United Steel Workers v. Int'l-Matex Tank Terminals

Decision Date30 November 2022
Docket NumberCivil Action 22-2491
CourtU.S. District Court — District of New Jersey

Not for Publication



In this case, Plaintiff seeks to enforce the purported terms of a labor arbitration award involving one of its members. Currently pending before the Court is Defendant's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). D.E. 4. Plaintiff filed a brief in opposition, D.E 7, to which Defendant replied, D.E. 12.[1] The Court reviewed the submissions made in support and opposition to the motion and considered the motion without oral argument pursuant to Fed.R.Civ.P. 78(b) and L. Civ. R. 78.1(b). For the foregoing reasons, Defendant's motion is DENIED.


Plaintiff and Defendant are parties to a collective bargaining agreement (the “CBA”) that governs the terms and conditions of certain of Defendant's full-time and part-time employees.[2]Compl. ¶ 1. Article VIII of the CBA sets forth a grievance and arbitration procedure for disputes between a covered employee and Defendant. The CBA requires that an arbitrator issue an award in writing and states that the award is final and binding. Id. ¶ 6.

Plaintiff filed a grievance on behalf of bargaining unit member James Calton under Article VIII after Defendant terminated Calton without cause. On March 16, 2021, Arbitrator Janet M. Spencer held a hearing on the grievance and the parties submitted post-hearing briefs. On May 24, 2021, Arbitrator Spencer issued an award (the “Award”) in which she found that Defendant did not have just cause to terminate Calton. Id. ¶¶ 9-10. The Award further provided as follows:

The Company [Defendant] shall reinstate Mr. Calton to his previous position forthwith, and shall promptly make him whole for back pay (minus interim earning and/or unemployment benefits), seniority and benefits lost as a result of his termination.
This arbitrator will retain jurisdiction for 60 days for the sole purpose of assisting in the implementation of this Award, if requested.

Compl., Ex. B at 8.

Plaintiff alleges that prior to his discharge, Calton “routinely worked more than forty hours” a week and was paid overtime for these hours. Id. ¶ 13. But Plaintiff alleges that in implementing the Award, Defendant refused to include Calton's “average overtime earnings from the backpay calculation.” Id. ¶ 14. Thus, Plaintiff alleges that Calton has not been made whole as ordered by the Award. Id.

On April 28, 2022, Plaintiff filed the Complaint pursuant to Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185 (the LMRA). Id. ¶ 1. Plaintiff seeks to enforce the Award or in the alternative, remand the matter to the Arbitrator to calculate back pay. See Id., Prayer for Relief. Defendant subsequently filed the instant motion to dismiss. D.E. 4.


Defendant moves to dismiss the Complaint for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). For a complaint to survive dismissal under Rule 12(b)(6), it must contain sufficient factual matter to state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Further, a plaintiff must “allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of her claims.” Connelly v. Lane Constr. Corp., 809 F.3d 780, 789 (3d Cir. 2016). In evaluating the sufficiency of a complaint, district courts must separate the factual and legal elements. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009). Restatements of the elements of a claim are legal conclusions, and therefore, are not entitled to a presumption of truth. Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011). The Court, however, “must accept all of the complaint's well-pleaded facts as true” and give a plaintiff the benefit of all reasonable inferences flowing therefrom. Fowler, 578 F.3d at 210.


Plaintiff seeks to enforce the Award pursuant to Section 301(a) of the LMRA, 29 U.S.C. § 185(a). Compl. ¶ 1. “Judicial review of a labor-arbitration pursuant to a collective bargaining agreement is very limited.” Nat'l Ass'n of Letter Carriers, AFL CIO v. U.S. Postal Serv., 272 F.3d 182, 185 (3d Cir. 2001). If the arbitration award “draws its essence from the collective bargaining agreement, a court should uphold it” and “may not overrule an arbitrator's decision simply because the court believes its own interpretation of the contract would be the better one.” Pa. Nurses Ass'n, Local 729 v. John F. Kennedy Med. Ctr., 247 F.Supp.2d 665, 671 (E.D. Pa. 2003); see also Verizon Pa., LLC v. Commc'ns Workers of Am., Local 13000, 13 F.4th 300, 303 (2021) (“The deference given to arbitration awards is almost unparalleled, but not absolute.”).

