Pennsylvania Commonwealth Court Defines Limits Of An Arbitrator’s Authority To Impose Employee Discipline

By: Carl L. Engel

On December 12, 2022, the Pennsylvania Commonwealth Court, in the case Clarion County Career Center. v. Clarion County Career Center Education Association, provided guidance as to the limits that public policy places on an arbitrator’s authority to craft penalties for employee misconduct. The Clarion County Career Center, a vocational-technical school, had terminated one of its instructors after an investigation into several complaints of discrimination and harassment made by students and their parents. The instructor requested that they arbitrate his suspension pursuant to a collective-bargaining agreement between the Career Center and the instructor’s union. After a hearing, the arbitrator found six instances of misconduct and suspended the instructor without pay for 180 days, i.e., 30 days for each infraction.

The Career Center appealed the decision to the trial court, arguing that the instructor should have been terminated as a matter of public policy, because the misconduct found by the arbitrator included multiple instances of discrimination and harassment. The trial court agreed and held that the arbitrator erred by allowing the instructor to remain employed. The court reasoned that, because the instructor’s behavior was unlikely to change, the arbitrator’s decision to allow him to return to the school violated the public policy of keeping students safe from discriminatory and harassing misconduct.

The Commonwealth Court found that the trial court had exceeded its authority, however, and reversed. The Commonwealth Court explained that for an arbitrator’s decision to violate public policy, the decision must force the employer to violate the policy. It then found that the arbitrator’s decision did not force the Career Center to violate the public policy against discrimination and harassment, because a 180-day suspension without pay and benefits was sufficient to deter the instructor from further misconduct. The court reasoned that it “may not infer that public policy demands only the most severe penalty,” where the arbitrator has already imposed “substantial discipline.” The court recognized that the arbitrator’s authority to impose penalties is not unrestrained, however, observing hypothetically that a suspension of only 30 days “would appear to violate public policy.”

An employer negotiating an arbitration provision in an employment contract or collective-bargaining agreement must be mindful of these limits (or lack thereof) on the arbitrator’s and trial court’s authority to impose employment penalties. If an employer wants an employee to be terminated for certain serious misconduct, it should make that explicit in the agreement. As illustrated here, if the employer relies on an arbitrator to terminate serious offenders of company policy, it may be left disappointed.