Ohio Court of Appeals Upholds Arbitrator’s Authority When Arguably Construing or Applying Contract

posted by Michael R. Fortney  |  Apr 14, 2016 3:24 PM in Arbitration and Mediation

A recent ruling by the Ninth District Court of Appeals ruled that a trial court cannot vacate an arbitration award because the court disagrees with the arbitrator’s application of law or other merits of the arbitrator’s decision. The City of Lorain case involved an arbitration over whether an employee was terminated or voluntarily left his employment with the Lorain Fire Department.  The arbitrator held that the employee was not constructively discharged. The employee appealed the arbitrator’s decision and sought to vacate the arbitration award on grounds that the arbitrator exceeded his authority. The trial court reversed the arbitrator's decision, because it determined that the arbitrator incorrectly applied Ohio law as it relates to constructive discharge.

On appeal, the Court of Appeals reversed that decision and upheld the arbitrator’s original decision.

Ohio public policy favors arbitration, as is evidenced by The Ohio Arbitration Act, R.C. Chapter 2711, which limits the jurisdiction of trial courts once an arbitration has been conducted. Pursuant to R.C. §§ 2711.10 - 2711.11 an award in an arbitration case may only be vacated if (1) the award was procured by fraud, corruption or undue means, (2) there was evident partiality by the arbitrator, (3) the arbitrator’s behavior prejudiced a party, or (4) the arbitrator exceeded his powers. The employee argued that the arbitrator exceeded his powers.

Under Ohio law, as long as an arbitrator is even arguably construing or applying the contract at issue, a court cannot overturn an arbitrator even if it believes the arbitrator has committed a serious error. In this case, the Court of Appeals determined that the arbitrator clearly thought out his opinion, issued a 62-page written opinion, and supported his legal conclusions as best he could, even if they were the opposite conclusions the trial court would have reached.

Thus, the appellate court reaffirmed Ohio’s long-held view that here and in other cases where the reviewing court disagrees with the arbitrator’s application of law or other merits of an arbitrator’s decision, the court is powerless to vacate the award for those reasons. Instead an award may only be vacated if the arbitrator acted unlawfully, or issued a decision that was arbitrary or capricious. Since the arbitrator’s decision did not fall into either of those categories, his decision was valid under the Ohio Arbitration Act, and courts cannot vacate the award.

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