Rite Aid of N.Y., Inc. v. 1199seiu United Healthcare Workers E.

334 F. Supp. 3d 568
CourtDistrict Court, S.D. Illinois
DecidedJuly 10, 2017
Docket17-cv-1667(AJN)
StatusPublished
Cited by2 cases

This text of 334 F. Supp. 3d 568 (Rite Aid of N.Y., Inc. v. 1199seiu United Healthcare Workers E.) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rite Aid of N.Y., Inc. v. 1199seiu United Healthcare Workers E., 334 F. Supp. 3d 568 (S.D. Ill. 2017).

Opinion

ALISON J. NATHAN, District Judge:

*570Before the Court is Respondent 1199SEIU United HealthCare Workers East's (the "Union") motion to dismiss Petitioner Rite Aid of New York, Inc.'s ("Rite Aid") petition to stay an arbitration. For the following reasons, the Court grants the Union's motion to dismiss.

I. Background

Respondent 1199SEIU United HealthCare Workers East is a labor organization as defined in the National Labor Relations Act ("NLRA"), and Petitioner Rite Aid is an employer within the meaning of that Act. See Mot. at 1 (Dkt No. 10); Belovin Decl. ¶¶ 4, 6, 9 (Dkt No. 11); Petition ¶ 3 (Dkt No. 1). The two parties have entered into three agreements that are relevant to the current dispute. The first agreement is the 2009-15 Memorandum of Agreement ("MOA"), which established the parties' most recent collective bargaining agreement ("CBA"). Belovin Decl. Ex. 4 (Dkt No. 11-4); Mot. at 2; Opp. at 4 (Dkt No. 12). That agreement expired in April 2015. Belovin Decl. Ex. 4 at 16; Hinkle Decl. ¶ 4 (Dkt No. 14). On May 5, 2015, the parties entered into an agreement extending the CBA (the "Extension Agreement"). Hinkle Decl. Ex. A (Dkt No. 14-1). The agreement had no specific duration, but it permitted either party to terminate the agreement with ten days' written notice. Hinkle Decl. Ex. A; Opp. at 4. In July 2016, Rite Aid gave the Union notice that it was terminating the extension agreement. Hinkle Decl. ¶ 7. The parties subsequently implemented a final bargaining proposal ("Final Offer") on September 14, 2016, which remains in effect today. Hinkle Decl. ¶ 8; Hinkle Ex. B (Dkt No. 14-2).

The 2009-15 MOA required Rite Aid to make certain contributions to the 1199SEIU/Employer Child Care Fund. Belovin Decl. ¶ 9; Petition ¶ 4. A dispute eventually arose regarding the amount Rite Aid was required to contribute to the Fund. From October 30, 2009 through September 17, 2014, Rite Aid remitted contributions to the Fund at a rate of 0.4% of the employer's gross payroll. Petition ¶¶ 4, 8; Hinkle Decl. ¶ 3, 11. The Union, however, contends that the contribution rate should have been 0.5%. Mot. at 2; Hinkle Decl. ¶ 11. In September 2014, the Union informed Rite Aid that the proper contribution rate was 0.5%. Hinkle Decl. ¶ 11. Starting in October 2014, Rite Aid began remitting contributions at that rate. Hinkle Decl. ¶ 11; Opp. at 1. For several years, the Union did not take any further action concerning these contributions, such as seeking reimbursement for the allegedly underfunded contributions that were made before October 2014. Hinkle Decl. ¶ 11; Opp. at 6-7.

In 2017, the Union served a "Notice of Intention to Arbitrate" on Rite Aid related to the 1199SEIU/Employer Child Care Fund contributions. The Notice is dated February 8, 2017. Belovin Decl. Ex. 5 (Dkt No. 11-5). The Union claims that it sent the Notice to Rite Aid on February 9, 2017, see Mot. at 2, but Rite Aid contends that it did not receive the Notice until February 10, 2017, see Opp. at 7. See also Belovin Decl. ¶¶ 13-14; Belovin Ex. 6 (Dkt No. 11-6). The Notice stated, in part:

Pursuant to the terms of the Collective Bargaining Agreement between 1199SEIU United Healthcare Workers East and Rite Aid, this is to notify Rite Aid of our intention to conduct an arbitration against Rite Aid for failure to remit contributions to the:
1199SEIU/Employer Child Care Fund *571due in February 2011 - August 2014 and November 2016 - January 2017, on behalf of employees at Rite Aid.

