(San Francisco County Super. Ct. No. CPF-08-508438) Trial Judge: Honorable Patrick J. Mahoney.
The opinion of the court was delivered by: Kline, P.J.
CERTIFIED FOR PUBLICATION
"California law allows a court to correct or vacate a contractual arbitration award if the arbitrators `exceeded their powers.' [Citations.]" (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 366 (Advanced Micro Devices).) Here, the San Francisco Superior Court vacated an arbitrator's award in its entirety on the ground that the remedy fashioned by the arbitrator was contrary to layoff provisions of the memorandum of understanding (MOU) between defendant Service Employees International Union, Local 790 (Union) and plaintiff San Francisco Housing Authority (Housing Authority) and, therefore, exceeded the arbitrator's power. The Union appeals from the judgment, contending: (1) the arbitrator's remedy is rationally related to the violation she found; (2) the remedy she ordered was not precluded by any provision of the agreement; and (3) the arbitrator acted within her authority based upon the parties' stipulation in submitting the matter to arbitration that if a breach of the MOU were identified, the arbitrator would determine the appropriate remedy. We shall conclude the arbitrator did not exceed her powers and shall reverse the judgment of the trial court.
FACTS AND PROCEDURAL BACKGROUND*fn1
Layoff and Grievance Provisions of the MOU
Article IX, the layoff provision of the MOU between the Housing Authority and the Union, provides in relevant part:
"Section 1. Notice of Layoff. Seniority by classification will apply in cases of layoffs, demotions, and rehires. . . .
"Section 2. Seniority Bumping Rights. An employee with greater [Housing] Authority seniority may bump an employee with less seniority in the same classification, or in a lower classification in the same classification series. In addition, an employee may bump an employee with less seniority in a lower classification not in the same classification series if she/he has worked six (6) months in the lower classification and has maintained her/his skill level. A temporary or term employee may not bump a regular permanent employee, regardless of her/his seniority.
"Section 6. Alternatives to Layoff. . . . The Union has five (5) days after receiving notice [of contemplated layoffs] to request a meeting with the [Housing] Authority to meet and confer on the necessity for, impact of, and alternatives to such layoffs. The [Housing] Authority agrees to submit any alternative to the layoff(s) that the Union proposes to the Executive Director or designee. . . ."
Article XI, section 2, subdivision (d) of the MOU,*fn2 sets forth a grievance procedure for resolution of all disputes arising out of the MOU. It provides in relevant part:
"Level Three. In the event that the Union and/or employee is not satisfied with the decision rendered by the Executive Director or designee, any remaining unresolved disputes shall be submitted to an impartial arbitrator mutually acceptable to the [Housing] Authority and the Union. . . . The decision of the Arbitrator shall be final and binding. . . .
"Except when an agreement of the facts is submitted by the parties, it shall be the duty of the arbitrator to hear and consider the evidence submitted by the parties; to make written findings of fact and a disposition of the grievance which shall be final and binding upon the parties. The arbitrator shall have no power to amend this agreement or to recommend such amendment." (Italics added.)
The MOU also contains a "Management Rights" clause, stating that "[e]xcept to the extent there is contained in this agreement express and specific provision to the contrary, nothing herein shall be construed to restrict any legal [Housing] Authority rights concerning direction of its work force," and that the [Housing] Authority "may determine the methods, means and personnel by which the [Housing] Authority's operations are to be conducted."
Manchester's Work History
At the time of her layoff in 2005, Donise Manchester had been employed by the Housing Authority for 14 years. She was employed by the Housing Authority in 1991, first as a temporary employee, and then in a permanent position classified as administrative clerk from September 1991 until she was reclassified in 1997 to senior storekeeper. When she was an administrative clerk, several of those positions were audited and some, but not all, were reclassified as senior administrative clerk. Manchester never occupied a senior administrative clerk position, having moved to a different classification by the time the reclassification study was completed. In 1998, the senior storekeeper position was abolished, and she bumped into a different position and was again classified as an administrative clerk. She was reclassified as a senior account clerk in February 1999 until June 2003. (While so classified, she was assigned from May 2000 through January 2001 to replace the financial secretary, who was out because of illness, and was formally assigned as "acting financial secretary" in September 2000, after improving her typing skills.) When classified as a senior account clerk, she requested a desk audit and was reclassified to "acting accountant" in August 2002, but was not reclassified as an accountant, because she did not complete the educational prerequisites for that classification. She was returned to senior account clerk classification in February 2003.
In June 2003, Manchester was reassigned to the position of distribution specialist at the warehouse, and was told the reassignment avoided her being laid off in that year's budget cut. In that position, her assignment changed drastically from her senior account clerk position to what she characterized as a "laborer's" job, with significantly reduced level of skills, responsibilities and duties, including cleaning and operating a forklift. However, the Housing Authority continued to pay her at the higher rate of her prior position.
On June 1, 2005, Manchester was placed on paid administrative leave, pending investigation of allegations of inappropriate conduct. She was laid off on September 1, 2005, while still on administrative leave and before the investigation was completed. No further action was contemplated at that time because of the layoff. No notice of intended disciplinary action was issued and management witnesses testified that she would not have been terminated based on the allegations of inappropriate conduct, even if discipline were to result after completion of the investigation.
In 2005, the Housing Authority initiated layoffs due to a documented budget shortfall, caused by substantial funding decreases from the operating subsidies the Housing Authority received from the United States Department of Housing and Urban Development. The layoff list prepared in August 2005 listed a total of 29 employees to be laid off, including five temporary employees. Six permanent employees in the Union were listed for layoff, including Manchester, plus one employee who had bumping rights to a senior administrative clerk position.
Manchester had been continuously active in the Union since 1994, serving as a shop steward, representing employees, filing grievances, and requesting job audits that resulted in reclassifications. At the time of the 2005 layoff, Manchester's warehouse position was under the direction of the then deputy administrator for management support, who was directed to cut his budget to enable the Housing Authority to meet a 10 percent budget cut for the 2006 fiscal year. He testified that it was his decision to lay off Manchester, and that he was never told to single her out for elimination. He testified that she was selected solely because the MOU requires layoff by seniority in the classification. The only other distribution specialist had been in that classification for a long time and Manchester had been in the position ...