Before this Court is Plaintiff the City of Providence's ("City") Motion to Vacate an Arbitration Award. The arbitration award in question (the "2012 Award") denied a grievance by Respondent Rhode Island Laborers' District Council, Local 1033 ("Union") on the grounds that an alleged violation of the collective bargaining agreement then in effect was
FACTS AND TRAVEL
The City and the Rhode Island Laborers' District Council, Local 1033 have been parties to successive collective bargaining agreements ("CBAs") over a long period of time and remain bound by such an agreement to this day. Although the arbitration award at issue deals with an alleged violation of the CBA in effect on September 6, 2011, the cornerstone of the present dispute concerns a stipulated agreement between the City and the Union, dated November 9, 1993 and signed by an arbitrator, which the parties refer to as a "stipulated award."
On November 9, 1993, the City and the Union were parties to a CBA effective July 1, 1993 to June 30, 1994 (the "1993-1994 CBA"). The 1993-1994 CBA contained a clause requiring grievances to be arbitrated between the parties in certain circumstances. In relevant part, Article XXI, Section 1 of that agreement states: "It is mutually understood and agreed that all grievances of employees or the Union arising out of the provisions of this contract shall be filed and processed as follows." Additionally, Article XXI, Section 3 states that "[t]he Arbitrator's decision shall be final and binding upon the parties" and that "the arbitrator shall have no power to disregard, alter, amend, add to or deduct from the provisions of this Agreement." Section 3(b) further provides that "[t]he Employer and the Union agree to apply the decision of the arbitrator to all substantially similar situations." In addition, the 1993-1994 CBA contained a provision for "Changes or Amendments" in Article XXVII, stating: "This Agreement constitutes the entire agreement and complete understanding between the [City] and the Union arrived at as a result of collective bargaining, except such amendments hereto or modifications hereof as shall be reduced to writing and executed by the parties following the execution of this Agreement." It is undisputed that the language in these provisions from the 1993-1994 CBA remained intact in all of the successive iterations of CBAs between the Union and the City up to and including the CBA in effect on September 6, 2011.
The so-called "stipulated award" itself arose out of a dispute under the 1993-1994 CBA that the Union brought to arbitration during that time period. While the grounds for that dispute remain unclear from the record, the parties apparently reached an agreement concerning staffing levels at the Department of Communications Police Control Center during the pendency of the arbitration proceeding. This stipulated agreement, referred to by the parties as a "stipulated award," required the City to staff and assign a specific number of Union employees to work in specified positions at the Police Control Center at different times during the week. Also of relevance, the final provision of the stipulated agreement states the following: "The parties hereby agree and acknowledge that this agreement does not establish a precedent or practice and shall not be utilized in any future proceedings or forum, of any nature, except to enforce the provisions herein." Additionally, the agreement did not contain its own independent arbitration clause.
In lieu of issuing an Opinion and Award, the Arbitrator hearing the contemporaneous grievance then signed the stipulated agreement, which was subsequently confirmed by the Superior Court pursuant to § 28-9-17 on December 7, 1993.
For the following seventeen-plus years, the City and the Union periodically renewed the 1993-1994 CBA through subsequent agreements that explicitly incorporated by reference the preceding iteration of the CBA, adding amendments and making modifications to the body of the CBA as incorporated.
This factual concession on the City's part became the basis for the Union's current grievance, which the Union filed on October 6, 2011. The grievance was heard by an arbitrator on February 29, 2012, who heard arguments from counsel for both parties, accepted evidence, and reviewed post-hearing briefs. On June 4, 2012, the arbitrator explicitly found that the Union's grievance was arbitrable, and that the Union could rely upon the "stipulated award" as a basis for securing arbitral relief. However, because the claimed violation was
The central issue now ready for decision by this Court is arbitrability— specifically, whether a dispute relating to a side agreement stipulated to by the parties in 1993, but never referenced by or physically incorporated into ten subsequent CBAs spanning over seventeen years, is arbitrable under the CBA in effect at the time the Union's grievance arose in 2011.
STANDARD OF REVIEW
Judicial authority to review or vacate an arbitration award is limited.
A clear case of an arbitrator exceeding his or her authority is to hear a dispute that is not arbitrable.
A party asserting that the arbitrator has exceeded his or her authority bears the burden of proving this contention.
