Brook Park v. Fraternal Order of Police, Lodge 15

[Cite as Brook Park v. Fraternal Order of Police, Lodge #15, 2020-Ohio-3035.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
CITY OF BROOK PARK, :
Plaintiff-Appellee, :
No. 108879
v. :
FRATERNAL ORDER OF POLICE, :
LODGE #15,
Defendant-Appellant. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: May 21, 2020
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-18-897466
Appearances:
Mansour Gavin L.P.A., and James A. Budzik, for appellee.
Faulkner, Hoffman, and Phillips, L.L.C., Robert M.
Phillips, Joseph D. Mando, and Sara A. Liva, for
appellant.
SEAN C. GALLAGHER, P.J.:
Defendant-appellant Fraternal Order of Police, Lodge #15 (“FOP”)
appeals the decision of the trial court that vacated an arbitration award. Upon
review, we affirm the decision of the trial court.
Background
In February 2017, plaintiff-appellee city of Brook Park (“the city”)
passed Ordinance No. 10064-2016 that amended Chapter 153.06 of the Brook Park
Codified Ordinances to provide hospitalization and/or medical insurance benefits
to a group of retired employees in an amount that equated to $100 per month. In
response, FOP filed a grievance challenging the ordinance. FOP claimed that the
ordinance violated the “express terms of an alleged 2006 and 2009 contract
addendum affecting retired FOP member medical reimbursement entitlements and
the past practice.”
In 2006, the parties executed a settlement agreement and contract
addendum, with an attached memorandum of understanding, that provided a
defined group of retirees with health-insurance reimbursement benefits up to $400
per month. In 2009, the parties agreed to a second memorandum of understanding
(“the MOU”) providing for continued retiree health-insurance reimbursements in
an amount not to exceed $400 per month. The MOU was not included as part of
any collective bargaining agreement after 2009. However, the city continued to
make payments to retired FOP members until January 2017. The city then passed
the ordinance that FOP claimed was an attempt to abrogate health-care benefits.
At the time FOP’s grievance challenging the city’s ordinance was filed,
the effective collective bargaining agreement (“CBA”) was for the period from
January 1, 2016, through December 31, 2018. Article I of the CBA expressed the
parties’ intent that “both parties now desire to enter into a new Agreement to
supersede all previous agreements * * * and to set forth clearly the terms and
conditions of employment and responsibilities of each party * * *.” Article II of the
CBA recognized the FOP as “the exclusive representative for negotiating wages,
hours and other terms and condition of employment for all sworn full-time
employees of the Division of Police occupying the positions of patrol officers and
detectives * * *.” Article IX, Section 9.01 of the CBA defines a grievance as “a dispute
or a difference between the Employer and the FOP or the Employer and an employee
concerning the interpretation or application of any provision of this Agreement.”
FOP’s grievance was denied by the city. Thereafter, FOP made a
demand for arbitration and the parties selected an arbitrator. The parties stipulated
to the following facts:
● On March 9, 2006 the City and Union reached a Settlement
Agreement/Contract Addendum and attached Memorandum.
● Thereafter, on July 24, 2009, the parties reached a
Memorandum of Understanding (MOU) regarding retiree health
insurance. * * *
● The MOU was not made part of any collective bargaining
agreement after 2009. However, the City continued to make
payments to retirees pursuant to the 2009 MOU until January
2017.
● Retired members are not part of the bargaining unit pursuant to
Article II of the current Collective Bargaining Agreement.
● In 2016, the City adopted Ordinance No. 10064-2016 * * *, which
mandated the payment of $100 per month for retiree health care
to the class of employees noted in the ordinance (an expanded
group of retirees over the 2009 MOU).
During the arbitration proceeding, the city claimed that the grievance
was not arbitrable. Among other arguments, the city claimed that retirees are not
public employees and do not have access to the CBA’s grievance procedure, that the
grievance did not involve a “dispute or difference * * * concerning the application of
[the CBA],” and that the MOU was never attached to the controlling CBA.
The arbitrator issued a decision on February 12, 2018. In that
decision, the arbitrator determined that because the parties had stipulated to his
selection as arbitrator, “the parties herein clearly and unmistakably consented to the
arbitrator’s jurisdiction on the issue and waived the right to have the issue decided
by a court, [so] this arbitrator has jurisdictional arbitrability to review the instant
matter and to issue a final and binding determination as to its merits.” The
arbitrator proceeded to address the merits of the dispute and ultimately sustained
FOP’s grievance based on the 2009 MOU and past practice of the parties.
On May 9, 2018, the city filed an application to vacate the arbitration
award. The city claimed that the arbitrator exceeded his powers, or imperfectly
executed them, “in that the award does not draw its essence from any of the
contract provisions, that retirees are not even part of the bargaining unit and that
the Arbitrator lacked jurisdiction (the issue was not arbitrable) in the first
instance.” FOP filed a competing application to confirm and enforce the
arbitration award.
