Util. Sys., Inc. v. Int'l Union of Operating Eng'rs Local 825, AFL-CIO
| Decision Date | 24 March 2021 |
| Docket Number | Civil Action No. 20-14369 (SDw) (LDW) |
| Parties | Re: Utility Systems, Inc. v. International Union of Operating Engineers Local 825, AFL-CIO |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
CHAMBERS OF SUSAN D. WIGENTON UNITED STATES DISTRICT JUDGE
Ronald L. Tobia, Esq.
Othiamba Nkosi Lovelace, Esq.
Tobia & Lovelace Esqs., LLC
5 Sicomac Road, Suite 177
North Haledon, NJ 07508
Gregory J. Hazley, Esq.
Richard F.X. Regan, Esq.
Decotiis, Fitzpatrick, Cole & Giblin, LLP
61 South Paramus Road, Suite 250
Paramus, NJ 07652
Before this Court is Utility Systems, Inc.'s ("Utility" or "Petitioner") Motion to Vacate the Arbitration Award entered by Arbitrator Gerard G. Restaino (the "Arbitrator") on August 14, 2020, in favor of International Union of Operating Engineers Local 825, AFL-CIO ("Local 825" or "Respondent"). Also before this Court is Local 825's Motion to Confirm the Arbitration Award, filed in member case Civ. No. 20-14534 (consolidated on November 13, 2020). Jurisdiction and venue are proper pursuant to 28 U.S.C. §§ 1331 and 1391, respectively. This letter opinion is issued without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons discussed below, Utility's motion is DENIED and Local 825's motion is GRANTED.
Utility is a construction contractor incorporated and based in New Jersey and Local 825 is a labor union that is also based in New Jersey. (D.E. 1 (Petition to Vacate Arbitration Award) ¶¶ 3-4.) The present lawsuit arises out of a labor dispute between the parties regarding the hiring of operating engineers ("operators"). Utility's collective bargaining agreement with Local 825 (D.E. 7-2 Exs. B and D ("Utility-Local 825 CBA"))1 requires it to employ operators obtained from Local 825's open employment list (Local 825's "hiring hall"), and additionally requires Utility to subcontract work only to those subcontractors who agree to follow the same hiring hall procedure. (Utility-Local 825 CBA at 1, Art. 1 ¶ 2.) In October 2018, Local 825 filed grievances pursuant to the procedure set forth in the Utility-Local 825 CBA, for alleged hiring hall and subcontracting violations related to four projects that occurred in New Jersey from 2016 to 2018. A (August 14, 2020, Arbitration Opinion and Award ( )) at 1; see Utility-Local 825 CBA Art. XXIV.) The crux of the grievances is that Utility violated its CBA with Local 825 by subcontracting work to non-signatory contractors, including P&A Construction, Inc. ("P&A"), that did not follow the required hiring hall procedures. (See Arb. Op. at 8-11.) In accordance with the Utility-Local 825 CBA, these grievances proceeded to bilateral arbitration between Utility and Local 825 on September 24, 2019. (Id. at 1.)
On the eve of arbitration, Utility and P&A filed suit in this Court against Local 825 and another union—United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local 15024, AFL-CIO-CLC ("Local 15024")—to stay the bilateral arbitration between Utility and Local 825. P&A Constr., Inc. and Utility Systems, Inc. v. Int'l Union of Operating Engineers Local 825, Civ. No. 19-18247, 2020 WL 773128, at *1 (D.N.J. Feb. 18, 2020), appeal docketed, No. 20-1634 (3d. Cir. Mar. 23, 2020).2 Additionally, Utility and P&A moved to compel tripartite arbitration between (1) Utility and P&A, (2) Local 825, and (3) Local 15024, to resolve the issue of which union has jurisdiction over Utility and P&A's operator jobs. Id. In support of their motion, Utility and P&A claimed that they were "single employers" or "joint employers" within the meaning of § 301 of the Labor Management Relations Act, as amended, 29 U.S.C. § 185. See id. at *1. They argued that Local 825 claimed jurisdiction over operator jobs that Utility and P&A (as joint-employers) were obligated to fill with members of Local 15024 pursuant to a P&A-Local 15024 CBA. (Id.) This Court denied Utility and P&A's motion on February 18, 2020, and that decision is presently on appeal. (Id.)
