Over the last year, we’ve discussed a recent arbitrator’s award over a decision by the state of Minnesota’s Department of Corrections (DOC) to discipline Nathan Knutson, the former Assistant Commissioner of Corrections. Knutson was terminated, following the alleged violation of several DOC policies relating to using his position to obtain benefits and interfering with an investigation. However, following a four-day hearing under Minn. Stat. §43A.33, Knutson was reinstated to his position following a one-month suspension. The DOC appealed the arbitrator’s decision at the court of appeals.
After some procedural steps, discussed here, the Minnesota Supreme Court held that the arbitrator’s decision was reviewable by a writ of certiorari under the Minnesota Rules of Civil Procedure, and the matter was brought to the court of appeals for its determination as to the standard of review for arbitrators’ decisions under §43A.33, whether the arbitrator erred in applying the statute, whether the arbitrator erred in concluding that Knutson did not violate the code of ethics; whether the arbitrator erred in refusing to consider whether Knutson lied during his investigation; and whether the arbitrator ignored the requirements of Knutson’s high-level position in his conclusions.
As a reminder, §43A.33 provides grievance procedures for the resolution of disciplinary actions involving state employees who are not covered by a collective bargaining agreement. In determining the standard of review, the court of appeals held that the quasi-judicial decision of the arbitrator’s decision was the common-law standard, where the record is examined to “review questions affecting the jurisdiction of the agency, the regularity of its proceedings, and as to the merits of the controversy, whether the order or determination in a particular case was arbitrary, oppressive, unreasonable, fraudulent, under an erroneous theory of law, or without any evidence to support it.”
In reviewing the arbitrator’s decision under that standard, the court of appeals mostly disregarded the claims that the arbitrator erred in his analysis of the facts, except for when he did not consider communications between Knutson and a possible witness a day after he was placed on leave. However, the court did find that Knutson did commit multiple violations of the state’s Code of Ethics when he purchased a $250 chair for $40, requested personalized mousepads to give to vendors, and requested that a subordinate get a basketball signed by the Minnesota Timberwolves for him during a scheduled charity appearance.
In addition, the court found that the arbitrator determined that Knutson lied during the second investigation prior to Knutson’s termination, but failed to consider that information in error.
The DOC requested that its decision to terminate Knutson be upheld or that the administrative decision be vacated and remanded for a rehearing as a result of the recognized errors. The court stated, given the arbitrator’s determination that the circumstances justified reinstatement of Knutson’s employment at the DOC, “we remand the case to the arbitrator to determine – in light of the errors identified in this opinion and the standard set forth in section §43A.33…whether extenuating circumstances justify modification of the DOC’s action.”
With that, and barring an appeal to the Minnesota Supreme Court, the case is being sent back to the same arbitrator who issued the decision to determine whether, with the court of appeals’s help, whether the termination of Knutson should stand.
Employers must understand that this decision is only applicable to employees covered under §43A.33, subd. 3(d). However, the level of review applied by such a high-level court is surprising, and may spark additional interest in appealing unfavorable arbitration awards at the district or court of appeals level. We will continue to look for additional decisions pertaining to this unique discipline, and keep you up to date on any developments. If you, or your organization, need assistance in effective discipline or the processing of grievances, up and through arbitration, contact Wiley Reber Law, for arbitration experience that works.