Following Arbitrator’s Reinstatement of Management-Level Employee, State is Allowed to Appeal Decision to Minnesota Court of Appeals

Months ago, we discussed the decision of an arbitrator pertaining to the alleged misconduct of an assistant warden working within the Minnesota Department of Corrections (DOC).  After finding that the employee’s misconduct did not rise to the level to warrant termination, the arbitrator reinstated the assistant warden to his position with only a month-long suspension.

The State appealed the decision of the arbitrator directly to the Minnesota Court of Appeals for review under the Minnesota Administrative Procedure Act (MAPA).  MAPA allows for judicial review by the Court of Appeals of any “final decision in a contested case” by an agency.

The reinstated employee, Nathan Knutson, challenged the DOC’s ability to appeal the decision to the Court of Appeals in Minnesota Department of Corrections v. Knutson, arguing that the decision could only be appealed under the Minnesota Uniform Arbitration Act (UAA).  While the grounds for appeal under MAPA are fairly restricted, the reasons for which an arbitrator’s decision can be overturned under the UAA are even more limited, so the State would much prefer the appeal under MAPA.

In support of his argument against review by the Court of Appeals, Knutson argued that while his case was contested in front of an arbitrator, the arbitrator was not an employee of the State, or the BMS, whereas Minnesota statute 43A.33, the statute that gave him the ability to appeal the agency’s decision, states that review can only be granted based on a “final decision of an agency.”

The court dispensed with the argument in fairly short order, citing the plain language of both Minn. Stat. 43A.33 and the UAA.  Minn. Stat. 43A.33 first gives employees the right to appeal decisions to the Bureau of Mediation Services, and requires the BMS to provide a list of arbitrators to decide the case to the parties.  Based on this, the court held that the decision of the arbitrator, despite being an independent contractor, is a decision of the BMS, and subject to the appeal rights under MAPA.

In addition, the UAA provides the appeal rights under the UAA are limited only to arbitrations held pursuant to an agreement to arbitrate.  The employee’s ability to contest his termination in front of an arbitrator was provided via statute.

This is obviously a very narrow decision.  Minn. Stat. §43A only deals with state personnel management, so those government subdivisions will not be able to take advantage of the appeal opportunities provided by MAPA, and will have to appeal via the traditional district court review.  Moreover, even when reviewed at the Court of Appeals, the grounds for review of an arbitrator’s award under MAPA only include whether the determination was “arbitrary, oppressive, unreasonable, fraudulent, under an erroneous theory of law, or without any evidence to support it.”  That being said, it will be interesting to see the approach the State Attorney General’s office takes in challenging the decision of the arbitrator at the Court of Appeals.

The path to challenging the decision of an arbitrator is always difficult, but it is important to know your rights to do so following an unfavorable decision.  If you, or your organization, are weighing your options after arbitration, contact Wiley Reber Law, for arbitration experience that works.