When the Utility-Local 825 arbitration resumed on November 5, 2019, Utility argued that its violations of its CBA with Local 825 were excused by an unwritten "work sharing agreement" that dated back to 1983, decades before the parties signed the current CBA. (Arb. Op. at 23-24.) According to Utility, the work sharing agreement was among Utility, Local 825, P&A, and Local 15024, and it allowed Utility to employ P&A employees and Local 15024 members on its projects. (Id.) However, the testimony offered by Utility's witnesses at the arbitration hearing undercut its assertions about a work sharing agreement. Benedita Barros and Frank Pinho, two of Utility'sprincipals, did not produce any writing between the parties in support of such an agreement. (See id. at 31-32; see also id. at 2-3, 26.) James Stevens, a former P&A employee and former Local 15024 business agent, testified that he was unable to confirm the exact nature of the alleged work sharing arrangement. (See id. at 30.) Similarly, James Scarpone, a former Local 825 business agent, was unable to identify a work sharing agreement involving Utility. (See id.)
Months after the hearings concluded, on February 6, 2020, Utility asked the Arbitrator to reopen the hearing and allow Utility to recall Ms. Barros and Mr. Pinho, as well as call unidentified representatives of Local 825, for the purpose of rebutting the testimony of Utility's other two witnesses, Mr. Scarpone and Mr. Stevens. (D.E. 1-5 (Utility's E-mail Motion to Reopen); see Arb. Op. at 2-3.)3 Local 825 opposed this request the next day. (D.E. 7-1 Ex. G (Local 825's Opposition Letter); see Arb. Op. at 3.) On February 17, 2020, the Arbitrator denied the request, noting that "[b]oth parties had ample opportunity to present their cases-in-chief" and prolonging the matter would be "anathema to the arbitration process." (Arb. Op. at 3.)
On August 14, 2020, the Arbitrator issued his opinion and award. As to the alleged work sharing agreement, the Arbitrator concluded that Utility was unable to produce a written agreement and Utility's own witnesses were unable to confirm the existence of such an agreement. (Id. at 30.) Accordingly, the Arbitrator reviewed the alleged agreement under the standards of a past practice, providing five factors that must exist for a past practice to be binding: the practice must be (1) "unequivocal"; (2) "regularly and uniformly granted"; (3) "clearly enunciated, freely and openly allowed, and exist over a reasonable period of time"; (4) "accepted and acted upon by the parties themselves through their authorized agents in administering the written agreement"; and (5) "not vary the express provisions of the agreement." (Id. at 31.)
In analyzing these factors, the Arbitrator found that the record was "devoid of any documentation to support the existence of a past practice" and concluded that the testimony of Utility's witnesses did not corroborate Utility's position. (Id.) While Utility's principals testified that there was a 35-year work sharing agreement, they did not produce any documentation to support this testimony. (Id. at 31-32.) The Arbitrator noted that the fourth factor specifically weighed against finding that a binding past practice existed, as there was no proof of a mutual agreement between the parties; in fact, there was no evidence that Local 825 acknowledged, accepted, or even knew of the agreement. (Id. at 32.)
After rejecting Utility's argument that a work sharing agreement existed, the Arbitrator found that Utility had violated its CBA with Local 825. (Id. at 33.) Accordingly, the Arbitrator awarded $363,613.49 in damages to Local 825, consisting of lost wages and benefit funds due to the union. (Id. at 34; see id. at 19-20.) Utility subsequently filed the instant suit in this Court, onOctober 13, 2020, and moved to vacate the award. (D.E. 1, 2.)4 Local 825 timely opposed the motion, (D.E. 7), and Utility did not file a reply.
"There is a strong presumption under the Federal Arbitration Act ["FAA"], 9 U.S.C. § 1 et seq., in favor of enforcing arbitration awards." Brentwood Med. Assocs. v. United Mine Workers of Am., 396 F.3d 237, 241 (3d Cir. 2005) (citing Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)). "On application for an order confirming [an] arbitration award, [a] court 'must grant' the order 'unless the award is vacated, modified, or corrected as prescribed in [the FAA].'" Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 587 (2008) (quoting 9 U.S.C. § 9). A district court conducts its review "under an 'extremely deferential standard,' the application of which 'is generally to affirm easily the arbitration award.'" Hamilton Park Health Care Ctr. Ltd. v. 1199 SEIU United Healthcare Workers E., 817 F.3d 857, 861 (3d Cir. 2016) (quoting Dluhos v. Strasberg, 321 F.3d 365, 370 (3d Cir. 2003)).
As "courts accord arbitration decisions exceptional deference," a party seeking to vacate an award bears the "heavy burden" of proving that the award at issue should be overturned. Handley v. Chase Bank USA NA, 387 Fed. App'x 166, 168 (3d Cir. 2010) (citation omitted). Under the FAA, there are four grounds upon which an arbitration award may be vacated:
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