Arbitration award sustained absent proof that the award violates public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power

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Arbitration award sustained absent proof that the awardviolates public policy, is irrational, or clearly exceeds a specificallyenumerated limitation on the arbitrator's power
Shenendehowa Cent. Sch. Dist. Bd. of Educ. (Civil Serv.Empls. Assn., Inc., Local 1000, AFSCME, AFL-CIO, Local 864), 2013 NYSlip Op 00885, Court of Appeals
A school bus driver [Driver] tested positive for marijuana after submitting to a random drugtest. This resulted in the School District's terminating Driver from theposition, which action was ultimately submitted to arbitration.
The issue presented to the arbitrator: Did the terminationof Driver violate the collective bargaining agreement between the parties and,if so, what is the appropriate remedy?
The arbitrator concluded that the School District hadviolated the agreement and that the penalty imposed on Driver, dismissal, wastoo severe. The arbitrator directed the School District to reinstate Driverwithout back pay, subject to certain conditions including an evaluation by asubstance abuse professional and a negative drug test.*
The School District filed an CPLR Article 75 petitionseeking to vacate that portion of the arbitration award directing that itreinstate Driver to the position of school bus driver and to modify the award by imposing thepenalty of termination, contending that Driver had violated the SchoolDistrict’s “zero drug tolerance” policy.
SupremeCourt granted the School District’s Article 75 petition seeking to vacate anarbitration award thus  reinstating the School District's decision to terminate Driver's employment with the district.

TheAppellate Division vacated the Supreme Court’s ruling, finding that the awardwas not against public policy, was rational, and in making the award thearbitrator did not exceed his powers, holding that “Supreme Court should haveconfirmed the arbitration award.” TheAppellate Division explained that “If a matter is submitted to arbitration,reviewing courts should not interpret substantive conditions of the agreementor delve into the merits of the dispute.”
CitingMatter of Grasso, 72 AD2d 1463 [Leave to appeal denied, 15 NY3d 703], the courtsaid that "Courts must give deference to an arbitrator's decision andcannot examine the merits of an arbitration award, even if the arbitratormisapplied or misinterpreted the law or facts, but a court may vacate an award[where it] violates a strong public policy, is irrational or clearly exceeds aspecifically enumerated limitation on the arbitrator's power."
Further,the Appellate Division stated that "[W]here an agreement is 'reasonablysusceptible of the construction given it by the arbitrator, a court may notvacate the award," citing Matter of Albany County SheriffsLocal 775 of N.Y. State Law Enforcement Officers Union, Dist. Council 82,AFSCME, AFL-CIO [County of Albany], 27 AD3d 979.
The Court of Appeals agreed with the Appellate Division’sruling, noting that it has recognized three narrow grounds that may form thebasis for vacating an arbitrator's award, repeating the Appellate Division’scriteria that the award violates public policy, is irrational, or clearly exceeds aspecifically enumerated limitation on the arbitrator's power, commenting thatnone of these grounds had been established by the School District in thisaction.**
Specifically the high court ruled that:
1. The arbitrator's decision did not exceed a specificlimitation on his power; nor was it irrational.
2. Contrary to the School District's argument, the parties'agreement did not require the penalty of termination in these circumstances and
3. That the District did not in fact have a zero tolerancepolicy in place.
According, said the court, the arbitrator’s determinationthat Driver’s “reinstatement with conditions” was the appropriate penalty didnot violate public policy. Although, said the court, “reasonable minds might disagreeover what the proper penalty should have been [this] does not provide a basisfor vacating the arbitral award or refashioning the penalty...."
Significantly theCourt of Appeals noted that the arbitrator “determinedthat, contrary to the School District's argument, the parties' Taylor Law agreement didnot require the penalty of termination in these circumstances and that theDistrict did not in fact have a zero tolerance policy.” This suggests that had the Taylor Law agreement provided for termination in theevent the employee tested positive for an unlawful drug or if the School District had awritten "Zero Tolerance" drug policy known to Driver in place at the time Driver tested positive for an unlawfuldrug, the School District would have prevailed.

* The decision notes that “This effectively imposed, at that time, a six-monthunpaid suspension” on Driver.
** Article 75 of the CPLR sets out other grounds, not relevant in this action, for a court's vacating an arbitration award.
The decision is posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2013/2013_00885.htm

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