Andrea Dooley Arbitration

953 W. MacArthur Blvd., #8

Oakland, CA 94608
(510) 719-3089

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What Is Substantive Arbitrability?

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In my previous posts, I’ve talked about procedural arbitrability, which is a question about whether an arbitrator can hear a contractual dispute because one party has failed to follow the grievance procedure. In this post, I’ll discuss substantive arbitrability. Substantive arbitrability differs from procedural in that it depends on the question of whether the arbitrator has the authority to decide on the underlying substantive issue. For example, a contract may state that an arbitrator may not hear cases of a certain type. Substantive arbitrability issues can be raised to the arbitrator, but they are also raised after an arbitration decision in court when one party (or both) feels that the arbitrator exceeded their powers under the collective bargaining agreement.

Now let’s talk about substantive arbitrability. These are cases which one party believes the arbitrator doesn’t have jurisdiction over the subject matter. One example of this is Last Chance Agreements (LCA), which is a broader topic, but in general LCAs limit the arbitrator’s jurisdiction to deciding whether the employee violated the terms of the LCA or not. If the employee did, the consequence is spelled out in the LCA and the arbitrator cannot alter the outcome.

Managers frequently assert ‘management rights’ as the basis for why an arbitrator cannot hear a dispute. The actual language of the agreement will be very important here, and will involve a lot of argument. As a practice tip, both sides will need to identify what specific language in the agreement give the arbitrator jurisdiction or not.

Another substantive arbitrability issue arises when a party adds a claim or theory to the original grievance when they get to hearing. Just as an employee has a right to know what they are being fired for, an employer has a right to know what the union believes the contract violation is.

Often there is language in the agreement that limits the arbitrator’s jurisdiction, such as “cannot add to, subtract from or modify the agreement.” If one party believes that the remedy sought by the other side would do that, such as asking an arbitrator to create a new attendance policy, then they should argue this language prevents such a remedy, and ask that if a violation be found, the parties be ordered to fashion their own remedy, for example. In addition, parties sometimes ask arbitrators to act as EEOC administrators, or workers comp judges, or want a legal ruling on a statute. At the end of the day, the arbitrator is there to hear contract disputes, and usually wants to hear only those.

Finally, when should the parties argue the arbitrability issues? As soon as possible, not only in the grievance procedure but in the hearing. Some parties request bifurcation – that is, they want the arbitrator to hear the arbitrability issue before they hear the merits of the case. Unless the parties agree to bifurcate, the arbitrator retains the jurisdiction to rule on bifurcation. Often to an arbitrator, it makes more sense to hear the whole case at once, since the arbitrability issues are often interwoven, but it depends on the facts of the case.

I hope you have found this series useful. Please let me know if you have any questions that I can answer in future posts. You can email me at andrealdooley@gmail.com.

I Digress: “Equitable Estoppel” and Procedural Arbitrability

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An issue that sometimes arises in arbitration is a concept called “equitable estoppel.” I’ll try to keep this short, so you don’t zone out or fall asleep. The quickest way to explain equitable estoppel is, one party cannot lead the other party to believe that they agree or will resolve the issue, and then change course and claim the other side was untimely when they object to the failure to resolve the issue. For example, there’s a case where the employer agreed to pay contractual severance pay for the employees it was laying off and confirmed in writing several times that they would do this. They did not do this. The union tried to contact the employer about it and didn’t hear back until the employer’s bankruptcy attorney told the union that the employer would not pay. The union filed a grievance and the employer claimed the grievance was outside the 3-day window for filing after the employees received their final paychecks. The arbitrator rejected that timeliness argument, saying the union didn’t affirmatively know they wouldn’t get it until the bankruptcy lawyer told them so. It was reasonable to believe, based on the employer’s earlier statements, they’d get the money.

The moral of the story is, arbitrators don’t like it when the parties try to play tricks, and are unlikely to find the grievance is not arbitrable if the side arguing for lack of arbitrability was playing games during the grievance procedure.

If you’re interested, I’ve written about procedural arbitrability HERE and HERE and HERE, but definitely read them in order!

Other Types of Procedural Arbitrability Issues, plus bonus content on Timeliness!

