The issue in this certified appeal
The following facts are undisputed. The plaintiff and the defendant negotiated a collective bargaining agreement, effective July 1, 2003, to June 30, 2008. Article XIV, § 11.5, of the collective bargaining agreement provides: "The collective bargaining process will be the sole means for submitting requests for upgrading and/or title changes." Article XIV, § 14.9(F), of the collective bargaining agreement provides: "Effective [July 1, 2005] the parties agree that arbitration shall be used to redress all upgrades that have not been resolved in negotiations."
In January, 2006, the plaintiff and the defendant negotiated a number of upgrades that increased the pay of certain city employees. New Britain v. AFSCME, Council 4, Local 1186, supra, 121 Conn.App. at 566, 997 A.2d 560. The foremen did not receive upgrades during these negotiations, but the subordinate employees whom they supervise did.
Thereafter, it was discovered that, as a result of these upgrades, the foremen were paid at a rate less than 5 percent above the rate paid to the subordinates, in violation of the rules of the city's civil service commission. The civil service rule at issue provides that persons classified as foremen shall be paid at least 5 percent more than the employees whom they supervise. The foremen, as a class, filed an unfair labor
The matter was thereafter submitted to arbitration in two phases. In the first submission to the state board of mediation and arbitration (board), the plaintiff argued that the matter was not arbitrable at all. New Britain v. AFSCME, Council 4, Local 1186, supra, 121 Conn.App. at 566-67, 997 A.2d 560. In support of its claim, the plaintiff referred the arbitrators to the arbitration provision in the memorandum of understanding. Id. Specifically, the plaintiff claimed that it never agreed to arbitration because the memorandum of understanding specifically prohibited arbitration regarding upgrades not resolved therein, and the settlement agreement specifically reserved the plaintiff's right to raise the defense of arbitrability.
The board issued an award concluding that the matter was arbitrable. While recognizing that no foremen positions were at issue in the upgrades that had been negotiated for subordinates, the board concluded that it was "very questionable whether the prohibition against the use of arbitration [in the memorandum of understanding] was meant to concern the unforeseen consequences of an automatic upgrade to the foremen through reliance on the [c]ivil [s]ervice [r]ules." The board also concluded, in light of the settlement agreement, that it would be unreasonable to conclude that the matter was not arbitrable.
The parties then moved to the second phase of the arbitration. After hearing evidence, the board determined that the civil service rule mandating a 5 percent pay differential for supervisors applied in the present case. New Britain v. AFSCME, Council 4, Local 1186, supra, 121 Conn.App. at 567-68, 997 A.2d 560. The board further determined that the civil service rule did not conflict with the provisions of the parties' collective bargaining agreement. Id., at 568, 997 A.2d 560. The board thus concluded in the defendant's favor that the parties intended to incorporate the language of the civil service rules into their collective bargaining agreement, and that the two provisions should therefore be read and applied in concert. Id.
On February 29, 2008, the plaintiff filed an application to vacate the arbitration award pursuant to General Statutes § 52-418(a)(4),
The plaintiff appealed to the Appellate Court, which, applying the positive assurance test,
The plaintiff claims that the Appellate Court improperly affirmed the trial court's denial of its motion to vacate. First, the plaintiff claims that collective bargaining negotiations were a condition precedent to arbitration under the collective bargaining agreement and the memorandum of understanding, and that the mandatory negotiations did not take place. Second, the plaintiff asserts that the memorandum of understanding clearly evidenced the parties' intent not to arbitrate this dispute and the settlement agreement merely allowed the defendant to file a grievance in arbitration while specifically reserving the plaintiff's right to raise nonarbitrability as a defense. The defendant, on the other hand, claims that the condition precedent was satisfied when the parties negotiated the upgrades set forth in the memorandum of understanding, and, regardless, the plaintiff subsequently agreed to arbitrate the pay differential dispute in the subsequent settlement agreement.
We first determine our standard of review. In doing so, we note that both parties assert in their briefs that our standard of review in this case is limited. Indeed, when reviewing a denial of a motion
"[A party] can be compelled to arbitrate a dispute only if, to the extent that, and in the manner which, [it] has agreed so to do. . . . Because arbitration is based on a contractual relationship, a party who has not consented cannot be forced to arbitrate a dispute." (Citation omitted; internal quotation marks omitted.) MBNA America Bank, N.A. v. Boata, 283 Conn. 381, 386, 926 A.2d 1035 (2007). We recently noted that three distinct issues arise in cases such as the present one: (1) whether the parties agreed to arbitrate the underlying merits of the case, i.e., whether the matter is arbitrable; (2) who has the primary authority to decide that question—the arbitrator or the court; and (3) if the court has the primary authority to decide that question, whether the parties engaged in conduct that precludes judicial review of the arbitrator's decision on that matter.
