TRICON ENTERPRISES, INC. v. NEW JERSEY BUILDING LABORERS'STATEWIDE BENEFIT FUNDS

Filing 26

OPINION. Signed by Judge Claire C. Cecchi on 2/27/18. (cm, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
TRICON ENTERPRISES, INC.,

Civil Action No.: 2:17-cv-02168

Petitioner,
V.

OPINION

NEW JERSEY BUILDiNG LABORERS’
STATEWIDE BENEFIT FUNDS,
Respondent.
CECCHI, District Judge.
I.

INTRODUCTION
This matter comes before the Court on Petitioner Tricon Enterprises, Inc.’s (“Petitioner”)

motion to vacate an arbitration award, (ECF No. 1), and Respondent New Jersey Building
Laborers’ Statewide Benefit Funds’ (“Respondent”) motion to confirm an arbitration award and
cross-motion to dismiss Petitioner’s “declaratory complaint.” (ECF No. 10). The Court decides
this matter without oral argument pursuant to Rule 78(b) of the federal Rules of Civil Procedure.
For the reasons set forth below,’ the Court denies Petitioner’s motion, grants Respondent’s motion
to confirm the arbitration award, and denies Respondent’s cross-motion to dismiss Petitioner’s
“declaratory complaint” as moot.
II.

BACKGROUND
This labor dispute arises out of an audit report issued by Respondent, which alleges that

Petitioner “failed to make fringe benefit contributions to [Respondent], which were required per
the terms of [Petitioner’s] Collective Bargaining Agreement[]” (the “CBA”)2 from January 1, 2010

1

The Court considers any new arguments not presented by the parties to be waived. See Brenner
v. Local 514, United Bhd. of Carpenters & Joiners ofAm., 927 F.2d 1283, 1298 (3d Cir. 1991).
2
Although the parties reference two collective bargaining agreements in their submissions, there
appears to be no dispute that the relevant collective bargaining agreement to this matter is docketed
at ECF No. 23-1. (ECF Nos. 10 at 1; 19 at 1-2 (arguing in Petitioner’s letter brief that the CBA

through December 31, 2012 (the “Audit Period”)
for various employees, including yard
employees. (ECF No. 10 at 1; see also ECF No. 1 7).
¶ Respondent seeks to confirm an arbitration
award in the amount of $575,554.74, (ECF No. 1 21),
which upheld the findings of the audit
¶
report. (See generally ECF No. 10).
Petitioner’s sole challenge to the arbitration award is
that the arbitrator did not have the
authority to determine whether yard employees were
covered by the CBA. (ECF No. 1-2 at 1).
The parties agree that the CBA compels arbitration in certa
in circumstances. However, Petitioner
contends that “the Arbitrator did not have authority to
arbitrate this dispute and issue said Award.”
(Id.). Respondent maintains that this matter is subject
to arbitration because the language in the
Short Form Agreements in effect during the Aud
it Period (the “SFAs”) provide that “[t]he
permanent arbitrator appointed by the Trustees of the
funds shall decide all matters concerning
wages and benefits including all matters of procedural
and substantive arbitrability.” (ECF No.
10-3 at3, 4). The Court has jurisdiction under 29 U.S.
C. 185.

§

HI

LEGAL STANDARD

Petitioner seeks to vacate the arbitration award, whil
e Respondent seeks to confirm the
arbitration award. However, the only dispute between
the parties is whether the award exceeds
the arbitrator’s authority because the underlying matt
er was not subject to arbitration. (See ECF
No. 1 ¶ 33 (“The Arbitrator exceeded his authority and
jurisdiction in hearing this matter as the

