Indep. Lab. Employees' Union Inc. v. ExxonMobil Research & Eng'g Co.
| Decision Date | 29 July 2019 |
| Docket Number | Case No.: 3:18-cv-10835-BRM-DEA |
| Parties | INDEPENDENT LABORATORY EMPLOYEES' UNION, INC. Petitioner, v. EXXONMOBIL RESEARCH AND ENGINEERING CO., Respondent. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
Before this Court are: (1) Petitioner Independent Laboratory Employees' Union's ("ILEU") Motion to Confirm Arbitration Award (ECF No. 7); (2) ILEU's Motion to Dismiss Respondent's Answer and Counterclaim (ECF No. 26); (3) Respondent ExxonMobil Research and Engineering Co.'s ("EMRE") Motion to Dismiss Petitioner's First Amended Petition to Confirm Arbitration Award (ECF No. 30); and (4) EMRE's Cross-Motion to Vacate Arbitration Award (ECF No. 47). All motions are opposed (ECF Nos. 28, 36, 52). Having reviewed the parties' submissions filed in connection with the motion and having declined to hear oral argument pursuant to Federal Rule of Civil Procedure 78(b), for the reasons set forth below and for good cause having been shown, ILEU's Motion to Confirm Arbitration Award is GRANTED, ILEU's Motion to Dismiss Respondent's Answer and Counterclaim is GRANTED IN PART AND DENIED IN PART, EMRE's Motion to Dismiss Petitioner's First Amended Petition to Confirm Arbitration Award is DENIED, and EMRE's Cross-Motion to Vacate Arbitration Award is DENIED. Finally, JUDGMENT ON
This case concerns an arbitration award entered in favor of ILEU against EMRE, ordering EMRE to "cease and desist from permanently contracting out bargaining units at its Clinton, New Jersey facility." Ind. Lab. Empls.' Union, Inc. v. ExxonMobil Rsrch. & Eng. Co., Grievance No. 15-190 (ECF No. 1-3), at 21 (May 25, 2018) (Klein, Arb.) (the "Klein Award").
EMRE exists to support ExxonMobil Corporation's Upstream, Downstream, and Chemical business operations by seeking solutions to energy challenges anticipated to arise in the next two to three decades. Klein Award at 6. The facility in Clinton, New Jersey (the "Clinton Facility") is one of 432 laboratories and 92 plants EMRE maintains for that purpose. Id. EMRE divides its staff into two groups: "core" positions that "directly impact research and business functions" and "non-core" positions that serve "support functions such as security and materials delivery." Id.
EMRE's workforce is partially unionized. Id. ILEU is a union that represents approximately 165 EMRE employees, comprising approximately 25% of all EMRE staff. Id. Among ILEU's members, approximately 80% are research technicians qualifying as "core" positions. Id.
A collective bargaining agreement between EMRE and ILEU governs the "rates of pay, hours of employment, and other conditions of employment" of ILEU members employed at the Clinton Facility. (Agreement Between ExxonMobil Research and Engineering Co. and Independent Laboratory Employees' Union, Inc., art. I, § 2 (June 1, 2013) (ECF No. 3) (the"CBA").) The CBA provides that EMRE "recognizes [ILEU] as the exclusive representative of all EMRE employees whose job classifications are listed in Exhibit II and who are based at the [Clinton Facility]." (Id., art. I, § 2.)
The CBA permits EMRE to "let independent contracts," provided that EMRE notify ILEU of contracts that exceed a certain dollar threshold. (Id., art. XVIII.) The CBA also restricts layoffs and demotions during the contracting period. (Id.)
The CBA contains a "management rights" clause, reserving to EMRE "all rights of management for facilities covered by [the CBA] or pertaining to the operation of the business, except to the extent that such rights are limited by [the CBA]." (Id., art. XXVIII.)
Finally, the CBA allows either party to submit disputes to arbitration, and further provides that the arbitrator's decision is "final and binding" unless contrary to law or unless the arbitrator deviates from the terms of the agreement. (Id., art. VIII, §§ 1, 7.)
The bargaining history between ILEU and EMRE goes back over half a century.1 See Klein Award at 17. During that time, the parties have litigated grievances and arbitrated multiple disputes concerning EMRE's use of non-union independent contractors.
In 1977, ILEU grieved EMRE's use of independent contractors. See id. at 6. An EMRE vice president denied ILEU's grievance, but wrote that when EMRE "need[s] to utilize [non-union] personnel, [ILEU] can be assured that it will only be done when operations require, and in conjunction with, a combined program of employment and uprates [sic] of our own [union] personnel." Id. (quoting Letter from R.L. Weeks, Vice President, EMRE, to ILEU (Aug. 5, 1977)). The EMRE vice president wrote further, "I can state positively that there was not in this case, nor will there be in the future, any intent to erode the bargaining unit nor will there be inthe future, any intent to erode the bargaining unit nor to limit the number of bargainable [sic] employees." Id. (quoting Letter from R.L. Weeks, Vice President, EMRE, to ILEU (Aug. 5, 1977)).
