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Laborers' local Union Nos. 472 & 172 v. Tri-State Erosion Control, Inc.

United States District Court, D. New Jersey

November 22, 2017

LABORERS' LOCAL UNION NOS. 472 & 172, et al., Petitioners,
v.
TRI-STATE EROSION CONTROL, INC., Respondent.

          MEMORANDUM OPINION

          JEROME B. SIMANDLE U.S. District Judge

         This dispute comes before the Court by way of the motion of Petitioners Laborers' Local Union Nos. 472 & 172, Laborers' Local Union Nos. 472 & 172 Welfare and Pension Funds and Safety, Education and Training Funds, and Zazzali, Fagella, Nowak, Kleinbaum & Friedman, P.A.'s (hereinafter, “Petitioners”) to confirm an arbitration award entered on March 8, 2017 as a result of Tri-State Erosion Control, Inc.'s (hereinafter, “Respondent”) failure to remit fringe benefit contributions [Docket Item 2]; and by way of Respondent's cross-motion to vacate the same arbitration award. [Docket Item 9.]

         For the reasons that follow, Petitioners' motion will be granted, and Respondent's cross-motion will be denied. The Court finds as follows:

         1. Factual and Procedural Background.

         In their Verified Petition, Petitioners generally allege that Laborers' Local Union Nos. 472 & 172 (hereinafter, the “Union”) and Respondent are parties to a written collective bargaining agreement (hereinafter, the “CBA”) that requires, in relevant part, Respondent to remit certain fringe benefit contributions and that it resolve any dispute regarding payment of these contributions in arbitration. [Docket Item 1 at ¶¶ 2-3; Docket Item 16 at 1; see also Docket Item 9, Exhibit F at 79.]

         2. Under the CBA, Respondent recognized the Union “as the sole and exclusive collective bargaining representative for all employees employed by [Respondent] engaged in all work of any description whatsoever concerning the clearing, excavating, filling, back-filling and landscaping of all sites. . . .” [Id. at 7.] Several other duties to be performed by the Union were also listed as “covered” by the CBA. [Id. at 7-11.] The parties “agreed that all work described in [the CBA] or in the Manual of the Jurisdiction shall be performed only by employees covered by this Agreement.” [Id. at 11.]

         3. The CBA provided that Respondent would contribute to the Unions' Welfare Fund (Article 33), Pension Fund (Article 34), Safety, Education and Training Fund (Article 35), Annuity Fund (Article 36), and Vacation Fund (Article 37), on behalf of “each employee covered by [the CBA].” [Id. at 65-73.]

         4. Of note, the CBA also included an arbitration clause, which provided, in relevant part:

In the event that the Union, an Employer or the Fund's Trustees allege any dispute, violation or grievance concerning any provision of . . . Article 32 through 38 . . ., the dispute, grievance or violation including disputes over delinquencies, shall be submitted to the permanent arbitrator or arbitrators established by the Employer and Employee Trustees.

[Id. at 79.] The arbitration clause further provided that, “Any dispute in connection with the arbitratability of a matter shall be resolved by the arbitrator.” [Id.]

         5. Petitioners performed an audit of Respondent's payroll records for the time period between September 14, 2013 and August 31, 2015 (hereinafter, the “Audit”). [Docket Item 9, Exhibit E at 2.] An initial audit revealed a delinquency of $178, 243.03, but, after further evidence was provided by Respondent, the total amount owed was adjusted downward to $172, 419.47. [Id.] Notably, the Audit did not account for $39, 146.99 that Petitioners had received from General Contractors for work performed by Respondent, but which was maintained “on account.” [Id.]

         6. After the Audit was completed and Respondent refused to pay the delinquent contributions, Petitioners moved for arbitration and requested that the arbitrator issue an award supporting the Audit findings and ordering Respondent to remit the delinquent contributions, plus interest, fees, costs and damages. [Id.]

         7. On May 18, 2016, the arbitrator held a hearing, which both parties attended. [Id. at 1.] During the hearing, Respondent argued: (1) that it terminated the CBA on January 24, 2013 (effective February 28, 2014) and that it was, therefore, not responsible for remitting any fringe benefits after February 28, 2014; Respondent acknowledged that it employed union workers after February 28, 2014, withheld union dues, paid union wages, and paid fringe benefits to the Funds on some occasions that were required by the CBA; (2) $45, 978.87 of the delinquency amount identified in the Audit was attributable to work performed outside the territorial jurisdiction of the Union (and therefore not covered by the CBA); (3) that Respondent should not be required to pay $31, 515.89 in fringe benefits for “non-covered work” performed by Union employees during “winter months;” and (4) that two missing checks totaling $10, 547.79, which were referenced in a July 2016 email exchange, should also be credited to the amount owed to Petitioners. [Id. at 2-3, 8.] For these reasons, Respondent argued that it only owed $17, 647.38, rather than the $172, 419.47 identified by the Audit. [Id. at 3.]

         8. On March 8, 2017, the arbitrator issued a written decision. First, the auditor determined that, regardless of the effective “termination” date of the CBA, Respondent was bound under the CBA for any “bargaining unit work” (i.e., “covered work”), including “covered work” performed after February 28, 2014. [Id. at 5, 8.] Second, the auditor accepted Respondent's documentary evidence that certain work had been performed out of state and credited Respondent $45, 978.87 for the out-of-state work. [Id. at 8.] Additionally, the auditor credited Respondent the $39, 146.99 that had been maintained by Petitioners' “on account.” [Id.] Together, these credited payments reduced the delinquency amount from $172, 419.47 to $87, 293.61. [Id.] Third, the arbitrator determined that affidavits provided by Respondent asserting that Union workers had performed 1, 192 hours of mechanical maintenance work on vehicles during “winter months” between September 2013 and December 2014 were “not credible.” [Id.] Fourth, the arbitrator found that Respondent failed to produce any physical evidence ...


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