Originally from Dispute Resolution Journal

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EMPLOYMENT
Explanation of Award

An arbitrator’s brief explanation of the basis for his decision satisfied the arbitration agreement’s requirement that the arbitrator explain the decision with respect to each of plaintiff’s theories, the 6th Circuit ruled.

The case alleged termination of employment in violation of Michigan’s age and race discrimination statutes. The post-dispute arbitration agreement provided that the award “shall be accompanied by an opinion which explains the arbitrator’s decision with respect to each theory advanced by each plaintiff….” The arbitrator decided in favor of the employer. The six-page opinion set forth the plaintiff’s allegations and focused primarily on a “corporate resizing process” that allegedly operated in a discriminatory manner. The opinion concluded:

“Considering all the evidence, the Arbitrator finds that Plaintiff Daniel Green has not met his burden of proof that the decision to terminate his employment in November of 1992, constituted race discrimination in violation of [state law].
“Considering all the evidence, the Arbitrator finds that Plaintiff Daniel Green has not met his burden of proving, in accordance with the standards set under [state law], that retaliation for protected activity was a factor that made a difference in the decision to terminate his employment in November of 1992. The Arbitrator finds no evidence to support the Plaintiff’s position that retaliation was, in any way, a factor in Plaintiff Daniel Green’s termination.”

Green argued the award should be vacated because it failed to comply with the arbitration agreement. The district court agreed, finding that the arbitrator merely announced, but did not explain, his decision. Accordingly, it vacated the award and remanded the matter to a new arbitrator.

The 6th Circuit reversed and remanded for purposes of reinstating the award. Although the award was short and conclusory, the court found it provided a separate discussion regarding each of the plaintiff’s theories. Therefore, the arbitrator met the contractual requirement of explaining why the employer prevailed on each theory. The court observed that parties who wish a more detailed opinion must be more specific and may be better off using familiar legal terms.

The appeals court went on to address the remand motion in dictum. It concluded that the district court erred in concluding that it could not remand for clarification to the same arbitrator because of the doctrine of functus officio. The 6th Circuit opined that the “ambiguity” exception to functus officio, which applies when an ambiguous award fails to address a contingency that later arises, or when the award is susceptible to more than one interpretation, could apply to a failure to explain an award. It reasoned that the purpose of this exception is to permit the arbitrator to complete an assigned task.

Green v. Ameritech Corp., 2000 WL 10606 (6th Cir. 2000).