In support of its view that the October 6, 2011 grievance was not substantively arbitrable, the City contends that the stipulated agreement was unenforceable under the terms of the 1993-1994 CBA, under the terms of the stipulated agreement itself, and under the terms of the CBA in effect on September 6, 2011. The City argues first that the stipulated agreement was not enforceable under the 1993-1994 CBA because that CBA expired on June 30, 1994. According to the City's argument, even if the stipulated agreement was considered indistinguishable from the 1993-1994 CBA, the provisions of the stipulated agreement carried no independent duration that would outlast the 1993-1994 CBA. Next, the City argues that if the stipulated agreement was considered purely on its own terms, such that it did carry an independent duration, the stipulated agreement would have expired on November 9, 1996 because of the three-year statutory limitation on municipal contracts with labor organizations imposed by § 28-9.4-5. Finally, the City argues that the stipulated agreement was unenforceable under the CBA in effect on September 6, 2011 because no express provision of that CBA related to minimum staffing levels at the Police Control Center and no CBA between the City and the Union was ever formally amended to reflect the terms of the stipulated agreement. By implication, the City argues that there was no mechanism in the parties' mutual understanding at the time of the stipulated agreement that would otherwise integrate the stipulated agreement into the 1993-1994 CBA for purposes of renewal. In support of these contentions, the City forcefully asserts that the stipulated agreement does not reflect an interpretation of any CBA it ever entered into with the Union, and furthermore that it did not amount to a "decision" of the arbitrator. The City argues that the grievance was effectively submitted pursuant to an expired—therefore, void and unenforceable— stipulated agreement. The City contends that because it did not violate any provision of the CBA in effect on September 6, 2011, the grievance was not substantively arbitrable.
In response, the Union first argues that longstanding fundamental precedents in labor arbitration disputes require the conclusion that its current grievance is substantively arbitrable. Specifically, because the CBA in effect on September 6, 2011 contained an agreement to arbitrate that did not specifically exclude the subject matter of the Union's grievance, and since there was no other forceful evidence indicating that a dispute pursuant to the stipulated agreement should not be arbitrated, the Union asserts that the dispute must be arbitrable. The Union stresses that ever since the Rhode Island Supreme Court approved the holdings of the "Steelworkers Trilogy"
The "Stipulated Award"
It is evident to this Court that a key threshold matter for determination is the nature of the so-called "stipulated award," which was signed by an arbitrator on November 9, 1993, and judicially confirmed by Order of the Superior Court on December 7, 1993. Determination of this threshold issue carries consequences not only with respect to the outcome of the present dispute, but also perhaps with respect to similar stipulated agreements reached by the parties in the past, many of which were not physically incorporated into the body of successive iterations of the parties' CBA.
To begin, this Court is mindful that inherent differences exist between the settlement of a dispute and the resolution of a dispute through arbitration.
Here, the Union essentially concedes that the stipulated agreement was not the result of any procedure resembling adjudication. The so-called "stipulated award" from 1993 was not issued by the arbitrator after "consider[ing] the respective positions of the parties;" nor was there a "full evidentiary hearing" or any kind of "hearing on the merits." (Union Memorandum at 15-16.) Rather, it appears that instead of resolving through arbitration the Union's grievances—the precise nature of which is not disclosed in the record—the parties stipulated to new contractual terms of their own free will in an agreement that is very clearly drafted by the parties' lawyers. It is noteworthy that the stipulated agreement itself makes no reference to any provision or any specific language of the 1993-1994 CBA which it is purported to interpret, and no express provision in any CBA from 1993 through present is related to staffing levels at the Police Control Center.
Additionally, even if the Union is correct that the Superior Court Order confirming the "stipulated award" on December 7, 1993 should be treated as a "consent decree," the Order does not indicate precisely what the parties consented to, other than the terms of the stipulated agreement. This Court is not convinced that the parties' decision to reach a stipulated agreement at that time, rather than to commit to resolution of their dispute through arbitration, means that the parties intended to create interpretive precedent for certain provisions of the 1993-1994 CBA that were not then even specified. Moreover, other courts have agreed—under closely analogous circumstances—that "the ministerial recording of . . . agreements as stipulated arbitral awards does not automatically transform the agreements into full-blown arbitration `decisions'" because "the awards represented nothing other than the parties' own agreements resolving all remaining issues between them."
The Circuit Split
Having determined that the "stipulated award" properly reflects an agreement between the parties, this Court now analyzes the substantive arbitrability of the Union's grievance. The Union's grievance is premised on the contention that the 1993 stipulated agreement created a binding obligation on the City under the CBA in effect on September 6, 2011, violation of which is therefore subject to arbitration under that CBA.
The proper test for ascertaining the arbitrability of side or settlement agreements is an issue of first impression in Rhode Island, and other courts are split on the issue. Under the approach of the Third, Sixth, Seventh, and Ninth Circuits, the court considers the side agreement to be a part of the CBA and then determines whether the side agreement would have fallen under the scope of the CBA's arbitration clause.
This Court is also cognizant of recent precedent from both the United States Supreme Court and the Rhode Island Supreme Court suggesting that the general presumption in favor of arbitrability alone is not dispositive of this case. For example, arbitration is not permitted when an arbitration agreement is completely silent as to the arbitrability of certain classes of disputes.
Importantly, the "collateral" test pays deference to the principle that an arbitrator's authority first must derive from the contract itself.
Applying the "Collateral" Test
Under the "collateral" approach, the Court first decides whether the relevant arbitration clause is narrow or broad.
Here, the relevant arbitration clause is found in Article XXI of the CBA, entitled "GRIEVANCE AND ARBITRATION PROCEDURE." The parties agree that the language in the clause has not changed in any iteration of the parties' CBA since 1993-1994. The clause states: "It is mutually understood and agreed that all grievances of employees or the Union arising out of the provisions of this contract shall be filed and processed as follows." Additionally, Article XXI, Section 3(A) limits the power of the arbitrator, stating that the arbitrator "shall have no power to disregard, alter, amend, add to or deduct from the provisions of this Agreement."
