Appeals court rejects firefighters' arbitration agreement

Steve Korris Nov. 16, 2007, 2:26am

Arbitrator Zane Lumbley of Monroe, Wash., abandoned his neutrality so outrageously for the benefit of Beaumont firefighters that he hurt every municipal employee in Texas.

His award of three 9 percent pay raises to Local 399 of the International Association of Firefighters forced the Ninth District Court of Appeals to knock down a wall between arbitration and civil justice.

The Ninth District scrapped Lumbley's award on Nov. 8.

Arbitration normally operates in isolation from litigation, but now the Ninth District has set a precedent for judicial review of arbitration awards.

That tips the balance in collective bargaining, as the firefighters feared it would.

Their attorney, John Werner of Beaumont, warned in May that wiping out the award would "spread a chilling effect on municipal labor negotiations throughout the state."

He wrote, "Without the finality and deference accorded to an arbitration award, the whole process is called into question and there will be a powerful temptation for dissatisfied parties to simply view the court system as a chance to seek a 'do over' if they do not like the results that they get the first time around."

The sudden change in structure matters a great deal to the firefighters, for now they must ask for another arbitration. The firefighters agreed not to appeal the court's decisions after a Nov. 13 union meeting and have asked the city to consider a Dec. 3 date to begin new arbitration.

A new arbitrator will have to consider a piece of evidence Lumbley refused to consider – pay scales of firefighters in other Texas cities.

Although Local 399's contract provides for comparison to other cities, Lumbley compared the pay of Beaumont firefighters to the pay of refinery firefighters.

That prompted Elizabeth Pratt, attorney for the city of Beaumont, to compare Lumbley to a baseball umpire who declares after a game that runs scored by left handed batters don't count.

When the firefighters' contract expired two years ago, the union proposed to arbitrate but the city resisted. They then asked Jefferson County District Judge Donald Floyd to compel arbitration.

John Durkay, attorney for the city of Beaumont, wrote, "Local 399 has sought virtually from day one to circumvent collective bargaining, opting instead to bet on an arbitration outcome."

Parties shouldn't arbitrate until they mediate, he argued, "and no reasonable juror could conclude that Local 399 had first submitted to mediation."

State law requires a notice of issues to be arbitrated, he argued, and the firefighters had not served a notice.

A day before Floyd would have held a hearing, the city agreed to arbitrate, with Lumbley, Mike Higgins for the union and Lane Nichols for the city making up the panel.

The panel held a hearing in March 2006, in which the firefighters presented evidence of pay scales for refinery firefighters, but did not include a comparison to other municipal firefighters.

On July 21, 2006, Lumbley awarded annual raises of 9 percent plus increases in contributions to pensions and health insurance and made the first raise retroactive to Oct. 1, 2005.

Two weeks later the city sued the union. Durkay wrote, "The pay award is extremely large, representing an estimated net cost to the city of Beaumont of $10 million over the course of the three year contract period."

Both sides moved for summary judgment, and on Oct. 18, 2006, former District Judge James Mehaffy reluctantly upheld the award.

He said arbitration was "contrary to common law, contrary to all of the safeguards and procedures that Anglo-American law has developed over the centuries."

He signed an order giving the city 30 days to execute a collective bargaining agreement with the firefighters.

The city appealed to the Ninth District, arguing that Lumbley rejected comparisons to other municipal firefighters, although Local 399 had not served notice on that issue.

Pratt argued that "This arbitration was totally unfair" and that Lumbley committed "egregious errors."

She wrote, "…he had no power to act at all, having chosen to ignore the very provisions that created his authority."

Ninth District Justices Hollis Horton, David Gaultney and Charles Kreger agreed with Pratt.

Horton wrote, "In deciding an issue that was not submitted to them, the arbitrators exceeded the scope of authority delegated to them…"

He wrote, "It has long been settled that an arbitration award that exceeds the authority conferred by the arbitration agreement is void."

When a panel unilaterally decides issues that were not submitted, he wrote, they deprive the parties of their contractually required notice.

He quoted a U. S. Supreme Court opinion that an arbitrator "does not sit to dispense his own brand of industrial justice."

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