## Facts

- The National Union of Hospital and Health Care Employees District No. 1199 (Union) and the Board of Regents of the University of New Mexico, operating University Hospital (Hospital), negotiated a successor collective-bargaining agreement under New Mexico’s Public Employee Bargaining Act (PEBA) and the University’s Labor Management Relations Resolution (LMRR).
- During mediation, the Union made its last offer, and the Hospital responded with its last, best, and final offer. Mediation ended without agreement.
- PEBA and the LMRR required that if an impasse continued after 30 days, the dispute would proceed to binding “final-offer package arbitration,” where the arbitrator must select one party’s complete last, best offer, and issue a final written decision no later than 30 days after notice of the arbitrator’s selection.
- Arbitrator Paul Gerhart was notified of his selection by letter dated November 7, 2007.
- An arbitration hearing occurred on December 12, 2007. During the hearing, the arbitrator conferred with the parties off the record and allowed the Union to modify its offer several times over the Hospital’s objections.
- Before concluding the December 12 hearing, the arbitrator stated he would allow additional modified offers after the hearing. He later met with counsel and shared his views about the modified offers and how he would view certain changes.
- The arbitrator directed the parties to submit modified offers simultaneously on January 4, 2008. He believed the LMRR allowed him to choose between the “last, best offers” before him at the time he issued his decision.
- The arbitrator selected the Union’s January 4 submission and issued an award in the Union’s favor.
- The Union filed an action in district court to confirm the award under the New Mexico Uniform Arbitration Act. The Hospital sought vacatur, asserting the arbitrator exceeded his authority and/or engaged in misconduct, and also argued that a bonus provision in the award violated public policy.
- The district court vacated the award and declared it of no further effect. The Union appealed.

## Issues

1. Whether the arbitrator exceeded the authority granted by PEBA and the LMRR by permitting post-hearing modifications of the parties’ “last, best offers” and then selecting a modified offer submitted on January 4, 2008.
2. Whether PEBA and the LMRR’s 30-day deadline for issuing a final written decision limits the arbitrator’s power such that acting outside that time frame supports vacatur under the Uniform Arbitration Act.
3. Whether the arbitrator’s off-record communications and evaluative guidance to counsel, combined with permitting rolling offer changes, constituted misconduct or otherwise required vacatur.
4. Whether the award (including any bonus component) could be confirmed despite the Hospital’s objections based on the Uniform Arbitration Act’s general deference to arbitration awards.

## Decision

- The Court of Appeals of New Mexico affirmed the district court’s order vacating the arbitration award and declaring it of no further effect.
- The court held that PEBA and the LMRR created a narrow form of final-offer package arbitration: the arbitrator was limited to selecting one of the parties’ complete last, best offers and lacked authority to convert the proceeding into a continuing bargaining process through post-hearing revisions.
- The court rejected the arbitrator’s view that “last, best offer” meant whatever proposals were most recently submitted to him before he ruled; instead, the statutory and LMRR limits constrained what the arbitrator could consider and how the decision could be made.
- Because the award resulted from actions outside the authority granted by PEBA and the LMRR, vacatur was proper under the Uniform Arbitration Act’s “exceeded powers” and related provisions.
- Having affirmed vacatur on excess-of-authority grounds, the court did not need to sustain the award on any theory, and the award could not be confirmed in part.

## Legal Principles

- Under the New Mexico Uniform Arbitration Act, a court must vacate an arbitration award when the arbitrator exceeds the powers given by the governing statute, resolution, or agreement creating the arbitration.
- Final-offer package arbitration limits the arbitrator to choosing one party’s complete offer; it does not permit issue-by-issue selection or an arbitrator-managed cycle of revisions after the hearing.
- When a public-sector bargaining statute and implementing rules impose a defined arbitration timetable and define the decision method, those limits restrict the arbitrator’s authority.
- Off-record communications and an arbitrator’s active role in steering parties toward revised proposals may support vacatur when they are part of a process that departs from the required final-offer structure.

## Conclusion

The Court of Appeals affirmed vacatur of the Union-favored impasse award because PEBA and the University’s LMRR required final-offer package arbitration with a constrained decision method and timetable, and the arbitrator exceeded those limits by allowing repeated post-hearing offer changes, engaging in off-record discussions with counsel about revisions, and selecting a later-submitted modified offer rather than choosing between the parties’ complete last, best offers as required.


National Union of Hospital and Health Care Employees District No. 1199 v. Board of Regents of the University of New Mexico, 245 P.3d 51, 149 N.M 107 (2010)