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In Coachable Moment, District Court Reminds Parties of Deference Given to Arbitration Awards

Tim McCarthy on 3/29/2016
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As the Philadelphia Union sit atop their Major League Soccer divisional standings, it is an appropriate time to address the significant win the Union had during the offseason. A dispute arose over the firing of Union Coach Piotr Nowak, after which an arbitration was held. On January 11, 2016, a federal court in the Eastern District of Pennsylvania determined that the arbitrator had properly concluded that Nowak's firing did not violate his employment contract. See Nowak v. Pa. Prof'l Soccer, LLC, Civil Action No. 12-4165, 2016 U.S. Dist. LEXIS 2865 (Jan. 11, 2016). This case highlights the significance of arbitration agreements in the employment context, and the deference courts continue to afford to arbitration decisions.

Nowak was hired by Pennsylvania Professional Soccer, LLC and Keystone Sports and Entertainment, LLC (the "Union") to coach the Union through an employment agreement entered into on June 1, 2009. This agreement contained a mandatory arbitration clause. On June 13, 2012, Nowak was informed that his employment would be terminated for cause, in accordance with his employment agreement. This termination arose out of Nowak's apparent "egregious conduct" towards players, which included interference with players' rights to engage in union activities; threatening the safety and health of players; hazing of rookies; and other violations of MLS and Union team rules. Specifically, the record indicated that Nowak had required all players to complete a 10 mile run "while denying them access to water," and had also sought employment outside of his coaching position, in violation of the employment agreement.

Thereafter, Nowak filed the complaint underlying this action, in which he argued that his firing violated the agreement. Relying on the mandatory arbitration clause, the Union sought to have the matter ordered to arbitration. This request was granted in September 2012. The Arbitrator issued an Interim Award in April 2015, denying Nowak's claims. Thereafter, on November 5, 2015, a Final Award was entered, which directed Nowak to pay attorneys' fees and costs to the defendants. Nowak then filed a motion in federal court seeking to vacate the arbitration award.

The court made it clear that confirmation of arbitration awards is viewed through an extremely deferential lens. First, the court determined that the arbitrator had not misapplied the law, particularly with regard to evidentiary rulings and interpretation of the employment contract itself. Further, the court determined that the arbitration award was "not completely irrational" – meaning, that the arbitrator's legal and factual conclusions were adequately supported by the record. Last, Nowak had failed to present any evidence of bias or impartiality on the part of the arbitrator.

In the end (or, in soccer parlance, "the 90th minute"), Nowak provided no basis to disturb the arbitrator's decision and the award was confirmed. As noted by the court, when "a disappointed employee moves to vacate but cannot meet the limited statutory grounds to vacate a fully-litigated award, [courts will grant the] employer's motion to confirm the arbitration award and deny the disappointed employee's motion to vacate."

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