Union May Not Assign Its Right to Appeal

Dillman v. Town of Hooksett
Dillman v. Town of Hooksett
No. 2005-564
Friday, April 7, 2006

The New Hampshire Supreme Court has clarified that a public sector union may not assign to an individual member the union’s right to appeal an award entered in an arbitration conducted pursuant to a collective bargaining agreement.

The plaintiff, Stephen Dillman, was an employee of the Town of Hooksett and a member of the Hooksett Permanent Firefighter Association, a certified union for Hooksett firefighters. The union’s collective bargaining agreement (CBA) with the town included a grievance article that specifically provided it was subject to the provisions of RSA Chapter 542. In May 2002, the town terminated Mr. Dillman’s employment. The union filed a grievance with the town on his behalf and an arbitration was held in accordance with the CBA. The arbitrator determined that the town had “just cause” for terminating Mr. Dillman.

Mr. Dillman then brought suit seeking a review of the arbitration decision. He alleged that the union had assigned to him its rights under RSA 542:8 to seek review, modification and correction of the arbitrator’s award. This was the first time the New Hampshire Supreme Court addressed the question of whether a union could legally assign these rights to an individual union member.

RSA 542:8 provides that “[a]t any time within one year after the award is made any party to the arbitration may apply to the superior court for an order” confirming, correcting, modifying or vacating the award. The Court found that the plain language of the statute makes being a “party to the arbitration” a necessary condition to applying for such a judicial order. Although it may seem counterintuitive, an employee generally is not a party to a union arbitration, even when the arbitration involves that employee’s termination. “This rule follows from the fact that the union and the employer, and not the individual employee, are usually the only signatories to the CBA.”

An exception to this rule is when the union has breached its duty of fair representation to the employee. Therefore, the Court wrote, when the union and the employer are the only parties to the arbitration, an individual employee may only have standing to challenge the arbitration award if he or she brings a claim against the union for breach of the union’s duty of fair representation. In this case, Mr. Dillman did not bring any such claim. In fact, in exchange for the assignment of the union’s right to appeal, Mr. Dillman had surrendered his right to bring any claim against the union for breach of the duty of fair representation.

The Court also found that it is against public policy to allow unions to assign their rights to seek judicial review of an arbitration decision to aggrieved individual employees. RSA Chapter 273-A, New Hampshire’s Public Employee Labor Relations Act, was enacted to “foster harmonious and cooperative relations between public employers and their employees and to protect the public by encouraging the orderly and uninterrupted operation of government.” Labor peace is enhanced by providing employees with a single voice when bargaining with their employer, and by eliminating the burden on the employer of facing conflicting demands from various employees within a single working unit.

The Court held that this principle applies to all phases of arbitration proceedings under a CBA between a public employer and an exclusive bargaining representative. If unions were permitted to assign their rights of appeal to individual union members, employers would be forced to deal directly with multiple employees without collective representation, and costs to employers could increase. This could materially increase the burden upon a public employer that had negotiated the terms of a CBA in good faith, while leaving the union insulated from liability to the employees it was organized to represent.

Therefore, the Court concluded, the assignment of the union’s rights to Mr. Dillman in this case is invalid because it “materially increases the burden or risk imposed” upon the town and “is inoperative on grounds of public policy.”