A 1981 arbitration concerned EMRE's plan to contract for additional entry-level mail room staff while EMRE's parent corporation Exxon underwent a change in the mail processing procedures for its affiliated companies, a process expecting to last several months. See EMRE v. ILEU ("Stark Award"), at 2, 6 (Aug. 12, 1981) (Stark, Arb.).2 The arbitrator found that EMRE failed to provide ILEU notice of the contracting as required by CBA article XVIII. Id. at 11-13. In the award, the arbitrator wrote that while article XVIII "is not onerous" and "is clearly not a very restrictive provision," but also indicated that the parties should not read article XVIII "in a highly legalistic manner." Id.
ILEU and EMRE also arbitrated a 1983 dispute resulting from a backlog in EMRE's Distribution Control and Manuals Division that arose while EMRE attempted to set up a new computer system. See ILEU v. EMRE ("Florey Award"), Grievance No. WP-75, at 2 (Apr. 11 & 19, 1983) (Florey, Arb.).3 EMRE hired independent contractors to reduce the backlog. Id. Holding that EMRE's use of independent contractors in this instance was permissible,4 the arbitrator distinguished between (1) EMRE's permissible use of independent contractors to satisfy its business' operational needs, and (2) a hypothetical, impermissible use of independent contractors to replace union employees and thereby undermine the bargaining unit. Id. at 13.The arbitrator explained that "the use of [non-union] personnel was in response to a true operational problem and not designed to undermine the bargaining unit in violation of the recognition clause of the [CBA]." Id. Expanding on that theme, the arbitrator opined that "even with the broad language of Article XVIII," the CBA would not support "the position that [EMRE] need not hire any more persons into the bargaining unit so that [ILEU] would atrophy by attrition." Id. at 13-14.
This dispute arose when EMRE began phasing out union positions in favor of independent contractor positions as union employees retired. Klein Award at 8. The company expected to "mov[e] towards a fully contracting model" for all non-core positions that would permanently replace union members with non-union independent contractors, and sought to achieve its goal through the "attrition" of union members. Id. at 8-9.
On November 11, 2015, ILEU grieved EMRE's attrition program. Id. at 9. The parties subsequently submitted their dispute to arbitration. The arbitrator held two hearings at which the parties presented oral argument, witness testimony, and documentary evidence. Id. at 1. After receiving post-hearing briefs, the arbitrator issued a 21-page written award, sustaining ILEU's grievance and ordering EMRE to "cease and desist from permanently contracting out bargaining unit positions at [the Clinton Facility]." Id. at 21.
This action ranks among most procedurally complex cases this Court has faced. ILEU first filed what it styled as a "Verified Complaint," and later filed what it styled "First Amended Petition to Confirm Arbitration Award and Entry of Judgment," both substantially similar documents seeking confirmation of the Klein Award and asking this Court to enter judgment infavor of ILEU and against EMRE on that award. (ILEU's First Am. Pet. (ECF No. 6) ¶ 1; ILEU's Verified Compl. (ECF No. 1-1) ¶ 1.) ILEU also filed a motion seeking the same relief. (ILEU's Notice of Mot. to Confirm Arb. Award (ECF No. 7) at 1-2.)
In response, EMRE submitted a filing entitled "Answer" to ILEU's First Amended Petition, responding to each paragraph in ILEU's First Amended Petition, raising five affirmative defenses, and stating a counterclaim.5 (EMRE's Answer (ECF No. 21) at 1-12.) ILEU moved to dismiss this Answer and its accompanying counterclaim. (ILEU's Mot. to Dismiss (ECF No. 26) at 1-2.) EMRE, in turn, moved to dismiss ILEU's First Amended Petition. (EMRE's Mot. to Dismiss (ECF No. 30) at 1-2.)
ILEU then filed what it styled as a "Second Amended Petition," substantially similar to its initial Verified Complaint and First Amended Petition, and seeking the same relief. (ILEU's Second Am. Pet. (ECF No. 43) ¶ 1.) EMRE subsequently filed what it styled as an "Answer" to ILEU's Second Amended Petition, responding to each of the numbered paragraphs in ILEU's Second Amended Petition, raising four of the five affirmative defenses6 from EMRE's first Answer, and bringing the same counterclaim from EMRE's first Answer. (EMRE's Second Answer (ECF No. 44) at 1-13.)
ILEU asked the Court for leave to amend its pending Motion to Dismiss EMRE's First Answer so as to seek dismissal of EMRE's Second Answer. (Letter from Annemarie T. Greenan, Counsel to ILEU, to the Court, at 1 (Nov. 21, 2018) (ECF No. 45).)
Finally, EMRE filed its own cross-motion to vacate the...
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