Frankfort Police arbitration award against city is thrown out by Court of Appeals

The Police Officers Association of Michigan filed a grievance against the City of Frankfort when it refused to re-hire a former officer, Tim Cavric, after he was laid-off.  The grievance went to arbitration, where the arbitrator held that Cavric must reinstate the officer.  The City appealed and the Court of Appeals overturned the arbitrator's decision. 

Under a new Collective Bargaining Agreement executed by the parties while Cavric was laid-off, the Union and the City limited to one year the City's previously unlimited obligation to re-hire laid-off officers.  At the time the new CBA was executed, Cavric had been laid-off for 15 months so the City refused him employment in a newly-created part-time position.  The Union claimed that during bargaining there was tacit agreement that Cavric would be excepted from the operation of the new 12-month re-hire limitation, however, the City denied any such agreement or exception.

The Arbitrator reinstated Cavric not based on the Union witnesses' testimony, but rather in reliance upon a contract interpretation favored under section 212 of the Restatement of Contracts, 2d. The interpretation he adoped focuses not only on the plain meaning of the terms, but also on the context of the contract.  In simple terms, the Arbitrator noted that enforcement of the new 12-month limit was not necessary in Cavric's case in order to achieve the contractual goals of both parties.  The Court of Appeals majority ruled that the arbitrator exceeded his arbitral authority in doing so, and that he was bound by the contract if its words were "clear and unambiguous."