Union’s Lawyer Disqualified From Arbitration Panel

Connecticut is one of several states that break public safety negotiations impasses with a “tri-partite” arbitration panel. Typically, the employer and union each appoint one member of the panel, and those two appointees select the third member of the panel. The “neutral” panel member is typically an experienced arbitrator, and the panel’s decision is arrived upon by majority vote.

For many years, there has been a practice of appointing professionals as the parties’ “partisan arbitrators” on these tri-partite panels. And so it went with negotiations between the City of Waterbury, Connecticut and the Connecticut Alliance of City Police (CACP). Partisan arbitrators were selected, including Marshall Segar, who had served as CACP’s attorney early in the bargaining process.

When a neutral arbitrator, Gerald Weiner, was selected from a list of the State Board of Arbitration and Mediation, things began to veer from the usual path. The City voiced its objection to the appointment of Segar as the party arbitrator for the CACP, contending Segar “had a conflict of interest in serving on the arbitration panel because he was privy to information outside of the scope of arbitration in that 1) he represented CACP and participated in prior negotiations relative to the subject collective bargaining agreement; 2) his representation of CACP in prior negotiations for this very same contract permitted him to be part of “off the record” discussions that may impact his appointment as an arbitrator; 3) he was presently the counsel for CACP and continues to represent CACP in matters involving grievances and workers’ compensation issues for which he is compensated; and 4) his representation is a violation of the Rules of Professional Conduct.”

A Connecticut trial court sided with the City, and issued a declaratory judgment disqualifying Segar from sitting on the panel. The Court started by acknowledging how tri-partite arbitration generally worked: “The applicable arbitration statute does not speak to any challenge to the selection of a party arbitrator. Each of the parties and the witnesses presented admit that the accepted procedure for appointment of arbitrators permits the appointment of an arbitrator that ‘advocates’ for their party. The issue which now confronts the Court in regard to these appointments is whether there is any restriction for the appointment of a party appointed arbitrator.

“Arbitrators should be without suspicion of abuse to the system. There should be some objectivity to the process to obtain a fair and equitable solution. If the appointed arbitrator is more than an advocate, the party has stepped over the line and is more than merely not impartial. When parties agree to arbitration before a tri-partite arbitration panel, it is commonly understood that the party-appointed arbitrators are not and cannot be neutral at least in the sense that the third arbitrator or a judge is.

“The arbitration system, established through statute and by operation, has permitted and accepted a degree of connection between the arbitrator and the party. It is acceptable that the arbitrator has some knowledge of the position of the party and is willing to advocate a position for the party. The tri-partite process was intended to allow the party’s arbitrator to have the ability to educate and hopefully influence the neutral as to the party’s position.”

The problem, the Court found, was that Segar was simply too involved with CACP: “The testimony and evidence in the instant action, however, provides a plethora of involvement for Attorney Segar with CACP absent his appointment as a party arbitrator. In the last months of the negotiation of the very collective bargaining agreement that is subject to this mandatory interest arbitration, Attorney Segar was the sole counsel for CACP. He not only advised CACP in various matters and for part of the time but also became their negotiator, legal counsel and attorney for grievances, workers’ compensation claims and prohibited practice claims. During the course of the negotiations for this agreement he took part in off-the-record discussions that should not be conveyed or used during the arbitration proceedings.

“He not only had attorney-client discussions during the negotiations but presently has attorney-client obligations because he continues in this capacity. Thus, in effect, he is wearing two hats at the same time, that is, counsel for CACP and party arbitrator. Segar’s active representation of CACP, including his active involvement in this very action, creates a relationship well beyond any factual scenarios ever considered by prior court actions.

“This dual responsibility provides at the very least a public perception of conflict and unfairness. The result of the dual responsibility is that Attorney Segar cannot be fair and act in good faith when it may have an impact on his client’s needs for his services. Any decision by the arbitration panel will be seen by the public as a done deal with no opportunity for a fair, balanced approach that considers the taxpayers who will fund any arbitration finding.”

The Court also expressed concern as to whether Segar could ethically sit on the arbitration panel and continue to act as CACP’s attorney, noting that with “the abundance of evidence and testimony about the strong connection and advocacy by Segar for CACP, his ongoing employment with CACP, his remuneration for work as counsel, as well as the Application of the Rules of Professional Conduct, there is strong support for the finding that Attorney Segar cannot act in a fair manner which will satisfy both of his masters. He cannot continue as counsel and at the same time hide under the cloak of an arbitrator.”

Because of these concerns, the Court ordered CACP to select a different partisan arbitrator.

City of Waterbury v. Connecticut Alliance of City Police, 2014 WL 7647778 (Conn. Super. 2014).