Those familiar with the arbitration process understand that a court will rarely vacate an award based on the arbitrator’s substantive determinations. A court’s only concern under both federal and state statutes is that the process be procedurally fair. For example, the Federal Arbitration Act provides that an award may be vacated:
“(1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.”
At the same time, arbitration offers an aspirational goal of providing the parties with a more expeditious proceeding than what they may encounter in a judicial court proceeding. Thus, arbitrators are tasked with exercising control over the process to ensure it “moves along,” while recognizing that failure to provide a party with a fair opportunity to present its case may result in the award being set aside by a court.
A recent decision by the Connecticut Appellate Court provides insight into this balancing act. In Lemma v. York and Chapel, Corp., an employee prevailed in an arbitration seeking damages associated with a claim of wrongful termination. The employer moved to vacate, asserting as one of its grounds that the arbitrator unreasonably failed to grant a postponement of the hearing. The underlying circumstances, set forth in detail by the trial court, explained that the hearing was scheduled to proceed on May 22 and 23, 2019. On May 17,
“the respondent’s attorney sent an e-mail to opposing counsel at 6:15 p.m. …—on which the arbitrator was copied—which reads in part as follows: ‘I was informed Thursday morning of an impending death of a friend of over [forty] years. He passed yesterday afternoon. I knew he was in hospice. I was unable to work at all yesterday and very little today. The arrangements are still not firm but are anticipated to be Monday/Tuesday or Tuesday/Wednesday. It will be in [Foxborough] MA. I am giving the eulogy. I plan to work Monday [morning, as] I have a [long-standing] mediation in an important case and then will be out of town. Because I was unable to attend to this, I request a continuance of the hearing.”
The arbitrator partially acceded to the request, granting a one day postponement, with the directive that the arbitration hearing would be reduced to one day, May 23. The arbitrator advised that, if the respondent’s designated counsel was not available, another attorney from his firm “should handle the case on behalf of the respondent.”
As the trial court explained, “[t]he respondent’s attorney did not return home from Massachusetts ‘until very late on May 22, 2019.'” On May 22, 2019, in the early afternoon, the respondent’s attorney sent a second continuance request, which was denied.”
The arbitrator’s denial of the postponement was made in the context of various objections raised by claimant’s attorney:
“[M]y client is literally en route from points west to attend the hearing tomorrow. [The] [r]espondent has an entire firm (including [one attorney], who participated in the preliminary conference call in the arbitration and has represented [the] [r]espondent in related litigation proceedings) available to handle this proceeding. [The] [c]laimant has paid all of the fees for this arbitration, the hearing of which was scheduled in November. [The] [r]espondent has ignored deadlines, failed to make payments and caused avoidable motion practice (motion to dismiss counterclaim). Enough is enough. As I wrote last week, I, as a solo attorney, do not have availability to handle a rescheduled hearing for several weeks. The prejudice to [the] [c]laimant is therefore even more palpable than it was several days ago. [The] [c]laimant insists that we proceed as ordered tomorrow. … One last point—at least one [third-party] witness has been subpoenaed to the hearing tomorrow as well. Disrupting the hearing therefore causes inconvenience to more than just the [p]anel, the parties and counsel.”
The arbitration proceeded, with the respondent being represented at the hearing by other counsel from other attorneys than the designated lead counsel. Having lost the arbitration, respondent moved to vacate, citing the arbitrator’s refusal to postpone.
The trial court denied the motion to vacate, explaining as follows:
“The court concludes that the arbitrator … acted within his discretion when he denied the respondent’s second request to continue the arbitration. This is because there were reasonable grounds for the refusal. To begin, the reason for the requested postponement— attendance at a close friend’s funeral in a neighboring state—is insufficiently compelling to require an arbitrator to postpone, twice, a previously scheduled hearing. While the court takes seriously the attorney’s loss of a close personal friend, that circumstance does not rise to the level of an event that would prescribe an adjournment in many circumstances, such as a medical emergency materially affecting the admission or presentation of evidence…
“Moreover, according to the respondent, [the attorney] was back home from the funeral on May 22, 2019, albeit ‘very late.’ Thus, the respondent’s attorney had returned by May 23, 2019, and the record does not reflect that [he] was unable to attend the hearing…In addition, and while [respondent’s preferred attorney] did not attend the hearing, the respondent was represented by counsel at the hearing, namely, by two of [his] colleagues, at least one of whom had been involved previously in the case.
“Finally, in declining the respondent’s request for a second continuance, the arbitrator was not limited to a consideration of the respondent’s concerns. Rather, the arbitrator was required to balance ‘the prejudice to the moving party resulting from the failure to postpone against the prejudice to the opposing party due to granting a postponement . . . and other circumstances as warranted in each case.’ … Here, in opposing the second requested continuance, the applicant’s counsel cited as prejudicial, inter alia, the fact that (1) the applicant was ‘en route from [the West Coast] to attend the hearing,’ (2) at least one third-party witness had been subpoenaed to the hearing, and (3) the applicant’s counsel, as a solo attorney, could not handle a rescheduled hearing for a period of time.”
Having failed to convince the trial court to vacate the award, the respondent appealed. The Connecticut Appellate Court was not persuaded, holding that the trial court “thoroughly addressed the arguments that are now before this court on appeal,” and adopting “its well reasoned decision.”
The takeaway from Lemma, at least in Connecticut, is that arbitrators will be afforded substantial deference in their management of a proceeding, without undue fear that their decisions will render the award vulnerable to vacatur.