Daily Decisions: If the CBA States that the Arbitrator Can’t Award Attorneys’ Fees, then the Arbitrator Can’t Award Attorneys’ Fees (with One Exception!)

Washington State Department of Transportation v. Marine Employees Commission (Division 2, April 18, 2012), addresses an arbitrator’s power to award attorneys’ fees despite clear language in the parties’ collective bargaining agreement that each side should pay its own fees and costs. While the Court of Appeals held that fees could be awarded under such a CBA in the case of an unfair labor practice, that circumstance did not apply here. Accordingly, the Court vacated the arbitrator’s fee award.

Back in 2004, several members of the Marine Engineers’ Beneficial Association (“MEBA,” a union representing ferry employees) sued the Department of Transportation claiming that they were entitled to wages for “watch turnover” — the practice of a new crew meeting with the old crew between shifts to discuss the condition of the vessel, any problems, or other relevant matters. The employees won in superior court, but the Court of Appeals vacated the award, holding that the dispute should have been subject to arbitration under the parties’ CBA. However, in the course of remanding for arbitration, the Court of Appeals specifically held that watch turnover was a “regular, essential, and required work activity” and that the DOT was therefore required to compensate the employees for that work. The Court warned that “whether watch changes are work or whether watch changes must be compensated is not an issue for future grievance or arbitration.”

The Court’s opinion in hand, MEBA filed a grievance arbitration against the DOT seeking wages for watch turnover. MEBA claimed that, in light of the Court of Appeals’s ruling, all the arbitrator needed to do was calculate damages. The DOT disagreed. It argued (1) that the Court of Appeals’s statement was wrong on the law and (2) that the statement was dicta and therefore the issue remained open.

Well, the arbitrator disagreed and ruled in favor of MEBA. It also awarded MEBA its attorneys’ fees. The DOT appealed to the superior court, but fared no better. So the DOT once again appealed to the Court of Appeals. Knowing better than to argue to the Court of Appeals that the Court’s own previous opinion was wrong, the DOT’s appeal was limited to the award of attorneys’ fees.

First, the Court determined that it had jurisdiction to review the arbitration award. Despite the fact that the parties’ CBA and the relevant provisions of the WAC were silent on the issue of judicial review, “judicial review is nevertheless available by petitioning the superior court for a constitutional writ of certiorari.” That’s what happened here, so we’re all good.

Such review, however, is “extremely limited.” The Court determines “only whether the arbitrator acted outside his authority under the CBA in awarding attorney fees to MEBA. . . . But so long as the arbitrator is even arguable construing or applying the contract and acting within the scope of his authority, the fact that we are convinced he committed serious error does not suffice to overturn his decision.”

Here, the arbitrator’s decision failed to meet that very permissive standard. The CBA “is explicit in relation to attorney fees.” It clearly states that all costs and fees (other than those charged by the arbitrator) “will be paid by the party incurring them.” The WAC and relevant statutory provisions are all in accord.

Despite this clear language, however, the Court of Appeals noted that “state and federal law provide persuasive support than an . . . arbitrator could award attorney fees when a party to collective bargaining commits an unfair labor practice by refusing to collectively bargain in good faith.” (emphasis added). But the Court of Appeals concluded that the conduct here at issue failed to meet that standard.

There are specific procedures for bringing an unfair labor practice claim. The MEBA did not follow those procedures here. Indeed, the MEBA “has never alleged that an unfair labor practice occurred.” Moreover, the arbitration itself was conducted pursuant to the CBA, so it was part of the collective bargaining process, not a refusal to engage in that process. So the award of attorneys’ fees was ultra vires and improper.

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One thought on “Daily Decisions: If the CBA States that the Arbitrator Can’t Award Attorneys’ Fees, then the Arbitrator Can’t Award Attorneys’ Fees (with One Exception!)

  1. Pingback: Monday Morning Mash-up: April 23, 2012 | Ziff Blog

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