In this special proceeding pursuant to CPLR Article 75, petitioners New York City Transit Authority and Manhattan and Bronx Surface Transit Operating Authority seek an order vacating an Opinion and Award dated June 27, 2006, rendered after arbitration with respondents Transport Workers Union of America, Local 100 and its President, Roger Touissant, concerning disciplinary action taken against bus operator and Union member Ed L. Heckstall. Petitioners will be referred to collectively as such or as "the Transit Authority"; Respondents will be referred to collectively as such or as "the Union"; Mr. Heckstall will be referred to by name or as "grievant."

The arbitration was held pursuant to a Collective Bargaining Agreement ("CBA") that makes the remedy available to three types of "grievances" or complaints on the part of any covered employee, such as Mr. Heckstall: a "Contract Interpretation Grievance," a "Disciplinary Grievance," or a "Medical Appeal Grievance." (See CBA Article II, Exhibit A to Affirmation of [*2]Edward Pichardo.) Here, arbitration was the third step in disciplinary grievance proceedings following a Disciplinary Action Notification ("DAN") to Mr. Heckstall dated December 28, 2005.

The underlying facts are not in dispute. Mr. Heckstall had been employed as a bus operator for six years when, on October 23, 2004, he returned to the depot a bus that had been damaged. After testing positive on a required alcohol test, he was suspended and referred to the Transit Authority's Employee Assistance Program ("EAP".) Thirteen months later, Mr. Heckstall was discharged from the EAP, and disciplinary charges followed.

The DAN dated December 28, 2005 charged Mr. Heckstall with violation of a provision of the Transit Authority's Policy/Instruction addressing "Drugs and Controlled Substances." Presumably because the cited provision was clearly inapplicable, the charges were later amended to allege violations of the Policy/Instruction addressing "Alcohol." The Transit Authority's apparent carelessness in filing disciplinary charges is disquieting, particularly given the emphasis it places here on Mr. Heckstall's disciplinary record.

The amended charges alleged violation of Sections 6.5 and 8.3 of the Policy/Instruction. Section 6.5 does not in terms state any duty on the part of the employee; it provides that, "[w]here an employee is suspended and referred to EAP . . . and EAP reports that the employee has not satisfactorily met the requirements of the EAP program the employee shall be dismissed." Section 8.3 provides: "Employees referred to EAP programs . . . must comply in all respects with the directions and program requirements of EAP or be subject to dismissal from service."

As found by the arbitrator, Mr. Heckstall came to arbitration with a "horrendous" disciplinary record, "includ[ing] 20 DANs for a total of 185 days of disciplinary suspension

and . . . 14 so-called final warnings'." (See Opinion and Award, Exhibit 3 to Verified Petition, at 8.) Mr. Heckstall's participation in the EAP program was marked by "several instances of unauthorized absence from treatment, two positive alcohol tests while in treatment, and one final transgression in which he turned up at a conjoint session [with the Union's member assistance program] with alcohol on his breath and admitted to having imbibed alcohol earlier that day." (See id., at 9.)

Concluding that the Transit Authority "had cause to discipline" Mr. Heckstall, the arbitrator nonetheless ordered that he be "reinstated to the EAP," and that he "comply in each and every respect with the treatment program." (See id., at 13.) The arbitrator prescribed a "disciplinary penalty" of "suspension without pay of time served, to continue until the grievant is recommended by the EAP for return to work upon satisfactory completion of treatment and is thereupon returned to work." (Id.) Mr. Heckstall was "advised that this AWARD represents a Final Warning that the first instance of non-compliance with the EAP treatment program shall subject him to discharge from the EAP." [*3]

The Transit Authority contends that the Award must be vacated because it is "in excess of the Arbitrator's contractually limited power" and is "irrational." (See Notice of Petition.) Specifically, the Transit Authority maintains that "the Award exceeds the Arbitrator's contractually limited power, as it modifies the terms of the collective bargaining agreement by modifying the discipline to a penalty less than discharge." (See Petitioners' Memorandum of Law in Support of Petition to Vacate an Arbitration Award, at 2-3.)

The Union responds, in the first instance, that "the petition is moot and must be dismissed." (Verified Answer and Objection in Point of Law, ¶ 19.) Mr. Heckstall resigned from his position with the Transit Authority, effective January 2, 2007, and, therefore, "the Authority has no outstanding obligation under the Award." (See id., ¶ ¶ 17-18.)

