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New Jersey Regional Council of Carpenters v. Dynasty Contracting

July 27, 2011

NEW JERSEY REGIONAL COUNCIL OF CARPENTERS,
PLAINTIFF,
v.
DYNASTY CONTRACTING, INC. ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hochberg, District Judge:

NOT FOR PUBLICATION CLOSED

OPINION & ORDER

I. INTRODUCTION

This matter comes before the Court upon the motion of petitioner, New Jersey Regional Council of Carpenters (the "Union") to confirm an arbitration award entered in its favor and against respondents, Dynasty Contracting, Inc. ("Dynasty") and Vision General Construction ("Vision"). The Union contends, and the arbitrator found, that Dynasty and Vision were operated as a double-breasted employer in violation of a collective bargaining agreement entered into by Dynasty. Respondents contend that the award contains numerous factual and legal errors and should be set aside as a result.

II. BACKGROUND

Dynasty was incorporated in 2001 by Paul Lowenstein. In the same year, Dynasty entered into a short form collective bargaining agreement, executed by Paul Lowenstein, with the Union. The short form agreement expressly incorporated by reference the terms of "every current collective bargaining agreement between the Local Unions, Regional Councils, State Council and The Building Contractors Association of New Jersey governing wages, working conditions and payments to fringe benefit funds." Petition to Confirm Arbitration Award ("Petition"), Ex. A. The short form agreement also contained an evergreen clause, indicating that it would continue in effect and "be deemed renewed on the same basis" as the current collective bargaining agreement, "including any amendments and/or modifications thereto . . . unless at least 90 days before termination of the then current collective bargaining agreement, either party notifies the other in writing of cancellation" of the agreement. Id.

Vision was created in 2003 as a general contractor and was initially owned by Paul Lowenstein, Richard Lowenstein, Dave Marinaro, and John Struble. At the time, Dynasty was owned by Paul Lowenstein, Richard Lowenstein, and Dave Marinaro. Vision never signed a collective bargaining agreement with the Union, but nevertheless subcontracted carpentry work to union signatory contractors. John Struble ultimately became the sole owner of both Dynasty and Vision and was the sole owner in early 2010, when Vision served as the general contractor for the renovation of four Kohl's stores.

For the Kohl's project, Union carpentry superintendents were used to supervise non-Union carpentry subcontractors. The superintendents were paid Union wages and benefits by Dynasty, but were given business cards, credit cards, and company vehicles by Vision and supervised non-Union carpenters who were not paid Union wages and benefits. After hearing extensive testimony, the arbitrator concluded that Vision and Dynasty, which are nominally separate entities, were operating as one integrated entity with common management and ownership in violation of the double-breasting provision of the current collective bargaining agreement. Petition, Ex. C at 11-12. That provision states "[t]he Employer represents that its members, officers, and supervisory personnel will not attempt to form or participate in the creation of or operation of new or double-breasted corporations for the purposes of avoiding the obligations of this Agreement." Petition, Ex. B, Article XIX, Section 4.

III. STANDARD OF REVIEW

"District courts have very little authority to upset arbitrator's awards." United Transp. Union Local 1589 v. Suburban Transit Corp., 51 F.3d 376, 379 (3d Cir. 1995). A court "may not overrule an arbitrator simply because it disagrees with the arbitrator's construction of the contract," but must enforce the award so long as "the arbitrator has arguably construed or applied the contract, regardless of [whether] . . . a court is convinced that [the] arbitrator has committed a serious error." News America Publications, Inc. v. Newark Typographical Union, Local 103, 918 F.2d 21, 24 (3d Cir. 1990) (emphasis in original). An award should not be vacated so long as it "draws its essence" from a collective bargaining agreement. United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597-99 (1960).

However, an award may be reversed where there is "no support at all in the record justifying the arbitrator's determinations." United Transp., 51 F.3d at 379. An award should be vacated if its findings cannot "be rationally derived either from the agreement between the parties or from the parties submissions to the arbitrators" and the terms of the award are "completely irrational." Mut. Fire, Marine & Inland Ins. Co. v. Norad Reins. Co., 868 F.2d 52, 56 (3d Cir. 1989) (quotations omitted). An award may also be vacated if the arbitrator ignored the plain language of a contract, or essentially rewrote material terms of the contract. Exxon Shipping Co. v. Exxon Seamen's Union, 788 F. Supp. 829, 835 (D.N.J. 1992).

IV. DISCUSSION

Respondents argue that the award should be set aside because it was not supported by the evidence, the arbitrator acted outside the scope of his authority, and the arbitrator did not find that respondents were entitled to a refund of contributions to Union funds on behalf of the Union superintendents. The first two arguments advanced by respondents are closely related. Respondents argue that the award was not supported by the evidence, and the arbitrator acted outside of his authority, because: (1) Dynasty is not bound by the current long form collective bargaining agreement, (2) Dynasty is an independent contractor, and (3) Dynasty did not ...


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