FEDWAY ASSOCIATES, INC. v. WINE, LIQUOR & DISTILLERY WORKERS UNION LOCAL 1-D, UFCW

CourtDistrict Court, D. New Jersey
DecidedSeptember 28, 2022
Docket2:21-cv-19604
StatusUnknown

This text of FEDWAY ASSOCIATES, INC. v. WINE, LIQUOR & DISTILLERY WORKERS UNION LOCAL 1-D, UFCW (FEDWAY ASSOCIATES, INC. v. WINE, LIQUOR & DISTILLERY WORKERS UNION LOCAL 1-D, UFCW) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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FEDWAY ASSOCIATES, INC. v. WINE, LIQUOR & DISTILLERY WORKERS UNION LOCAL 1-D, UFCW, (D.N.J. 2022).

Opinion

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

FEDWAY ASSOCIATES, INC., Plaintiff, Civil Action No. 21-19604 (SDW) (JBC) v. OPINION WINE, LIQUOR & DISTILLERY WORKERS’ UNION LOCAL 1-D, UCFW, September 28, 2022 Defendant.

WIGENTON, District Judge. Before this Court is Defendant Wine, Liquor & Distillery Workers’ Union Local 1-D, UCFW’s (“Defendant” or the “Union”) Motion to Compel Arbitration (D.E. 46) brought pursuant to 9 U.S.C. § 4, as well as Plaintiff Fedway Associates, Inc.’s (“Plaintiff” or “Fedway”) Motion for Summary Judgment (D.E. 47) brought pursuant to Federal Rule of Civil Procedure (“Rule”) 56 and Plaintiff’s Motion for Sanctions (D.E. 48) pursuant to Rule 11. Venue is proper pursuant to 28 U.S.C. § 1391 and 31 U.S.C. § 3732(a). This opinion is issued without oral argument pursuant to Rule 78. For the reasons stated herein, Defendant’s Motion to Compel Arbitration is DENIED, Plaintiff’s Motion for Summary Judgement is GRANTED, and Plaintiff’s Motion for Sanctions is DENIED. I. BACKGROUND AND FACTUAL HISTORY Plaintiff Fedway is engaged in the business of wholesale distribution of liquor to retail customers and employs several hundred employees at its warehouse facility (“Facility”) located in Elizabeth, New Jersey. (D.E. 47-2 at ¶¶ 2–3.)1 Defendant, the Union, is a labor organization that represents warehouse employees who work at Fedway’s Facility. (D.E. 47-2 at ¶ 6.) For over thirty years, Fedway and the Union have been signatories to successive collective bargaining agreements that set forth the terms and conditions of employment for Fedway’s warehouse

employees. (D.E. 47-2 at ¶ 10.) Fedway and the Union’s collective bargaining agreement (“CBA”)2 contains an arbitration provision, which provides, in pertinent part, that: “[t]he parties agree to submit solely to arbitration all disputes, grievances, or issues that may arise between them involving the interpretation or application of this Agreement during the term thereof, or upon any subsequent renewal, reopening or modification thereof . . . .” (D.E. 47-2 at ¶¶ 11–12; D.E. 47-10 at 20; D.E. 49 at ¶ 1, 6.) The CBA further provides that employees can be terminated for “good and just cause.” (D.E. 47-2 at ¶ 16; D.E. 47-10.) On October 21, 2019, Donald Walker (“Walker”), a bargaining unit employee at Fedway’s Facility, was involved in a work-related accident. (D.E. 47-2 at ¶¶ 14–15; D.E. 49 at ¶ 2.) As a result, Walker underwent a drug and alcohol test, testing positive for marijuana. (D.E. 47-2 at ¶

15.) Subsequently, Walker, the Union, and Fedway executed a Last Chance Agreement (“LCA”) on November 24, 2019, and December 11, 2019, respectively. (D.E. 47-2 at 17; D.E. 47-11; D.E. 49 at ¶ 3.) The LCA specifically states that “[u]pon your return to work, you will be subject to periodic unannounced testing at Fedway’s discretion for a period not to exceed two (2) years. Should you again test positive for either drugs or alcohol after being permitted to return to work, you will be discharged.” (D.E. 47-2 at ¶ 18, D.E. 47-11 at 1.) The LCA further states that “[t]his

1 Record citations in this opinion are generally to Plaintiff’s Local Rule 56.1 Statement of Material Facts Not in Dispute (D.E. 47-2), Defendant’s Response to Plaintiff’s Statement of Material Facts and Counterstatement of Material Facts (D.E. 49), Plaintiff’s Response to Defendant’s Counterstatement of Material Facts (D.E. 53-1), as well as record citations contained therein.

