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1-01-0138

JUSTICE REID delivered the opinion of the court:

Following the entry of an arbitration award, the City of Northlake (Northlake) filed apetition to vacate in the circuit court of Cook County. Both parties then filed motions forsummary judgment. The circuit court reversed the decision of the arbitrator. The arbitrator'saward sustained several grievances contesting the amount of sick leave paid to the police officersupon separation from employment. The trial court vacated the arbitrator's award, holding thatthe arbitrator exceeded his authority.

Following the reversal by the trial court, the Illinois Fraternal Order of Police LaborCouncil, Lodge 18 (Union), filed the instant appeal, seeking to reverse the circuit court's orderand confirm the arbitration award pursuant to the Uniform Arbitration Act (710 ILCS 5/1 et seq.(West 2000)). For the reasons that follow, we reverse the decision of the trial court and reinstatethe award of the arbitrator.

Northlake is a public employer under the Illinois Public Labor Relations Act (5 ILCS315/3(o), 20 (b) (West 2000)) (Act). Police employment is controlled by a collective bargainingagreement between the parties. The collective bargaining agreement (agreement) was negotiatedpursuant to the Act. By the terms of the agreement between the parties, the Union is theexclusive bargaining representative for all sworn police officers below the rank of assistant chiefemployed by Northlake. The agreement contains a grievance procedure culminating in final andbinding arbitration, as mandated by the Act.

In the instant matter, grievances were filed by the Union on behalf six retired officers andone officer who left employment in good standing prior to reaching retirement age. Those policeofficers claim Northlake neglected to properly pay out their accumulated sick leave when theyleft their employment. The accumulated sick leave payout is governed by section 18.1 of theagreement, which reads as follows:

"Sick leave shall only be used for the purpose for which it wasintended, that being, to provide an employee protection against lossof pay due to illness. Sick leave may not be converted into anyother forms of compensation. Accrued, unused sick leave will beforfeited, provided however, that employees who shall have ninety(90) or more days of accumulated sick leave, and who shallseparate in good standing with the Employer, upon separation willbe paid at their regular salary rate in a lump sum for all suchaccumulated leave up to a maximum of the equivalent of three (3)months pay. Therefore, it shall be required that thirty (30) days ofaccumulated sick leave be used for each one (1) month'sequivalent pay. If an employee has less than ninety (90) daysaccumulated sick leave, he shall receive a prorated one-thirtieth(1/30th) of one month's pay for each day of accumulated sick leaveexisting at that time." (Emphasis added.)

All of the police officers in question had 90 days of accumulated sick leave and left theiremployment in good standing. When they left employment, Northlake paid them based upon amonth's pay being a fraction of their annual wage. Northlake took the position that it is onlyrequired to pay 60 days of salary, which it views as the equivalent of two months' pay. Northlakearrived at this figure for two months of salary by dividing the annual salary by 12 and multiplyingthat amount by 3. Even though it could be argued that there are only 20 working days in acalendar month, Northlake stands firm that employee salary is calculated based upon an annualwage. The Union argues that a month is 20 working days for purposes of calculating the value ofthis type of sick leave.

The Union claims the parties resolved their grievances on May 28, 1998, at which timethe Union and Northlake agreed that the employees would receive day-for-day pay, up to 90 daysof their accumulated sick leave. The parties signed off on their agreement, using the followinglanguage:

"INTENT -- 90 days of pay is equal to three (3) months of fullpay, NOT sixty (60) days pay (as claimed in the pendinggrievance)."

The Union contends that, even though the above language was agreed to by both partiesafter the fact, it indicates Northlake's understanding and agreement to pay the officers theadditional 30 days of full pay. The police officers claimed both the chief and assistant chief, inseparate conversations, confirmed that this was the new understanding.

