University System of New Hampshire Board of Trustees & A. v. Marco Dorfsman & A

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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Strafford
No. 2015-0187
UNIVERSITY SYSTEM OF NEW HAMPSHIRE BOARD OF TRUSTEES & a.
v.
MARCO DORFSMAN & a.
Argued: November 12, 2015
Opinion Issued: December 23, 2015
Sulloway & Hollis, P.L.L.C., of Concord (Edward M. Kaplan on the brief
and orally), for the petitioners.
Milner & Krupski, PLLC, of Concord (Glenn R. Milner on the brief and
orally), for the respondents.
DALIANIS, C.J. The respondents, Marco Dorfsman and the University of
New Hampshire Chapter of the American Association of University Professors
(Union), appeal an order of the Superior Court (Tucker, J.) granting the petition
for declaratory relief filed by the petitioners, the University System of New
Hampshire Board of Trustees and the University of New Hampshire
(collectively, UNH). The superior court vacated the arbitrator’s decision that
UNH had violated its collective bargaining agreement (CBA) with the Union by
terminating Dorfsman’s employment for engaging in an act of “moral
turpitude.” We affirm.
I. Procedural Background
The relevant facts follow. In 2012, Dorfsman was an Associate Professor
and the Chair of the Language, Literature, and Culture Department at UNH. In
December of that year, he intentionally lowered the evaluations that students
had given a certain lecturer by erasing markings on the evaluations; if the
highest ranking had been given, he entered a different and lower rating. In
May 2013, UNH terminated Dorfsman’s employment for this conduct, which
UNH determined constituted an act of “moral turpitude” within the meaning of
the CBA. Dorfsman and the Union grieved his termination, and, pursuant to
the CBA, the parties submitted to binding arbitration to resolve that grievance.
Although the arbitrator agreed with UNH that Dorfsman’s conduct
constituted an act of “moral turpitude,” he also determined that, because of
several mitigating factors, Dorfsman’s termination did not comport with
principles of just cause. At the arbitration hearing, the arbitrator remanded
the matter so that they could negotiate the proper level of discipline; should
they fail to agree within 30 days, the arbitrator would determine Dorfsman’s
discipline.
UNH timely filed its complaint in superior court seeking a declaration
that the arbitrator had exceeded his authority and requesting the court to
vacate his decision. Following a hearing, the trial court concluded that: (1) it
had jurisdiction to consider UNH’s appeal of the arbitrator’s award; (2) the
issues raised in that appeal were ripe for adjudication; and (3) the arbitrator
exceeded his authority under the CBA when he found that Dorfsman’s
termination was not supported by just cause. The respondents unsuccessfully
moved for reconsideration, and this appeal followed.
On appeal, the respondents argue that the trial court lacked jurisdiction
to review the arbitrator’s decision, the issues are not ripe for judicial review,
and the arbitrator did not exceed his authority when he found that UNH lacked
just cause to terminate Dorfsman’s employment. The respondents do not
challenge the arbitrator’s finding that Dorfsman’s conduct constituted “moral
turpitude” within the meaning of the CBA.
II. Analysis
A. Jurisdiction
We first address whether the superior court had jurisdiction to consider
UNH’s appeal of the arbitrator’s decision. Whether the trial court had
jurisdiction is a question of law subject to de novo review. See In the Matter of
Muller & Muller, 164 N.H. 512, 517 (2013). The respondents contend that the
superior court lacked jurisdiction to review the arbitrator’s award because: (1)
RSA chapter 542 is the only means by which the court could have had such
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jurisdiction; (2) pursuant to RSA 542:1 (2007), the provisions of RSA chapter
542 do “not apply to any arbitration agreement between . . . employers and
associations of employees unless such agreement specifically provides that it
shall be subject to the provisions” of RSA chapter 542; and (3) the CBA does
not specifically provide that it is subject to the provisions of that chapter.
Article 9.5.5 of the CBA provides, in pertinent part:
The decision of the Arbitrator . . . shall be final except that within
thirty (30) calendar days after the issuance of a decision by the
Arbitrator either party may appeal the decision to the Superior
Court. The basis of the appeal shall be limited to plain mistake,
whether legal or factual, fraud, corruption, or misconduct by the
parties, or on the grounds that the Arbitrator exceeded his or her
powers as specified in this Article.