Generally, courts should not "pass on academic, hypothetical, moot, or otherwise abstract questions." (See Matter of Hearst Corporation v Clyne, 50 NY2d 707, 713-14 [1980].) A matter will be considered moot "unless the rights of the parties will be directly affected by the determination of the [matter] and the interest of the parties is an immediate consequence of the judgment." (Id., at 714.) The mootness doctrine applies to an Article 75 proceeding to vacate an arbitrator's award. (See Matter of Utica Mutual Ins. Co. v Selective Ins. Co. of Am., 27 AD3d 990, 991-92 [3d Dept 2006].)

"Here, it cannot be said that a determination by this Court would not affect the rights of the parties." (Id., at 992.) Although Mr. Heckstall is no longer employed by the Transit Authority, there has been no showing that a determination that he must be dismissed from employment would not have a real consequence to his future employment or other prospects. It is evident, moreover, that the nature and extent of an arbitrator's authority under the CBA is of significant and continuing consequence to the parties to the agreement, who are, in fact, the parties to the arbitration and to this proceeding. Even more directly, under a provision of the CBA discussed below, the Opinion and Award that Petitioners seek to vacate would be deemed "past precedent" for future arbitrations raising similar issues. (See CBA, § 2.1 [C] [19] [c].)

"Courts may vacate an arbitrator's award only on the grounds stated in CPLR 7511 (b)." (Matter of New York City Tr. Auth. v Transport Workers' Union of Am., Local 100, AFL-CI0, 6 NY3d 332, 336 [2005].) Here, the Transit Authority contends that the arbitrator "exceeded [her] power," a ground specified in CPLR 7511 (b) (1) (iii). "Such an excess of power occurs only where the arbitrator's award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power." (Id.; see also Rochester City School Dist. v Rochester Teachers Assn., 41 NY2d 578, 582 [1977].) A party seeking to vacate an arbitration award for such an excess of power has a "heavy burden." (See Scollar v Cece, 28 AD3d 317, 317 [1st Dept 2006].)

"Where the arbitration involves public collective bargaining agreements, the arbitrators may do justice and the award may well reflect the spirit rather than the letter of the agreement." (Matter of Manhattan & Bronx Surface Tr. Operating Auth. v Local 100, Transport Workers [*4]Union, 84 AD2d 749, 750 [2d Dept 1981].) "[T]he Legislature in the Taylor Law explicitly adopted a . . . policy encouraging such public employers and such public employee organizations to agree upon procedures for resolving disputes . . . , as a means of promoting harmonious relations between governmental employers and their employees, and preventing labor strife endangering uninterrupted governmental operations." (Matter of New York City Tr. Auth. v Transport Workers Union of Am., Local 100, AFL-CI0, 99 NY2d 1,7 [2002].)

In contending that the arbitrator exceeded her power under the CBA, the Transit Authority relies primarily on a provision that the arbitrator, "in rendering any opinion or determination, shall be strictly limited to the interpretation and application of the provisions of this Agreement, or of any written rule, or Policy/Instruction of the Authority governing or affecting hourly paid employees, and [she] shall be without any power or authority to add to, or delete from, or modify any of the provisions of this Agreement, or of such rules, or Policy/Instructions." (See CBA, § 2.1 [C] [19] [c].) The Transit Authority maintains that the Award "is contrary to the mandate contained in paragraph 6.5 of Appendix E-2 to the [CBA] which provides if EAP reports that the employee has not satisfactorily met the requirements of the EAP program the employee shall be dismissed," and that "[i]n finding that Heckstall did not satisfactorily meet the requirements of the EAP program but modifying the discipline to a penalty less than discharge, the arbitrator modified the terms of the [CBA]." (Verified Petition, ¶ ¶ 14-15; see also Affirmation of Dennisa Torres, ¶ ¶ 6, 16,17; Affirmation of Kimberly D. Westcott, ¶ ¶ 9,13.)

