Baltimore County Fraternal Order of Police Lodge No. 4 v. Baltimore County
57 A.3d 425
Md.2012Background
- Arbitrability survives expiration of a collective-bargaining agreement (CBA) when dispute concerns rights vested during the agreement and a broad arbitration clause remains operative.
- The dispute concerns retiree health-insurance subsidy; MOUs from 1995–2004 dictated a fixed subsidy vesting language; the 2007 decrease prompted FOP to lodge a grievance.
- The MOU containing the arbitration clause expired June 30, 2007; the grievance was filed September 14, 2007.
- Arbitrator concluded the 85/15 subsidy was a vested right and arbitrable despite expiration; the County sought to vacate.
- Circuit Court granted summary judgment for FOP; Court of Special Appeals reversed; Maryland Supreme Court granted certiorari.
- Court adopts Nolde/Litton vesting principles and holds a broad arbitration clause may survive expiration when the dispute arises under the expired agreement and vesting occurred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitration survives expiration when vested rights exist | FOP: clause survives; vested retiree rights render arbitrable | County: expired MOU means no duty to arbitrate | Yes; arbitrable if vested rights exist under the expired agreement |
| Who decides arbitrability when merits require contract interpretation | Arbitrator should determine based on vesting/contract interpretation | Court should decide arbitrability | Arbitrator may decide; threshold question remains within arbitrator when merits/interpretation are involved |
Key Cases Cited
- Nolde Bros. v. Bakery & Confectionery Workers Union, 430 U.S. 243 (1977) (arbitrability may survive expiration when dispute arises under contract through vesting/interpretation)
- Litton Fin. Printing Div. v. NLRB, 501 U.S. 190 (1991) (three circumstances for post-expiration arbitrability; vesting/interpretation approach)
- Gold Coast Mall v. Larmar Corp., 298 Md. 96 (1983) (scope of arbitration; when to send to arbitrator for ambiguous clauses)
- NSC Contractors, Inc. v. Borders, 317 Md. 394 (1989) (broad arbitration clauses and severability principles in Maryland)
- Holmes v. Coverall N. Am., 336 Md. 534 (1994) (arbitration clause severability; court vs arbitrator on validity)
- Nowak v. NAHB Research Center, Inc., 157 Md.App. 24 (2004) (arbitrability vs merits where overlap occurs)
- Messersmith, Inc. v. Barclay Townhouse, 313 Md. 652 (1988) (threshold issue of arbitrability vs merits; who decides)
- Cheek v. United Healthcare of the Mid-Atl., Inc., 378 Md. 139 (2003) (limits of court review; arbitrability boundaries)