9th Circuit Finds Constitutional Property Interest in Arbitration Reinstatement Order

By David E. Worley

In Phillips v. Marion County Sheriff’s Office (194 LRRM 2389 (9th Cir. 2012)), the Ninth Circuit Court of Appeals ruled that a Corrections Officer  has a constitutionally protected property interest in their employment once a final and binding reinstatement order has been issued.  The Ninth Circuit stated that the property interest extends beyond the employment itself to the reinstatement of employment as well.  The Marion County Sheriff’s Association (in Salem, Oregon), was successful in having a discharged deputy ordered reinstated in a “final and binding” arbitration decision.  The County refused to abide by the arbitration decision, making the argument that public policy did not approve of the mistreatment of inmates, the misconduct the plaintiff was accused of.   

 The Ninth Circuit found that under prevailing Oregon State Court concerning the binding nature of arbitration awards, Phillips had “a legitimate claim to entitlement” that the reinstatement be upheld.  The County had agreed to binding arbitration in the CBA and did not have the discretion to pick and choose which arbitration decisions to follow:

The CBA refers to the decision to participate in binding arbitration as the Association’s “right.” Oregon law specifically allows for such an arrangement as a way to resolve employee grievances. Or. Rev. Stat. §243.706(1). The County’s agreement in the CBA to submit to arbitration for all grievances, and to accept the decision of the arbitrator as binding, was “intended to be a significant substantive restriction on [the County's] decision making.” See Mustafa v. Clark Cnty. Sch. Dist., 157 F.3d 1169, 1178 [8 AD Cases 1119] (9th Cir. 1998) (internal quotations marks omitted). When the arbitrator reinstated Phillips, the County did not have discretion to ignore the reinstatement award; it had to abide by it. Phillips, therefore, had a “legitimate claim of entitlement,” to the outcome of the arbitrator’s award and had a property interest in her arbitrator-ordered reinstatement.

The employer argued that it was entitled to qualified immunity in refusing to abide by the arbitration decision on the grounds that a public policy violation was present, a claim the court rejected:

The enforceability of the arbitrator’s award does not turn on whether the employee’s misconduct violated some public policy.  The proper inquiry, instead, is whether the award itself complies with the specified kind of public policy requirements.

The employer only argued that the abuse of an inmate, the reason for the initial discipline was a violation of public policy, but failed to argue that the reinstatement itself was also a violation of public policy.  Thus, the appellate court determined the employer here, was not afforded qualified immunity, and will be bound by the arbitration decision.