Accepting for the moment the Transit Authority's characterization of the Opinion and Award, the Transit Authority's positions on this Petition are not consistent with its participation in the arbitration. According to the Opinion and Award: "The parties agree[d] that the one issue to be decided is: Did the Employer have cause to discipline the grievant? If so, what shall its penalty be? If not, what shall the remedy be?" (Opinion and Award, at 2.) The Transit Authority maintained that "discharge of the grievant by the EAP was reasonable, and, under the circumstances, termination of his employment [was] the appropriate penalty" (id., at 3); that "dismissal [was] the only appropriate penalty," and "the grievant . . . [was] deserving of a harsh disciplinary penalty" (id., at 12.)

Indeed, there is no suggestion in the Opinion and Award, or in any of the papers submitted by either party on this Petition, that the Transit Authority asserted before the arbitrator any limitation on her power to determine the "appropriate penalty." The Transit Authority does not dispute that it agreed to submit to the arbitrator the questions articulated in the Opinion and Award, nor does it dispute her descriptions of the positions taken by the Authority before her. "A party may claim that the arbitrator exceeded his authority in some respect, but he may not argue that the arbitrator lacked the power to resolve the question submitted." (Rochester City School Dist. v Rochester Teachers Assn., 41 NY2d at 583.)

There is significant authority that indicates that the Transit Authority has waived any objection to the arbitrator's resolution of the questions submitted. (See Board of Educ. v Yonkers [*5]Federation of Teachers, 46 NY2d 727, 729 [1978]; Matter of Monroe County v Monroe County Sheriffs' Ass'n, 248 AD2d 984, 984 [4th Dept 1998]; Matter of Sherman Fitzpatrick & Co. [Lerner Assoc.], 181 AD2d 581, 581 [1st Dept 1992]; Matter of City School Dist. Of Oswego [Oswego Classroom Teachers' Ass'n], 100 AD2d 13, 17 [4th Dept 1984]; Board of Educ. v Farmingdale Fedn. Of Teachers, 92 AD2d 599, 601 [2d Dept 1983]; see also Matter of New York City Tr. Auth. v Transport Workers Union of Am., Local 100, AFL-CI0, 99 NY2d 1, 9, 11 [2002]; but see Matter of City of New York v Local 1549 of Dist. Council 37, AFSCME, 248 AD2d 125, 126 [1st Dept 1998].)

Waiver aside, however, there are other difficulties with the Transit Authority's contentions on this Petition. First, in a recent decision involving these same parties, the Court of Appeals has implicitly held that a provision restricting the arbitrator from changing the terms of the CBA is not a "specifically enumerated limited on [the arbitrator's] power." (See Matter of New York City Tr. Auth. v Transport Workers' Union of Am., Local 100, AFL-CI0, 6 NY3d at 335-36; see also Matter of Albany County Sheriff's Local 775 (County of Albany), 63 NY2d 654, 656 [1984]; Matter of New York City Tr. Auth. v Amalgamated Tr. Union of Am., AFL-CI0 Local 1056, 284 AD2d 466, 468 [2d Dept 2001].)

In contrast, the same section of the CBA that restricts the arbitrator from changing the terms of the CBA also includes the following provision:

"If there is presented to the [arbitrator] for decision any charge which, if proved in Court, would constitute a felony, or any charge involving assault, theft of Authority property, intoxication, use of Controlled Substances, chronic absenteeism, the question to be determined by the [arbitrator] shall be with respect to the fact of such conduct. Where such charge is sustained by the [arbitrator], the action by the Authority, based thereon, shall be affirmed and sustained by the [arbitrator] except if there is presented to the [arbitrator] credible evidence that the action by the Authority is clearly excessive in light of the employee's record and past precedent in similar cases." (CBA, § 2.1 [C] [19] [c].)

Courts have treated this provision as a "specifically enumerated limitation" on the arbitrator's power. (See Matter of New York City Tr. Auth. v Transport Workers' Union of Am., Local 100, AFL-CI0, 306 AD2d 486, 486-87 [2nd Dept 2003]; Matter of New York City Tr. Auth. v Transport Workers Union of Am., 239 AD2d 421, 421 [2d Dept 1997]; Matter of Manhattan & Bronx Surface Tr. Operating Auth. v Transport Workers Union of Am., 180 AD2d 798, 799 [2d Dept 1992].)

