For
Plaintiff: Elizabeth A. Wiens, Esq.
For
Defendant: Timothy M. Bliss, Esq.
DECISION
MONTALBANO, J.
Before
this Court is a petition by the Cranston Fire Fighters, IAFF
Local 1363, AFL-CIO (the Union) to vacate an arbitrator's
award in a dispute with the City of Cranston (the City),
concerning pension contributions contained in the
parties' Collective Bargaining Agreement (CBA). The City
moves to confirm the arbitrator's award. Jurisdiction is
pursuant to G.L. 1956 § 28-9-18.
I
Facts
and Travel
The
Union and the City have had a long-standing collective
bargaining relationship. During the 1990s, the City became
concerned about the financial feasibility of its pension
system. Specifically, at that time the City's financial
advisors warned that the costs of paying out pensions were
considerably more than what was being funded by the
employees' contributions. As a result, Cranston's
then-Mayor, Michael Traficante, approached the Union seeking
to make changes to the fire fighters' pension plan.
According to Mayor Traficante, the City wanted the police and
fire fighters to change from the private pension system that
was in place to the retirement plan that was being offered by
the State, the Municipal Employees' Retirement System
(MERS). (Award 4.) Under MERS, the City and the Union learned
that the employees' contribution rate would be ten
percent. Id. at 5.
Once
agreements between the parties were reached, the CBA codified
the contribution rate of ten percent for those employees who
were part of the new MERS system. Id. at 5. Paul
Valletta, the President of the Union, testified that in
negotiating the CBA, the Union sought to lock-in the employee
pension contribution rates for employees entering the MERS
system. Id. Therefore, Section 24.2 was included in
the CBA, which sought to require the City to cover any
increase in the MERS employees' contributions.
Specifically, Section 24.2 provided in pertinent part:
"In the event contributions by members of the Fire
Department to the present pension system are more than . . .
ten (10%) percent for the State of Rhode Island 'Optional
Twenty (20) Year Service Pension' R.I.G.L.
45-21-2-22[1] [sic], with modifications at the effective
date of this Agreement are increased during the term hereof,
the City of Cranston agrees to pay the difference between the
said . . . ten (10%) percent then required to be contributed,
retroactively to the date of such increase over . . . ten
(10%) percent."
In
2011, the State changed the MERS retirement program by
enacting the Rhode Island Retirement Security Act of 2011.
(Award 18.) The Rhode Island Retirement Security Act of 2011
became effective July 1, 2012 and created a new defined
contribution plan for municipal Police and Fire in the State
of Rhode Island, which increased the fire fighters' total
contribution rate to eleven percent. Id. at 7, 18.
However, the Union did not file a grievance at that time.
According to Mr. Valletta, the Union did not file a grievance
because prior to this increase, the fire fighters were
actually contributing a total of 11.5% on their own
accord-with 10% going to the state pension and 1.5% going to
the City to aid the City during a time of financial
uncertainty.[2] (Tr. 43). Therefore, the fire
fighters' deductions actually went down by .5% as a
result of the modification, and the Union elected not to file
a grievance. Id. However, the Union noted in its
memorandum that in July 2015, "the State increased the
[firefighters'] contribution rate to thirteen
percent" with ten percent going to the defined benefit
plan and three percent going to the defined contribution plan
(Union's Mem. 5). See Award, 7-9. It was
pursuant to this increase that the Union filed the present
grievance. (Award 7; Tr. 30.)
Subsequently,
with respect to this increase, the City informed the Union
that it intended to deduct three percent from the fire
fighters' paychecks, both retroactively and
prospectively, in order to pay the three percent mandatory
contribution under the new defined contribution plan.
However, the Union argued that the City was obligated by the
terms of the CBA-specifically, Section 24.2-to pay the
increased pension contributions owed by the fire fighters. As
a result, the Union filed a grievance with the City on August
29, 2015. The grievance was not resolved by the parties, and
pursuant to the terms of the CBA, the Union submitted the
grievance to arbitration.
The
parties had a hearing before Arbitrator Gary Altman (the
Arbitrator) on April 7, 2016. During the arbitration hearing,
the parties stipulated that the issue to be decided was the
disposition of the grievance, and if the grievance was
sustained, what the remedy should be. (Award 2.)
A
The Arbitration Award
In his
decision, the Arbitrator first concluded that the grievance
was procedurally arbitrable, although the grievance was filed
more than thirty days after the event that triggered the
grievance. [3] (Award 16.) The Arbitrator determined that
"even if there is no actual written agreement to waive
time limits[] a party, by its conduct, can be held to have
waived its right to raise timeliness of the grievance at
arbitration." Id. According to the Arbitrator,
the City waived its right to challenge the timeliness of the
Union's grievance by failing to raise the issue at the
hearing. Id.; see also, Elkouri &
Elkouri, How Arbitration Works 5-23 (Kenneth May
ed.) (8th ed. 2016) ("An employer can be deemed to have
waived objections to the union's failure to follow a
contract's procedural requirements, particularly when the
employer cannot prove that it had been prejudiced
thereby."). As the grievance was procedurally
arbitrable, the Arbitrator then addressed the merits of the
matter.
According
to the Arbitrator, Section 24.2 referred specifically to
employee contributions "to the State of Rhode Island
'Optional Twenty (20) Year Service Pension' R.I.G.L.
45-21-2-22." (Award 18.) The Arbitrator found that the
'"Optional Twenty (20) Year Service
Pension"' cited in Section 24.2 was a defined
benefit pension plan, which provided "employees
an annual pension in which the amount of the pension is based
on years of service, and age." Id. at 18. In
contrast, the Arbitrator found the additional three percent
contribution required by the State did not come into
existence until the Rhode Island Retirement Security Act of
2011. Id. Such an increase, the Arbitrator believed,
was a result of the Act's creation of a new mandatory
defined contribution plan. Id. The
Arbitrator concluded that this newly-created defined
contribution plan was a statutorily separate and distinct
pension plan from the plan articulated in §
45-21.2-22-the statutory section referenced in Section 24.2
of the CBA. Id. at 19. Additionally, in his
decision, the Arbitrator further concluded as follows:
"Since this additional defined contribution plan was not
in existence when the parties first negotiated the language
of Section 24.2, it certainly cannot be concluded that this
defined contribution plan was in the minds of the negotiators
when they first agreed to the 10% cap that appears in Section
24.2." Id.
As
such, the Arbitrator concluded that Section 24.2 of the CBA
had not been violated by the City's failure to cover the
new three percent contribution owed by the fire fighters, and
therefore, he denied the grievance. Id. at 19-20.
Following
the Arbitrator's decision, the Union filed the present
petition with this Court. The Union seeks to have the
Arbitrator's Award vacated. In support of its position,
the Union argues that the Arbitrator disregarded Section 24.2
of the CBA, which the Union believes required the City to pay
for the additional three percent contribution. The Union
further argues that the Arbitrator disregarded the
parties' intent in drafting Section 24.2, and therefore,
his decision failed to draw its essence from the contract.
Finally, the Union contends the Arbitrator exceeded his
powers by interpreting and applying a long-expired CBA
between the parties from the 1990s instead of the CBA in
effect when the grievance was filed.[4]
II
Standard
of Review
The
judicial authority to vacate arbitration awards is
statutorily prescribed in § 28-9-18. Pursuant to §
28-9-18, this Court may vacate an ...