Because they do not argue otherwise, the petitioners apparently agree that the
language of Article 9.5.5 was insufficient to bring the CBA within the aegis of
RSA chapter 542. See Southwestern Trans. Co. v. Durham, 102 N.H. 169, 173
(1959) (stating that “[t]he collective bargaining agreement in this case is subject
to the provisions of RSA ch. 542 by its express terms”); cf. Appeal of Internat’l
Assoc. of Firefighters, 123 N.H. 404, 409 (1983) (holding that arbitrator’s
decision was not subject to review by the New Hampshire Public Employee
Labor Relations Board because the parties’ agreement “made no reference to
RSA chapter 542[,] . . . did not provide for an appeal to the PELRB[,] [and] . . .
expressly stated that the arbitrator’s decision was to be binding upon both the
union and the city”). Accordingly, for the purposes of this appeal, we assume
without deciding that RSA chapter 542 does not apply to this case.
The petitioners argue that, notwithstanding RSA chapter 542, the
superior court had jurisdiction to review the arbitration award here. We agree.
“The superior court is a court of general jurisdiction and has authority to
entertain actions in equity where there is no adequate remedy at law.”
Woodstock Soapstone Co. v. Carleton, 133 N.H. 809, 816 (1991); see RSA
498:1 (2010). We have previously recognized that the superior court has
jurisdiction to review arbitral awards. See, e.g., Brampton Woolen Co. v. Local
Union, 95 N.H. 255, 256 (1948) (concluding that court had jurisdiction to
determine whether a dispute was arbitrable); Ford v. Burleigh, 60 N.H. 278(1880) (reviewing whether arbitrators exceeded their authority).
To the extent that the legislature intended RSA chapter 542 to abrogate
the common law right of superior court review of an arbitration award when, as
in this case, the parties specifically bargained for that review, it had to state so
expressly. “We will not construe a statute,” here RSA chapter 542, “as
abrogating the common law unless the statute clearly expresses such an
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intention.” Case v. St. Mary’s Bank, 164 N.H. 649, 655 (2013) (quotations and
brackets omitted). RSA chapter 542 does not clearly express such an
intention. Indeed, RSA 542:1 exempts “any arbitration agreement between
employers and employees, or between employers and associations of
employees,” unless that agreement “specifically provides that it shall be subject
to the provisions of [the] chapter,” implying that far from intending to abrogate,
the legislature intended to preserve the common law right of superior court
review of arbitration decisions. Thus, we agree with UNH that the superior
court had jurisdiction to review the arbitrator’s decision.
The respondents argue that our decision “create[s] havoc in the public
sector labor community by establishing the Superior Court as an appellate
body for run of the mill employment related arbitration cases, even for labor
agreements that do not invoke RSA 542.” This argument is made to the wrong
forum, as matters of public policy are reserved for the legislature. Petition of
Kilton, 156 N.H. 632, 645 (2007). Moreover, given that the New Hampshire
Public Employee Labor Relations Board “has no general authority to review an
arbitration award, absent some indication that the parties intended to reserve a
right to administrative review of the award,” Bd. of Trustees v. Keene State Coll.
Educ. Assoc., 126 N.H. 339, 342 (1985), we fail to see how our decision
“create[s] havoc in the public sector labor community.”
We have reviewed the respondents’ remaining arguments on this issue
and conclude that they do not warrant further discussion. See Vogel v. Vogel,
137 N.H. 321, 322 (1993).
B. Ripeness
We next consider whether the issues in UNH’s appeal are ripe for
adjudication. “[R]ipeness relates to the degree to which the defined issues in a
case are based on actual facts and are capable of being adjudicated on an
adequately developed record.” Appeal of City of Concord, 161 N.H. 344, 354,
(2011) (quotation omitted). Although we have not adopted a formal test for
ripeness, we have found “persuasive the two-pronged analysis used by other
jurisdictions that evaluates the fitness of the issue for judicial determination
and the hardship to the parties if the court declines to consider the issue.”
Appeal of State Employees’ Assoc., 142 N.H. 874, 878 (1998). With respect to
the first prong of the analysis, fitness for judicial review, a claim is fit for
decision when: (1) the issues raised are primarily legal; (2) they do not require
further factual development; and (3) the challenged action is final. Petition of
State of N.H. (State v. Fischer), 152 N.H. 205, 210 (2005), superseded by rule
on other grounds as stated in State v. Mottola, 166 N.H. 173, 176 (2014). “The
second prong of the ripeness test requires that the contested action impose an
impact on the parties sufficiently direct and immediate as to render the issue
appropriate for judicial review at this stage.” Id. (quotations omitted).
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The respondents challenge the ripeness of UNH’s appeal issues on a
single ground – that the arbitration award in this case is not final. They argue
that the award is not final because it directed the parties to negotiate the
penalty to be imposed. The respondents contend that without a penalty, “there
is no award for any [c]ourt to review.” We disagree.