Since the quoted provision appears in the arbitration section of the CBA, and applies to "any charge involving . . . intoxication," which appears to describe the charge made against Mr. Heckstall, it is at the least surprising that neither the Petition, nor any of the supporting affirmations or memorandum of law, makes any mention of the provision. The Union notes the provision in its Memorandum of Law as an example of an express limitation on the arbitrator's power to modify disciplinary penalties, while arguing that it does not apply here because Mr. [*6]Heckstall was charged, not with "intoxication," but with non-compliance with the EAP. (See Respondents' Memorandum of Law in Opposition to Petitioners' Motion to Vacate an Arbitration Award, at 13-14.)

In its response, the Transit Authority appears to make a similar distinction, arguing that the charges described in the provision do not carry mandated penalties, whereas failure to comply with the EAP does. (See Petitioners' Reply Memorandum of Law in Further Support of Petition to Vacate an Arbitration Award, at 7.) The problem with such a distinction is that it would require the conclusion that the arbitrator has greater authority to prescribe an appropriate penalty for the "offenses" of intoxication and use of drugs than the arbitrator has when the employee fails to "satisfactorily" complete an EAP. In any event, the provision is not mentioned in the Opinion and Award.

Even assuming, however, that there has been no waiver and that the arbitration section of the CBA includes a specific limitation on the arbitrator's authority to modify the stated penalty of dismissal for non-compliance with an EAP, Petitioners are incorrect in their characterization of the Award as a modification of a prescribed penalty. It is clear from the Opinion as a whole and the language of the Award that the arbitrator did not modify the stated penalty of dismissal for not having "satisfactorily met the requirements of the EAP program" (see CBA, Alcohol Policy/Instruction, ¶ 6.5.) Rather, the arbitrator determined that it was inappropriate for the Transit Authority to have discharged Mr. Heckstall from the EAP for non-compliance.

The Opinion and Award acknowledge that Mr. Heckstall did not dispute the charge that he was "discharged from EAP for an inability to follow treatment recommendations." (See Opinion and Award, at 2-3.) As summarized by the arbitrator, "[t]he Employer and the Union both directed their respective positions regarding the outcome of this matter toward establishing that the EAP did (Union) or did not (Employer) unreasonably discharge the grievant from the EAP." (Id., at 7-8.) Apparently quoting the Transit Authority's submission, the arbitrator states that the Authority asserted that "the EAP reasonably applied its non-compliance standards to the Grievant," and that "unless the arbitrator finds that the EAP determination [to discharge the grievant] was unreasonable, the judgment of the EAP must stand." (Id., at 5, 6.) Although disagreeing that the "reasonableness" of the discharge was the sole consideration (see id., at 8), the arbitrator determined to "give [Mr Heckstall] the benefit of the doubt by affording him one last chance at rehabilitation and directing that he be reinstated to the EAP for further treatment to be determined by its professional staff" (see id., at 13.)

The arbitrator's consideration of the appropriateness of Mr. Heckstall's discharge from the EAP, "the precipitating factor in the disciplinary charges" (see id., at 3), was consistent with general principles of contract law applicable to the CBA. "[I]n every contract there exists an implied covenant of good faith and fair dealing." (Kirk La Shelle Co. v Armstrong Co., 263 NY 79, 87 [1933]; see also Kevin Spence & Sons, Inc. v Boar's Head Provisions Co., Inc., 5 AD3d 352, 353 [2d Dept 2004].) The covenant has particular application to whether conditions precedent have been satisfied, and where the satisfactory performance of one party is left solely [*7]to the judgment of the other. (See A.H.A. Gen. Constr. v New York City Hous. Auth., 92 NY2d 20, 31 [1998]; Matter of Associated Teachers of Huntington v Board of Educ., Union Free School Dist. No. 3, Town of Huntington, 33 NY2d 229, 233-34 [1973].) The covenant exists in collective bargaining agreements. (See id.)

