Ne. Reg'l Council of Carpenters v. KRS Constr. Grp., LLC
| Decision Date | 13 August 2015 |
| Docket Number | Civ. Action No.: 15-0047(FLW)(LHG) |
| Parties | NORTHEAST REGIONAL COUNCIL OF CARPENTERS and NEW JERSEY CARPENTERS FUNDS and the TRUSTEES THEREOF, Petitioners/Plaintiffs, v. KRS CONSTRUCTION GROUP, LLC d/b/a CANAL DRIVE CONSTRUCTION, INC. d/b/a DOUBLE E SERVICES LLC, et al. Defendants. |
| Court | U.S. District Court — District of New Jersey |
*NOT FOR PUBLICATION*
:
Petitioner Northeast Regional Council of Carpenters and the New Jersey Carpenters Funds and the trustees thereof ("the Union" or "Petitioners") initiated this action to obtain confirmation of an arbitration award rendered against Defendant KRS Construction ("KRS") doing business as Canal Drive Construction ("Canal Drive") (collectively "Respondents") in connection with an alleged violation of a Collective Bargaining Agreement ("CBA") between the parties. The Union contends that KRS violated the CBA by conducting business as Canal Drive, an alleged alter ego entity, and not hiring union member carpenters. KRS opposes the petition and argues that that: (1) Petitioners violated 9 U.S.C. Section 4 by proceeding to arbitration without KRS present and by failing to file a motion to compel the arbitration; (2) the CBA was not in effect at the time of the alleged violation; (3) the CBA lacks necessary language to allowthe court to confirm arbitration; (4) petitioners failed to follow the "steps" required under article XVII of the CBA prior to requesting arbitration.
For the reasons detailed herein, Petitioners' Motion to Confirm the Arbitration Award is granted.
Petitioner is the regional Carpenters Union, and the authorized bargaining agent for carpenters, millwrights, lathers, and all others who perform work in the jurisdiction of the United Brotherhood of Carpenters and Joiners of America in this area. Respondent KRS Construction group is an incorporated carpentry contractor. Canal Drive is an incorporated entity which does construction work. Both companies were, or are, run by the same family, the Engelkens. See Certification of Catherine Engelken ¶¶ 2, 4, 6.
KRS and Petitioner are signatories to a Short Form Agreement ("SFA") signed on November 14, 2002. . The SFA states three points relevant here: (1) it "govern[s] any corporation, partnership or sole proprietorship which is deemed to be a controlled entity under the Internal Revenue Code or which is a successor to, joint employer with, or alter ego of the undersigned contractor"; (2) that "the permanent arbitrator . . . shall herein decide all matters concerning wages and benefits and all matters concerning procedural or substantive arbitrability"; (3) and that the SFA "shall continue in full force and effect from year to year unless at least 90 days before termination of the then current collective bargaining agreement either party notifies the other in writing . . . of cancellation of this agreement." (Id.).
Further, the SFA incorporates "every applicable current CBA between the State Council of Carpenters, Regional Council of Carpenters, or other local Carpenters Unions affiliated with the United Brotherhood of Carpenters and Joiners of America and the Building Contractors Association of New Jersey, governing wages, working conditions and payments to fringe benefits funds, which agreements are incorporated by reference." (SFA and CBA collectively the "Agreement") (Id.; Certification of Bradley M. Parsons Ex. B at 1 [hereinafter "Successive CBAs"].) By signing and accepting the terms of the SFA, KRS was agreeing to be bound to all successive CBAs as a contractor. (SFA.) Cover pages of the Successive CBAs indicate that each CBA is an agreement by and between the Northeast Regional Council of Carpenters of the United Brotherhood of Carpenters and Joiners of America, the Building Contractors Association of New Jersey, the Associated General Contractors of New Jersey, the Drywall & Interior Systems Contractors Association, Inc. of New Jersey, and the Construction Contractors Labor Employers. (Successive CBAs at 1, 47, 85.) Three subsequent CBAs became effective between the Union and KRS during the relevant dates: (1) the CBA in effect from May 1, 2002 through April 30, 2007 (id. at 1); (2) the CBA in effect from May 1, 2007 through April 30, 2012 (id. at 47); (3) and the current CBA which is dated as effective from May 1, 2013 through April 30, 2016 (id. at 85). Each CBA contains language which prohibits an employer from subcontracting "any work within the jurisdiction of the Union . . . except to a contractor who holds an agreement with the United Brotherhood of Carpenters and Joiners of America . . . or who agrees in writing" to be bound by the CBA. (Id. at 22, 41, 62). The same Article prohibits the employer from forming "new or double-breasted corporations for the purposes of avoiding the obligations of this Agreement." (Id.).
