A federal district court in California confirmed a partial arbitration award issued by an arbitrator who decided the liability issue in the case, but then ordered the parties to find a different arbitrator to decide the appropriate remedy.

In New United Motor Manufacturing, Inc. v. United Auto Workers Local 2244, No. C 08-0976 TEH, 2008 WL 2540702 (N.D. Cal. June 19, 2008), United Auto Workers Local 2244 (UAW) entered into a collective bargaining agreement (CBA) with New United Motor Manufacturing (NUMM), and the CBA provided a dispute resolution procedure that culminated in binding arbitration. After NUMM implemented a new sick leave policy that resulted in the termination of about 100 employees, UAW filed a grievance and the dispute went to arbitration.

At the initial hearings, NUMM argued that the remedy issue should be decided at another hearing, so the parties only briefed and the arbitrator only decided the liability issue. The arbitrator found in favor of UAW, and although the parties had authorized the arbitrator to retain jurisdiction over the remedy issue, he "decline[d] that delegation of authority" and ordered the parties to select a new arbitrator to decide that issue.

UAW moved to confirm and NUMM moved to vacate the award. NUMM argued that the award was not "final" under the Federal Arbitration Act (FAA), and therefore the Court did not have jurisdiction to confirm the award. NUMM also argued that the arbitrator exceeded his authority by ordering the parties to proceed with a new arbitrator.

The Court rejected both of NUMM’s arguments and confirmed the award. The Court, citing extensive precedent, held that under the FAA, a court may review an award that determines liability in a bifurcated arbitration proceeding even if remedy issues remain – a bifurcated award is "final" under the FAA. Consequently, the Court held that although the arbitration was not formally bifurcated, it would treat it as such because the arbitrator’s award "conclusively decided every point required by and included in the liability phase." Thus, the Court had jurisdiction to review the award.

Similarly, the Court rejected NUMM’s argument that the arbitrator exceeded his authority by ordering the parties to select a new arbitrator. NUMM argued that because the CBA used singular language ("an arbitrator"), the arbitrator exceeded his authority by ordering the parties to select a second arbitrator. The Court rejected NUMM’s argument, holding that the plain interpretation of such language was that the parties intended the arbitration process to involve one rather than a panel of arbitrators. Thus, since the remedy issue would still only be decided by one arbitrator, the arbitrator did not exceed his authority.

In confirming the award, the Court noted that it "in no way condones [the arbitrator’s] decision to decline jurisdiction in the middle of an arbitration," but "[n]onetheless, NUMM[] has not shown any ground[s] for vacating the [award]."