A team of Venable attorneys led by Robert Ames and Lesley Pate Marlin recently won a landmark ruling in a challenge to an arbitration award on behalf of the Washington Metropolitan Area Transit Authority (WMATA). The arbitration award at issue granted wage increases and improved pension benefits to approximately 7,700 WMATA employees, constituting about 70 percent of WMATA’s workforce, who are represented by the Local 689, Amalgamated Transit Union (Local 689). WMATA petitioned to vacate the arbitration award on the grounds that the Board of Arbitration failed to follow the procedural and substantive requirements of the National Capital Area Interest Arbitration Standards Act (NCAIASA), 40 U.S.C. § 18301 et seq. WMATA and Local 689 disagreed fundamentally over the requirements of the NCAIASA as well as the judicial standard of review of arbitration awards subject to the NCAIASA.
At a hearing in March 2010, the Honorable Peter J. Messitte of the United States District Court for the District of Maryland found that the wage increases and improved pension benefits granted in the arbitration award did not “demonstrate compliance” with the NCAIASA. The Court then remanded the matter to the arbitrators, directing them to render a supplemental opinion complying with the NCAIASA. In late June, 2010, the chairman of the arbitration panel issued a supplemental opinion, which WMATA maintained fell woefully short of complying with the NCAIASA’s requirements for a final award as set forth in 40 U.S.C. § 18303(d).
During a hearing on WMATA’s challenge to the supplemental opinion on August 10, 2010, the Court determined that it needed additional information to resolve the parties’ pending motions for summary judgment. Specifically, the Court instructed the parties to submit further briefing with respect to the historical background of interest arbitration in labor disputes, any interest arbitration cases involving mass transit systems, and the legislative history of the NCAIASA.
On February 18, 2010, the Court issued its written opinion in this landmark case of first impression interpreting the NCAIASA. In that decision, adopting the arguments advanced by WMATA, the Court held that “[a] fair reading of the language of the statute can only signify that the Act imposes more stringent requirements – both on arbitrators and on reviewing courts—than would ordinarily apply under the common law of arbitration.” The Court found that judicial review of arbitration awards subject to the NCAIASA should proceed like judicial review of agency decisions under the Administrative Procedure Act. The Court further found that because the NCAIASA requires arbitrators “to consider explicit statutory factors,” the arbitration decision “must do more than merely state that those factors were considered.” Rather, the arbitration decision “must include the critical step of connecting the facts to the conclusion.” The Court determined that neither the original arbitration award nor the supplemental opinion complied with the NCAIASA. Having interpreted the statute, the Court remanded the matter to the arbitration panel for “one final opportunity” to issue a supplemental opinion demonstrating that it has complied with the NCAIASA, as defined by the Court. Although the legal proceedings continue, Judge Messitte’s historic decision will significantly impact interest arbitration awards involving WMATA in the future.