On July 11, 2018, the trial court issued a decision that denied FOP’s
application to confirm and enforce the arbitration award and granted the city’s
motion to vacate the arbitration award. The trial court recognized the narrow
scope of review under R.C. 2711.10(D), and determined as follows:
[The arbitrator] based his decision on the 2009 memorandum of
understanding and past practice. However, the parties stipulated that
the MOU was not made part of any collective bargaining agreement
after 2009. The controlling CBA states that it is intended to supersede
all previous agreements. If it was the parties’ desire to govern retirees’
health insurance reimbursement benefit in subsequent collective
bargaining agreements, they could have easily done so.
Additionally, retirees are not recognized as part of the union;
instead, the CBA recognizes the union as the exclusive representative
for current employees in the positions of patrol officers and detectives.
The grievance and arbitration procedure is only available for disputes
between the city and the union or the city and an employee concerning
provisions of the collective bargaining agreement, i.e., there is no
contractual provision or attached memoranda concerning retiree
health insurance reimbursement. An examination of past practice
equally does not concern the interpretation or application of a
provision of the parties’ collective bargaining agreement.
Conclusion
The arbitrator’s decision cannot rationally be derived from the terms of
the collective bargaining agreement between the city and the union
because retirees are not recognized members of the union, there is no
provision in the controlling collective bargaining agreement or
attached to it regarding retiree health insurance reimbursement, and
the arbitrator’s determination regarding past practice is not based on
any term of the parties’ collective bargaining agreement. Because the
arbitrator exceeded his powers in violation of R.C. 2711.10(D) by
deciding an issue that was not arbitrable, the union’s application to
confirm the arbitration award is denied and the city’s application to
vacate the arbitration award is granted.
FOP timely appealed the trial court’s decision. The matter is now
before us on review.
Law and Analysis
FOP raises two assignments of error. FOP claims that the trial court
erred (1) by not confirming the award of the arbitrator pursuant to R.C. 2711.09, and
(2) by finding that the arbitrator imperfectly executed his powers and vacating the
arbitrator’s award under R.C. 2711.10(D)
R.C. 2711.09 requires a common pleas court to grant a timely
application for an order confirming an arbitration award “unless the award is
vacated, modified, or corrected as prescribed in [R.C. 2711.10 and R.C. 2711.11].”
Upon an application to vacate the arbitration award, R.C. 2711.10 requires a
common pleas court to vacate the award under limited circumstances. Applicable
hereto, R.C. 2711.10(D) requires the arbitration award to be vacated when “[t]he
arbitrators exceeded their powers, or so imperfectly executed them that a mutual,
final, and definite award upon the subject matter submitted was not made.”
The Supreme Court of Ohio has held that “[w]hen reviewing a trial
court’s decision to confirm, modify, vacate, or correct an arbitration award, an
appellate court should accept findings of fact that are not clearly erroneous but
should review questions of law de novo.” Portage Cty. Bd. of Dev. Disabilities v.
Portage Cty. Educators’ Assn. for Dev. Disabilities, 153 Ohio St.3d 219, 2018-Ohio-
1590, 103 N.E.3d 804, ¶ 2. Whether an arbitrator has exceeded his authority
pursuant to R.C. 2711.10(D) is “‘a question of law’” that is reviewed de novo. Id. at
¶ 25, quoting Green v. Ameritech Corp., 200 F.3d 967, 974 (6th Cir.2000). An
arbitrator exceeds the arbitrator’s authority and departs from the essence of the
collective bargaining agreement when the arbitrator’s award “‘conflicts with express
terms of the collective bargaining agreement’” or “‘is without rational support or
cannot be rationally derived from the terms of the agreement.’” Cedar Fair, L.P. v.
Falfas, 140 Ohio St.3d 447, 2014-Ohio-3943, 19 N.E.3d 893, ¶ 7, quoting Ohio Office
of Collective Bargaining v. Ohio Civ. Serv. Emps. Assn., Local 11, AFSCME, AFL-
CIO, 59 Ohio St.3d 177, 572 N.E.2d 71 (1991), syllabus.
Upon our review, we accept the trial court’s findings of fact, which are
consistent with the facts set forth above and included the stipulation of facts
submitted by the parties to the arbitrator. We shall review de novo the trial court’s
decision to deny FOP’s application to confirm and to grant the city’s application to
vacate the arbitration award upon concluding the arbitrator exceeded his powers in
violation of R.C. 2711.10(D).
In vacating the arbitration award pursuant to R.C. 2711.01(D), the
trial court determined that the arbitrator’s award was not rationally derived from
the terms of the CBA. The trial court recognized that the arbitrator based his
decision on the 2009 MOU and past practice of the parties. However, the trial court
determined that the parties stipulated that the MOU was not part of the controlling
CBA, and Article I of the CBA clearly states that the agreement is intended “to
supersede all previous agreements” of the parties. Further, the trial court
determined that Article II of the CBA recognizes the FOP as the exclusive
representative for current employees in the positions of patrol officers and
detectives, that retirees are not recognized as part of the union, and that the dispute
is not one concerning the controlling CBA.