On or about September 27, 2011, a union representative allegedly witnessed KRS employees performing CBA-covered work at a job in Manalapan, New Jersey, under the company name Canal Drive. (Arbitrator's Op. at 6.) Following this discovery, and suspecting Canal Drive was an "alter ego" entity of KRS, the Union issued correspondence to KRS and Canal Drive at their shared address in compliance with the four steps defined in Article XVIII1 of the CBA, to be followed when a grievance such as this arises between the parties (Successive CBAs, CBA Effective 5/1/2017-4/30/2012, at 14-15; Certification of Bradley M. Parsons, Ex. H [hereinafter "Grievance Step Procedure Notices"]; Arbitrator's Op. at 6-7). After the Union had satisfied grievance resolution steps I-III, the Union, in compliance with step IV, made a request on October 25, 2011 that Arbitrator J.J. Pierson, Esq., hold an arbitration hearing to determine ifKRS had violated the Agreement. (Grievance Step Procedure Notices at 11). Accordingly, an arbitration hearing was scheduled for November 10, 2011. (Id. at 10). However, before the scheduled arbitration hearing, KRS, allegedly d/b/a Canal Drive, completed the disputed job in Manalapan, New Jersey. Id. Following the completion of this job, the Union found KRS to have gone "off the radar," "could not be found," and the Union concluded KRS was "'inactive' and out of business." (Arbitrator's Op. at 5.) No arbitration hearing was held.
Several years later, on August 11, 2014, the Union became aware that KRS was again doing business as Canal Drive and performing CBA-covered work at a job in Paramus, New Jersey in violation of the SFA. (Arbitrator's Op., p. 6.) Because the Union had already completed steps I-III of the CBA's grievance procedures after KRS' 2011 work as Canal Drive was discovered, the Union bypassed the first three steps and proceeded with step IV on August 29, 2014 by requesting another arbitration hearing. (Certification of Bradley M. Parsons, Ex. I. [hereinafter "Notice of Arbitration, August 29, 2014"]).
Arbitrator Pierson convened a hearing on September 18, 2014 to consider the issue of whether KRS Construction, doing business as Canal Drive Construction, violated CBA Article XIX's prohibition on the use of alter ego or double breasted entities to avoid the CBA's terms, by performing CBA-covered work through Canal Drive at the Paramus, New Jersey job site. (Arbitrator's Op., p. 1.) Neither KRS nor Canal Drive attended the arbitration hearing despite notice being issued by Arbitrator Pierson. (Id. at 11; Notice of Arbitration, August 29, 2014.). On October 9, 2014, Arbitrator Pierson issued an arbitration award against KRS. Pet. at 1.
At the September 18, 2014 arbitration hearing, Arbitrator Pierson considered testimony of witnesses and twenty-five exhibits submitted by the Union. Additionally, Pierson considered a prior grievance which culminated in an arbitration proceeding between the Union and KRS.2
In the current arbitration matter, after considering all of the material submitted by the Union, Arbitrator Pierson concluded that the Union had satisfied its burden of proving that KRS and Canal Drive were signatories to the SFA and therefore obligated to employ union member carpenters for work within the CBA's jurisdiction. Pierson further found that KRS and its principle agent Kirk Engelken violated CBA Article XIX § 4 by both creating Canal Drive and by failing to employ union carpenters at the Paramus, New Jersey job site. (Arbitrator's Op. at 12). Arbitrator Pierson stated that the Union's evidence "clearly and convincingly" established that "by [KRS] failing to employ [u]nion [c]arpenters, Canal, as a 'double-breasted' entity of KRS, caused a loss of work opportunity for Council Carpenters and monetary damages for lost work opportunity." (Id.)
Based on these findings, Arbitrator Pierson awarded and ordered the following on October 9, 2014:
To continue reading
Request your trial