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University of Alaska v. Alaska Community Colleges' Federation of Teachers, Local 2404 (2/21/2003) sp-5667
University of Alaska v. Alaska Community Colleges' Federation of Teachers, Local 2404 (2/21/2003) sp-5667
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
email corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
UNIVERSITY OF ALASKA, )
) Supreme Court No. S-9732
Appellant, )
) Superior Court No.
v. )
3AN-98-11406 CI
)
ALASKA COMMUNITY COLLEGES )
FEDERATION OF TEACHERS, ) O P I N I O N
LOCAL 2404, )
) [No. 5667 - February 21,
2003]
Appellee. )
_____________________________________)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, John E. Reese, Judge.
Appearances: Thomas M. Daniel, Perkins Coie,
LLP, Anchorage, for Appellant. William K.
Jermain, Jermain, Dunnagan & Owens, P.C.,
Anchorage, for Appellee.
Before: Matthews, Eastaugh, Bryner, and
Carpeneti, Justices. [Fabe, Chief Justice,
not participating.]
CARPENETI, Justice.
I. INTRODUCTION
I. The University of Alaska Anchorage granted pay
increases to non-represented faculty members, but not to union
members, to remedy perceived salary inequities. The union filed
a grievance that progressed through arbitration. The arbitrator
found that the university discriminated against union members by
failing to include the members in the equity distributions. The
university appealed to the superior court, which confirmed the
arbitrators award. Because the arbitrator erred in his analysis
of the nondiscrimination clause of the collective bargaining
agreement, we reverse.
II. FACTS AND PROCEEDINGS
A. Facts
In 1992 the University of Alaska entered into a
collective bargaining agreement (CBA) with the Alaska Community
Colleges Federation of Teachers, Local 2404. The agreement
covered faculty members teaching vocational-technical or lower
division courses. Under section 7.1 of the CBA, salaries were
set by the Board of Regents policy in effect as of May 8, 1992.
Under this policy, represented and non-represented employees were
entitled to 3% salary increases subject to legislative approval.
Soon after entering into the CBA, the university faced
funding shortfalls. On August 30, 1993, perceiv[ing a] financial
crisis, the regents indefinitely suspended the annual 3% salary
increase for all employees, union and non-union. The union filed
a grievance, arguing that the suspension of the 3% salary
increase was in violation of the CBA. This grievance resulted in
arbitration before William Corbett. Based on the provisions of
the CBA, Corbett ruled that union employees were insulated from a
decision of the regents to suspend the annual raises.
Accordingly, the non-represented employees did not receive the
annual salary increase, while the union employees did receive the
raise.
In August 1995 the regents revised the compensation
policy and authorized the administration to develop new
regulations to implement the policy. Under the new policy,
chancellors were directed to set aside an amount equal to 2.6% of
the cumulative value of regular faculty salaries with 1% of that
amount earmarked for promotion, retention offers, equity salary
adjustments, and extraordinary performance. The remaining 1.6%
of the set-aside funds was to be used to fund annual performance-
based increases.
As a part of the changes in the compensation
guidelines, Chancellor Lee Gorsuch of the Anchorage campus
commissioned a study (the Lampman study) in 1996 to identify
employees who were underpaid relative to their peers. The study
was limited to non-union employees. In response to the studys
findings, underpaid non-union employees received a pay adjustment
of up to 2.6%. Union employees, who were already receiving a 3%
annual increase pursuant to the Corbett decision, did not receive
any part of this 2.6% increase.
B. Proceedings
In 1996 the union and six female faculty members, on
their own behalf and on behalf of similarly situated faculty
members, filed a grievance (grievance 96-40) under step one of
the grievance procedure in the CBA. The grievance alleged that
the university had discriminated against the women by paying them
salaries lower than those for comparable male faculty members and
that the university had violated the non-discrimination clause of
the CBA by failing to include union members in the study to
identify and compensate underpaid employees.
In 1997 the union filed a second grievance (grievance
97-43) alleging various violations of the CBA. These allegations
included claims that the union members were entitled to the same
salary increase as non-represented employees and that the
university failed to request funds from the legislature for
salary increases for union members. A new collective bargaining
agreement was entered into in 1997 in which the parties agreed to
settle grievance 97-43 on a non-precedent setting basis by
payment of the salary increases to the 26 Faculty Members to the
grievance.
