Quintanilla v. Suffolk Paving Corp.

• Decision Date: 10 February 2011
• Docket Number: CV 09-5331 (SJF) (AKT)
• Parties: NELSON QUINTANILLA, ALEJANDRO AMAYA, ALEX AMIR, AREVALO MAYNOR FAJARDO, WALTER GARCIA, JOSE L. MARTINEZ, PRACELIS MENDEZ, OSMAR W. PAGOADA, JAVIER QUINTANILLA, EDWIN RIVERA, CARLOS ESCALANTE, KEVIN GALEANO, LERLY NOE RODRIGUEZ, JOSE VEGA CASTILLO, JUAN QUINTEROS, MARCOS TULIO PEREZ, Plaintiffs, v. SUFFOLK PAVING CORP., SUFFOLK ASPHALT CORP., LOUIS VECCHIA, CHRISTOPHER VECCHIA, HELENE VECCHIA AND JOHN DOES 1-5, Defendants.
• Court: U.S. District Court — Eastern District of New York

NELSON QUINTANILLA,ALEJANDRO AMAYA, ALEX AMIR,AREVALO MAYNOR FAJARDO, WALTER GARCIA,JOSE L. MARTINEZ, PRACELIS MENDEZ,OSMAR W. PAGOADA, JAVIER QUINTANILLA,EDWIN RIVERA, CARLOS ESCALANTE, KEVIN GALEANO,LERLY NOE RODRIGUEZ, JOSE VEGA CASTILLO,JUAN QUINTEROS, MARCOS TULIO PEREZ, Plaintiffs, v. SUFFOLK PAVING CORP., SUFFOLK ASPHALT CORP.,LOUIS VECCHIA, CHRISTOPHER VECCHIA, HELENE VECCHIAAND JOHN DOES 1-5, Defendants.

CV 09-5331 (SJF) (AKT)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

February 10, 2011

REPORT AND RECOMMENDATION

A. KATHLEEN TOMLINSON, United States Magistrate Judge:

Before the Court on referral from District Judge Feuerstein is the defendants' motion to dismiss the complaint and compel arbitration [DE22] and the plaintiffs' cross-motion to amend the complaint [DE26].¹ Having reviewed all of the papers on both motions, I am recommending to Judge Feuerstein that the defendants' motion be denied and that the plaintiffs' motion be granted as set forth below. This determination would allow the plaintiffs to file the Revised Proposed Second Amended Complaint, annexed as Exhibit 3 to the Goldberg Affirmation [DE30], subject to the defendants' objections to the argument raised for the first time in theplaintiffs' reply papers. That argument, as discussed later in this Report and Recommendation, involves plaintiffs' request to remove paragraph 106 of the proposed second amended complaint and to replace it with a claim asserting third party beneficiary rights under state funded contracts.

I. BACKGROUND

The plaintiffs commenced this lawsuit on December 8, 2009, alleging violations of the Fair Labor Standards Act ("FLSA") and the New York Labor Law, and common law claims of breach of contract, quantum meruit and unjust enrichment. The plaintiffs allege that during their employment with the corporate defendants, they were not paid all the wages owed to them, including overtime pay, and that some of them were retaliated against by the defendants for complaining about the underpayments. Some, but not all, of the plaintiffs are or were members of the Road and Heavy Construction Laborers' Union Local No. 1298 and International Union of Operating Engineers Local 138.

The defendants move to dismiss the action pursuant to the Federal Arbitration Act (the "FAA"), arguing that arbitration of the dispute is compelled under several Collective Bargaining Agreements ("CBAs" or "Agreements"). The plaintiffs argue that arbitration cannot, as a matter of law, be compelled by the CBAs, and they cross-move to amend the complaint to add additional claims and to correct certain factual assertions.

II. DISCUSSION

A. The Motion to Dismiss:

As noted, the defendants move to dismiss the complaint and compel arbitration pursuant to clauses set forth in several CBAs. See DE[23-1], Zabell Decl., Exs. B, C, D & E. I note, as a threshold issue, that seven of the plaintiffs are not members of a union and not bound by theCBAs in question. The defendants do not challenge the assertion that some plaintiffs are not union members and do not put forth any argument as to how or why they would be compelled to arbitrate their claims if the CBAs did mandate arbitration. Thus, the motion to dismiss and compel arbitration must be denied as to the non-union plaintiffs without reference to the CBAs.

As to the union plaintiffs, the defendants have provided copies of four CBAs that they say mandate arbitration of the plaintiffs' claims. They are as follows. The Agreements with the Road & Heavy Construction Laborers' Union Local #1298 for the periods June 1, 1999 to May 31, 2003, and June 1, 2003 to May 31, 2007 provide, in the sections captioned "ARTICLE IX/Labor Dispute:"

Section 1. Any and all complaints, grievances, controversies or disputes between the union and the employer in connection with or in relation to this Agreement or concerning the interpretation, application, performance or alleged breach thereof by either of the parties hereto, or by any other parties signatory to this industry-wide collective bargaining Agreement, or with respect to any term or condition of employment hereunder (herein collectively referred to as a "dispute") shall be referred to the union shop steward and the appropriate employer representative on the job site.