We agree with the trial court’s determinations in this matter. Ohio
law supports the conclusion that retirees are not subject to the grievance procedure
under the CBA unless they are specifically included. R.C. 4117.01 defines a “public
employee” as “any person holding a position by appointment or employment in the
service of a public employer * * *.” R.C. 4117.04 states that “[p]ublic employers shall
extend to an exclusive representative designated under [R.C. 4117.05], the right to
represent exclusively the employees in the appropriate bargaining unit * * *.” In
Carter v. Trotwood-Madison City Bd. of Edn., 181 Ohio App.3d 764, 766, 2009-
Ohio-1769, 910 N.E.2d 1088 (2d Dist.), the court acknowledged that Ohio case law
follows the approach that “retirees are not bound by the grievance procedure in the
collective bargaining agreement, unless they are specifically included.” Id. at ¶ 41.
The arbitrator in this case cited the Sixth Circuit decision in Cleveland
Elec. Illum. Co. v. Util. Workers Union, Local 270, 440 F.3d 809, 815 (6th Cir.2006)
in discussing the issue of arbitrability of the grievance in this matter. However, even
the Sixth Circuit recognized that “[t]he presumption of arbitrability applies to
disputes over retirees’ benefits if the parties have contracted for such benefits in
their collective bargaining agreement * * *.” Id. at 816. In that case, “the parties
clearly bargained for retirees’ health benefits.” Id. at 814.
FOP’s claim that the arbitrator had jurisdiction to decide the dispute
and did not exceed his powers because the parties had arguably agreed to submit
the matter to arbitration misses the mark. The dispositive issue in this case is
whether the arbitrator exceeded his power such that the award must be vacated
pursuant to R.C. 2711.10(D). “[U]nder R.C. 2711.10(D)[,] arbitrators can exceed
their powers by going beyond the authority provided by the bargained-for
agreement or by going beyond their contractual authority to craft a remedy under
the law.” Cedar Fair, L.P., 140 Ohio St.3d 447, 2014-Ohio-3943, 19 N.E.3d 893, at
¶ 7.
Moreover, “[i]n order to avoid being vacated, an arbitrator’s decision
challenged under [R.C. 2711.10(D)] must be rationally supported by the collective
bargaining agreement or, at least be capable of being rationally derived from it.”
Stow Firefighters v. Stow, 193 Ohio App.3d 148, 2011-Ohio-1559, 951 N.E.2d 152,
¶ 34 (9th Dist.), citing Piqua v. Fraternal Order of Police, 185 Ohio App.3d 496,
2009-Ohio-6591, 924 N.E.2d 876, ¶ 24 (2d Dist.). In the Stow Firefighters case, the
court found that R.C. 2711.10(D) required the trial court to vacate part of an
arbitration award where the arbitrator never should have reached the merits of
issues related to fitness-for-duty evaluations because there was no provision in the
collective bargaining agreement that related to fitness-for-duty evaluations. Id. at
¶ 30-36.
Likewise, the dispute in this matter cannot be said to be rationally
derived from the CBA. FOP is not designated as a representative of retirees under
the CBA, there are no provisions in the CBA that concern retirees’ health-insurance
reimbursement benefits, and Article IX limits a “grievance” to “a dispute or
difference * * * concerning the interpretation or application of any provision of [the
CBA].” As was the case in Stow Firefighters, “[i]t does not appear that the terms of
the collective bargaining agreement in this matter can ‘give grounds for, make
legitimate, or provide justification for, the [arbitrator’s] award’ in regard to the
arbitrability of the grievance.” Id. at ¶ 35, quoting Piqua at ¶ 26.
In this case, the trial court determined that “the dispute is not one
concerning the controlling [CBA], i.e., there is no contractual provision * * *
concerning retiree health insurance reimbursement. An examination of past
practice equally does not concern the interpretation or application of a provision of
the parties’ [CBA].” We agree with the trial court. As was the case in Stow
Firefighters, “the arbitrator’s award failed to draw its essence from the collective
bargaining agreement and the arbitrator exceeded the power the agreement
afforded him.” Id. at ¶ 36, citing R.C. 2711.10(D).
Upon our de novo review, we conclude that the arbitrator exceeded
his power by issuing an award that was not rationally derived from the terms of the
CBA. Accordingly, we affirm the trial court’s decision to vacate the arbitration award
pursuant to R.C. 2711.10(D). We are not persuaded by any of the other arguments
raised by FOP and overrule the assignments of error.
Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment
into execution.
A certified copy of this entry shall constitute the mandate pursuant to
Rule 27 of the Rules of Appellate Procedure.
SEAN C. GALLAGHER, PRESIDING JUDGE
MICHELLE J. SHEEHAN, J., and
RAYMOND C. HEADEN, J., CONCUR