By Jim Cline
A recent Ninth Circuit Court of Appeals decision made to provide labor organizations an additional tool in their efforts to enforce final and binding arbitration awards. As explained in our recent article, in addition to enforcing such awards under State contract law, labor organizations in concert with the affected employee, may be able to argue that refusal to abide by “final and binding” arbitration awards also constitute a violation of constitutional due process rights.
The significance of turning these enforcement actions into constitutional cases is that it provides another mechanism for the labor organization to collect its attorney’s fees. Some background on attorney fees in arbitration is in order. Most labor contracts contain a provision requiring each party to pay the fees of their own representative. But in some labor contracts this ordinary “boilerplate” clause is absent. In IAFF, local 46 v. City of Everett, the Everett firefighters were successful in arguing that when the fee responsibility clause was absent, a union successfully winning a discipline case, could collect its attorney’s fees by treating the arbitration award as a “wage recovery” action.
What happens when an employer refuses to abide by a final and binding arbitration award and the union is forced to take the action into court? Labor organizations have argued that the fee responsibility clauses are only waivers of the union’s right to attorney fees in the arbitration proceeding, not in the post arbitration court action. So far, at least Division III of the Court of Appeals has faced this issue twice, most recently in a case involving this office and the Yakima County Deputy Sheriffs —YAKIMA COUNTY LAW ENFORCEMENT OFFICERS GUILD v. YAKIMA COUNTY and the court has refused to award the Guild its fees, claiming that the fee waiver provision was not limited to the arbitration proceeding:
The relevant statute authorizes fees for successful actions to recover wages or salaries. RCW 49.48.030. The statute is remedial and is liberally construed to advance the legislature’s intent to protect employee wages and ensure payment. City of Everett, 146 Wn.2d at 34. And the statute applies to labor unions that recover wages for its members through grievance arbitration. Id. at 51.
But the right to recover attorney fees can be waived by the parties in a CBA. Id. at 49 (citing Hitter v. Bellevue Sch. Dist. No. 405, 66 Wn. App. 391, 397-99, 832 P.2d 130 (1992)). The waiver must be clear, unmistakable, and knowingly made. Pasco Police Officers’ Ass’n v. City of Pasco, 132 Wn.2d 450, 462, 938 P.2d 827 (1997).
And the right to fees was waived here: “Each party shall pay the expenses of their own representatives, witnesses and other costs associated with the presentation of their case. The cost and expense of the arbitrator shall be borne equally by the parties.” Guild’s Ex. 44, at 18 (CBA $ 20.8 Step 3(f)(ii)).
The Guild’s breach of contract (wage recovery) action is for us the “appeal” in Hitter. The Guild sought judicial review of the arbitrator’s decision, albeit for enforcement purposes. The superior court proceedings are then not so attenuated from the arbitration proceeding itself as to be separate for purposes of attorney fee recovery under RCW 49.48.030 and was then waived by the CBA.
Division III of the Court of Appeals had ruled similarly in another arbitration enforcement action involving our firm and the Wenatchee Police Guild City of Wenatchee v. Wenatchee Police Guild in which they similarly cited the “Hitter” decision as holding that post arbitration attorney fees were waived by these clauses. The other Courts of Appeals have yet to address this issue and ultimately, this issue is likely to be eventually resolved by the Supreme Court.
In the meantime, as is currently being done by the Yakima County Law Enforcement Officers Guild, the parties can negotiate a clarifying clause in their grievance procedure that any agreement to pay fees is limited to the arbitration proceeding only. The Yakima County Guild is presenting this issue and interest arbitration later this year so we will have an opportunity to see how an interest arbitrator views this issue.
The Ninth Circuit decision concerning the “final and binding” nature of arbitration decisions was based on Oregon state court interpretations but those same court interpretations have been adopted in Washington State. In another recent case involving our firm and the Kitsap County Deputy Sheriffs Guild, the Washington State Supreme Court agreed that the “public policy” exception to the enforceability of arbitration awards related not to the nature of the misconduct involved (in the Kitsap case, untruthfulness) but in whether the reinstatement of the officer was barred by public policy. As the Court explained:
Washington statutes prohibit making false statements to a public officer but there is no statute or other explicit, well defined, and dominant expression of public policy that requires the automatic termination of an officer found to have been untruthful.
The parties negotiated a collective bargaining agreement and agreed that the arbitrator’s decision would be final and binding. The arbitrator conditioned LaFrance’s reinstatement on successful passage of the County’s own physical and mental fitness-for-duty exams. Even if we were to agree that the arbitrator’s decision was not good public policy and thought LaFrance’s reinstatement distasteful, the County has failed to cite any explicit, well defined, and dominant public policy that requires vacating this award. We reverse the Court of Appeals and reinstate the award.
The oral argument for this Supreme Court case can be followed at TVW: Since the Kitsap decision, the number of employer attacks on arbitration decisions has diminished, but has not ceased. Working to ensure that you can recover your attorney fees, when these unwarranted “appeals” from final and binding arbitration awards are undertaken, may create an additional deterrent to such attacks.
