January 05, 2018 Practice Points

Arbitrator Not Required to Follow Own Precedent

By Michael S. Oberman

In Rite Aid of New York, Inc. v. 1199 SEIU United Healthcare Workers East, 16-3342-cv(August 22, 2017), the Second Circuit issued a summary order that affirmed the denial of a petition to vacate an award under the Labor Management Relations Act. The court rejected a challenge that the arbitrator exceeded his power and ignored the collective bargaining agreement (CBA) in his application of a contract provision. In that regard, the court said: "We cannot ourselves reweigh the merits of the grievance submitted to the arbitrator, and we cannot conclude that his reasoning in reaching the challenged conclusion was insufficiently 'colorable' to 'withstand judicial scrutiny'" (at p. 4, citing National Football League Mgmt. Council v. Nat'l Football League Players Ass'n, 820 F. 3d 527, 539 (2d Cir. 2016)).

The opinion went on to address a second and more unusual challenge to the award—that the arbitrator had interpreted the CBA differently than he had in a prior case. In that regard, Rite Aid contended that "the arbitrator's construction of the CBA provision '[d]eviated [f]rom' his reasoning in a different arbitration." (at p. 5, quoting App. Br.). The court responded: "Even if we were to agree with Rite Aid's understanding of the other arbitration, the argument is defeated by precedent rejecting the notion that 'an arbitrator has a duty to follow arbitral precedent,' or that 'failure to do is a reason to vacate' an arbitration award." (at p. 5, citing Wackenhut Corp. v. Amalgamated Local 515, 126 F.3d 29, 32 (2d Cir. 1997)).

Michael S. Oberman is counsel with Kramer Levin Naftalis & Frankel LLP in New York, New York.

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