Arbitration
Arbitration Award May Offset Discipline the SPB Upheld
Updated
In Department of Human Resources v. California Correctional Peace Officers Association, the Third District Court of Appeal held that an arbitrator did not exceed her powers by issuing an award that offset a 60-workday suspension the State Personnel Board had upheld. The court concluded the award did not contravene any explicit expression of public policy, reversed the trial court’s order correcting the award, and remanded with directions to confirm the award in its entirety.
Background
Tracylyn Lopez, a correctional officer and union representative, was disciplined after she posted materials from an earlier disciplinary action on a union bulletin board near the prison entrance. The posting revealed the nature of her discipline and the surnames of two officers involved. The California Department of Corrections and Rehabilitation suspended her for 60 workdays.
Lopez appealed the discipline to the State Personnel Board (SPB), which ultimately reinstated the full 60-workday suspension, finding the posting fostered a “code of silence” and constituted cause for discipline under the Civil Service Act.
Separately, her union, the California Correctional Peace Officers Association, pursued a contractual grievance and arbitration alleging the discipline was retaliation for protected union activity in violation of the parties’ memorandum of understanding and the Ralph C. Dills Act.
The arbitrator ruled for Lopez and the union, finding retaliatory motive, and ordered the employer to rescind the notice of adverse action and make Lopez whole. On the employer’s petition, the trial court struck those portions of the award, reasoning the arbitrator lacked authority to undo discipline the SPB had upheld.
What the Court Held on the Arbitrator’s Powers
The Court of Appeal reviewed de novo whether the award contravened public policy, while paying substantial deference to the arbitrator’s view of her own authority. It framed the public policy exception as a two-part test: first identify an explicit, clear, or well-defined public policy, then determine whether the award itself—not the underlying conduct—contravenes it.
The court accepted that article VII, section 3, subdivision (a) of the California Constitution, directing the SPB to “review disciplinary actions,” expresses a clear public policy. But it found the award did not violate that policy. The SPB reviewed the discipline for cause under the Civil Service Act, and the arbitrator separately reviewed it for retaliation under the memorandum of understanding and the Dills Act.
Distinguishing cases where employees bypassed the SPB entirely, the court explained that Lopez did not choose arbitration instead of the SPB. She was obliged to pursue cause before the SPB and the retaliatory nature of the discipline in arbitration. The court characterized the result not as reversing the SPB but as offsetting the suspension, and it noted that just cause and a retaliatory motive can lawfully coexist.
An arbitrator does not exceed her powers, and an award does not violate public policy, merely because it offsets a suspension the SPB upheld for cause where the arbitrator instead found the discipline was imposed in retaliation for protected activity.
The Code-of-Silence Argument
The employer argued in the alternative that the award undermined public policy favoring efforts to combat the code of silence. The court questioned whether the cited materials amounted to an explicit legislative expression of public policy at all.
Even assuming they did, the court held the award still did not violate that policy. The relevant question was not whether Lopez’s conduct was improper, but whether public policy required any particular term of suspension—and the employer had not shown that it did. The judgment was reversed and remanded with directions to confirm the award in full.
What This Means for You
This decision addresses when an arbitration award in the public-employment sector can be set aside under the public policy exception. It holds that an award offsetting discipline the SPB upheld for cause does not, by itself, contravene the constitutional mandate that the SPB review disciplinary actions, and that the exception looks to whether the award itself conflicts with a clear public policy.
I write these summaries as general information about developments in California employment law. They are not legal advice and don’t create a mediator–client relationship. For guidance on a specific matter, consult a qualified attorney.