754 F.3d 109
2d Cir.2014Background
- Carla LaGreca, a USPS employee, was placed on leave after USPS concluded it had no work consistent with her medical restrictions; she filed a grievance under the Collective Bargaining Agreement (CBA) and an MSPB appeal claiming arbitrary and capricious agency action.
- An ALJ denied LaGreca’s MSPB appeal, finding she was totally disabled as of September 2, 2008; her appeal of that decision was dismissed as untimely.
- The APWU pursued arbitration under the CBA; USPS argued the grievance was not arbitrable because the MSPB decision precluded relitigation.
- Arbitrator Randall Kelly bifurcated the arbitration, held the MSPB decision had preclusive effect (collateral estoppel), and found the grievance not arbitrable.
- APWU moved in district court to vacate the award, arguing the arbitrator exceeded his powers by applying collateral estoppel without contractual authorization; the district court vacated the award.
- The Second Circuit reversed, holding the arbitrator acted within his authority under the broad arbitration clause by interpreting the CBA to permit preclusion principles.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitrator exceeded CBA authority by applying collateral estoppel | Arbitrator lacked contractual basis to apply preclusion; CBA’s only explicit preclusion provision (Art.16.9) does not apply to LaGreca | Arbitrator reasonably interpreted CBA (including Art.16.9) and could decide preclusive effect under a broad arbitration clause | Arbitrator did not exceed authority; award stands and must be confirmed |
Key Cases Cited
- Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064 (2013) (arbitral constructions of contract stand unless arbitrator lacked contractual basis)
- Stolt–Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) (vacatur proper where arbitrator had no contractual basis for class procedures)
- U.S. Fire Ins. Co. v. Nat’l Gypsum Co., 101 F.3d 813 (2d Cir. 1996) (arbitrator may determine preclusive effect under broad arbitration clause)
- Nat’l Union Fire Ins. Co. v. Belco Petroleum Corp., 88 F.3d 129 (2d Cir. 1996) (arbitrator decides preclusive effect of prior arbitration under broad clause)
- St. Mary Home, Inc. v. Serv. Emps. Int’l Union, Dist. 1199, 116 F.3d 41 (2d Cir. 1997) (excess‑of‑powers test asks whether award draws its essence from the CBA)
- Jock v. Sterling Jewelers Inc., 646 F.3d 113 (2d Cir. 2011) (vacatur under excess‑of‑powers standard is narrow)
- Harry Hoffman Printing, Inc. v. Graphic Communications Int’l Union, Local 261, 950 F.2d 95 (2d Cir. 1991) (vacatur where arbitrator created contract terms prohibited by CBA)
- Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979) (definition and principles of collateral estoppel)