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Appeals Court Clarifies What Constitutes Exceeding An Arbitrator's Authority, Approves Arbitration of Wage Act Claims

The Massachusetts Appeals Court has ruled that an arbitrator exceeds her authority only when "she awards relief beyond the scope of the arbitration agreement, beyond that to which the parties bound themselves, or enters an award prohibited by law." Conway v. CLC Bio, LLC, 2015 WL 9883907, Mass. App. Ct. No. 14-P-350 (June 12, 2015), at 5-6. The Court also reiterated that the Federal Arbitration Act ("FAA") requires enforcement of an agreement to arbitrate statutory claims "absent a question of arbitrability, countervailing Congressional command, or cognizable challenge to the validity of the agreement to arbitrate." Id., at 10. 

The Conway case presented an appeal of a Superior Court order denying the Plaintiff's motion to vacate an arbitration award ("the Award"). Id., at 1. The Award was issued by a single arbitrator on the Plaintiff's claims arising out of the termination of his employment with the Defendant, including claims for breach of contract and violations of the Massachusetts Wage Act. Id., at 3-4. The Plaintiff claimed that the arbitrator had (i) exceeded her authority, and (ii) rendered an award not in accordance with the law. Id., at 4-5.

The Appeals Court cited the well established principles that "[c]ommercial arbitration awards...are subject to a narrow scope of judicial review" and "[a]bsent fraud, corruption or other undue means in the procurement of the agreement to arbitrate or a showing that the award is otherwise void or voidable, an arbitrator's award is binding." Id., at 5. In treating the specific issues on appeal, the Appeals Court held that, even if, as the Plaintiff claimed, the arbitrator had committed an error of law, that error alone would not mean that she exceeded her authority. Id., at 6. To the contrary, "[a]n arbitrator exceeds her authority if she awards relief beyond the scope of the arbitration agreement, beyond that to which the parties bound themselves, or enters an award prohibited by law." Id., at 5-6. 

The Plaintiff attempted to analogize the statutory arbitration provisions of the Education Reform Act of 1993 to his arbitration agreement with the Defendant. The Appeals Court rejected the analogy stating, "[I]n cases where the source and scope of the arbitrator's authority emanate from a commercial agreement to arbitrate claims [as opposed to a statute]...the arbitrator is fully empowered to interpret the underlying contract and the extent of her powers thereunder." Id., at 8-9 (internal quotations omitted). 

Finally, the Appeals Court treated the Plaintiff's argument that the Award was "contrary to public policy to the extent that it consigns the enforcement of statutes (like the Wage Act) which are meant to benefit the public as a whole, to private, unreported, unreviewable, standards adjudication." Id., at 9. The Court held that it was foreclosed from considering that argument based on an oft-cited line of cases enforcing private agreements to arbitrate. Id. The Court held, "Any attempt to refashion our State law to permit de novo review of commercial arbitration awards involving statutory claims would run afoul of the FAA, which...prohibits review of an arbitrator's findings of fact and rulings of law, so long as the arbitrator does not otherwise exceed her authority." Id., at 10. 

Based on the foregoing, the Appeals Court affirmed the Superior Court's denial of the Plaintiff's request to vacate the Award.

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