307 P.3d 942
Alaska2013Background
- The Aleut Corporation terminated Troy Johnson, its chief executive officer, triggering a binding arbitration under Johnson's employment contract.
- The contract contains a broad arbitration clause requiring arbitration for any disputes arising out of or relating to the agreement and/or Johnson's employment or termination.
- At arbitration, the issues were whether The Aleut Corporation breached the contract by terminating Johnson and whether Johnson's alleged breach justified termination; the arbitrator awarded Johnson damages.
- The Aleut Corporation sought to vacate the award in superior court, arguing the arbitrator decided an issue not submitted to arbitration and exceeded authority.
- The superior court vacated the award; Johnson challenged that decision, and the Alaska Supreme Court reversed, holding the dispute was arbitrable and the arbitrator did not exceed authority.
- The arbitrator concluded the contract would automatically extend unless the board canceled the extension and that Johnson's conduct did not constitute a proper cause; however, he found the board breached by failing to timely notify of cancellation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the arbitrator exceed authority by addressing an unsubmitted issue? | Johnson/arbitration submission supported by broad clause and claims. | Arbitrator exceeded authority by addressing non-submitted issue. | No; arbitrator reasonably interpreted arbitrable dispute and did not exceed powers. |
| Is the dispute arbitrable under the employment agreement's broad arbitration clause? | Clause covers all disputes about the contract and employment; dispute is arbitrable. | Dispute not limited to the precise claimed issue; arbitration should be narrowed. | Yes; arbitration clause covers the dispute and it was arbitrable. |
| May arbitrator resolve arbitrable disputes on a basis different from that argued by the parties? | Arbitrator may rely on contract interpretation and different rationale. | Arbitrator must adhere to theories advanced by the parties. | Yes; arbitrator may reach a different basis so long as dispute is arbitrable. |
| Should the superior court have vacated the award based on arbitrability and scope? | Vacatur was improper; the award falls within arbitrable scope. | Vacatur appropriate if arbitrator exceeded authority or misinterpreted scope. | Vacatur reversed; award confirmed and fees vacated. |
Key Cases Cited
- Ahtna, Inc. v. Ebasco Constructors, Inc., 894 P.2d 657 (Alaska 1995) (arbitrator may rely on provisions not expressly argued if dispute arises under the contract)
- OK Lumber Co. v. Alaska R.R. Corp., 123 P.3d 1076 (Alaska 2005) (arbitrator did not exceed authority by interpreting contract to resolve dispute)
- Pub. Safety Emps. Ass'n v. State, 732 P.2d 1090 (Alaska 1987) (deference to arbitrator on questions submitted; public policy favors arbitration)
- Marathon Oil Co. v. ARCO Alaska, Inc., 972 P.2d 595 (Alaska 1999) (arbitrator's scope and remedies; deference to arbitration decisions)
- Sea Star Stevedore Co. v. Int'l Union of Operating Engineers, Local 302, 769 P.2d 428 (Alaska 1989) (arbitrator exceeds authority by addressing a question not submitted)