Local Union No. 38, Sheet Metal Workers' International Ass'n v. Hollywood Heating & Cooling, Inc.

1 F. App'x 30
Court of Appeals for the Second Circuit·Decided January 5, 2001·No. No. 00-7415·Published·Cited by 3 cases

Opinion

[32] SUMMARY ORDER

ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the District Court be and it hereby is AFFIRMED.

Hollywood appeals from the March 17, 2000, judgment of the United States District Court for the Southern District of New York (McMahon, J.) granting Local 38’s motion for summary judgment and confirming three arbitration awards by the Local Joint Adjustment Board (“LJAB”) and National Joint Adjustment Board (“NJAB”) against the company. Two of the awards ordered Hollywood to pay the union $18,657.60 and $36,405.60 in damages, and one of the awards ordered Hollywood to execute a collective bargaining agreement with the union effective July 1, 1999, through April 30, 2002. In a thorough written decision, Judge McMahon held that the arbitrators acted within the scope of their authority and that the contract between Hollywood and Local 38 justified the arbitration awards. Local Union No. 38 v. Hollywood Heating & Cooling, Inc., 88 F.Supp.2d 246 (S.D.N.Y. 2000). The two appeals stemming from the district court’s decision are consolidated.

With respect to both appeals, Hollywood argues that the arbitration awards are unenforceable because no valid underlying contract existed. Defendant variously contends that the union coerced it into signing the agreement on September 9, 1997, that the employer effectively repudiated the agreement orally several times and in writing on July 17, 1998, and that the union obtained the agreement by fraud. Hollywood’s arguments going to the validity of the contract are unavailing. It is within the province of the courts to decide issues of arbitrability, such as whether the parties agreed to arbitrate a particular grievance. See Transit Mix Concrete Corp. v. Local Union No. 282, Int’l Bhd. of Teamsters, 809 F.2d 963, 967 (2d Cir.1987). However, the court may not rule on the potential merits of the claims, see id., and its review of awards resulting from the arbitration process is narrow. See Wackenhut Corp. v. Amalgamated Local 515, 126 F.3d 29, 31-32 (2d Cir.1997). Hollywood failed to raise issues of arbitrability in federal court by seeking a stay of arbitration or otherwise challenging the authority of the LJAB or NJAB to hear its disputes with Local 38. The employer attended one of the three hearings and received notice of all three hearings. Hollywood failed to raise its repudiation defense at the arbitration hearings. That defense was therefore waived. See Europ-car Italia, S.p.A. v.. Maiellano Tours, Inc., 156 F.3d 310, 315 (2d Cir.1998) (issues not raised before the arbitrator are generally waived). Hollywood also failed to litigate before the arbitrators the issues of coercion and fraudulent inducement, which are “matter[s] to be determined exclusively by the arbitrators.” Id. Moreover, Hollywood’s claims that the collective bargaining agreement was coerced and was fraudulently induced in violation of the National Labor Relations Act (“NLRA”) are barred because Hollywood failed to challenge the agreement within the NLRA’s six-month statute of limitations. See 29 U.S.C. § 160(b); see also I.B.E.W. Sys. Council U-7 v. New York State Elec. & Gas Corp., 180 F.3d 368, 370 (2d Cir.1999) (applying NLRA statute of limitations to an action to compel arbitration). Hollywood’s argument that the statute of limitations should be tolled because it did not discover the fraud until ten months after the agreement was signed is unavailing, because the alleged misrepresentations involved legal and factual information that Hollywood could have and should have obtained from [33] other sources. See Truck Drivers & Helpers Union, Local No. 170 v. NLRB, 993 F.2d 990, 998 (1st Cir.1993) (statute of limitations will not be tolled unless party exercises “due diligence”).

In a related argument, Hollywood contends that arbitration was not available to the union in the proceeding concerning renewal of the contract because Local 38 failed to serve a notice of reopening 90 days before the contract expiration date of June 30, 1999. According to defendant, because the union filed a notice of reopening 88 days prior to contract expiration, the contract and its arbitration clause ceased to exist. The contract provision upon which Hollywood relies, however, calls at worst for the automatic renewal— not the expiration- — of the existing contract if neither party serves a notice of reopening. Therefore, a contract clearly was in force at the time of the NJAB arbitration. As discussed more fully below, the NJAB decision that Local 38’s notice was timely draws its essence from the contract and is a colorable finding of fact.

Looking to the merits of the three arbitration awards, courts accord a high degree of deference to arbitrators. We must determine whether the arbitrator acted within the scope of his authority. See Local 1199, Drug, Hosp. & Health Care Employees Union v. Brooks Drug Co., 956 F.2d 22, 25 (2d Cir.1992). We ask only “whether the arbitrator’s award draws its essence from the collective bargaining agreement, since the arbitrator is not free merely to dispense his own brand of industrial justice.” Wackenhut, 126 F.3d at 31 (quotation marks and citation omitted). We will uphold arbitration awards as long as they have “even a barely colorable justification.” Id. (quotation marks and citation omitted). Courts must confirm even those awards it views as incorrect as long as they are “plausibly grounded” in the parties’ contract. Local 97, Int’l Bhd. of Elec. Workers v. Niagara Mohawk Power Corp., 196 F.3d 117, 125 (2d Cir.1999) (quotation marks and citation omitted). The contract at issue here calls for the arbitration that took place, and the awards draw their essence from the agreement. With respect to the two damage awards, the LJAB found that Hollywood violated explicit contract provisions by hiring non-union workers. With respect to the award extending the contract between the parties, the NJAB interpreted the contract to find that Local 38 served a timely notice of reopening and that negotiations between the parties were at impasse. The district court properly confirmed the arbitration awards at issue.

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Local Union No. 38, Sheet Metal Workers' International Ass'n v. Hollywood Heating & Cooling, Inc., 1 F. App'x 30 (2d Cir. 2001).

1 F. App'x 30 (Local Union No. 38, Sheet Metal Workers' International Ass'n v. Hollywood Heating & Cooling, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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