In accordance with these principles, in determining our standard of review, we first examine who had the primary authority to resolve the question of arbitrability in the present case: the court or the arbitrators. It is well established that, absent the parties' contrary intent, it is the court that has the primary authority to determine whether a particular dispute is arbitrable, not the arbitrators. Id., at 714, 987 A.2d 348. Thus, courts generally review challenges to an arbitrator's determination of arbitrability de novo.
Because, however, "[a]rbitration is a creature of contract"; (internal quotation marks omitted) State v. Philip Morris, Inc., 289 Conn. 633, 642, 959 A.2d 997 (2008); parties may agree to arbitrate the question of arbitrability; White v. Kampner, supra, 229 Conn. at 472, 641 A.2d 1381.
We review the documents at issue in the present case in chronological order. First, the arbitration provision in the collective bargaining agreement clearly did not contain an agreement by the parties to submit the issue of arbitrability to the arbitrator's sole authority. Likewise, that provision did not contain broad terms from which we may infer such intent. Rather, by providing in article XIV, § 14.9(F), of the collective bargaining agreement that "arbitration shall be used to redress all upgrades that have not been resolved in negotiations"; (emphasis added); the arbitration provision limits the submission to the arbitrator to the merits of the dispute. According to this provision, the arbitrator is given the authority to resolve disputes regarding pay upgrades, but not the overall question of arbitrability. The memorandum of understanding further restricted the scope of the arbitrator and indicated in no way that the parties intended to submit the question of arbitrability to the arbitrator for final determination. Finally, the settlement agreement explicitly indicated only that the defendant could file a grievance in order to arbitrate the underlying question of the civil service rule violation.
The plaintiff asserts two theories in support of its appeal. First, it claims that the collective bargaining agreement and the memorandum of understanding require negotiations as a condition precedent to arbitration. Second, it claims that the memorandum of understanding evidences the parties' intent not to arbitrate the foremen's dispute, and that the settlement agreement did not evidence a contrary intent. Because the record reveals that the plaintiff did not raise its first claim before the arbitrators, we conclude that the plaintiff did not preserve this claim. With respect to its second claim, however, the plaintiff argued before the arbitrators that the memorandum of understanding clearly
As we have indicated, the plaintiff never waived its right to judicial review by agreeing to have the issue of arbitrability decided solely by the arbitrators. In Bacon Construction Co. v. Dept. of Public Works, supra, 294 Conn. at 710, 987 A.2d 348, we concluded that the defendant waived its right to judicial review by agreeing that the arbitrator would be the final authority on the question of arbitrability. Specifically, in its answering statement to the arbitrator, the defendant in that case had stated: "The actual issues in this proceeding are [the plaintiff's] delay and disruption claims, and [the defendant's] special defenses that: [the plaintiff's] claims are barred by the doctrine of sovereign immunity [and thus are not arbitrable]. . . . Those issues may be heard and fully and finally determined by this arbitration." (Emphasis in original; internal quotation marks omitted.) Id., at 711, 987 A.2d 348. This unequivocal declaration by the defendant that the arbitrator would determine arbitrability "`fully and finally,'" demonstrated that "the defendant intended to be bound by the arbitrator's decision and constitute[d] a waiver of judicial review of the issue of arbitrability." Id. Contrastingly, as we noted previously, the settlement agreement in the present case did not evidence any intention by the parties to submit the question of arbitrability to the arbitrators for their full and final decision on the matter. Finding no indication that the parties intended to contract out of judicial review in the present case, we review the plaintiff's claim de novo in accordance with the principle that courts have plenary review over the question of arbitrability absent a showing of the parties' contrary intent.
Turning to the merits of the appeal, the plaintiff claims that it never agreed to arbitrate the foremen's dispute. Specifically, the plaintiff contends that the memorandum of understanding evidenced its intention to avoid arbitration, and that the settlement agreement preserved its right to raise the defense of nonarbitrability. The defendant responds that, regardless of the memorandum of understanding, the settlement agreement contains the plaintiff's agreement to arbitrate the foremen's dispute. We agree with the plaintiff.
