Fraternal Order of Police Lodge 10 v. State of Delaware
12813-VCMR
Del. Ch.Oct 2, 2017Background
- Plaintiff (Fraternal Order of Police Lodge 10) sought enforcement of an arbitration award that reinstated a grievant, converted termination to a 90-day suspension, and ordered defendant (State of Delaware) to “make Grievant whole” for lost wages, benefits, and seniority less the 90-day suspension.
- The arbitrator issued the award on February 8, 2016; Plaintiff filed a petition to enforce the award in Delaware Court of Chancery on October 3, 2016.
- Defendant moved to dismiss under Chancery Rule 12(b)(6), not to vacate the award, asking the court to declare that “make whole” requires offsetting interim earnings (or, alternatively, to remand to the arbitrator for clarification).
- At arbitration, Plaintiff requested full back pay for the separation period; Defendant’s post-hearing brief identified remedy as an issue but did not request an offset for interim earnings or unemployment.
- The court applied the narrow Federal Arbitration Act standard for reviewing awards and considered whether the award was clear or ambiguous on the offset issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration award’s phrase “make whole” includes an offset for interim earnings | Award silence means no offset; Defendant waived offset by not requesting it before arbitrator | “Make whole” commonly implies offset for interim earnings; court should presume offset or remand for clarification | Court held silence means no offset granted and denied remand; defendant had opportunity and failed to request offset |
| Whether court may add a judicial presumption that “make whole” includes offsets | N/A | Court should apply common arbitration practice presuming offsets | Court rejected imposing a judicial gloss/presumption in light of FAA’s narrow review standard |
| Whether award is ambiguous such that remand to arbitrator is warranted | No ambiguity; award is clear on face | Ambiguity exists; remand for clarification appropriate | Court found no facial or extraneous ambiguity and denied remand |
| Whether court may modify/correct award to include offset under FAA correction/modification provisions | N/A | Court could correct or modify to apply offset | Court held FAA allows correction only in narrow statutory circumstances, none applied here; cannot add offset |
Key Cases Cited
- In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162 (Del. 2006) (Rule 12(b)(6) pleading and inference standards)
- Savor, Inc. v. FMR Corp., 812 A.2d 894 (Del. 2002) (pleading standard quoted)
- International Union of Operating Engineers, Local No. 841 v. Murphy Co., 82 F.3d 185 (7th Cir. 1996) (arbitrator silence on offsets means no offset granted)
- UBS Fin. Servs., Inc. v. Padussis, 842 F.3d 336 (4th Cir. 2016) (rejecting judicial presumption that awards include offsets)
- Automobile Mechs. Local 701 v. Joe Mitchell Buick, Inc., 930 F.2d 576 (7th Cir. 1991) (arbitrators have discretion to decide offsets; silence implies none)