was not intended to cover yard employees, with
no reference to the collective bargaining
agreement docketed at ECF No. 10-5)). Petitioner’s cont
ention that the Court should not consider
the CBA because it is not signed, (ECF No. 24), is with
out merit. The Short form Agreements in
effect during the Audit Period were signed by the parti
es and explicitly incorporated the CBA by
reference. (ECF No. 10-3 at 3, 4; see also ECF No.
25). There is therefore no requirement that
the CBA itself be signed. See Bd. ofTrs. ofthe mt ‘1 Unio
n ofOperating Eng ‘rs Local 825 Pension
Fund v. River Front Recycling Aggregate, LLC, No.
15-8957, 2016 WL 6804869, at *4 (D.N.J.
Nov. 16, 2016). Accordingly, the Court may properly
consider the CBA.
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parties had no agreement to arbitrate this dispute[.]”)). Thus, the only issue before the Court is
whether it was proper for the arbitrator to determine that yard employees were covered by the
CBA.
When determining arbitrability arising out of a collective bargaining agreement, courts are
to apply federal law contract principals to interpret the scope of that agreement, subject to any state
law defenses. See Harris v. Green Tree Fin. Corp., 183 f.3d 173, 179 (3d Cir. 1999) (citing Moses
H. Cone Mem ‘tHosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n.32 (1983)).
The Third Circuit recognizes the strong federal policies that favor arbitration of labor
disputes. See Rite Aid ofPa., Inc. v. United Food & Commercial Workers Union, Local 1776, 595
F.3d 128, 131 (3d Cir. 2010).

Moreover, it instructs that the key principals governing any

arbitrability inquiry are that: (1) a party cannot be forced to arbitrate when it has not agreed to do
so; (2) a court may not rule on the underlying merits when determining whether a dispute is
arbitrable; and (3) when a contract contains an arbitration clause, there is a presumption that a
dispute is arbitrable unless “it may be said with positive assurance that the arbitration clause is not
susceptible of an interpretation that covers the asserted dispute.” Lukens Steel Co. v. United
Steelworkers ofAm. (AFC-CIO), 989 F.2d 668, 672 (3d Cir. 1993) (quotingAT&TTechs., Inc. v.
Commc ‘ns Workers ofAm., 475 U.S. 643, 650 (1986)). In other words, when the arbitration clause
is “broad,” doubts with respect to arbitrability “should be resolved in favor of coverage.” Id.; see
also Local 827, Int’l Bhd. ofElec. Workers, AFL-CIO v. Verizon Ni, Inc., 458 F.3d 305, 311 (3d
Cir. 2006).
In light of these principals, the Third Circuit directs that courts should consider three
questions when assessing whether a dispute is arbitrable: “(1) Does the present dispute come
within the scope of the arbitration clause?[;] (2) does any other provision of the contract expressly
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exclude this kind of dispute from arbitration?[;] and (3) is there any other ‘forceful evidence’
indicating that the parties intended such an exclusion?” United Steelworkers ofAm., AFL-CiO
CLCv. Hohm &Haas Co., 522 F.3d 324, 331 (3d Cir. 2002) (citations omitted).
District courts have very little authority to upset arbitrators’ awards.
“[C]ourts
play an extremely limited role in resolving labor disputes.” “A court may not
overrule an arbitrator simply because it disagrees with the arbitrator’s construction
of the contract. or because it believes its interpretation of the contract is better
than that of the arbitrator.” Rather, “[a]s long as the arbitrator has arguably
construed or applied the contract, the award must be enforced, regardless of the fact
that a court is convinced that [the] arbitrator has committed a serious error.” Thus,
“there must be absolutely no support at all in the record justifying the arbitrator’s
determinations for a court to deny enforcement of an award.” “[O]nly where there
is a manifest disregard of the agreement, totally unsupported by principles of
contract construction and the law of the shop, may a reviewing court disturb the
award.”
.

.

.

.

.

United Transp. Union Local 1589 v. Suburban Transit Corp., 51 F.3d 376, 379 (3d Cir. 1995)
(citations omitted).
IV.

DISCUSSION

Petitioner contends that “[t]he Arbitrator exceeded his authority and jurisdiction in hearing
this matter as the parties had no agreement to arbitrate this dispute[.]”

(ECF No. 1

¶ 33).