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In my prior posts, I talked about why we have labor arbitration, what procedural arbitrability is, and how arbitrators handle timeliness issues. I’ll discuss that again in a moment, but first I want to mention that there are other kinds of procedural arbitrability issues, that I’ll discuss now. Two particular procedural issues that arise are (1) the form of the grievance and (2) the manner of delivery. Both can also be dictated by the contract. The form of the grievance could be a pre-printed form, or it could be a letter to management, or it could be a simple email. It could even be a phone call. The parties usually agree on what form the grievance will take, but they may not. If they don’t agree, then it may be a procedural arbitrability issue. For example, if the union sends an email and the employer says they had to file a preprinted form, the arbitrator will decide if there was a proper grievance.

The manner of delivery is also usually agreed upon, or even stated in the agreement. Maybe it must be sent by fax, or email, or certified mail. If the contract isn’t specific, then the practice of the parties will govern. The types of questions that occasionally arise – Must it be faxed to a specific office? Must a specific form be sent certified mail? Or is an email saying, “We’re moving John’s grievance to step 3,” sufficient?  – seem nit-picky, but for unions and companies with established practices and large workforces, it can be hard to keep track of everything unless the correct procedures are followed. At least, that’s what one party will argue.

As a practical matter, it makes sense to file or move a grievance to the next step at the earliest possible time. A grievance can always be withdrawn, but a union who fails to follow the administrative steps of the grievance procedure could be left holding more liability than necessary. At the same time, Employers should be aware that playing gotcha with the grievance procedure will sour labor relations and put the union in an unnecessarily difficult spot. This is particularly true when the union cannot get in touch with a grievant because of the grievant’s incapacity, such as insanity (one case in the materials), hospitalization or incarceration.

Some contracts have specific consequences for failing to respond in a timely fashion. For most of this, we’ve assumed that the union didn’t timely move the grievance, but an employer who fails to respond to a grievance may be waiving arguments, become subject to automatic next steps, or even lose the grievance.

One party can waive arguments by failing to raise procedural defects until the arbitration hearing, but there isn’t a hard and fast rule on this. Different arbitrators have ruled differently on this question but as a practical matter, it’s better to raise procedural arguments throughout the grievance procedure.

What Is Procedural Arbitrability? Part Two

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In my last post, I talked about the importance of following timelines to ensure that there are no procedural arbitrability issues related to timeliness. I said, “Untimely grievances will not be heard” by an arbitrator.

Although the rule sounds firm, most arbitrators prefer to reach the merits, and don’t like to ding one party on a technicality. You sometimes hear this framed as, “Arbitrators dislike forfeiture,” meaning they hate forcing one party to forfeit on minor grounds. Arbitrators typically find that a dispute is arbitrable if there is some ambiguity in the language.

When does the time to file a grievance start running? As with so many things, it depends on the contract. The most straightforward answer is, when the employee knew or should have known about the contract violation, and has had a chance to raise it to their supervisor. If the contract language is unclear, an arbitrator isn’t going to impose a timeline. However, an employer argument that the employee unreasonably delayed raising the issue after learning about it might have some merit.

What is “knew or should have known”? This depends entirely on the facts of the case.  Obviously, an employee will probably know when they were terminated. On the other hand, an employee might not know that their vacation accrual is wrong until the union educates them about the contract. Parties seeking to enforce a strict timeline should show clear communication about the event triggering the grievance.

What about prospective events? An employer sends a notice on March 1 saying, effective June 1, they are unilaterally changing the schedule? When is the grievance ripe? When the event actually occurs. From March until the end of May, the union may seek to change the employer’s mind, and can hope to do so until it actually goes into effect. A grievance filed after June 1 within the timelines, is timely.

The timeline ends when the contract says it does. But what happens if it falls on a holiday, or a Sunday? Again, this will depend on the facts and how the parties have treated those days in the past, but some arbitrators will apply state law court filing rules to this. For example, if the state law says that court filings that would be filed on a Monday which is a state holiday are still timely if filed the next day, an arbitrator might apply the same rule to the grievance filing deadline.

Another definition that an arbitrator might need clarification on is whether the parties use calendar days or business days. For example, a five-day deadline will have very different consequences if it’s five calendar days rather than five business days. A union representative who isn’t aware of the meaning of their own contract could very easily failed to file their grievance in a timely fashion.

