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Cacace Associates, Inc. v. Southern New Jersey Building Laborers District Council

February 19, 2009

CACACE ASSOCIATES, INC; PLAINTIFF,
v.
SOUTHERN NEW JERSEY BUILDING LABORERS DISTRICT COUNCIL, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Wolfson, United States District Judge

OPINION

Presently before the Court are Motions brought by Plaintiff Cacace Associates, Inc. ("Plaintiff" or "Employer") to re-open the above-captioned matter*fn1 and vacate the arbitration award entered on July 15, 2008, arising out of a dispute with Defendants,Southern New Jersey Building Laborers District Council, Northern New Jersey Building Laborers District Council, Central New Jersey Building LaborersDistrict Council (collectively "the Union"), New Jersey Building Laborers Statewide Benefit Funds, New Jersey Building Laborers Statewide Welfare Fund, New Jersey Building Laborers Statewide Annuity Fund, New Jersey State Political Action Committee, Laborers' - Employers' Cooperation and Education Trust, New Jersey Laborers' Health and Safety Fund, Building Laborers' of New Jersey Training and Education Fund, and Building Contractors Association of New Jersey Industry Advancement Fund (collectively "Funds").Defendants also move this Court to confirm the arbitration award entered on July 15, 2008, asserting that the arbitrator reasonably construed the parties' Collective Bargaining Agreement ("CBA"). For the reasons that follow, Plaintiff's Motion to Vacate the Arbitration Award is denied. In addition, the Court grants Defendants' Cross-Motion to Confirm the Arbitration Award.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

On May 2, 2002, Northern New Jersey Building Laborers District Council, Central New Jersey Building Laborers' District Council and the Southern New Jersey Building Laborers District Council (collectively "the Union") signed the CBA, to which Plaintiff became a party via a Short Form Agreement executed on November 11, 2002. Pl.'s Compl. ¶¶7-8. As a result of a Declaration of Trust of the Funds, Plaintiff was required to make contributions to the Funds. Certification of Michael G. McNally ¶9. Sometime in 2005, Defendants sought an audit of Plaintiff's books. Pl.'s Br. pg. 3-4. Plaintiff refused to comply and Defendants sought an arbitration hearing to resolve the matter. In May 2006, the Union and Plaintiff entered into a settlement agreement, which specifically stated that "Upon receipt of the payments specified above, the Southern New Jersey Building Laborer's District Council will release Cacace Associates, Inc. from any and all claims accrued to date." Compl. ¶9; Declaration of Desmond O'Neill ("O'Neill Decl."), Settlement Agreement. The settlement agreement was memorialized and signed by Defendants' counsel on May 22, 2006. Compl. ¶9. On June 16, 2006, the Union informed the arbitrator that the matter had been resolved.

On November 17, 2006, Defendants, through their counsel, requested that Plaintiff submit to an audit that included an inquiry into contributions owed before May 22, 2006, beginning on November 19, 2002. Id. ¶10. Plaintiff objected, stating that the settlement agreement precluded Defendants from pursuing any claims related to contributions before May 22, 2006, rendering an audit moot. Id.

As a result of this disagreement, Plaintiff contends that Defendants sought an arbitration hearing to determine whether the settlement agreement precluded an audit of records before May 22, 2006. Id. Defendants intimated to Plaintiff that the arbitration would occur regardless of Defendant's response. Id. ¶11. In order to avoid an arbitration hearing, Plaintiff scheduled the requested audit on July 19, 2007. Id. ¶12. The audit was eventually initiated on August 16, 2007, however Defendants' auditor refused to complete it that day. Id. Plaintiff alleges, that "notwithstanding "[Plaintiff's] scheduling of the audit, Defendant Funds participated in an ex parte arbitration hearing before Arbitrator J.J. Pierson, Esq. . .without effective notice to, or participation by, [Plaintiff]"onJuly 23, 2007.Id. ¶13.

Plaintiff filed a Complaint in the United States District Court in the District of New Jersey on December 14, 2007 seeking to vacate the arbitration award obtained without its participation On January 3, 2008, this Court entered a 60 day Order dismissing the case as settled, whereby the parties would submit to another arbitration hearing or settle the matter in another fashion. On February 13, 2008, this Court entered an Order extending time to consummate the settlement. On April 17, 2008, the Court again entered an Order which modified this Court's previous Order dismissing the case, providing the parties an additional forty-five days through June 15, 2008, to re-open the case if an agreement could not be reached. On July 15, 2008, J.J. Pierson, Esq., the arbitrator for the dispute ("Arbitrator"), entered an Award in favor of Defendants and ordered Plaintiff pay the arbitration fees, totaling $2,500.00. On August 14, 2008, Plaintiff filed this Motion to re-open the case and vacate the Arbitrator's award. For the reasons that follow, Plaintiff's Motion to Vacate the Arbitration Award is denied and Defendants' Cross-Motion to Confirm the Arbitration Award is granted.

II. DISCUSSION

A. Standard of Review

Pursuant to the Federal Arbitration Act ("FAA"), there is a strong presumption in favor of enforcing arbitration awards. Brentwood Medical Associates v. United Mine Workers of America, 396 F.3d 237, 241 (3d Cir. 2005). The Act underscores the overarching federal policy favoring arbitration to resolve labor disputes. Major League Baseball Players Association v. Garvey, 532 U.S. 504 (2001); see also Penntech Papers, Inc. v. United Paperworkers Int'l Union, 896 F.2d 51, 53 (3d Cir. 1990) (finding that the overwhelming presumption in favor of arbitration awards "protect[s] the benefits of labor arbitration, namely, speed, flexibility, informality, and finality."). Accordingly, a district court may only vacate an arbitrator's award in rather limited circumstances:

(1) where the award was procured by corruption, fraud or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

9 U.S.C. §10(a); see also United Transp. Union Local 1589 v. Suburban Transit Corp., 51 F.3d 376, 379 (3d Cir 1995). "As long as the arbitrator's award 'draws its essence from the collective bargaining agreement,' and is not merely ' his own brand of industrial justice,' the award is legitimate." United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 36 (1987) (quoting Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960); Exxon Shipping Company v. Exxon Seamen's Union, 801 F. Supp. 1379, 1384 (3d Cir. 1992). Recently, the Second Circuit expounded on the rationale behind the deference to an arbitration award:

Vacatur of an arbitral award is unusual for good reason: The parties agreed to submit their dispute to arbitration, more likely than not to enhance efficiency, to reduce costs, or to maintain control over who would settle their disputes and how-or some combination thereof.

Stolt-Nielsen SA v. AnimalFeeds International Corp., 548 F.3d 85, 92 (2d Cir. 2008). In addition, a court may vacate an arbitration award if the arbitrator's decision is wholly unsupported by the agreement's plain language or the arbitrator fails to adhere to basic principles of contract construction. News Am. Publications, Inc., Daily Racing Form Div. v. Newark ...


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