Court Affirms Arbitrator’s Award Upholding Termination of Veteran Teacher for Shoplifting

An arbitration award supporting the termination of a Woodbridge teacher for repeated shoplifting has been affirmed by the New Jersey Superior Court and Appellate Division. In this case, Michele Schwab v. Woodbridge Township School District Board of Education, the terminated teacher argued that her shoplifting incidents were caused by a mental health disability and that she should not have been terminated for cause.  In rejecting this argument on appeal, the courts have issue another reminder of how difficult it is to overturn the decision of a private arbitrator.

During her sixteen years as an educator, Michele Schwab received awards such as “Educator of the Year” and was frequently described as a highly effective teacher. However, in February of 2015, Ms. Schwab engaged in criminal behavior by shoplifting from a store in the Woodbridge Center Mall. Ms. Schwab’s arrest and the charges against her were later dismissed. More than a year later, she again was charged with shoplifting and pled guilty to the charges brought against her after a video of the act surfaced on social media.  The video of her shoplifting that was seen by several of her fourth-grade students. Ms. Schward did not report her arrest to her employer, which the Board of Education claimed is a violation of a district policy.

When the school learned of the charges, Ms. Schwab was placed on suspension pending an investigation. Ms. Schwab’s employer additionally filed tenure charges against her, citing two counts of theft, failure to report her arrest, violation of district policies, and a pattern of unbecoming conduct. The charges were transmitted to an arbitrator for a hearing. After an investigation, the arbitrator decided that the Board of Education had established just cause to discipline Ms. Schwab, and that termination was an appropriate response to her charges.

On appeal, Ms. Schwab argued that the arbitrator improperly reviewed the case using an abuse-of-discretion standard, as opposed to a de novo standard; meaning that instead of considering the situation with a fresh, unbiased outlook, the arbitrator simply reviewed whether or not the Board abused its discretion in terminating Ms. Schwab. Furthermore, Ms. Schwab argued that her unbecoming behavior resulted from a mental health disability that she suffered from, for which she relied on medication. Both the lower court and the Appellate Court rejected her arguments and held that the arbitrator did not abuse their power in affirming the termination of Ms. Schwab for cause.

The Appellate Division court references scenarios where an arbitration award may be questioned, including (1) when there is evidence of corruption or fraud, (2) when arbitrators are guilty of misconduct prejudicial to the rights of any party, or (3) where the arbitrators exceeded or imperfectly executed their power in deciding the award. In her case, Ms. Schwab argued that the arbitrator imperfectly executed his power by relying on the decision of the Board of Education as opposed to making an independent determination regarding her termination.

The Appellate Court rejected Ms. Schwab’s argument, stating that the arbitrator had a clear understanding of the required standard, and extensively considered all of the relevant facts before analyzing the Board of Education’s decision. Regarding her mental health disabilities, the court affirmed the arbitrator’s decision that her handicap was not enough to mitigate the consequences of her criminal conduct.

This case highlights the power that arbitrators may have in definitively deciding a case, and further serves to structure the cases in which arbitration awards may be overturned.