Local 348-S, Ufcw, Afl-Cio v. Meridian Management

583 F.3d 65, 187 L.R.R.M. (BNA) 2129, 2009 U.S. App. LEXIS 21690
CourtCourt of Appeals for the Second Circuit
DecidedOctober 2, 2009
DocketDocket 07-0080-cv
StatusPublished
Cited by3 cases

This text of 583 F.3d 65 (Local 348-S, Ufcw, Afl-Cio v. Meridian Management) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Local 348-S, Ufcw, Afl-Cio v. Meridian Management, 583 F.3d 65, 187 L.R.R.M. (BNA) 2129, 2009 U.S. App. LEXIS 21690 (2d Cir. 2009).

Opinions

HALL, Circuit Judge:

Plaintiff-Appellee Local 348-S, UFCW, AFL-CIO (“Local 348”) brought suit against Defendant-Appellant Meridian [66]*66Management Corporation (“Meridian”), alleging that Meridian had failed to contribute to the union’s Health and Welfare Fund as required by a collective bargaining agreement (“CBA”) that was between Local 348 and Cristi Cleaning Services, Inc. (“Cristi”), Meridian’s predecessor. The complaint sought an order compelling Meridian to arbitrate the fund dispute under the terms of the CBA. The district court found that because Meridian was the successor employer to Cristi, Meridian was required to arbitrate the issue of whether it was bound by any of the terms of the CBA. On appeal, Meridian urges us to adopt the holding of the Third Circuit in AmeriSteel Corp. v. International Brotherhood of Teamsters, 267 F.3d 264 (3d Cir.2001), and conclude that, even if Meridian is obligated to arbitrate under the CBA, because it is not bound by the specific terms of that agreement, arbitration would be futile because no arbitration award could receive judicial sanction. We disagree, and hold that, while Meridian’s status as Cristi’s successor does not automatically bind Meridian to the substantive terms of the pre-existing CBA, Meridian is required to arbitrate the issue of whether and to what extent it is bound by the terms of that agreement. We offer no opinion regarding the extent to which Meridian is bound by the substantive terms of the CBA between Cristi and Local 348. We leave that question to the arbitrator to decide in the first instance. Accordingly, the judgment of the district court is AFFIRMED.

BACKGROUND

I. Meridian Management Corporation Contracts with Cristi Cleaning Services, Inc.

In October 2003, Meridian successfully bid for a contract with the Port Authority of New York and New Jersey to provide engineering and janitorial services at the Jamaica Air Train Terminal (the “Terminal”) for the period from October 2003 until September 2006. Meridian elected to perform the engineering services itself and to subcontract the janitorial services to Cristi under a contract that was to begin in December 2003 and continue until December 2004 and would thereafter automatically renew on a month-to-month basis until one party gave the other party 30-day notice of its intent to terminate the agreement.

At the time of the subcontract between Cristi and Meridian, Local 348 represented Cristi employees who worked at JFK International Airport. The CBA between Cristi and Local 348 required Cristi to contribute to Local 348’s Health and Welfare Fund for each of its full-time employees. The CBA contained an arbitration clause which provided that all disputes between Cristi and Local 348 would be resolved through arbitration. The terms of the CBA were binding upon Cristi and Local 348 as well as their “successors.” After Meridian awarded Cristi the subcontract at the Terminal, Local 348 and Cristi agreed to amend the CBA to apply to Cristi employees who worked at the Terminal.

In September 2005, Meridian gave Cristi 30-day notice of its intent to terminate the subcontract for the janitorial services at the Terminal, effective November 1, 2005. Although Meridian initially accepted bids from other cleaning services, it eventually elected to perform the janitorial services at the Terminal rather than subcontracting the work to another company. Prior to November 1, 2005, Meridian hired a majority of Cristi employees who had worked at the Terminal. Eventually, Local 348 sought from Meridian recognition as the bargaining representative of the Meridian employees who performed the janitorial [67]*67work at the Terminal. Meridian declined to recognize Local 348 as the employees’ representative.

II. Local 348 Brings an Action Seeking to Arbitrate the Dispute

In January 2006, Local 348 filed a complaint against Meridian pursuant to the Labor Management Relations Act (“LMRA”), 29 U.S.C. §§ 141, et seq., and the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001, et seq. Local 348 alleged that after November 1, 2005 there had “been a continuation of the Cristi cleaning services work” at the Terminal and that employees represented by Local 348 had “continuously performed that work by the same methods.” According to the complaint, after November 1, 2005, Meridian failed to make the contributions to the Health and Welfare Fund that were required by the CBA. Local 348 asserted that “Meridian, by its continuation of the cleaning services work” at the Terminal, had “assumed Cristi’s obligations under the CBA and ... had a duty to contribute to the Fund” as required by the terms of the CBA. The Union requested that the district court enter judgment compelling Meridian to submit the Health and Welfare Fund dispute to arbitration.

In July 2006, Local 348 filed a motion for summary judgment in which it argued that the arbitration provision of the CBA applied to Meridian because there was a “substantial continuity in the identity of the business” before and after Meridian assumed the janitorial services at the Terminal. Thereafter, Meridian also sought summary judgment, arguing that it was not bound by the terms of the CBA between Cristi and Local 348.

III. The District Court Compels Meridian to Arbitrate with Local 348

In November 2006, the district court issued an order granting Local 348’s motion for summary judgment and denying Meridian’s motion for summary judgment. The court ordered Meridian to arbitrate. In doing so, the court determined that there was “obvious continuity in the workforce employed by [Meridian] and Cristi.” It also concluded that there was “continuity in the work performed by the terminal employees under Cristi and [Meridian],” noting that, despite Meridian’s claim that it had made “sweeping changes” to the nature of the cleaning work at the terminal, “the fact remains that Cristi and [Meridian] were required by contract to perform the exact same cleaning services at the terminal.” Noting that Local 348 sought contributions to the Fund “for the period following [Meridian’s] hiring only,” the court rejected Meridian’s claim that because Cristi remained a viable entity, Local 348 could have sought relief from that company. The court concluded that “[b]ecause of the circumstances presented ... it [was] appropriate for the arbitrator to decide if [Meridian] is bound, as a successor, to any terms of the CBA beyond the obligation to arbitrate.” In December 2006, the district court issued an order granting Meridian’s motion for a stay of its order compelling the company to arbitrate, pending the outcome of this appeal.

Meridian appeals.

DISCUSSION

On appeal, Meridian raises three issues to support its argument that it is not obligated to arbitrate in this case. Meridian first argues that the continuing identity of the workforce between Cristi and Meridian is not sufficient to bind Meridian to the terms of the CBA between Local 348 and Cristi. Second, it contends that if the district court’s analysis were correct, it would bind every successor employer to the terms of a pre-existing CBA. Third, [68]

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583 F.3d 65, 187 L.R.R.M. (BNA) 2129, 2009 U.S. App. LEXIS 21690, Counsel Stack Legal Research, https://law.counselstack.com/opinion/local-348-s-ufcw-afl-cio-v-meridian-management-ca2-2009.