A hearing was held on grievance 96-40 before Chancellor
Gorsuch, as provided in step two of the CBAs grievance
procedures. Chancellor Gorsuch denied the unions grievance in
January 1997. Chancellor Gorsuch decided that the grievance was
untimely because the CBA required that a grievance be filed
within thirty days after the employee became aware of the alleged
conduct and the union failed to do so. Chancellor Gorsuch went
on to state that, even if the grievance had been timely, the
evidence was insufficient to support claims of gender and union
discrimination. However, Chancellor Gorsuch did instruct the
university administrative staff to conduct a review of the
salaries of represented employees that used a methodology similar
to that used in the Lampman study.
The union appealed the chancellors opinion to
Arbitrator George Lehleitner, as provided in step three of the
CBAs grievance procedures. Lehleitner issued his opinion and
award on September 17, 1998. Lehleitner decided that the union
failed to establish an actionable claim of gender discrimination,
but that the university did violate the terms of the CBA by
excluding the union from the Lampman study and the distributions
arising from the study. On the issue of timeliness of the
grievance, Lehleitner decided that the union failed to file the
grievance within thirty days of discovering the gender
discrimination, but that the union did file the grievance within
a reasonable time after discovering that the Lampman study did
not include represented employees.
Lehleitner also decided that, in settling grievance 97-
43, the issue of whether the university violated the CBA by
failing to request funding from the legislature for 1996
increases for represented faculty pursuant to the Lampman study
was settled and that the settling of grievance 97-43 did not
settle grievance 96-40. Lehleitner ordered the university to
undertake a separate Lampman type study of the [union] faculty
and then apply the 2.6% equity adjustment monies to correct
whatever inequalities are identified retroactive to January 1,
1996.
The university filed a motion to vacate or modify the
arbitrators award in superior court, as arguably permitted by
part four of grievance step three in the CBA, which states that
the arbitrators decision could be appealed as provided by law.
Before the superior court, the university argued that the
arbitrator had disregarded the law and exceeded his authority,
had impermissibly rewritten the CBA, and had addressed questions
that were not before him. For its part, the union asked the
superior court to confirm the arbitrators award with interest
from the date of the award. Superior Court Judge John E. Reese
rejected the universitys arguments, confirmed the arbitrators
award, and directed the university to pay the award with interest
accrued.
The university appeals the superior courts decision
confirming the arbitrators award.
III. STANDARD OF REVIEW
We review the superior courts review of the arbitrators
decision de novo as it deals with questions of law and contract
interpretation.1 On questions of law, we adopt the rule of law
that is most persuasive in light of precedent, reason, and
policy.2 The appropriate standard of review of the
arbitrators decision is a contested issue. The union argues that
the CBA which provides that [t]he decision of the arbitrator
shall be . . . appealable as provided by law should be
interpreted as incorporating the Uniform Arbitration Acts3
provisions for review. The Uniform Arbitration Act (the Act)
provides the most highly deferential standard. Under it, the
arbitrators findings of fact and law are not reviewable;4
judicial review may only be had for fraud, corruption, and the
like.5 The university reads the CBAs provision that the
arbitrators award is appealable as provided by law differently
than the union. According to the university, this provision
rejects incorporation of the Act and instead requires application
of the common law to appeals of arbitrators decisions.
Accordingly, the university argues for a less deferential
standard of review than that provided under the Act. Because
arbitration is compulsory in this case, the university claims
that the abuse of discretion standard should apply.
We agree with the university that the CBA does not
incorporate the Act and its fraud/corruption standard. In
specifying the law applicable to step three grievance procedures,
the CBA provides that such procedures will be resolved by
arbitration under AS 09.43.010-180[6] and as provided by the
Agreement. But on the issue of appeal of the arbitrators award,
the CBA states simply that [t]he decision of the arbitrator shall
be . . . appealable as provided by law. Had the drafters of the
CBA wished to limit appellate review to that allowed under the
Act, they would have used the kind of language that they used in
setting out the law applicable to step 3 grievance procedures;
they would have stated that appellate review is available under
the Uniform Actor under AS 09.43.010-180 rather than as provided
by law.