Belovin Decl. Ex. 5. The Notice also stated:

PLEASE TAKE NOTE that pursuant to Section 7503 of the CPLR, unless within twenty days after service of the Notice of Intention to Arbitrate Rite Aid moves to stay the arbitration, Rite Aid shall be barred from putting into issue the making of said agreement, the failure to comply with it, and from asserting in court the bar of a limitation of time.

Id. The Union later dropped its claim for the second time period, November 2016 to January 2017. Mot. at 3 n.3.

In a Notice of Hearing dated February 17, 2017, the Union notified Rite Aid that an arbitration hearing was scheduled for February 28, 2017. Mendelson Decl. Ex. B (Dkt No. 13). On February 23, Rite Aid asked the Union to adjourn the arbitration hearing, but the Union responded by telling Rite Aid to ask the arbitrator. Mendelson Decl. ¶ 5. Accordingly, counsel for Rite Aid emailed the arbitrator that same day to request an adjournment. Mendelson Decl. ¶ 6. In that email, counsel for Rite Aid represented that the reason for the adjournment was that counsel was going to be "out-of-town." Mendelson Decl. Ex. C; Belovin Decl. Ex. 7 (Dkt No. 11-7). Rite Aid's counsel also wrote that Rite Aid would "be raising a statute of limitations defense" and that the company recognized that "under CPRL 7503(c), which is referenced in the Union's Notice of Intention to Arbitrate ..., the Company must raise that defense by filing an action in court to enjoin the arbitration." Id. The arbitrator granted the request for an adjournment, and the hearing was rescheduled for March 30, 2017. Belovin Decl. Ex. 7.

According to Rite Aid, it engaged in settlement negotiations with the Union from February 23 through March 5. Opp. at 9; Mendelson Decl. ¶ 7. Rite Aid represents that these "discussions concluded unsuccessfully on March 5." Opp. at 9.

On March 6, 2017 - either twenty-four (Rite Aid's view) or twenty-five (the Union's view) days after Rite Aid received the Notice of Intention to Arbitrate - Rite Aid filed a petition with this Court to enjoin the March 30 arbitration hearing. Dkt No. 1. That petition contends that the Union's cause of action is barred by the statute of limitations and the doctrine of laches. Petition ¶¶ 34-36. Specifically, Rite Aid contends that the Union "seeks to arbitrate a claim that the Company failed to implement an increase in the contribution rate to the Union's Child Care Fund 7.5 years ago," see Opp. at 1, and that this claim is barred by a six year statute of limitations, Petition ¶ 34.

In response to the petition, the Court ordered the parties to meet and confer to submit a proposed briefing schedule on the petition and to discuss whether discovery was necessary. Dkt No. 4. The Court also ordered the Union to state whether it consented to a stay of arbitration. Id. On March 8, 2017, instead of providing a joint proposed briefing schedule, the parties provided competing letters. Dkt No. 5, 7. Rite Aid suggested adopting an "expedited discovery schedule" to resolve purported "material issues of fact in dispute that go to [Rite Aid's] laches defense," followed by a two to three week briefing schedule for the underlying petition. Dkt No. 5. The Union's letter contended that Rite Aid's petition to enjoin the arbitration was untimely, and the Union indicated its intent to file a motion to dismiss on that ground. Dkt No. 7. The Union therefore suggested bifurcating the case, with the Court first resolving the Union's motion to dismiss.

*572Id. If the Court denied the motion to dismiss, then the Union agreed with Rite Aid that discovery and further briefing were warranted. Id.

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334 F. Supp. 3d 568, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rite-aid-of-ny-inc-v-1199seiu-united-healthcare-workers-e-ilsd-2017.