A New York court held that where an employment arbitration award is silent regarding pre-award interest, a court may not modify the award by awarding pre-award interest itself. However, it is within the court's discretion to grant post-award, prejudgment interest.

In Chamois v. Countrywide Home Loans, Inc., No. 9938/2007, 2008 WL 4149749 (N.Y. Sup. Ct. Sept. 9, 2008), Alice Chamois and Rachel Douglas were employees of Countrywide Home Loans (Countrywide). After a dispute arose between the employees and Countrywide, the parties went to arbitration. An award was issued in favor of the employees: Chamois was awarded $125,000, and Douglas was awarded $70,000.

Chamois and Douglas (Employees) moved to confirm the award, and in their motion to confirm, the Employees sought pre-arbitration award interest, and also post-award, prejudgment interest.

As an initial matter, the Court held that while the Employees claimed to seek confirmation of the arbitration award, "in reality they seek to partially confirm the [a]ward and modify other portions." The Employees sought to modify the award to include pre-award interest because the award was silent on the issue. The Employees claimed that pre-award interest on their claims brought pursuant to Title VII of the Civil Rights Act of 1964 was required by the statute.

The Court held that while arbitrators may provide for prejudgment interest in their award, "if the award is silent on pre-judgment interest, a court is not entitled to award such interest." In addition, the Court held "[a]lthough Title VII authorizes prejudgment interest, it remains within the fact finder's discretion whether or not such interest will be granted and how such prejudgment interest will be calculated." Consequently, the arbitrator's failure to award prejudgment interest was not a manifest disregard of the law.

The Employees also sought post-award, prejudgment interest, which the Court granted. The Court held that "[u]nder the [Federal Arbitration Act], the award of post-award prejudgment interest is a matter left with the district court." Countrywide argued that the Court should not award post-award, prejudgment interest because the Employees unnecessarily delayed entering judgment on the award. In support of its argument, Countrywide cited its offer to Employees to pay the face amount of the award soon after it was issued without the necessity of a confirmation proceeding, which the Employees declined because the offer did not contain pre-award interest.

The Court rejected Countrywide's argument, holding that the money given in the award was on account of an existing obligation, and therefore the post-award, prejudgment interest was a "matter of right," and the Employees were entitled to it regardless if they were responsible for the delay in confirming the award. As a result, the Court confirmed the award in favor of the Employees, declined to award pre-award interest, but granted the Employees' motion for post-award, prejudgment interest.