a state trial court to confirm the arbitration award. Although the trial court confirmed the award, a state appellate court and the state supreme court disagreed. In reviewing the collective bargaining agreement, the Massachusetts Supreme Court refused to enforce the arbitration award, noting that the language of the collective bargaining agreement made it clear that, although the parties could arbitrate a tenure denial, the outcome of the arbitration was not binding.
Grievants challenging a tenure denial may attempt to state claims of procedural noncompliance that actually attack the substance of the tenure decision. For example, in AAUP, University of Toledo Chapter v. University of Toledo, 797 N.E.2d 583 (Oh. Ct. C.P. 2003), an assistant professor denied tenure challenged the negative decision as a procedural violation, stating that the determinations of the department chair and the dean that the professor had produced an insufficient number of publications violated the contract's procedural requirements. The arbitrator ruled that the agreement had not been violated and found for the university, and the plaintiff appealed the award to a state trial court. The court upheld the arbitrator's award, stating that the contract's procedural requirements afforded the chair and the dean the latitude to determine what weight to give a tenure candidate's publications compared with teaching and service, and that the arbitrator did not exceed his authority by interpreting the contract in the university's favor.
The decision of an institution to limit arbitration of employment decisions to only procedural issues rather than to the merits of the decision may persuade a court to allow a plaintiff to litigate the merits of the decision in court—at least when discrimination is alleged. In Brennan v. King, cited above, a faculty handbook provided for arbitration of procedural issues in tenure disputes but specifically provided that the arbitrator was without the power to grant or deny tenure. Because the arbitration procedure did not provide “a forum for the entire resolution” of the candidate's tenure dispute, said the court, the plaintiff did not have to exhaust his arbitral remedies prior to bringing a lawsuit alleging discrimination.
Although arbitration awards are usually final and binding (unless the agreement provides for some other arrangement, such as “advisory arbitration”), courts are reluctant to overturn an arbitrator's award because the parties to the agreement intended it to be final. Nevertheless, courts will overturn arbitration awards that go beyond the power of the arbitrator, that are viewed as harmful to public policy, or that are a result of arbitrator misconduct (such as a conflict of interest or dishonesty). Generally speaking, a court will examine whether the issues as defined by the parties and the arbitrator are within the terms of the agreement. Second, the authority for the arbitrator's award must be rationally derived from the agreement (State System of Higher Education v. State College and University Professional Association, 743 A.2d 405 (Pa. 1999)). (See Luzerne County Community College Association of Higher Education v. Luzerne County Community College, 916 A.2d 731 (Pa. Commw. Ct. 2007), upholding the arbitrator's award of promotion because the agreement included such authority; but see Massachusetts Board of Higher Education v. Massachusetts Teachers Association, 943 N.E.2d 485 (Mass. App. Ct. 2011), holding that an arbitrator had exceeded his authority by ordering a college to hire a grievant.)
If an arbitration award is challenged on public policy grounds, the party seeking to overturn the award must demonstrate that the award is contrary to law or some recognized source of public policy. For example, in Illinois Nurses Association v. Board of Trustees of the University of Illinois, 741 N.E.2d 1014 (Ill. App. Ct. 2000), a nurse had been fired for actions that endangered patient safety. An arbitrator reinstated her, ruling that the hospital had not proved one of the charges and that the nurse's long seniority and otherwise good work record mitigated the severity of her misconduct. The court refused to enforce the arbitrator's award, ruling that the nurse's actions had threatened patient safety and thus her reinstatement violated public policy with respect to patient care.
A Pennsylvania appeals court determined that an arbitration award reinstating a faculty member found responsible for engaging in sexual harassment of students violated public policy and thus refused to enforce it. In Slippery Rock University of Pennsylvania v. Association of Pennsylvania State College and University Faculty, 71 A.3d 353 (Pa. Commw. 2013), the university had terminated a tenured faculty member and department chair who had made allegedly inappropriate sexual comments to students while intoxicated on a field trip to Spain that he was leading. Although the arbitrator credited the professor's defense that his comments were “trash talk” and not sexually harassing, the court found that several of the arbitrator's findings were not rationally derived from the collective bargaining agreement, and also that, given the alleged conduct, which the professor admitted, and an earlier instance of sexual harassment by that individual, reinstating the professor violated public policy.
Also, the Supreme Court of New Hampshire vacated an arbitration award that would have reinstated a tenured professor who had lowered evaluations that students had given another instructor. In University System of New Hampshire Board of Trustees v. Dorfsman, 130 A.3d 1219 (N.H. 2015), the university had terminated the professor on the grounds of moral turpitude—one of the “just cause” reasons for termination in the collective bargaining agreement. Although the arbitrator found that the misconduct did constitute moral turpitude, he determined that the termination did not comport with the requirements of just cause and ordered the professor reinstated. The court ruled that the arbitrator acted beyond the scope of his authority; his finding that the professor's misconduct constituted moral turpitude required the arbitrator to uphold the termination.
Arbitration clauses are appearing in student enrollment agreements, particularly those used by for-profit proprietary schools. To date, most students who have signed such agreements, but who have then attempted to avoid arbitration and pursue class action claims for fraud, breach of contract, and other state law claims, have been unsuccessful. The decision of the U.S. Supreme Court in AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), which ruled that arbitration clauses containing waivers of class action claims, both in court and in arbitration, were not preempted by the Federal Arbitration Act, is in large part responsible for this lack of success. For example, in Miller v. Corinthian Colleges, Inc., 769 F. Supp. 2d 1336 (D. Utah 2011), and Montgomery v. Corinthian Colleges, Inc., 2011 U.S. Dist. LEXIS 31651 (N.D. Ill. March 25, 2011), students who had enrolled at Everest College, owned by Corinthian Colleges, signed arbitration agreements that not only limited the students to arbitration in the event of a dispute but also included a waiver of their right to file class action lawsuits or demands for arbitration. The students later attempted to bring class action lawsuits against Corinthian under state consumer protection laws for allegedly deceptive practices and promises. In both cases, federal trial courts ruled that the arbitration clauses were valid and that the only remedy was individual arbitration. See also Bernal v. Burnett and Westwood College, 793 F. Supp. 2d 1280 (D. Colo. 2011) (same result).
Students in one case had some success escaping the arbitration clause they had signed. In Rude v. NUCO Education Corp., 2011 Ohio App. LEXIS 5605 (Ohio Ct. App. December 30, 2011), a state appellate court ruled that an arbitration clause in the enrollment agreement of a nursing school was both procedurally and substantively unconscionable as a contract of adhesion. But in Best v. Education Affiliates, Inc., 82 So.3d 143 (Fla. Dist. Ct. App. 2012), the court ruled that the arbitrator, not the court, must determine whether the enrollment agreement's arbitration clause was invalid because of its limits on remedies for students.
Faculty and administrators should carefully weigh the benefits and challenges of ADR systems when considering whether to implement such innovations as mediation, arbitration, or the creation of a campus ombudsperson. Although these systems are useful in channeling disputes away from the courts, they require extensive internal processes, additional staff, and careful adherence to procedural requirements in order to be effective.
Section 2.4. Institutional Management of Liability Risk6
2.4.1