However, pursuant to the functus officio doctrine, once an arbitrator decides an issue, she generally cannot revise the decision without the parties' consent. Verizon Pa., LLC, 13 F.4th at 303. There are three exceptions to the functus officio doctrine. As relevant here, “where the award, although seemingly complete, leaves doubt whether the submission has been fully executed, an ambiguity arises which the arbitrator is entitled to clarify.”[3] Id. at 307 (quoting Office & Pro. Emps. Int'l Union, Local No. 471 v. Brownsville Gen. Hosp., 186 F.3d 326, 331 (3d Cir. 1999)). Consequently, if a damages award in an arbitration decision is ambiguous, the district court must remand the matter to the arbitrator for clarification. Id. at 309; see also Health Pros. & Allied Emps., Local 5091 v. Bergen Reg'l Med. Ctr., No. 08-1031, 2010 WL 147938, at *4-5 (D.N.J. Jan. 8, 2010) (remanding matter to arbitrator to determine how mitigation impacted the back pay award).

As set forth in the Award, Arbitrator Spencer ordered Defendant to reinstate Calton and make him whole for back pay lost due to his termination. Compl. ¶ 11. Defendant maintains that by reinstating Calton and giving him back pay at 40 hours a week, it complied with the Award. Defendant continues that overtime pay is more than “make whole relief” and would result in a windfall to Calton. Def. Br. at 5. Plaintiff counters that average overtime is properly included in an arbitrator's relief to make whole. Plf. Opp. at 4.

Make whole equitable relief is intended to restore an employee to the same place he would have been in had the wrongful action not occurred. See Crozer-Chester Med. Ctr. v. NLRB, 976 F.3d 276, 295 (3d Cir. 2020) (explaining the function of a remedy in unfair labor case); see also Eshelman v. Agere Sys., Inc., 554 F.3d 426, 442 (3d Cir. 2009) (explaining that the remedial purpose of make whole relief within the employment discrimination context is to “restore the employee to the economic status quo that would exist but for the employer's conduct” (quoting In re Cont'l Airlines, 125 F.3d 120, 135 (3d Cir. 1997)). Make whole relief is not limited to traditional wages or salary and overtime can be a component of make whole relief. See Serv. Emps. Int'l Union, Local 79 v. Beverly Enters., No. L87-37-CA5, 1988 WL 185869, at *2 (W.D. Mich. Sept. 21, 1988) (“If historically a pattern and practice of regular overtime existed then it, too, must be considered as the pay [the employee] would have earned had she remained employed.”); see also Lou's Transport, Inc. v. NLRB, 945 F.3d 1012, 1023-24 (6th Cir. 2019) (explaining that overtime calculation for back pay award must be flexible “depending on the circumstances of each case”); Atl. Limousine, Inc. v. NLRB, 243 F.3d 711, 717-18 (3d Cir. 2001) (concluding that unreported tips could be included in back pay calculation).

Here, Plaintiff pleads that Calton “routinely worked more than forty hours in a week” and received overtime pay for these hours. Compl. ¶ 13. Moreover, in the Award, the Arbitrator referenced the fact that Calton previously worked overtime and that Defendant's covered employees understood they were expected to work overtime at times. Compl., Ex. B at 1, 3. Thus, Plaintiff plausibly pleads that there is an ambiguity as to whether Calton is entitled to overtime as part of his make whole relief. Moreover, through the functus officio doctrine, Plaintiff plausibly establishes that this issue could be remanded to Arbitrator Spencer for clarification.

Next, Defendant argues that Plaintiff waived its right to raise the overtime dispute because it did not timely raise the issue with the arbitrator. Def. Br. at 6-7. In her Award, Arbitrator Spencer stated that she would retain jurisdiction to assist in the implementation of the Award for sixty days. Compl., Ex. A at 8. Plaintiff does not dispute that it initiated this action long after the sixty-day period expired. But Plaintiff counters that it did not waive any rights. Plf. Opp. at 6-9.

Defendant relies on Teamsters Local Union No. 760 v. United Parcel Service, Inc., 921 F.2d 218 (9th Cir. 1990) in support of its waiver argument. Def. Br. at 6-7. But in Teamsters, the waiver arose due to a private agreement between the parties. The parties in Teamsters also disagreed about whether the defendant should have included overtime in the back pay calculation and whether the union waived its objections to the back pay computation. The parties, however, agreed to submit these issues to the arbitrator and that the arbitrator's decision on both issues would be final and binding. Teamsters, 921 F.2d...

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