Arbitrator Awards – Take Your Chances

Kegler Brown Housing Newsletter

The Cuyahoga Metropolitan Housing Authority learned the hard way that arbitration decisions are often virtually unappealable, no matter how erroneous they may appear to be.  Cuyahoga Metropolitan Housing Authority v. SEIU Local 47 (Cuy. Co. 2007).

The Cuyahoga MHA fired a service worker who was a union member. The employee had been given a credit card and PIN number for purchasing fuel. The card tracked the employee, the vehicle, and the details of fuel purchases. In this case, the employee purchased gas before work, purportedly for a CMHA vehicle. However, the quantity of gas purchased exceeded the tank capacity for the vehicle and an incorrect odometer reading was recorded. Upon discovery, the PHA discharged the employee for conversion of property. However, the employee testified that employees shared PIN numbers and they used the credit cards to purchase gas for tools and equipment as well as the cars. On this basis, the arbitrator concluded that there was no evidence that the employee was guilty of using the gas for personal purposes.  The arbitrator found there was no just cause for the discharge and reinstated the employee.

The PHA appealed the arbitrator's decision, arguing that it lacked rational support and contravened public policy. The court rejected all the arguments, relying on the oft-quoted principle that an arbitrator's award will not be modified unless the arbitrator "exceeded his authority" or was guilty of "fraud, misconduct, partiality, or material mistake." In other words, the court held that the parties bargained for the arbitrator's award, and they will be forced to accept that award unless it clearly contradicts the unambiguous terms of the union contract. The appeals court noted that, even though the employee's purchases "appeared spurious," the arbitrator was within his authority to decide that just cause for termination did not exist.