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Dylnicky v. Port Authority of New York and New Jersey

September 8, 2009


On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5758-04.

Per curiam.


Argued May 6, 2009

Before Judges Rodríguez, Payne and Waugh.

Plaintiffs Steven Dylnicky, William Richie, James Hunter, Dennis Royer and Kevin Schroder (collectively "plaintiffs") are electricians, formerly employed by the Port Authority of New York and New Jersey ("Port Authority"). They worked the night shift in the Lincoln Tunnel. In 2002, the Port Authority found that plaintiffs had, on numerous occasions, secreted themselves in an unauthorized room, equipped with bunk beds, to which they repaired during work hours. Records were falsified to hide the fact that they were there. The Port Authority pursued disciplinary actions against plaintiffs for sleeping on the job and not doing their assigned work.

Those disciplinary charges were the subject of an arbitration pursuant to the governing collective bargaining agreement ("CAB") between the Port Authority and plaintiffs union, the International Brotherhood of Electrical Workers ("IBEW"). Arbitrator Stuart Bauchner resolved the disciplinary charges against plaintiffs. The plaintiffs were terminated effective May 14, 2004.

In the course of the disciplinary proceedings, the IBEW brought a grievance on plaintiffs' behalf in which it claimed that the failure to identify an impartial hearing officer and set a hearing date for the charges against plaintiffs constituted a violation of the CBA. Arbitrator Eric Schmertz heard that grievance on December 11, 2002. At that time, the IBEW argued that the lengthy suspensions had become constructive discharges, transforming the grievances into a case of "just cause," warranting a determination on the merits of the charges. The Port Authority contended that Schmertz had jurisdiction only to determine whether the suspensions were procedurally proper. Schmertz issued his opinion and award ("Schmertz award") on February 19, 2003. In it, he adopted the Port Authority's position, finding that the suspensions without pay were properly authorized. However, he found that the length of the suspensions without resolution of charges was unreasonable and constituted a denial of due process, despite the Port Authority's arguments that the delay was caused by the need to conclude a pending criminal proceeding. Schmertz thus ordered that the disciplinary proceedings commence within two weeks. After some delay, Bauchner was selected as the arbitrator, and he eventually found against plaintiffs.

An interim issue was raised due to the delay as to whether Bauchner had jurisdiction to consider the merits of the disciplinary charges. In a decision dated July 11, 2003, he found that he did, finding that the Port Authority had complied with the Schmertz award, and, if it hadn't, that Bauchner would still have jurisdiction under the CBA to determine the merits of the charges.

In his May 14, 2004 arbitration award, Bauchner found that: plaintiffs occupied the south tower room at the dates and times alleged; plaintiffs were not performing any job duties while they occupied the south tower room; plaintiffs' presence in the south tower room was improper because the room was not the sanctioned break room (which existed in the Lincoln Tunnel administration building); plaintiffs were not authorized to use the room while they were on standby; on many of the dates that they used the room plaintiffs were "sleeping, dozing, or otherwise being inattentive to their assigned work duties" and were absent without leave from their assigned work areas; plaintiffs submitted falsified time cards in which they claimed to have worked eight hours on their job assignments when in reality they had not; and plaintiffs violated the Port Authority's security access system, taking steps to avoid creating a computer record of the time they spent in the south tower building by having one employee card into the building, wait between thirty seconds and one minute, and then card out while remaining in the building with the others.

In addition to the disciplinary proceedings, the Port Authority also referred the matter to the Hudson County Prosecutor, who presented the matter to the grand jury and obtained an indictment for theft by deception, N.J.S.A. 2C:20-4.

However, the indictment was dismissed by the State on the day of trial for unstated reasons.

Plaintiffs then brought a civil action against the Port Authority and Kenneth Sagrestano, manager of the physical plant at the Lincoln Tunnel facility, for intentional infliction of emotional distress, malicious prosecution and violation of the Schmertz award. The Port Authority moved in limine, asking the court to give preclusive effect to Bauchner's findings of fact with respect to the plaintiffs' conduct. The judge reserved decision, stating that he would "make a decision prior to the opening statements." The appellate record contains no ruling from the court. However, the court clearly denied the motion, because plaintiffs were permitted to introduce many facts that were contrary to Bauchner's findings.

The malicious prosecution claim was tried to a jury, which awarded each plaintiff $650,000 in compensatory damages, for a total award of $3,250,000. The claim of intentional infliction of emotional distress was dismissed on summary judgment. The claim alleging violation of the Schmertz award was dismissed by a pretrial motion in limine and remanded for further arbitration. The Port Authority moved for judgment notwithstanding the verdict (JNOV) and contested the judge's pretrial ruling that the claim of violation of the Schmertz award should be remanded for additional arbitration. Both motions were denied.

On appeal, the Port Authority challenges the decision remanding for further arbitration the claim that it violated the Schmertz award. Specifically, the Port Authority argues that the count should have been dismissed with prejudice because arbitrator Bauchner, in an award dated July 11, 2003, found that the Port Authority had not violated the Schmertz award. Bauchner issued that ruling upon plaintiffs' request, after they challenged his jurisdiction to consider the merits of the disciplinary charges brought against ...

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