Board of Education of Watertown City School District v. Watertown Education Association

Two consolidated cases concerned the issue of whether arbitration was permitted under a collective-bargaining agreement to address an increase in employees’ health-insurance copayment cap. In the first case, the Board of Education of Watertown City School District (the district) (plaintiff) entered into a collective-bargaining agreement (CBA) with the Watertown Education Association (the union) (defendant). The CBA contained provisions addressing health-insurance benefits and outlined the breakdown of premium costs for the parties. The CBA contained an arbitration clause obligating the parties to arbitrate any dispute with respect to its meaning and interpretation. The district entered into a municipal-cooperation agreement to provide health-insurance benefits for its employees. The insurance plan’s administrator subsequently raised the employees’ copayment cap. The district maintained that even though the plan was governed by a board of trustees consisting of CEOs from the various districts, the districts had no control over the amount or type of health-insurance benefits provided by the plan. The union filed a grievance alleging that the reduction in health benefits was impermissible under the CBA. The union then made a demand for arbitration, which the district sought to stay on the ground that the dispute was not covered by the CBA. The union cross-moved to compel arbitration. The supreme court ruled in favor of the district, and the appellate division affirmed, holding that the issue was not arbitrable. The union appealed. The second case also involved a school district. It contained an identical set of facts and followed the same procedural path. The cases were consolidated on appeal.