We find Providence Journal v. Providence Newspaper Guild, 271 F.3d 16(1st Cir. 2000), instructive. In the First Circuit, when “an arbitration case . . .
is bifurcated into liability and damages phases, the arbitral award with respect
to liability is a final award under the Federal Arbitration Act . . . and is
therefore subject to review by courts.” Providence Journal, 271 F.3d at 19
(citation omitted). To determine whether an arbitration award is “final, and
thus subject to judicial review,” the First Circuit Court of Appeals examines two
factors: “(1) whether, and to what extent, both parties had expressed an intent
to bifurcate, and (2) whether the arbitrator and the parties understood the
determination of liability to be a final award.” Id. (quotation omitted).
In Providence Journal, the court concluded that, although the parties did
not formally bifurcate the arbitration proceedings, they informally “divided the
arbitration into separate phases,” a liability phase and a remedy phase, “and
requested that the arbitrator retain jurisdiction over the remedy issue.” Id. at
20. In the liability phase, the arbitrator had “to determine whether the
collective bargaining agreement had been violated.” Id. at 19. “All evidence
related to the issue of liability was then presented to the arbitrator, and shortly
thereafter he issued his decision on liability.” Id. Because “both the parties
and the arbitrator agreed to bifurcate the arbitral proceeding and understood
the determination of liability to be a final award,” the court deemed the
arbitrator’s decision on liability to be a “final” decision subject to judicial
review. Id. at 20 (quotation omitted).
In this case, as in Providence Journal, “the parties intended, though
never formally stated, to bifurcate the proceedings.” Id. According to the
arbitrator, he was initially to determine “whether [UNH’s] decision to dismiss
. . . Dorfsman violated the terms of the [CBA].” The arbitrator stated that the
parties then agreed “that should [he] . . . decide[ ] . . . that the dismissal
violated the [CBA], . . . the matter should be remanded back to the parties to
attempt to agree upon an appropriate resolution” and, if they were unable to
agree, he “would retain jurisdiction over any appropriate remedy.” “[H]ad the
parties not been stipulating to bifurcation, there would have been no need for
[them] to specifically request that the arbitrator retain jurisdiction over the
remedial phase.” Id.
As in Providence Journal, the parties and arbitrator understood the
arbitrator’s liability decision to be final. Here, both the parties and the
arbitrator understood that, once the arbitrator decided whether UNH violated
the CBA, there were to be no further arbitral proceedings on that question.
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Accordingly, as to the only issue the arbitrator decided – whether UNH violated
the CBA when it terminated Dorfsman’s employment – we deem the arbitrator’s
decision to be final and properly the subject of judicial review. See id. Because
the respondents do not challenge the ripeness of UNH’s appeal issues on any
other ground, we conclude that those issues are ripe for our review.
C. Scope of Arbitrator’s Authority
Finally, we address whether the trial court correctly determined that the
arbitrator exceeded his authority under the CBA when he found that
Dorfsman’s termination was not supported by just cause. “A judicial challenge
to arbitral authority requires the reviewing court to consider both the CBA and
the arbitral submission.” Appeal of Merrimack County, 156 N.H. 35, 39 (2007)
(quotation omitted). Although ordinarily we interpret contractual provisions de
novo, “the general rule is that the interpretation of a CBA is within the province
of the arbitrator, subject to certain exceptions recognized by our case law that
are not relevant here.” Id. at 40 (quotation and brackets omitted). Thus, our
review, and the superior court’s review, of the arbitrator’s interpretation of the
CBA is limited. See id. We accord the same deference to the arbitrator’s
interpretation of the parties’ submission. Id.
A court may not reject the arbitrator’s interpretation of the CBA simply
because it disagrees with it. See id. Provided that an arbitrator’s decision
“draws its essence” from the CBA and the arbitrator is not fashioning “his own
brand of industrial justice,” the award will stand. Paperworkers v. Misco, Inc.,
484 U.S. 29, 36 (1987) (quotations omitted). A court’s task, thus, is “ordinarily
limited to determining whether the arbitrator’s construction of the CBA is to
any extent plausible.” Appeal of Merrimack County, 156 N.H. at 40 (quotation,
ellipsis, and brackets omitted).
However, “[w]hen the arbitrator’s words manifest an infidelity to th[e]
obligation” to draw the essence of his award from the collective bargaining
agreement, “courts have no choice but to refuse enforcement of the award.”
Steelworkers v. Enterprise Corp., 363 U.S. 593, 597 (1960). One example of
when an arbitrator’s award fails to draw its essence from the CBA is when the
award conflicts with the express terms of the CBA. See Misco, Inc., 484 U.S. at
38. “If the language of an agreement is clear and unequivocal, an arbitrator
cannot give it a meaning other than that expressed by the agreement.” Poland
Spring Corp. v. United Food, Local 1445, 314 F.3d 29, 33 (1st Cir. 2002).