It is precisely this type of problem that arbitrators see most often. Someone forgot, sent it a day or two late, sent it to the wrong person or made some other minor mistake that causes the grievance to be untimely. Human error is no excuse, if the timelines have been consistently enforced in the past. Again, any lax enforcement will probably excuse the human error, but it will be an evidentiary question.

In my next post, I will discuss other types of procedural arbitrability issues. In the meantime, drop me a note if you have any questions or comments. Thanks!

What is Procedural Arbitrability? Part One

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In my last post, I talked a little about the purpose of arbitration, and mentioned that sometimes, one party or the other challenges whether a dispute can be arbitrated. This is a question of “arbitrability,” and there are two types: procedural and substantive. In this post, I will be talking about Procedural Arbitrability.

As the name suggests, procedural arbitrability means that one party believes that there is a procedural error, such as timeliness. Arbitrators and courts have held that it is up to the arbitrator to determine whether there is a procedural arbitrability issue.

The most common procedural arbitrability issue is timeliness. Timeliness concerns whether both parties have met the timeline required in their agreement. For example, the union might be required to file a grievance within 10 days of learning about the incident that causes a dispute, and the employer might be required to respond to the grievance within 7 days of receiving it.  Most arbitrators in most cases strictly enforce the timeline set out in the grievance procedure, where the parties have consistently enforced those requirements. Untimely grievances will not be heard. Time limits are generally treated as jurisdictional; in other words, if the timeline wasn’t met, the arbitrator doesn’t have the authority to hear the merits of the case. This is less straightforward than it sounds.

Timelines must be consistently enforced. If the parties have been lax, or the practice has been inconsistent, the parties should be prepared to present evidence supporting their position about how the parties have treated timelines in the past. For example, the employer might show that every grievance that was filed after ten days had passed was denied, while the union might show that the employer gave them a one-day grace period on many occasions in the past. The arbitrator will consider this evidence in deciding whether the grievance in arbitrable.

Timelines can be waived by mutual agreement. For example, in one case, a union steward was on vacation when a union member was terminated and didn’t return until after the deadline for filing the grievance had passed. He wrote the grievance and brought it to the supervisor, asking that the supervisor agree that the grievance be “deemed timely,” because of his absence. The supervisor agreed, and they proceeded through the grievance procedure. At the arbitration hearing, a human resources manager testified that the supervisor had not authority to agree to waive the timeline and that the grievance was untimely when it was filed a few days late. I found that, if the supervisor had the authority to discipline employees and receive the grievance in the first place, he had the authority to agree to waive the timeline, and in fact, it was good for their labor relations that he did so. The discipline was upheld on the merits and the union steward and supervisor continued to work together harmoniously to resolve disputes.

In my next post, I will continue to discuss procedural arbitrability. Please let me know if you have any questions that I can answer in a future post!

Why Does Labor Arbitration Exist?

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Over the next few weeks, I am going write a bit about “arbitrability,” which is the question of whether a labor dispute can be arbitrated. Before I discuss the main topic, I want to share my understanding of the purpose of arbitration. Without a union contract, every term and condition of employment is set by the employer. Unions negotiate take-aways; every term in an agreement is one that the Union has helped set, taking away management’s authority over that issue. For example, before there’s a union, the employer may have unlimited discretion to deny vacation requests or set vacation schedules. After the union negotiates a contract, the employer must follow whatever they’ve agreed to, like seniority bidding on vacation use. This means the union has “taken away” the employer’s discretion on this issue.

The only exception to this principle is the grievance procedure, which is a take-away from the Union. With a grievance procedure, a union cannot have a strike or take other labor action that deprives the employer of its labor. The union must submit its dispute to the grievance procedure. The grievance procedure “takes away” the union’s right to strike. To ensure labor peace and stability, there’s a strong incentive to use the grievance procedure, up through arbitration.

It does occur, however, that there are issues that one side or the other does not believe should be arbitrated, or even grieved. When this happens, we say that there is an issue of arbitrability. There are two kinds of arbitrability: Procedural and substantive. I’ll take about procedural arbitrability in my next post.

Thanks for reading and let me know if there are any topics you’d like me to address!