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New Jersey Transit Bus Operations, Inc. v. Amalgamated Transit Union

July 18, 2006

NEW JERSEY TRANSIT BUS OPERATIONS, INC., PLAINTIFF-RESPONDENT,
v.
AMALGAMATED TRANSIT UNION, NEW JERSEY STATE COUNCIL, DEFENDANT-APPELLANT.



On certification to the Superior Court, Appellate Division.

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

In its review of an arbitrator's interpretation of a contract, so long as the arbitrator's interpretation of the contractual language is reasonably debatable, a court is duty bound to enforce it. The sole issue in this appeal is whether the Appellate Division adhered to that standard when it vacated two arbitration awards.

Part-time bus operators were required to show up for work five minutes before the start of each shift but were not paid for that time nor for the time spent in returning their vehicles post-shift. They also were not paid for time spent in filling out accident reports. Pursuant to the terms of the collective bargaining agreement between New Jersey Transit Bus Operations and the Amalgamated Transit Union, the parties entered into binding arbitration to resolve the grievances. With respect to pre-shift reporting time and post-shift turn-in time, the arbitrator interpreted section 7(B) of the agreement as evidencing an intention by the parties that the work provisions would be applied to all operators without differentiating between full and part-time operators. The arbitrator concluded that section 16(P)(h) of the agreement required the bus company to pay part-time operators the same hourly rate as full-time operators and held that the bus company was required to include pre-shift reporting times and post-shift turn-in times when computing the hours worked by part-time operators. The arbitrator also concluded that the bus company would be required to pay part-time operators for their time spent in completing accident reports.

The bus company filed a complaint in the Chancery Division seeking to vacate the arbitration awards. The Chancery Division judge affirmed the awards. The Appellate Division reversed and vacated the awards, concluding that by not limiting part-time operators to the pay and benefits enumerated in section 16 of the agreement, the arbitrator exceeded his authority.

This Court granted the union's petition for certification.

HELD: The Appellate Division substituted its judgment for that of the arbitrator when it reversed the two arbitration awards in issue. The arbitrator's interpretation of the contractual language satisfied the reasonably debatable standard. We reverse and remand for reinstatement of the arbitration awards.

1. An appellate court's review of an arbitrator's interpretation is confined to determining whether the interpretation of the contractual language is reasonably debatable. Under that standard, a reviewing court may not substitute its own judgment for that of the arbitrator, regardless of the court's view of the correctness of the arbitrator's interpretation. The policy of strictly limiting judicial interference with arbitration is intended to promote arbitration as an end to litigation. (pp. 10-11)

2. The statutory check on arbitral authority does not alter the traditional scope of review in matters of contract interpretation, which holds that the arbitrator's interpretation is to be affirmed if the contractual language is open to debate. (p. 12)

3. The arbitrator's weaving together of the numerous provisions that bore on the compensation issues before him was certainly reasonable. The only standard that the arbitrator's interpretative decisions were required to meet, in order to pass judicial scrutiny, was the reasonably debatable standard. That his decisions clearly did. (p.13)

4. We hold that the Appellate Division substituted its judgment for that of the arbitrator when it reversed the two arbitration awards in issue. The arbitrator's interpretation of the contractual language satisfied the reasonably debatable standard and, therefore, the awards should have been affirmed on appeal. (pp. 13-14)

The judgment of the Appellate Division is REVERSED and the matter is REMANDED for REINSTATEMENT of the arbitration awards.

CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ZAZZALI, WALLACE and RIVERA-SOTO join in this opinion. JUSTICE ALBIN did not participate.

Per curiam.

Argued May 2, 2006

A deferential standard of review applies to an arbitrator's interpretation of a contract. So long as the arbitrator's interpretation of the contractual language is "reasonably debatable," a reviewing court is duty-bound to enforce it. Kearny PBA Local # 21 v. Town of Kearny, 81 N.J. 208, 221 (1979). The sole issue in this appeal is whether the Appellate Division adhered to that standard when it vacated two arbitration awards that favored Amalgamated Transit Union, New Jersey State Council (Union). We granted the Union's petition for certification from the unpublished per curiam decision of ...


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