Last week, the Ohio Court of Appeals affirmed the reversal and vacation of an arbitration award in favor of a union's claim for holiday pay. Eastlake v. Fraternal Order of Police/Ohio Labor Council, 2011-Ohio-2201. In that case, the city and union had negotiated to delete a provision which provided employees with the option of (1) taking the holiday off with pay or (2) working the holiday and cashing out holiday pay at the end of the year. Afterwards, the City had the discretion to permit employees to work on holidays and to let the employee take a constructive holiday with pay. However, when the City exercised its rights under the new holiday provision following ratification of the bargaining agreement, the union argued that the employees were still entitled at their option to work the holiday and cash out holiday pay even though the former provision had been deleted. An arbitrator found that the new provision was ambiguous and would create a hardship for the employees if they lost out on the opportunity to receive 96 hours of pay at the end of the year as they had before negotiations. When the City moved to vacate the arbitration award, the trial court found that the arbitrator exceeded his authority by disregarding clear contract language, ignoring the bargain reached at the negotiating table and ignoring other provisions in the bargaining agreement. The Court of Appeals agreed.
According to the Court's opinion, before negotiations, union employees
had the option of either taking their 12 paid holidays as a holiday off with pay or working the holiday and then cashing out some or all of their holidays at the end of the year. Therefore, an employee could potentially cash out 96 hours of holiday pay in December of each year. That section read as follows:
"Employees shall have the option of either taking the time off with pay or to be paid for the holidays at their straight time rate of pay and shall notify the Chief of their election."
After negotiations, this provision was deleted from the bargaining agreement and Section 3 was inserted into the Agreement:
"Section 3. Holiday Work Option. At the discretion of the respective department head with consideration of workloads and department needs, an employee not regularly scheduled may work designated holidays. The employee may then elect to take the additional holiday compensation in the form of
Section 4. Holiday Time Scheduling. An employee that works on a recognized holiday or whose regular continuous schedule does not include the day of the observed holiday shall designate the days he wishes to take off at a later date, which shall be subject to the advance approval of the employee's supervisor as to when they may be taken. "An employee electing to take time off for holidays, shall be required to take the time during the year it is earned and not be able to carry the time over into the next calendar year.
payment.
The arbitrator found Section 3 to be ambiguous and, apparently, the Union testified that it had never been their intention during negotiations to lose the 96 hours of holiday pay. The common pleas court found that the arbitrator exceeded his authority in disregarding clear language in the agreement, finding a non-existent ambiguity, and giving the Union a better bargain than it negotiated.
The unequivocal language of the Agreement must be followed. Nowhere in Article 34 does it state that the Union would be entitled to cash out ten holidays in December of each year. In fact, as previously mentioned, the part of the Agreement that conferred such a benefit was deleted during negotiations. Under Sections 3 and 4, an employee may fall into only one of three categories: (1) an employee who is not regularly scheduled, but who is called into work by the respective department head; (2) an employee who is scheduled to work on a recognized holiday; and (3) an employee who is not scheduled to work on a recognized holiday. Only under the first scenario, i.e., Article 34, Section 3, may an employee cash out holiday compensation in the form of payment.
Further, the arbitrator's decision makes note of the fact that if the employees were not entitled to cash out the ten holidays for payment in December, it would be a harsh or unreasonable result and would have a substantial impact on the bargaining unit. However, the Union agreed both to the deletion of the provision, which granted them the holiday cash-out option, and to the addition of Section 3, which unequivocally limits the circumstance in which an employee may cash out holiday compensation in the form of payment.
Again, "'[a collective bargaining agreement] is limited to the provision bargained for and *** an arbitrator may not apply extraneous rules to the agreement, where those rules were not bargained for and are contrary to the plain terms of the agreement itself.' *** Because a valid arbitrator's award draws its essence from a [collective bargaining agreement], *** an arbitrator exceeds his powers when the award conflicts with the express terms of the agreement or cannot be derived rationally from the terms of the agreement. ***" (Internal citations omitted.) Summit Cty. Children Serv. Bd. v. Communication Workers of Am., Local 4546, 113 Ohio St.3d 291, 294, 2007-Ohio-1949.
Therefore, the Court of Appeals affirmed the common pleas court and ruled in favor of the employer.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
