a month after the Skelly hearing, the Arbitrator limited the City’s liability to that one month. The Arbitrator determined that the hearing before the City Manager cured the Skelly violation.

Keylon then sued the City, challenging the Arbitrator’s decision. A trial upheld Keylon’s termination, though it awarded Keylon back pay from the termination date to the date the City “adopted” the Arbitrator’s decision, a period of approximately one year. The City challenged the trial court’s back pay award through an appeal to the California Court of Appeals.

The Appeals Court agreed with the City, and set aside the trial court’s award of an additional year of back pay. The Court held that “arbitration is a matter of contract. Accordingly, a party who has not agreed to arbitrate a controversy cannot be compelled to do so. Keylon contends that she never agreed to arbitrate her termination.

“This Court need not decide whether the City could have compelled Keylon to submit the dispute to binding arbitration based on its personnel rules. The question is whether Keylon waived this issue.

“As outlined above, Keylon requested arbitration and the parties selected an arbitrator as set forth in the City’s personnel rules. At the beginning of the arbitration hearing, Keylon, through her attorney, agreed that the matter was properly before the Arbitrator and that the Arbitrator’s decision would be final. Keylon did not object to the binding nature of the arbitration at that time.

“A party may not agree to arbitrate a matter, participate in the arbitration and then attempt to avoid its binding nature when the result is unfavorable. In other words, a party is not permitted to sit on her rights, content in the knowledge that should she suffer an adverse decision, she could then attempt to vacate the arbitrator’s award. A contrary rule would condone a level of procedural gamesmanship that we have condemned as undermining the advantages of arbitration.

“Accordingly here, when Keylon agreed to, and knowingly participated in, the arbitration without objecting to the finality of the Arbitrator’s decision, she waived any claim regarding the validity of the arbitration provision or its binding nature. Therefore, the Arbitrator’s decision was binding and final.

“Being binding and final, the merits of the Arbitrator’s decision were not subject to judicial review. Keylon is bound by the Arbitrator’s decision, including the award of back pay.”

Keylon v. City of Dos Palos, 2014 WL 2957808 (Cal. App. 2014).