Northlake disputes the Union's claim that the parties resolved the dispute by signing atentative agreement to a successor contract. Northlake claims the "intent" paragraph, which wasnot incorporated into a successor contract, includes a number of agreements made at thebargaining table after the contract at issue had expired. Northlake explains in its brief that thetentative agreement was negotiated for a new, subsequent contract which is not at issue in theseproceedings. Northlake steadfastly refuses to disregard the traditional calendar and accept that amonth is 20 days. Northlake also denies that it agreed to pay any additional amounts beyondthose that the employees already received. Northlake further denies that the chief and assistantchief ever had conversations with anyone wherein Northlake agreed to pay more money.

Per the collective bargaining agreement, the matter was subsequently referred to bindingarbitration. The arbitrator's award sustained several grievances contesting the amount of sickleave paid to the police officers upon separation from employment. The arbitrator considered thetentative agreement and concluded that the collective bargaining agreement should be interpretedalong the lines of the Union's claim, that the agreement in force and effect constitutes a promiseto pay the grievants on a day-for-day basis. As a result, the arbitrator ordered Northlake to paythe remainder in question so that the grievants would have received the full 90 days ofaccumulated sick leave.

The arbitrator, in his report and decision, explains his rationale as follows:

"[T]he union also points to the tentative agreement ratified by theparties in May, 1998, and to testimony in which the City officialspurportedly state that the Grievants would receive day for day pay,based upon a 20 day work month, and with the monthly salarybeing prorated over those 20 days. * * * [T]he intent of theprovision of the tentative agreement leaves me throughlybewildered. I do not know what was intended. The statement of90 days being equivalent to three months of full pay, presumably90 days sick leave authorization, IS just exactly what the City alsoclaims. There is nowhere in the Agreement where a day's pay iscalculated other than as a fraction of the annual wages. *** Thetentative agreement, in and of itself, clarifies nothing.

However, combined with the testimony of the Unionwitness as to verbal agreements made at the time, it can beunderstood. In its way, it corroborates the testimony of the Union,that an agreement was made to pay the Grievants as the Uniondemanded that they be paid. However in-artful [sic] the language,there is in writing an agreement, totally inconsistent with what canbe deduced from the Agreement, that is convincing evidence of anagreement outside the Contract to make specified payments to theGrievants. If this agreement were verbal only, the Parol evidencerule would apply, and the writing in the agreement would takeprecedence. Here, however, a negotiated agreement to vary fromthe terms of the Contract is established in writing and signed off onby the parties. It was ratified and binds the City. By itself, thetentative agreement is not clear; as written verification of anagreement made, it is most clear. While it would not be valid tovary the words of the agreement, it is clear evidence of anagreement on the part of the parties to settle a grievance, and assuch, is clear evidence of an agreement on the part of the parties tosettle a grievance, and as such, can, and hereby is, enforced.

It is found that the parties negotiated an agreement to paythe Grievants on a day for day basis, contrary to the specific termsof the Agreement. The Agreement was confirmed in writing,which writing was negotiated and signed off on by the parties. Thegrievances are therefore allowed."

The trial court, on cross-motions for summary judgment, vacated the arbitrator's award,holding that the order exceeded the authority under the applicable statutes. In its ruling, the trialcourt made the following explanation of its reasoning:

"THE COURT: Well, it seems to me that the arbitrator didexceed his authority in this one. I mean, you have police officerwho says a month is 20 days of work and the City says a month is30 days of work, and it seems to me that it is a yearly contract. Ithink you take the yearly contract and divide it by 12. A month is amonth. And I think he exceeded his authority in this one andtherefore I am going to hold for the petitioner in this case andagainst the defendant. And I am going to reverse the arbitrator'sdecision and send it back for him to figure out. I don't even knowif I have to send it back.

[NORTHLAKE]: No, because the police officers have allbeen paid according to the formula.

THE COURT: All right. Just reverse it and that will beit."

This may well be a case of first impression in the State of Illinois. It is certainly a rarity,being a case where the parties to a collective bargaining agreement, in a doomed attempt toclarify and simplify the relations between them, enter into a properly negotiated settlement that iscontrary to the terms of the agreement, but continue to litigate, ultimately blaming the arbitratorfor accepting the settlement. We agree with the arbitrator that the claims were settled for thereasons stated in the arbitrator's report and decision and for the following reasons.