Our decision that the fraud/corruption standard does
not apply leaves the question of what standard to apply. While
we have held that, in general, grievance arbitration is reviewed
under the gross error standard of review,7 we have not decided
whether there should be a different standard for compulsory
grievance arbitration, the present case, as opposed to non-
compulsory grievance arbitration. However, we need not decide in
this case whether the more deferential gross error standard or
the less deferential arbitrary and capricious standard of review
applies, for both tests here lead to the same result. As set out
in part IV, we must reverse even under the more deferential
gross error standard. In these circumstances, as we have done
before, we leave the question open because the facts of the case
require a reversal under either standard:
In State v. Public Safety Employees
Association, 798 P.2d 1281 (Alaska 1990), we
were not required to address the question
whether compulsory grievance arbitration
proceedings might be subject to a standard of
review other than gross error. PSEA [v.
State, 895 P.2d 980 (Alaska 1995)] does not
resolve that question, but does note that
this court has applied the gross error
standard to grievance arbitration
proceedings. See PSEA, at 984. We choose
not to address in this case whether
compulsory grievance arbitration proceedings
might be subject to a standard of review
other than gross error, as we again are not
required to do so.[8]
IV. DISCUSSION
The Arbitrator Misapplied Section 3.2 of the CBA.
The university argues that, in order to rule
against it, Lehleitner was obligated to find that it illegally
discriminated against union employees when it offered salary
increases to non-union employees without making similar payments
to union employees. In the context of this case, Lehleitner was
required to find that the universitys acts constituted
discrimination prohibited by law.
But Lehleitners decision includes no such finding. He
acknowledges that his analysis begins and pretty much ends with
the Non Discrimination article contained in the [CBA]. The non-
discrimination article provides:
Neither the University nor the Union shall
discriminate on any basis prohibited by law,
including union-related activity.
In order to constitute a violation of this clause, activity must
consist of discrimination already prohibited by law.9
The only discrimination that the arbitrator found was
that, in the course of administering the university, its
officials drew distinctions between union and non-union
employees. Indeed, the arbitrator specifically found no evidence
of bad faith on the universitys part: He stated that the
university in attempting to redress past salary inequities acted
in a fair and equitable manner. As Lehleitner did not find any
evidence of discrimination prohibited by law or of any anti-union
animus, it was gross error to find a violation of the
nondiscrimination clause of the CBA.
The arbitrator grossly erred in his analysis of section
3.2. Therefore, we need not reach the other issues raised by the
university.
V. CONCLUSION
Because the arbitrator misapplied section 3.2 of the
CBA, we REVERSE the award and REMAND with instructions that the
grievance be dismissed. The university was entitled to take
steps in good faith to address issues of pay inequity without
risking an arbitrators decision that it had violated the non-
discrimination clause of the CBA.
_______________________________
1 Marathon Oil Co. v. ARCO Alaska, Inc., 972 P.2d 595,
600 (Alaska 1999); Ahtna, Inc. v. Ebasco Constructors, Inc., 894
P.2d 657, 660 (Alaska 1995).
2 Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
3 AS 09.43.010-180.
4 Ahtna, Inc., 894 P.2d at 660-61.
5 AS 09.43.120 provides that a court may vacate an award
only if it was procured by fraud or other undue means, if there
was evident partiality or corruption in any of the arbitrators or
misconduct prejudicing the rights of a party, if the arbitrators
exceeded their powers, or if there were other substantial
irregularities.
6 AS 09.43.010-180 is the entirety of the Uniform
Arbitration Act.
7 Pub. Safety Employees Assn, Local 92 v. State, 798 P.2d
1281, 1284 (Alaska 1990). Gross error is defined as only those
mistakes which are both obvious and significant. Pub. Safety
Employees Assn, Local 92 v. State, 895 P.2d 980, 984 (Alaska
1995), quoting City of Fairbanks v. Rice, 628 P.2d 565, 567
(Alaska 1981).
8 Pub. Safety Employees Assn, Local 92 v. State, 902 P.2d
1334, 1336 n.2 (Alaska 1995).
9 Differing treatment based on union membership is not
per se impermissible, but is prohibited by law under certain
circumstances. For example, under AS 23.40.110(a)(3), it is a
violation of the Public Employment Relations Act to discriminate
against public employees in order to encourage or discourage
union membership. In Alaska Community Colleges Federation of
Teachers, Local No. 2404 v. University of Alaska, 669 P.2d 1299
(Alaska 1983), we held that, to establish a violation of AS
23.40.110(a), the employers action generally must have been based
on an anti-union motive. Id. at 1307. We stated that [o]nly
where the employers conduct is inherently destructive of
important employee interests is proof of an antiunion motive
unnecessary under that section. Id.
