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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. 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.