The purpose of summary judgment is to determine whether a triable question of factexists. Stahulak v. City of Chicago, 291 Ill. App. 3d 824, 828 (1997), citing Seeger v. Canale,241 Ill. App. 3d 177, 184 (1993). Summary judgment is appropriate when the pleadings,depositions, admissions and affidavits demonstrate that no genuine issue of material fact existsand the movant is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2000); State Police v. Fraternal Order of Police Troopers Lodge No. 41, 323 Ill. App. 3d 322, 326(2001), citing Rotzoll v. Overhead Door Corp., 289 Ill. App. 3d 410, 413 (1997). In ruling on amotion for summary judgment, the trial court must view all evidence in the light most favorableto the nonmovant. State Police, 323 Ill. App. 3d at 326, citing Malone v. American CyanamidCo., 271 Ill. App. 3d 843, 845 (1995). We review grants of summary judgment de novo. StatePolice, 323 Ill. App. 3d at 326, citing Malone, 271 Ill. App. 3d at 845.

The trial court's review of an arbitrator's award is extremely limited. Illinois NursesAss'n v. Board of Trustees of the University of Illinois, 318 Ill. App. 3d 519, 529 (2000), citingAmerican Federation of State, County & Municipal Employees v. State of Illinois, 124 Ill. 2d246, 254 (1988) (AFSCME). The narrow scope of review available to us is, in part, a reflectionof the legislature's intent in providing finality for labor disputes submitted to arbitration. Countyof De Witt v. American Federation of State, County & Municipal Employees, Council 31, 298Ill. App. 3d 634, 637 (1998) (De Witt), citing American Federation of State, County & MunicipalEmployees v. Department of Central Management Services,173 Ill. 2d 299, 304 (1996) (CMS). Arbitration awards should be construed, whenever possible, so as to uphold their validity. 7-Eleven, Inc. v. Dar, 325 Ill. App. 3d 399, 404 (2001); Stahulak, 291 Ill. App. 3d at 833, citingAFSCME, 124 Ill. 2d at 254. The scope of an arbitrator's power generally depends upon whatthe parties agree to submit to arbitration. Stahulak, 291 Ill. App. 3d at 833, citing AFSCME, 124Ill. 2d at 254. There is a presumption that the arbitrator did not exceed his or her authority. 7-Eleven, 325 Ill. App. 3d at 404, citing Ure v. Wangler Construction Co., 232 Ill. App. 3d 492,496 (1992). If an award is within the submission and contains the honest decision of thearbitrator, after a full hearing, a court will not set it aside for error of law or fact. 7-Eleven, 325Ill. App. 3d at 404, citing Ure, 232 Ill. App. 3d at 496. "However, if all fair and reasonableminds would agree that the construction of the contract made by the arbitrator was not possibleunder a fair interpretation of the contract, then the court is bound to vacate or refuse to confirmthe award. 7-Eleven, 325 Ill. App. 3d at 404; see Rauh v. Rockford Products Corp., 143 Ill. 2d377, 391-92 (1991).