"[A] person can be compelled to arbitrate a dispute only if, to the extent that, and in the manner which, he has agreed so to do. . . . Because arbitration is based on a contractual relationship, a party who has not consented cannot be forced to arbitrate a dispute." (Citation omitted; internal quotation marks omitted.) MBNA America Bank, N.A. v. Boata, supra, 283 Conn. at 386, 926 A.2d 1035. Nevertheless, "[b]ecause we favor arbitration, we will defer to this alternative method of dispute resolution if the contractual arbitration provisions fall within the grey area of arbitrability, employing the positive assurance test as set out in United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). Under this test, judicial inquiry . . . must be strictly confined to the question whether the reluctant party did agree to arbitrate the grievance. . . . An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage." (Internal quotation marks omitted.) Board of Education
In analyzing the plaintiff's claims, the Appellate Court concluded that, "[a]lthough the parties originally stated that arbitration would not be used to redress the issue of upgrades, they later signed. . . [the] settlement agreement. . . ." New Britain v. AFSCME, Council 4, Local 1186, supra, 121 Conn.App. at 570, 997 A.2d 560. On the basis of its reading of the settlement agreement, the Appellate Court concluded that, "eight months after agreeing that arbitration should not be used to redress the upgrades, [the plaintiff] agreed to arbitrate the foremen's grievance. . . ." Id. The Appellate Court thus concluded that it could not say "with positive assurance that the parties intended to exclude the issue from arbitration." Id. Upon review of the contested documents, we agree that the parties agreed initially in the memorandum of understanding not to arbitrate the foremen's dispute, but we disagree that the settlement agreement prevents us from concluding with positive assurance that the plaintiff never agreed to arbitration.
Specifically, we note that the memorandum of understanding contained an agreement between the parties that "arbitration [would] NOT be used to redress all upgrades that ha[d] not been resolved in the negotiations." The parties thus explicitly agreed not to arbitrate any disputes involving upgrades that were not the subject of the negotiations memorialized in the memorandum of understanding. Because the foremen were not upgraded in these negotiations, their pay differential dispute falls within the class of disputes that the parties specifically agreed not to arbitrate.
Subsequently, in the settlement agreement the parties agreed that "the defendant may file a grievance regarding the issue of [f]oremen being paid less than 5 [percent] more than their subordinates." The agreement further provides that the grievance could be filed directly at arbitration, and that "either party may raise any claim or defense they could have made had they filed at step [one], including the issue of arbitrability but not including timeliness." Although the first clause in this settlement agreement indicated that the parties agreed that the defendant could file a grievance directly in arbitration, it clearly provides that the plaintiff did not concede the issue of arbitrability. Furthermore, reading the settlement agreement in its entirety, the second clause actually indicates that the plaintiff intended to preserve the defense of nonarbitrability, presumably because it planned to continue asserting that claim. We thus conclude that the settlement agreement, by its plain language, did not alter the parties' agreement to avoid arbitration that was contained in the memorandum of understanding, but, rather, preserved the plaintiff's right to assert its defense of nonarbitrability. Because the plaintiff did not agree to arbitrate the foremen's dispute, it could not be compelled to submit to arbitration.
The judgment of the Appellate Court is reversed and the case is remanded to that court with direction to reverse the judgment of the trial court and to remand the case to the trial court with direction to grant the plaintiff's application to vacate the arbitration award.
In this opinion NORCOTT, ZARELLA and McLACHLAN, Js., concurred.
HARPER, J., with whom, PALMER, J., joins, dissenting.
In considering whether the plaintiff, the city of New Britain, was entitled to have the arbitration award in favor of the
The plaintiff seeks to vacate the arbitration award in favor of the defendant on the ground that the dispute between the parties, namely, whether the plaintiff violated the collective bargaining agreement by failing to upgrade the position of foremen to conform with civil service rules requiring foremen to be paid at least 5 percent more than their subordinates, is not arbitrable.
A determination of whether an issue is arbitrable can implicate three related questions: "(1) whether the matter is arbitrable;
This specific principle proceeds from a general recognition that "[a]rbitration is a creature of contract between the parties and its autonomy requires a minimum of judicial intrusion. . . . The parties themselves, by the agreement of the submission, define the powers of the arbitrator." (Internal quotation marks omitted.) Office of Labor Relations v. New England Health Care Employees Union, District 1199, AFL-CIO, 288 Conn. 223, 228-29, 951 A.2d 1249 (2008).
