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Public Safety Employees Ass'n v. Alaska (10/6/95), 902 P 2d 1334
NOTICE: This opinion is subject to formal correction
before publication in the Pacific Reporter. Readers
are requested to bring errors to the attention of the
Clerk of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, telephone (907) 264-0607, fax (907) 276-
THE SUPREME COURT OF THE STATE OF ALASKA
PUBLIC SAFETY EMPLOYEES )
ASSOCIATION, LOCAL 92, )
INTERNATIONAL UNION OF POLICE )
ASSOCIATIONS, AFL-CIO, )
) Supreme Court No. S-5876
) Superior Court No.
v. ) 1JU-91-1819 CI
STATE OF ALASKA, ) O P I N I O N
______________________________) [No. 4270 - October 6, 1995]
Petition for Rehearing from the Supreme Court
of the State of Alaska, on Appeal from the
Superior Court, First Judicial District,
Juneau, Walter L. Carpeneti, Judge.
Appearances: James A. Gasper, Jermain,
Dunnagan & Owens, Anchorage, for Appellant.
Virginia B. Ragle, Patrick Gullufsen,
Assistant Attorneys General, and Bruce
Botelho, Attorney General, Juneau, for
Before: Moore, Chief Justice, Rabinowitz,
Matthews, Compton and Eastaugh Justices.
Public Safety Employees Association (PSEA) has
petitioned for rehearing of this court's decision in Public
Safety Employees Association v. State, P.2d , Op. No. 4213
(Alaska May 26, 1995) (PSEA). PSEA argues that this court
improperly applied the "arbitrary and capricious" standard of
review to the arbitrator's decision, since the arbitration was in
fact a voluntary grievance arbitration. As such, the "gross
error" standard should have applied.
I. FACTS AND PROCEEDINGS
The factual background of this case can be found in our
original opinion. See PSEA, Op. No. 4213 at 1-7. There we
observed that it was unclear what statutory provision mandated
the third arbitration proceeding (i.e., whether the arbitration
was grievance or interest arbitration),1 but that this lack of
facial clarity was unimportant since (1) the arbitration was
compulsory and not voluntary, and (2) the use of an interest
arbitration standard of review was appropriate as the proceedings
involved a dispute that was contractually formative in nature.
Id. at 6 n.3, 8-12, 17. Therefore, we reviewed the arbitrator's
ruling under the "arbitrary and capricious" standard that is
utilized in cases of compulsory interest arbitration. Id. at 8-
On petition for rehearing, PSEA argues that the
arbitration was voluntary, not interest arbitration, and that
therefore this court should have utilized the less searching
"gross error" standard of review.
We grant the petition for rehearing. However, we
conclude that assuming PSEA's contention has merit, the result in
this appeal is not affected by application of the "gross error"
standard of review.
In our original opinion we explained that this court
applies the "gross error" standard in reviewing grievance
arbitration awards, with "gross error" being defined as "'only
those mistakes which are both obvious and significant.'" Id. at
8 (quoting City of Fairbanks v. Rice, 628 P.2d 565, 567 (Alaska
1981)). However, citing (1) the compulsory aspect of the
arbitration and (2) the contractually formative nature of the
dispute, we reviewed the arbitrator's ruling under the less
deferential "arbitrary and capricious" standard that is applied
in cases of compulsory interest arbitration. Id. at 6 n.3, 8-12,
PSEA argues that both of the determinations which led
us to use the "arbitrary and capricious" standard were erroneous.
That is, PSEA asserts that the arbitration (1) was voluntary, and
(2) involved a grievance. It was not interest arbitration. PSEA
argues that if either of these assertions are correct, this
appeal should have been reviewed under the "gross error"
To determine the validity of PSEA's contention
regarding the nature of the arbitration would require further
briefing and argument. However, this is unnecessary. Even if
PSEA's assertions are correct, they do not affect the result of
this appeal. As the State argues on rehearing, the arbitrator's
mistake constituted not only an arbitrary and capricious result,
but gross error as well. We remarked in the original opinion
the arbitrator concluded that "absorption of
the cost [of the differentials] would require
reductions in force in a labor-intensive
agency on which the public depends for its
safety." (Emphasis added.) This invokes the
appropriation requirement provisions of AS
23.40.215(a), since "monetary terms of any
agreement" include those that "change . . .
productive work hours for state employees."
AS 23.40.250(4). The arbitrator ignored this
statutory language. Therefore, on this basis
alone, the arbitrator's decision was
arbitrary and capricious. He did not
consider statutory provisions that prohibit
the alternative that he held the State should
PSEA, Op. 4213 at 16-17. For this reason, the arbitrator's
opinion not only was arbitrary and capricious, but was so
mistaken that the flaw was "both obvious and significant." It
constituted gross error. Rice, 628 P.2d at 567.
The arbitration proceeding resulted in a mistake
constituting gross error. Therefore, the superior court's
refusal to enforce the arbitrator's award was not erroneous. On
rehearing, the judgment of the superior court is AFFIRMED.
1 "Interest arbitration is a process in which
the terms and conditions of the employment
contract are established by a final and
binding decision of the arbitration panel.
It differs from grievance arbitration, which
involves the interpretation of the employment
contract to determine whether the conditions
of employment have been breached."
Municipality of Anchorage v. Anchorage Police Dept. Employees
Ass'n, 839 P.2d 1080, 1081 n.1 (Alaska 1992) (quoting Arvid
Anderson & Loren A. Krause, Interest Arbitration: The
Alternative to the Strike, 56 Fordham L. Rev. 153 (1987)
2 In State v. Public Safety Employees Association, 798
P.2d 1281 (Alaska 1990), we were not required to address the
question whether compulsory grievance arbitration proceedings
might be subject to a standard of review other than gross error.
PSEA does not resolve that question, but does note that this
court has applied the gross error standard to grievance
arbitration proceedings. See PSEA, Op. No. 4123 at 8. We choose
not to address in this case whether compulsory grievance
arbitration proceedings might be subject to a standard of review
other than gross error, as we again are not required to do so.