The Court finds this language indistinguishable from the arbitration clause language analyzed in
Next, this Court must determine whether the dispute involves an agreement collateral to the agreement with the arbitration clause. Here, the agreement with the arbitration clause is the CBA in effect on September 6, 2011 and the Court must determine whether the stipulated agreement from 1993 was collateral to it, or, alternatively, whether the stipulated agreement "may be read as part and parcel of the Collective Bargaining Agreement."
As an initial matter, in Adkins, the Third Circuit applied the "collateral" test to a CBA and a side agreement that the union in that case contended was an "addendum"— therefore not collateral—to the parties' CBA.
In looking for similar guideposts in the present case, this Court draws a complete blank. As in
Rather than incorporating the stipulated agreement into the 1993-1994 CBA, or any CBA that followed, the Union allowed the stipulated agreement to lurk in the shadows until September 6, 2011, when the staffing levels fell below the purported requirement for a period of twenty minutes. This agreement was hidden from view and unknown to anyone examining the CBA. The Union emphasizes the City's longstanding compliance with the 1993 stipulated agreement, and then argues that such compliance indicates a continuing intent to be bound by the stipulated agreement on the City's part. The Union's characterization of the facts in this respect is self-serving, and it would be understandable for the City to refrain from making any characterization to the contrary while the current cross-motions are pending decision. At this stage, the Court is not convinced that the City's conceded compliance with the stipulated award for a period of seventeen years can reasonably be used to infer anything other than application of the City's managerial discretion to staffing levels at the Police Control Center during that time period.
For the reasons above, this Court finds that the stipulated agreement was at best collateral to the CBA in effect on September 6, 2011. The arbitrator in this case found the dispute substantively arbitrable by accepting at face value the Union's argument that the so-called "stipulated award" had become a "provision" of the CBA, and then cursorily determining that the presumption in favor of arbitrability of disputes should be applied. The arbitrator's conclusory and incomplete analysis failed to review the applicable statutes in a meaningful way and made no mention of the substantial case law that has been cited in this Opinion. Because the 1993 stipulated agreement was at best collateral to the CBA in effect on September 6, 2011, the instant grievance is not covered by that CBA's arbitration clause and the City's Motion to Vacate an Arbitration Award must be granted.
R.I.G.L. § 28-9.4-5
The Court notes separately that under the foregoing analysis, the stipulated agreement of 1993 expired on November 9, 1996 because of the three-year limitation on municipal contracts with labor organizations, as required by § 28-9.4-5. Therefore, the Union's grievance is not arbitrable under the CBA in effect in September 2011 for that supplemental reason as well.
Moreover, the Court points out that § 28-9.4-5 leaves little room for municipalities and their labor-organization partners to flout the three-year limitation on the basis of the parties' mutual consent. We must presume that the legislature knew how to enact a provision allowing for such consensual conduct. The parallel "Obligation to Bargain" statute under § 28-9.1-6 provides that in the context of Firefighters' Arbitration, "no contract shall exceed the term of one year,
Having found for the reasons above that the Union's current grievance is not substantively arbitrable, this Court need not reach the issue of whether the parties violated § 28-9.4-5 by simultaneously negotiating and executing two allegedly separate CBAs that in fact resulted in a comprehensive CBA with a span of four years. If such a practice is a violation of § 28-9.4-5, then vacation of the present award may be required on the grounds that the underlying CBA is void and unenforceable as well.
Whatever descriptive term is used to identify the 1993 agreement at issue— "stipulated award," or "side agreement," or "settlement agreement"—the inescapable fact remains that this understanding between the parties remained outside the lines, language, and intent expressed within the four corners of CBAs that were re-negotiated ten times, covering a seventeen-year period. The most accurate description of this agreement is that it was an outlier. There is nothing before the Court to suggest otherwise.
This Court is mindful of the salutary purpose of a carefully drafted, detailed CBA, that is, the written declaration of the respective rights and obligations of the parties. Moreover, a well-constructed agreement minimizes the likelihood of future disputes between employees and employers. No one's interests are served by leaving the negotiated settlement of a seemingly significant labor contract issue outside of the contract's purview it purportedly relates to for seventeen years.
The Court also notes that the contract at issue is a municipal contract involving the capital city of this state and, as such, implicates the public interest as well. It is certainly not in the public interest to permit and enforce negotiated side agreements which are allowed to exist in perpetuity, which are shielded from view or examination, and remain unknown except to those who originally negotiated the settlement agreement, until a dispute arises.
The case law, statutory law and public interest inherent in municipal contracts compel the conclusion that the City's Motion to Vacate the Arbitrator's Award must be granted. Moreover, the 1993 side agreement was repugnant to the three-year statutory limit on the duration of municipal-labor CBAs.
Accordingly, the arbitration award in this matter is vacated.
Counsel shall prepare a Judgment in conformity with this Decision.