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A Better Partnership
May 29, 2009

COA Opinion: Court clarifies the applicable statute of limitations in action to vacate union arbitration award

On May 28, 2009, the Michigan Court of Appeals, in a published per curiam opinion, decided that parties seeking to vacate an arbitration award involving a municipality and one of its unions have six years to do so before the statute of limitations extinguishes the claim. The case, City of Ann Arbor v. AFSCME Local 369 (Case No. 283814), arose out of labor negotiations between the City and the Union. The existing contract, which expired on June 30, 2001, contained a "me too" provision that required the City to provide the Union wage increases identical to any wage increases the City agreed to provide to other unions, such as police and firefighters. The City/Union negotiations were not completed prior to the June 30, 2001, contract end so both parties agreed to "ground rules" that, in part, kept the existing contract in effect until the parties agreed to a new one. Ultimately, the parties agreed to a new contract, which was ratified by the Union in October 2002.

In the period between July 1, 2001 and October 2002, the Union filed a grievance alleging that the City was violating the "me too" provision when the City did not adjust upward the Union's wages to match the wages given to another union. This led to an arbitration where the Union was awarded the wage increase under the "me too" provision. The City, however, only paid that increase through the end date of the contract -- June 30, 2001 -- and refused to do likewise during the extended period between July 2001 and October 2002. When a later decision of the arbitrator sided with the Union on the wage increases during the extended period, the City filed suit in the circuit court seeking to vacate that part of the award as being a decision outside the arbitrator's authority. In response, the Union claimed that the City's suit was barred because it was filed more than six months after the initial arbitrator's award, relying on the Sixth Circuit case of Badon v. General Motors, Corp., 679 F.2d (Ct. App. 1982) (interpreting section 301 of the Labor Management Relations Act, 29 USC 185).

The court of appeals reviewed of the Badon case and the authority cited within it -- and then conducted an extensive analaysis of previous Michigan law on the topic. Notably, the court of appeals noted that neither Badon nor its progeny involved actions to vacate, modify, or enforce arbitration awards. Ultimately, the court of appeals relied on the Michigan Supreme Court's opinion in Rowry v Univ of Michigan, 441 Mich 1, 9-11; 490 NW2d 305 (1992) -- particularly the concurrences of Justices Griffin and Riley -- to conclude that the City had six years to bring its action either under the statute of limitation period for contract actions or, otherwise, under the "catch all" statute of limitations period (MCL 600.5813).

Nevertheless, despite winning the statute of limitations battle, the City ultimately lost the wage war, as the court of appeals agreed with the Union that the existing contract (including its "me too" provision) applied until the Union ratified the new contract in October 2002.

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