A court may not reverse an arbitrator's decision simply because it is contrary to themanifest weight of the evidence. De Witt, 298 Ill. App. 3d at 637; see 710 ILCS 5/12, 13 (West2000) (circumstances where a court shall vacate and/or modify an award). Any questionregarding the interpretation of a collective-bargaining agreement is to be answered by thearbitrator, and we will not overrule that construction merely because our interpretation differsfrom that of the arbitrator. De Witt, 298 Ill. App. 3d at 637. A labor arbitration award must beenforced if the arbitrator acts within his scope of authority and the award draws its essence fromthe parties' collective bargaining agreement. Illinois Nurses, 318 Ill. App. 3d at 529, citingAFSCME, 124 Ill. 2d at 254. "However, an arbitrator's award may not stand if it contravenes'paramount considerations of public policy.'" Illinois Nurses, 318 Ill. App. 3d at 529, quotingAFSCME, 124 Ill. 2d at 260. "The public policy must be "well-defined and dominant" andascertainable "by reference to the laws and legal precedents and not from generalizedconsiderations of supposed public interests."'" Illinois Nurses, 318 Ill. App. 3d at 529, quotingCMS, 17 Ill. 2d at 307, quoting W.R. Grace & Co. v. Local Union No. 759, 461 U. S. 757, 766,76 L. Ed. 2d 298, 307, 103 S. Ct. 2177, 2183 (1983). The public policy of a state must bedetermined by its constitution, laws and judicial decisions. Illinois Nurses, 318 Ill. App. 3d at529, citing AFSCME, 124 Ill. 2d at 260. In deciding whether an award draws its essence fromthe agreement, a court determines whether the arbitrator limited himself to interpreting thecollective bargaining agreement. State Police, 323 Ill. App. 3d at 327, citing Water PipeExtension, Bureau of Engineering Laborers' Local 1092 v. City of Chicago, 318 Ill. App. 3d 628,637 (2000).

The Union argues that the award does not violate the Uniform Arbitration Act or publicpolicy and must, therefore, be confirmed. Because the Union and Northlake are parties to acollective bargaining agreement, the Union argues both parties have agreed to abide by thedecision of the arbitrator. The Union argues that the arbitrator reviewed the contract and theevidence presented at the hearing. The arbitrator found that the parties had agreed in advance toresolve conflicts in a certain way. The Union claims the evidence was not rebutted at thehearing. The Union argues the parties agreed to pay day-for-day for the 90 accrued sick days. Tocomply with this, the Union argues that Northlake agreed to pay 30 days over the 60 days alreadypaid.

Northlake responds and the trial court agreed that the arbitrator exceeded his authority. Itargues that it complied with the terms of the labor contract as written. In calculating the amountowed to the police officers, Northlake argues it employed the plain meaning of the language ofthe agreement. Since Northlake police officers are paid monthly, and the agreement requires thatthe payout be "at their regular salary rate in a lump sum *** up to a maximum of the equivalentof three(3) months pay," the proper payout was three-twelfths of their annual salary. Thecomputational equivalent, according to Northlake, is to take the amount of the annual salary andmultiply it by 25%. Northlake argues that the plain language of the agreement mandates that"thirty (30) days of accumulated sick leave be used for each one (1) month of equivalent pay." Northlake claims the Union is asking this court to ignore the plain, unambiguous language of theagreement. According to the Union's position, it breaks down a month into 20 working days and10 nonworking days. Since 20 working days multiplied by 3 months is 60 days and not 90, theUnion claims it is entitled to pay for 30 more days. Northlake responds that it has neveremployed such a formula in calculating salary and the agreement has no language in it that wouldlead a reasonable person to that interpretation. Northlake points out that the arbitrator concludedthat the Union's formula would lead to an absurd result and indicated that section 18.1 of theagreement supports Northlake's position. Northlake next points out that the arbitrator incorrectlybased his decision on the tentative agreement, the subsequent document signed during labornegotiations in contemplation of their next collective bargaining agreement. That tentativeagreement, which indicated the parties' intent to have 90 days equal 3 months of pay and not 60days, should not have been considered as it does not apply to the collective bargaining agreementat issue in these proceedings. Even though the arbitrator should not have used it, but did, theresult is the same as if the arbitrator had used what Northlake claims is the plain, unambiguouslanguage of the agreement.

The resolution of this case depends upon the answer to the question, for purposes ofaccumulated sick leave, "what constitutes 3 months pay"? For clarity's sake, we choose toidentify the competing theories of "monthly pay" argued by parties as being either "actual work"or "calendar basis." Both theories are capped at the agree-upon three months identified in thecollective bargaining agreement. It would be easy to fixate on the calculations involved or as theparties did, dwell on the number of months and somehow interpret the issue as a 20 versus 30days question, thereby missing the forest for the trees. Hopefully, the following will, if nothingelse, illustrate the need for precision in the drafting of collective bargaining agreements.