Therefore, we must consider whether, in the present case, the parties contractually agreed to submit to the arbitrators their dispute as to whether the foremen pay upgrades is arbitrable. Because the parties executed several agreements, I briefly outline the course of the parties' dealings as revealed by the following undisputed facts in the record. First, the parties entered into a collective bargaining agreement, which provides for a multi step internal grievance procedure and for arbitration of grievances on which satisfactory resolution has not been reached; both procedures must be initiated within specified time limits. Article XIV, § 14.8, of the collective bargaining agreement
Thereafter, the defendant filed an unfair labor practice complaint with the state board of labor relations, claiming that the plaintiff had failed to bargain in good faith by violating the collective bargaining agreement because the recent pay upgrades had resulted in a violation of the city's civil service rules, which the defendant contended had been incorporated into the collective bargaining agreement, requiring that foremen (whose pay had not been the subject of negotiation and had not been upgraded) be paid at least 5 percent more than subordinates. Weeks later, while that complaint was pending, the parties entered into a settlement agreement, which provides as follows: "The [plaintiff] hereby agrees that [the defendant] may file a grievance regarding the issue of [f]oremen being paid less than 5 [percent] more than their subordinates. This [g]rievance shall be filed directly to arbitration.
"The [plaintiff] and [the defendant] further agree that either party may raise any claim or defense they could otherwise have made had they filed at step [one], including the issue of arbitrability but not including timeliness.
"In consideration of the above, the [defendant] agrees to the withdrawal and closing of [the unfair labor practice complaint]." (Emphasis added.)
It is clear that neither the collective bargaining agreement nor the memorandum of understanding vests the arbitrators with authority to decide a dispute as to arbitrability.
The unusual specificity and concreteness of the settlement agreement sets this case apart in an important respect from the usual arbitration clause. The majority has cited First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995), for the principle that "[c]ourts should not assume that the parties agreed to arbitrate arbitrability unless there is `clea[r] and unmistakabl[e]' evidence that they did so."
Reinforcing the clear significance of the text of the settlement agreement, the course of the parties' dealings in this case forecloses any conclusion other than that the parties intended to submit to the arbitrators the issue of arbitrability. The settlement agreement brought to a close formal proceedings initiated by the defendant and moved the dispute to a new forum— arbitration—for resolution. To infer from this course of events that the parties intentionally transferred their dispute from a forum that was able to resolve the defendant's grievance to a forum that they knew was incapable of resolving even the threshold issue in that matter is to foist on the parties an intent that they could not possibly, in good faith, have held.
Finally, I draw attention to the course of litigation in the present case. Not only has the plaintiff consistently framed its contentions in a manner that unequivocally demonstrates that it does not challenge the arbitrators' authority to decide the question of arbitrability, the plaintiff also has made judicial admissions attesting to this grant of authority. Specifically, in its application to vacate the arbitration award submitted to the trial court, the plaintiff stated: "[O]n August 3, 2007, the parties submitted the issue of arbitrability to the arbitrator[s]." (Emphasis added.) In that application to vacate, the plaintiff further contended that, because the grievance was not arbitrable under the memorandum of understanding, "[t]he [arbitrators], by retaining jurisdiction of the award, did not issue a final and definite award as required by [§ 52-418]." (Emphasis added.) The plaintiff's latter assertion clearly presupposes that the arbitrators possessed initial "jurisdiction"
I recognize that the settlement agreement lacks some of the linguistic hallmarks of agreements that have been found to clearly and unmistakably vest the arbitrator with authority to arbitrate arbitrability. The settlement agreement does not vest the arbitrator with authority to resolve "any and all" disputes; see footnote 5 of this dissenting opinion; or provide that the grievance shall be "decided," "resolved" or "adjudicated" by the arbitrators or "committed to" the panel.
Having concluded that the arbitrators were contractually authorized to determine whether the defendant's grievance was arbitrable, I turn to the plaintiff's claim that the Appellate Court improperly affirmed the trial court's judgment denying the plaintiff's motion to vacate the award on the ground that the dispute at issue was not arbitrable. Specifically, the plaintiff contends: (1) in light of the memorandum of understanding expressly stating that "arbitration shall NOT be used to redress
The Appellate Court, like the majority in this certified appeal, applied the positive assurance test in reaching its conclusion. Under that test, "[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage." (Internal quotation marks omitted.) White v. Kampner, supra, 229 Conn. at 473, 641 A.2d 1381, quoting United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). The positive assurance test is applied, however, when courts determine, in the first instance, whether a dispute is arbitrable. See, e.g., Board of Education v. Nonnewaug Teachers' Assn., 273 Conn. 28, 30-32, 866 A.2d 1252 (2005) (action for declaratory judgment that dispute is not arbitrable); White v. Kampner, supra, at 472-73, 641 A.2d 1381 (motion to vacate award where court determined that arbitrator lacked authority to determine arbitrability); Welch Group, Inc. v. Creative Drywall, Inc., 215 Conn. 464, 467, 576 A.2d 153 (1990) (plaintiff's application for injunction restraining defendant from proceeding with arbitration); John A. Errichetti Associates v. Boutin, 183 Conn. 481, 488-89, 439 A.2d 416 (1981) (plaintiff's application for order directing defendant to proceed with arbitration); Board of Education v. Frey, 174 Conn. 578, 581-82, 392 A.2d 466 (1978) (action for injunction staying arbitration). That test is inapplicable when the threshold question of arbitrability has been committed to the arbitrator. See Bridgeport v. Bridgeport Police Local 1159, AFSCME, Council 15, 183 Conn. 102, 106, 438 A.2d 1171 (1981) ("[o]nce the trial court has determined that arbitrability is to be decided by the arbitrators, there is no need for it to apply the `positive assurance' test").
