Contracts And Memoranda Of Understanding

Contracts And Memoranda Of Understanding

Written on 09/01/2020
Will Aitchison

In February 2017, the City of Brook Park, Ohio, passed an ordinance calling for the City to pay hospitalization and/or medical insurance benefits to a group of retired employees in an amount that equated to $100 per month. Lodge 17 of the Fraternal Order of Police, which represents the City’s police officers, filed a grievance challenging the ordinance. The FOP claimed that the ordinance violated the terms of a 2009 memorandum of understanding (MOU).

An arbitrator applied the terms of the MOU and upheld the grievance. The City then challenged the decision through the court system.

The Ohio Court of Appeals struck down the Arbitrator’s opinion. The Court found that “Ohio law supports the conclusion that retirees are not subject to the grievance procedure under the CBA unless they are specifically included. The FOP’s claim that the Arbitrator had jurisdiction to decide the dispute and did not exceed his powers because the parties had arguably agreed to submit the matter to arbitration misses the mark. The dispositive issue in this case is whether the Arbitrator exceeded his power such that the award must be vacated. Arbitrators can exceed their powers by going beyond the authority provided by the bargained-for agreement or by going beyond their contractual authority to craft a remedy under the law.

“The dispute in this matter cannot be said to be rationally derived from the CBA. FOP is not designated as a representative of retirees under the CBA, there are no provisions in the CBA that concern retirees’ health insurance reimbursement benefits, and the CBA limits a grievance to ‘a dispute or difference concerning the interpretation or application of any provision of the CBA.’

“The dispute is not one concerning the controlling CBA, i.e., there is no contractual provision concerning retiree health insurance reimbursement. An examination of past practice equally does not concern the interpretation or application of a provision of the parties’ CBA. As such, the Arbitrator’s award failed to draw its essence from the collective bargaining agreement and the Arbitrator exceeded the power the agreement afforded him.”

With respect to the MOU, the Court found that the parties had not incorporated the terms of the MOU into the CBA. As such, the grievance procedure in the CBA could not be used to enforce the MOU.

City of Brook Park v. FOP, Lodge #15, 2020 WL 3501301 (Ohio App. 2020).

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