Here, we cannot say that the arbitrator’s construction of the CBA was “to
any extent plausible.” Appeal of Merrimack County, 156 N.H. at 40 (quotation
omitted). According to the arbitrator, the only issue for his review in this
bifurcated proceeding was “whether [UNH’s] decision to dismiss . . . Dorfsman
violated the terms of the [parties’] agreement.” Article 9.5.4 of the CBA
similarly limited the arbitrator’s authority in this first phase of the proceedings
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to determining whether UNH had “violated, misinterpreted or misapplied” the
CBA when it terminated Dorfsman’s employment. Article 14.2.1 gave UNH the
authority to terminate Dorfsman’s employment “for just cause.” That article
defined “just cause” as “encompass[ing] professional incompetence, deliberate
neglect of duty or moral turpitude.” Article 14.2.3 allowed UNH to terminate
Dorfsman’s employment immediately. It provides: “If charges involving moral
turpitude are sustained, the bargaining unit member may be terminated
immediately and the bargaining unit member shall not be entitled to receive
further pay or benefits.” By contrast, if the charges concerned professional
incompetence or deliberate neglect of duty, Article 14.2.3 allowed UNH to
terminate the employee’s employment only at “the end of the academic year, or,
in the case of tenured faculty members, twelve (12) months after receiving
formal notice of [UNH’s] intent not to renew the appointment.”
Thus, having found that Dorfsman engaged in conduct constituting
“moral turpitude” within the meaning of Article 14.2.1, “the arbitrator was
barred from further inquiry because such additional probing constituted
ignoring the plain language of the contract.” Poland Spring Corp., 314 F.3d at
34 (quotations and brackets omitted). “[O]nce an arbitrator finds that an
employee has committed an act specifically listed in the collective bargaining
agreement as providing just cause for termination, the arbitrator is not free to
fashion a separate remedy apart from the one provided by the parties’
agreement.” Id. “If the parties intended mitigating circumstances to affect
whether [moral turpitude] constitutes just cause for termination, then they
would have expressed their intent in the contract.” Id. at 35. Because the
arbitrator found that Dorfsman engaged in “moral turpitude” and that finding
is not challenged on appeal, his decision to overturn UNH’s decision to
terminate Dorfsman’s employment “due to mitigating circumstances
impermissibly substituted his own notions of industrial justice over those
established by the contract.” Id.The language of the CBA renders this case distinguishable from Appeal of
Merrimack County. The collective bargaining agreement in Appeal of
Merrimack County, unlike the CBA in this case, did not even use the phrase
“just cause.” Appeal of Merrimack County, 156 N.H. at 43 (quotation omitted).
Thus, in Appeal of Merrimack County, when the parties specifically “asked the
arbitrator to decide whether the county had ‘just cause’ to terminate [the
employee],” it was reasonable for the arbitrator to infer that they had asked
him to apply traditional principles of just cause to his review of the county’s
decision. Id. at 41. Such an inference was not reasonable in the instant case
because the CBA here “unambiguously provided that employees could not be
terminated except for just cause and expressly included the employee’s act
within the definition of just cause.” Id. at 43.
The respondents contend that because the CBA provides that a
bargaining unit member “may” be terminated and does not state that the
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member “shall” be so terminated, it does not “prevent the Arbitrator from
fashioning a remedy in conformance with the general ‘just cause’ standard.”
We disagree with the respondents that this is a plausible reading of the CBA.
“In a proper case[,] an arbitrator, in reliance on custom or usage in an
industry, may construe a ‘just cause’ provision of a labor contract to include a
progressive discipline requirement and may determine that certain conduct is
‘just cause’ for discipline but not for discharge.” Mistletoe Exp. Serv. v. Motor
Expressmen’s U., 566 F.2d 692, 695 (10th Cir. 1977). In the instant case,
however, Article 14.2.1 explicitly says that moral turpitude constitutes just
cause for either discharge or suspension without pay. In rejecting UNH’s
chosen penalty for moral turpitude, “the arbitrator substituted his views of the
proper industrial relationships for the provisions of the contract.” Id. “The
arbitrator may not rewrite the labor contract” in such a way. Id. Because the
arbitrator erroneously applied a further just cause analysis to misconduct that
was enumerated in the CBA as a proper basis for discharge, the arbitrator
exceeded the scope of his authority.
Affirmed.
HICKS, LYNN, and BASSETT, JJ., concurred.
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