When the parties have agreed to vest the arbitrator with primary authority to decide whether the dispute is arbitrable, as in the present case, we generally defer to the arbitrator's determinations of fact and law, vacating the award only on narrow grounds.
The plaintiff cites § 52-418(a)(4) as the basis for its application to vacate, under which "the arbitrators have exceeded their powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made." The plaintiff's central complaint is that the arbitrators exceeded their power by forcing the parties to arbitrate the issue of foremen's pay when the parties had signed a memorandum of understanding, following a round of wage negotiations, agreeing "that arbitration shall NOT be used to redress all upgrades that have not
The plaintiff's claim suffers from several fatal defects. First, "[w]e have explained that, [i]n our construction of § 52-418(a)(4), we have, as a general matter, looked to a comparison of the award with the submission to determine whether the arbitrators have exceeded their powers." (Internal quotation marks omitted.) Harty v. Cantor Fitzgerald & Co., 275 Conn. 72, 84, 881 A.2d 139 (2005); see also Board of Education v. AFSCME, Council 4, Local 287, 195 Conn. 266, 271, 487 A.2d 553 (1985) ("[t]he memorandum of decision may ... be examined to determine if an arbitrator has exceeded his or her authority by making an award beyond the scope of the submission"). The plaintiff does not contend, however, that the award fails to conform to the submission, and there appears to be no basis to make such an assertion. See footnote 2 of this dissenting opinion. Ordinarily, if an issue is submitted to an arbitrator, this court will not second-guess the reasoning behind the arbitrator's resolution of that issue. Garrity v. McCaskey, 223 Conn. 1, 12, 612 A.2d 742 (1992) ("[a]n award conforming to an unrestricted submission should generally be confirmed by the court").
Second, the Wallingford case and the others cited by the plaintiff in its brief to this court are inapposite. In those cases, the court had applied the positive assurance test to determine whether the dispute was arbitrable. See, e.g., Wallingford v. Wallingford Police Union, Local 1570, 45 Conn.App. 432, 437, 696 A.2d 1030 (1997). For the reasons I previously have set forth, that test is not applicable in the present case.
Third, it is clear that in reaching its decision, the arbitrators attempted to ascertain the parties' intent in drafting the memorandum of understanding. The arbitrators found as follows: "A reading of the January 19, 2006 [m]emorandum of [u]nderstanding providing the upgrades clearly shows that no [f]oremen positions were at issue in the upgrades. Nor is there testimony that at anytime the parties discussed the upgrading of [f]oremen during the upgrade negotiations. It is very questionable whether the prohibition against the use of arbitration was meant to concern the unforeseen consequences of an automatic upgrade to the [foremen through reliance
I respectfully dissent.
Finally, the dissent contends that the plaintiff never claimed that the board was not authorized to decide finally the question of arbitrability and, indeed, that the plaintiff has made judicial admissions that the board had such authority. With respect to the plaintiff's purported admissions, as we have indicated, submission of the question of arbitrability to the arbitrator in the first instance does not constitute an admission that the arbitrator has the authority to decide that issue finally, without de novo review by the court. With respect to the dissent's contention that the plaintiff has never raised the claim that the issue of arbitrability was to be decided by the trial court rather than the arbitrator, we note that, as the dissent recognizes, the plaintiff did claim on appeal that this court should apply the positive assurance test, which is applicable only when the court has the primary authority to decide arbitrability. Accordingly, we conclude that the claim is fairly before us.
The Appellate Court did not explain why it had applied a different standard of review than the trial court and did not state a conclusion as to whether the question of arbitrability itself had been committed to the arbitrators, although it quoted case law stating that such authority may be committed to the arbitrators. The fact that the Appellate Court failed to give any legal effect to the settlement agreement's express reservation of the plaintiff's right to assert the defense of nonarbitrability suggests that the court may have conflated the question of whether the arbitrators were empowered to decide arbitrability, under which the defendant's reservation of that defense would not bar the exercise of authority, and the merits of the arbitrability question, under which such a fact could be dispositive.