Respondent, in turn, argues that “[u]nder any reasonable reading of the contract operating between
the parties, during the Audit Period.

..

[Respondent’s] audit findings, including the audit findings

relating to ‘yard work,’ are clearly arbitrable.” (ECF No. 10 at 13). As a preliminary matter, the
Court notes that Petitioner’s submissions do not address the arbitration clauses in the SfAs.
Rather, Petitioner contends that this dispute is not subject to arbitration pursuant to the CBA.
Because the CBA and $fAs were in effect during the Audit Period, the Court must consider all of
the agreements in determining whether the Arbitrator exceeded his authority.
The Court finds that the parties’ dispute comes within the scope of the arbitration clauses
in the CBA and SFAs. There is no dispute that the parties entered into the June 18, 2007 SFA and
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the July 2, 2010 $FA. (ECF No. 10-3 at 3-4). These SFAs were in effect during the Audit Period.
(Id.). The arbitration clauses in these SFAs state that “[t]he permanent arbitrator appointed by the
Trustees of the funds shall decide all matters concerning wages and benefits including all matters
of procedural and substantive arbitrability.” (Id.). Petitioner appears to argue that as a matter of
law, the parties could not agree to arbitrate matters of substantive arbitrability. (ECF No. 1-2 at
2). The Court disagrees.
“Generally, the ‘question of arbitrability

.

.

.

is undeniably an issue for judicial

determination.” Jones Lang LaSalle Americas, Inc. v. Int’l Bhd. ofElec. Workers, Local 313, No.
16-190, 2017 WL 2957816, at *3 (D. Del. July 11, 2017) (quotingAT&T Techs., Inc., 475 U.S. at
649). “However, ‘U]ust as the arbitrability of the merits of a dispute depends upon whether the
parties agreed to arbitrate that dispute, so the question “who has the primary power to decide
arbitrability” turns upon what the parties agreed about that matter.” Id. (quoting First Options of
Chi., Inc. v. Kaplan, 514 U.S. 938, 943 (1995)). “Courts should not find that parties agreed to
arbitrate the question of arbitrability ‘[u]nless the parties clearly and unmistakably provide
otherwise.” Id. (citations omitted). “The burden of overcoming the presumption is onerous, as it
requires express contractual language unambiguously delegating the question of arbitrability to the
arbitrator.” Chesapeake Appalachia, LLC v. Scout Petroleum, LLC, 809 f.3d 746, 753 (3d Cir.
2016) (citations omitted).
As the Court previously observed, the SFAs state that “[t]he permanent arbitrator appointed
by the Trustees of the funds shall decide all matters concerning wages and benefits including all
matters of procedural and substantive arbitrability.” (ECF No. 10-3 at 3-4). Petitioner’s argument
that “[t]he issue of whether Petitioner[’s]
Petitioner.

.

.

.

.

.

yard employees are covered by the CBA between

and [Respondent] is clearly not an issue that falls within the ambit of the arbitration
5

clause[sJ of the [CBA],” (ECF No. 1-2 at 4), is without merit. The SFAs provisions that “all
matters concerning wages and benefits including all matters of procedural and substantive
arbitrability” are subject to arbitration, (ECF No. 10-3 at 3, 4) (emphasis added), clearly
encompasses the question of whether Petitioner was responsible for making fringe benefit
contributions for yard employees under the CBA. While the Court agrees that whether yard
employees fall within the scope of the CBA is a question of substantive arbitrability, the parties
clearly and unmistakably agreed that such matters were delegated to the arbitrator to decide.
Moreover, “once it is determined that a substantive dispute is arbitrable, normally the arbitrator
has the authority to decide all matters necessary to dispose of the claim.” Fed. Kemper Ins. Co. v.
Reager, $10 F. Supp. 150, 155 (ED. Pa. 1992) (emphasis added) (citations omitted). The SFAs’
arbitration clauses plainly apply to this dispute, especially in light of the presumption of
arbitrability. Accordingly, the Court finds Petitioner’s arguments without merit.
Petitioner does not maintain that another provision of the CBA or $fAs expressly excludes
this dispute from arbitration. Instead, Petitioner cites to three pieces of evidence in support of the
contention that Petitioner’s “yard employees were not intended to be covered by the” CBA.3 (ECF
No. 1-2 at 1). The question before the Court, however, is not whether the yard employees were
intended to be covered by the CBA, but rather whether the arbitrator was foreclosed from
determining that they were actually covered. Petitioner presents no evidence that making such a
determination was outside the scope of the arbitrator’s authority.

