Firefighter Layoffs Deemed Not Arbitrable

When the City of Reno, Nevada lost federal grant money in 2014, the City announced it was laying off 32 firefighters whose jobs were funded by the grants. Local 731 of the International Association of Fire Fighters, which represents the City’s rank-and-file firefighters, filed a grievance challenging the layoffs. The essence of Local 731’s grievance was that the City had sufficient discretionary funds to keep all firefighters employed.

Local 731, recognizing that the Arbitrator lacked the authority to issue an injunction to prevent the layoffs from occurring while the arbitration was pending, filed a lawsuit in Nevada state court seeking an injunction against the layoffs.

When the trial court granted the injunction, the City appealed to the Nevada Supreme Court. The Supreme Court agreed with the City and dissolved the injunction.

The Supreme Court pointed out that only those disputes that parties to a collective bargaining agreement agreed to submit to arbitration could be decided by an arbitrator. The City, in the Management’s Rights provision of the contract, specifically reserved the “right to reduce in force or lay off any employee because of lack of work or lack of funds.”

In light of this provision, the Court ruled that “the fact that parties agreed to reserve that right to the City without negotiation is the most forceful evidence that the layoffs for lack of funds is not a decision subject to mandatory bargaining and therefore falls outside the scope of the contract. It would exceed the Arbitrator’s powers under the contract to assume arbitral jurisdiction of the IAFF’s grievance.”

The layoff provision of the contract was a recitation of a section of Nevada’s collective bargaining law, which was also referenced and incorporated into the contract. The section of the law specifically reserved to employers the non-negotiable right to lay off employees for lack of funds but made layoff procedures a mandatory subject of bargaining.

Although the contract did include a provision setting forth the procedure for layoffs, including such things as consideration for seniority and rehiring laid off employees before new employees could be hired, the Court pointed out that those provisions did not render the decision to lay off employees subject to negotiation, grievance, or arbitration.

The Court dissolved the injunction, clearing the way for the City to lay off the firefighters.

City of Reno v. International Association of Fire Fighters, Local 731, 2014 WL 744982 (Nev. 2014)