Public Sector “Advisory” Arbitrations Restricted by Court

April 25, 2013 by John C. Provost

An appellate court has limited the manner in which California government agencies consider advisory arbitration decisions that are submitted to the governing body of an agency for adoption or rejection.

Many local government agencies in California provide for arbitration of disputes but then make the arbitrator’s decision subject to adoption or rejection by their governing bodies.  In many cases the attorney who presents the arbitration case for the agency is the same attorney who then advises the governing body on whether to adopt or reject the decision.  The results are predictable, and create the impression (if not the fact) of a kangaroo court.

In Sabey v. City of Pomona (Second Appellate District, Division Two, Los Angeles), issued on April 16, 2013, the court invalidated a decision by the Pomona City Council to reject an arbitration award that reduced a police officer’s firing to a suspension.  The court said that because one partner in a private law firm had presented the arbitration case for the city and a different partner in the same firm advised the city council regarding the arbitrator’s award, the grievant was denied due process of law.  The court said that partners in a law firm owe each other a fiduciary duty and this situation created an expectation that one partner would want to support the other with regard to the outcome of the arbitration.  The appellate court remanded the matter to the city with the requirement that it either get independent legal advice or adopt the arbitrator’s decision that it had rejected.

Oddly, the decision makes a distinction for two attorneys within a county counsel or city attorneys’ office acting in the same manner.  The court said that does not create the same due process issue because two attorneys in a city or county counsel’s office do not owe a fiduciary duty to each other and they can therefore each fulfill their respective roles (one presenting the arbitration case and the other advising the governing body whether to adopt it or reject it) without creating the appearance of bias.

Nonetheless, the decision is clear that such conduct by partners in the same private law firm is inappropriate, and any decision made in reliance on one partner’s advice in this situation may provide grounds for overturning the decision.

For assistance in Labor Law matters, please contact us at Beeson, Tayer and Bodine.

 

 

 

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