The Union champions the "actual work" theory. Under the "actual work" theory, theUnion distinguishes between working and nonworking days. Whether salaried or hourly, anemployee under the "actual work" theory would be entitled to a greater payout for accumulatedsick time, because that employee' s rate of pay would be higher, whether or not it is calculatedhourly, weekly, biweekly or monthly. Once a rate of pay is calculated, under section 18.1 of theagreement, the employee's "actual work" rate of pay would be applied to the number of days heor she has in the sick day bank at the time of his or her separation from employment. Thiscalculation is subject to the cap of the equivalent value of three months' pay.

A simpler form of calculation is advocated by Northlake. Under that theory, theemployee's salary is divided by one-twelfth, to arrive at the "monthly pay." Without gettingmired in mathematics, if no distinction is made between working and nonworking days, anemployee would be entitled to less of a payout under Northlake's "calendar basis" theory. Theemployee would instead be entitled to the maximum of three-twelfths of his or her salary or thethree months mentioned in section 18.1.

The language in section 18.1 is ambiguous. The arbitrator found it so and we agree. Theprimary ambiguity is located in the sentence that says employees "upon separation will be paid attheir regular salary rate in a lump sum for all such accumulated leave up to a maximum of theequivalent of three (3) months pay." "It is axiomatic that a court's principal goal in construing acontract is to ascertain and give effect to the parties' intent at the time they entered the contract." Shields Pork Plus, Inc. v. Swiss Valley Ag Service, 329 Ill. App. 3d 305, 310 (2002), citing USGCorp. v. Sterling Plumbing Group, Inc., 247 Ill. App. 3d 316, 318 (1993). "'[W]hen the languageused is susceptible to more than one meaning [citation] or is obscure in meaning throughindefiniteness of expression [citation],' a contract is properly considered ambiguous." ShieldsPork Plus, 329 Ill. App. 3d at 310, quoting Wald v. Chicago Shippers Ass'n, 175 Ill. App. 3d607, 617 (1988). The determination of whether a contract is ambiguous is a question of law forthe court. Shields Pork Plus, 329 Ill. App. 3d at 311, citing Clay v. Illinois District Council ofthe Assemblies of God Church, 275 Ill. App. 3d 971, 977 (1995), citing Quake Construction, Inc.v. American Airlines, Inc., 141 Ill. 2d 281, 288 (1990). Once the court determines that thecontract is ambiguous, parol evidence may be considered by the trier of fact in determining theparties' intent. Shields Pork Plus, 329 Ill. App. 3d at 311, citing Rybicki v. Anesthesia &Analgesia Associates, Ltd., 246 Ill. App. 3d 290, 300-01 (1993).

In this case, the arbitrator went outside the four corners of the agreement to resolve thecase. He specifically found that the tentative agreement became necessary to explain what wasintended between these parties. In examining the issues at hand, the arbitrator found that theparties settled their grievances.

In his report and decision, the arbitrator found that the "tentative agreement, in and ofitself, clarifies nothing." However, the arbitrator found the evidence convincing that there was anegotiated settlement of these grievances between these parties. The arbitrator correctly pointsout that, while it cannot vary the words of the original agreement, the settlement is a clear,enforceable agreement to settle the grievances. We agree. Pursuant to this settlement, by which90 days of accrued sick leave is converted to 3 months of full pay, the arbitrator found that thegrievants were not paid enough. We find no basis for concluding that an arbitrator is unable toaccept a properly negotiated, freely entered-into settlement that is dispositive of the issuesbetween the parties. Since the arbitrator was acting within the scope of his authority in acceptingthe settlement, the trial court's decision to reverse it is error.

In light of the foregoing, the judgment of the trial court is reversed and the arbitrationaward is hereby reinstated and confirmed.

Reversed.