2 The parties’ current CBA is effective for the period of November 1, 2018, through October 31, 2023. (D.E. 49 at ¶ 1.) constitutes a full settlement of this matter with the understanding that you have been placed on a final warning which will be reflected in your personnel file. Failure to comply with any of the terms or conditions set forth above will result in your immediate discharge.” (D.E. 47-2 at ¶ 19, D.E. 47-11 at 1.) To confirm that Walker accepted the terms and conditions of his reinstatement,

he agreed and signed the following: I, Donald Walker, accept the terms and conditions of my return to work and continued employment. I understand that if I refuse to submit to a random drug test or test positive for a controlled substance, I will be subject to immediate discharge without recourse to grievance or arbitration from my union.

(D.E. 47-2 at ¶ 20; D.E. 47-11 at 3; D.E. 49 at ¶ 4.) On June 21, 2021, Fedway was notified by its alcohol/drug screening vendor that Walker’s June 14, 2021 test was positive for marijuana. (D.E. 47-2 at ¶ 22.) On June 23, 2021, Fedway notified Walker and the Union by letter that his employment was terminated pursuant to the terms of his LCA. (D.E. 47-2 at ¶ 23, D.E. 47-12; D.E. 49 at ¶ 8.) Fedway’s June 23, 2021 letter reiterated, inter alia, that “[Walker] signed a Last Chance Agreement acknowledging that [he] would be discharged without recourse to grievance or arbitration from [his] union if [he] tested positive for a controlled substance within a 2-year period” and that “under the provisions of the [CBA], [Fedway] has decided to terminate [Walker’s] employment.” (D.E. 47-2 at ¶ 23.) Thereafter, the Union filed a grievance (“Grievance”) contesting, inter alia, Walker’s termination and stating that “Don Walker was [i]llegally terminated based on a ‘random’ Drug test according to an Out-Dated Drug Testing Policy. It is the Company’s responsibility to update any policy when there is a change in State Law, which would supersede its policy. Random Drug testing is now ‘Restricted’ in the State of N.J.” (D.E. 47-2 at ¶ 25; D.E. 47-13; D.E. 49 at ¶ 8.) On August 11, 2021, the Union submitted a Demand for Arbitration (“Demand”) to the American Arbitration Association (“AAA”), alleging that Fedway breached the CBA by terminating Walker’s employment “without just cause” and demanded that arbitration be held in Manhattan, New York. (D.E. 47-2 at ¶¶ 26–29.) On August 13, 2021, Fedway denied the Grievance. (D.E. 47-2 at ¶ 26.) On that same date, Fedway’s counsel emailed the AAA stating, in pertinent part,

that “the Union previously agreed that [Fedway’s] termination of Donald Walker is neither grievable or arbitrable, according to the express terms of the attached [LCA], which was fully executed by [Fedway], [the Union], and Donald Walker. . . . Given the parties’ express agreement not to arbitrate Donald Walker’s termination, AAA should not process [the Union’s] Demand.”3 (D.E. 47-2 at ¶ 31; D.E. 47-6.) II. PROCEDURAL HISTORY Subsequently, on September 29, 2021, Fedway received the Union’s demand letter pursuant to New York Civil Practice Law and Rules (“CPLR”) §7503 (“CPLR 7503 Demand”). (D.E. 47-1 at 7.) On October 18, 2021, Fedway filed a Verified Petition to Stay Arbitration in the United States District Court for the Southern District of New York (“SDNY”), seeking preliminary

injunction staying Arbitration (Count One), transfer of the action to the United States District Court for the District of New Jersey (Count Two), permanent injunction of the Arbitration (Count Three), and declaratory judgment that the Union waived its rights to grieve or arbitrate (Count Four). (D.E. 7.) On October 26, 2021, Fedway filed an Order to Show Cause seeking a stay of the Arbitration and for an Order to transfer the action to the District of New Jersey. (D.E. 15.) On November 3, 2021, the Honorable Valerie E. Caproni, U.S.D.J.

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FEDWAY ASSOCIATES, INC. v. WINE, LIQUOR & DISTILLERY WORKERS UNION LOCAL 1-D, UFCW, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fedway-associates-inc-v-wine-liquor-distillery-workers-union-local-njd-2022.