This evidence includes: (1) a letter from Edison Severino, opining that a collective bargaining
agreement not in effect during the Audit Period (the “Local 7$ CBA”) does not cover yard
employees (ECF No. 1-1 Exhibit A); (2) an affidavit from Radek Korek, declaring that the same
Local 7$ CBA not in effect during the Audit Period does not cover yard employees (id. Exhibit
D); and (3) a letter from Al Castagna, submitting that the CBA does not cover yard employees (id.
Exhibit B (which was soon thereafter retracted in a subsequent letter as discussed below)).
6

Even assuming, arguendo, that the question before the Court was whether the yard
employees were intended to be covered by the CBA, Petitioner points to no “forceful evidence”
supporting this argument. See United Steelworkers ofAm., 522 F.3d at 331. With respect to the
letter and affidavit that Petitioner submitted opining that the Local 78 CBA does not cover yard
employees, (ECF No. 1-1 Exhibits A, D), the Court notes that the Local 78 CBA was not in effect
during the Audit Period. Rather, it was the CBA at issue, not the Local 78 CBA, which governed
the parties’ relationship during this time. Moreover, although Petitioner submitted a letter from
Al Castagua opining that the CBA does not cover yard employees, Mr. Castagua sent a follow-up
letter two days later stating:
Please be advised that I misspoke in my letter of April 27, 2016 regarding yard
workers under the Building Laborers collective bargaining agreement. Under
Article II, Section 2.10, under “Miscellaneous” all “yardmen, watchmen, guards,
flagmen, the manning and servicing of all tool room,” etc. does fall within the scope
of work covered by the collective bargaining agreement. Accordingly, please
disregard my previous letter. I am sorry for any inconvenience this error may have
caused you.
(Id. Exhibit C). finally, despite Petitioner’s contention that “it is clear that up until April 29, 2016,
and especially during the [A]udit [P]eriod

.

.

.

Mr. Castagna’s interpretation, practice and

application with respect to the [CBA] was that [Petitioner’s] yard work was not covered,” (ECF
No. 19 at 2), Petitioner presents no evidence supporting this statement.
Based on the foregoing, the Court finds that the dispute was arbitrable, and will confirm
the arbitration award.4

Respondent also filed a cross-motion to dismiss Petitioner’s “declaratory complaint.” It is
unclear to the Court whether Petitioner has requested a declaratory judgment; however, to the
extent Petitioner has made such a request, it is denied. Having found that the parties unequivocally
agreed to arbitrate both substantive and procedural disputes related to wages and benefits, the
Court need not “conduct an Evidentiary Hearing to determine whether [Petitioner’s] ‘yard’
employees are covered by the [CBA].” (ECF No. 1 at 5). Accordingly, Respondent’s cross-motion
is denied as moot. Moreover, Respondent also contends that Petitioner may be seeking a
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V.

CONCLUSION
For the reasons set forth above, the Court denies Petitioner’s motion, grants Respondent’s

motion to confirm the arbitration award, and denies Respondent’s cross-motion to dismiss
Petitioner’s “declaratory complaint” as moot. An appropriate Order accompanies this Opinion.
DATED:

-°

I

C
CLAIRE C. CECCHI, U.S.D.J.

declaratory judgment with respect to the scope of the Local 78 CBA. (ECF No. 10 at 24). Because
the Local 78 CBA is irrelevant to this matter, the Court also denies Respondent’s cross-motion on
these grounds as moot.
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