More importantly, recent Court of Appeals rulings involving Transit Authority discipline confirm the broad authority of the arbitrator to consider the circumstances giving rise to a disciplinary charge and assess an appropriate penalty, even if the result is that the mandated penalty for the condition charged is avoided. In Matter of Dowleyne v NY City Transit Auth. (3 NY3d 633 [2004], rev'g 309 AD2d 583 [1st Dept 2003]), Transit Authority "regulations specifically require[d] a given penalty; that is, that the employee who has refused to take a drug test be removed from performing a safety-sensitive function, such as driving a bus, and that she not be reinstated to such position without a verified negative drug test result by a substance abuse professional." (309 AD2d at 586.) The arbitration panel (at that time, a three-member panel) concluded that the Authority could not discipline the employee for refusal to take the test when she could not produce an adequate specimen for the test, but the First Department vacated the award on the ground that "[t]he regulations [were] not discretionary, and the collective bargaining agreement cannot be used to frustrate their mandate." ( See id.) In a sentence, the Court of Appeals reversed, stating that the vacatur could not stand because the Appellate Division "substituted its factual judgment for that of a majority of the arbitration panel." (3 NY3d at 633.)

At issue in Matter of New York City Tr. Auth. v Transport Workers' Union of Am., Local 100, AFL-CI0 (6 NY3d 332) was the CBA Policy/Instruction on Drugs and Controlled Substances, which is similar to the Policy/Instruction on Alcohol. Under the Policy/Instruction, "a refusal to take the required urine test [was] deemed an admission of improper use of controlled substances with a resultant dismissal." (Id., at 334.) "Under the CBA, the arbitrator had the authority to resolve all grievances so long as he did not change the terms of the CBA." (Id., at 335.) The employee was charged when he maintained that he could not provide a specimen, and the arbitrator "reduced the penalty from termination to suspension and reinstatement to the former position with no back pay." (See id.)

On the Transit Authority's petition to vacate the award, the Second Department affirmed Supreme Court's ruling for the Authority, but the Court of Appeals again reversed. "[T]he decision by the arbitrator was not irrational nor did it exceed a specifically enumerated limitation on his power." (See id., at 336.) "It was . . . appropriate—or even if inappropriate was not a defect of which the Transit Authority may complain—for the arbitrator to fashion a remedy short of dismissal for what he found to be misconduct falling short of a refusal." (Id., at 337.)

Admittedly, a determination as to whether an employee has "refused" to take a urine test is different from a determination as to whether an employee has "satisfactorily" completed a treatment program, but the Second Department has given similar effect to an arbitration panel's determination concerning a Transit Authority employee's compliance with a drug counseling [*8]program. (See Matter of Akers v NY City Transit Auth., 172 AD2d 749 [2d Dept 1991].) The message is clear that such a determination will be upheld unless it is "irrational." (See id., at 749.)

The Transit Authority contends that the Award here is irrational, pointing to the arbitrator's finding that Mr. Heckstall's disciplinary record included 14 "final warnings," and arguing that "[t]o allow Heckstall another final warning after what the arbitrator finds is already too many final warnings is irrational." (See Verified Petition, ¶ 17.) But the Transit Authority does not explain why a 15th final warning is any more irrational than the 14th, or the 10th, or the 2nd issued by the Authority.

The arbitrator, on the contrary, explained her view that the "mixed messages" given to Mr. Heckstall by being "permitted to keep working over and over again" was "perhaps equally troubling" as his disciplinary record. (See Opinion and Award, at 12.) She suggested that "it is not without the realm of reason to conclude that he was not sufficiently alarmed at the prospect of losing his job to seek the help he needed." (Id.) Of course, the arbitrator's own assessment of the rationality of her conclusions is not determinative. But her view on this point appears within a five-page discussion of the evidence and the parties' respective positions.

She noted, in addition, that "the grievant's transgressions were limited to isolated instances," and "the grievant never came up positive on mandated rechecks" (id., at 9-10); "it is clear that the Employer's policy is to recognize that relapses occur and generally to treat them in an enlightened and realistic manner" (id.); and "the discharge on the one hand was based on non-compliance but on the other hand was also the result of the EAP's inability to provide the additional long term treatment everybody agreed the grievant needed" (id., at 11.)

Were this Court making the determination de novo, it might have made a different one. It may also be that on such safety-sensitive matters the judgment of the Transit Authority's professionals should govern. The Authority's remedy, however, must be found at the bargaining table. (See Rochester City School Dist. v Rochester Teachers Assn., 41 NY2d at 583-84.)

Judgment is for Respondents, denying the Petition.

May 3, 2007_________________

Jack M. Battaglia

Justice, Supreme Court

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