Step 1: If the union shop steward and an employer representative are unable to resolve the dispute, the matter shall be referred to the union business agent and the appropriate employer representative involving the job in question.

Step 2: If the union business agent and appropriate employer representative are unable to resolve the dispute within twenty four (24) hours thereafter, the matter shall be referred to the Union Business Manager and the Association Representative for final disposition.

Step 3: Should the union business manager and the employer representative fail to agree on the resolution of the dispute, the matter shall be submitted to the New York State Employment Relations Board for an appointment of an arbitrator in accordance with the rules and regulations.

DE[23-1], Zabell Decl., Ex. B at 37-38; Ex. C at 42-44.

The Agreements go on to provide for the powers of the arbitrator and other details of thearbitration. See id. The Agreement between Road & Heavy Construction Laborers' Union No. 1298 effective June 1, 2007 through May 31, 2012 provides substantially similar terms, in slightly different formatting, stating, in Article XI/Labor Dispute, that:

Section 1. Any and all complaints, grievances, controversies or disputes between the union and the employer in connection with or in relation to this Agreement or concerning the interpretation, application, performance or alleged breach thereof by either of the parties hereto, or by any other parties signatory to this industry-wide collective bargaining Agreement, or with respect to any term or condition of employment hereunder (herein collectively referred to as a "dispute") shall be referred to the union shop steward and the appropriate employer representative on the job site; subsequently, the following should be considered:

• If the Union Shop Steward and an employer representative are unable to resolve the dispute, the matter shall be referred to the union business agent and the appropriate employer representative involving the job in question.

• If the Union Business Agent and appropriate employer representative are unable to resolve the dispute within twenty four (24) hours thereafter, the matter shall be referred to the Union Business Manager and the Association Representative for final disposition.

• Should the union business manager and the employer representative fail to agree on the resolution of the dispute, the matter shall be submitted to the New York State Employment Relations Board for an appointment of an arbitrator in accordance with the rules and regulations.

DE[23-1], Zabell Decl., Ex. D at 36.

The fourth Agreement at issue is with Local Union 138, 138A, 138B and 138C of the International Union of Operating Engineers for the period June 1, 2009 through May 31, 2015. That Agreement provides, in relevant part:

ARTICLE IV - GRIEVANCE PROCEDURE

. . . Section 1. It is agreed that for the purpose of settling any dispute between the parties herein as to any claim or violation of this Agreement, or any dispute that may arise in connection therewith, or for construing the terms and provisions hereof, the matter shall be taken up by the Employer with the Union. In the event that no amicable agreement can be reached, it may th[e]n be placed before a JointPanel comprised of an equal number of Union and Long Island Contractors Association or Building Association representatives, as the case may be, whose decision may be final and binding.

. . .

In the event the Panel deadlocks and cannot reach a decision as to the issues submitted, the matter shall be promptly submitted to an arbitrator agreed upon by the parties.

DE[23-1], Zabell Decl., Ex. E at 9.

The defendants argue that these provisions compel arbitration of the wage claims herein. The decision as to whether to compel arbitration is governed by the FAA, and established federal public policy strongly favors arbitration as an alternative path toward resolution of a dispute. Arrigo v. Blue Fish Commodities, Inc., 704 F. Supp. 2d 299, 302 (S.D.N.Y. 2010) (citations omitted). The Second Circuit has noted that "it is difficult to overstate the strong federal policy in favor of arbitration, and it is a policy [the Second Circuit] has often and emphatically applied." Id. (quoting Arciniaga v. General Motors Corp., 460 F.3d 231, 234 (2d Cir. 2006)). Compulsion of arbitration is not, however, without its limits, and no party may be compelled to arbitrate any dispute that it has not agreed to arbitrate. Id. (citations omitted).

To determine whether to compel arbitration, the court must consider: (1) whether the parties agreed to arbitrate; (2) whether the plaintiff's claims fall within the scope of that agreement; and (3) if federal statutory claims are at issue, whether Congress intended those claims to be non-arbitrable. Id. (citing Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840, 844 (2d Cir. 1987)). If the court determines that some but not all of the claims in the case are arbitrable, it must then determine whether to stay the balance of the proceeding pending arbitration. Genesco, 815 F.2d at 844.

A collective bargaining agreement cannot preclude a lawsuit based on individual statutoryrights unless the arbitration clause in the agreement is "clear and unmistakable." See Wright v. Universal Maritime Servs. Corp., 525 U.S. 70, 79-80 (1998); Pyett, 129 S. Ct. 1465 ("This Court has required only that an agreement to arbitrate be 'explicitly stated' in the collective-bargaining agreement.") (citing Wright, 525 U.S. at 80). A "clear and unmistakable" waiver exists where one of two requirements is met: (1) if the arbitration clause contains an explicit provision whereby an employee specifically agrees...