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IN RE SUNRISE UNDERGARMENT CO.

September 29, 1976

Application of SUNRISE UNDERGARMENT CO., INC., Petitioner, For a Judgment Staying the Arbitration Commenced by UNDERGARMENT & NEGLIGEE WORKERS' UNION, LOCAL 62, I.L.G.W.U., Respondent


The opinion of the court was delivered by: PIERCE

MEMORANDUM OPINION

 PIERCE, District Judge.

 Petitioner Sunrise Undergarment Co. (the Employer) instituted this action to stay arbitration proceedings commenced against it by respondent Undergarment & Negligee Workers' Union Local 62, I.L.G.W.U. (the Union). At the commencement of the lawsuit, the Employer sought a preliminary injunction against the Union; however, that application was withdrawn by consent order dated March 9, 1976. The Union now moves for summary judgment denying the Employer's petition for a stay of arbitration. For the reasons that follow, the motion is granted and the petition denied.

 On September 26, 1975, the Union served the Employer with a notice of intention to arbitrate pursuant to two collective bargaining agreements entered into between the Union and the Allied Underwear Association, Inc. (the Association), a multi-employer bargaining unit of which the Employer was a member. The first agreement (the 1972 Agreement) was dated July 1, 1972 and expired June 30, 1975; the second agreement (the 1975 Agreement) was dated July 1, 1975. The notice asserted that the Employer had failed to make payments to certain Union funds as required by each of the two agreements. *fn1"

 In October 1975, the Employer filed a petition to stay arbitration in the Supreme Court of the State of New York, New York County. By a removal petition filed October 28, 1975, the Union transferred the controversy to this forum.

 In its petition, the Employer seeks a stay of arbitration under the two agreements on the ground that the Union has failed to follow certain pre-arbitration procedures and also on the ground that the arbitrator is biased. With regard to the 1975 Agreement, the Employer asserted the additional claim that it had effectively withdrawn from the multi-employer bargaining unit and thus that it was not bound by the terms of that agreement.

 The Union now moves for summary judgment denying the petition. Initially, the Union claims that the issues raised are all matters which must first be placed before the arbitrator. In the alternative, the Union argues that even if there are questions for the Court present, the Union is entitled to summary judgment on these issues since there are no disputes as to material facts and since as a matter of law the Employer's defenses to arbitration are without merit. The Employer asserts that it, not the Union, is entitled to summary judgment on the issue of the withdrawal, or in the alternative that there are issues of material fact which preclude the grant of summary judgment to either party. The Employer also argues that the issues of compliance with pre-arbitration procedures and arbitrator bias must be resolved by the Court, and that those issues are also inappropriate for summary disposition. Having considered the matter, the Court concludes that the Employer's attempted withdrawal from the Association was ineffective as a matter of law, and that the other issues are matters for the arbitrator in the first instance.

 The Employer's Attempted Withdrawal

 Although the parties hereto have failed to submit statements pursuant to Rule 9(g) of the Local Rules of this Court, it is clear that the following matters are not in dispute.

 For many years, the Employer was a member of the sixty-member multi-employer bargaining unit known as the Allied Underwear Association. Since the Employer employed only about 35 of the 5,000 employees involved in the Association, it has never actively participated in negotiations between the Union and the Association. The Association bargains on behalf of its members concerning wages, hours and other working conditions of their employees. There is no dispute that, as a member of the Association, the Employer was bound by the terms of the 1972 Agreement entered into between the Union and the Association for a term commencing July 1, 1972 and expiring June 30, 1975.

 While the Employer states that, in the past, negotiations for the industry-wide contract began in the month of April, it is undisputed that the negotiations leading up to the 1975 Agreement commenced on March 19, 1975. At that first meeting between the Union and the Association, proposals and counterproposals for the renewal of the contract were exchanged and discussed; the negotiations were thereafter adjourned until April 21, 1975.

 On or about March 31, 1975, the Employer notified the Association that it was withdrawing from the multi-employer unit and informed the Union that it would not renew the contract scheduled to expire June 30, 1975. Upon receipt of this notice, the Union took the position that the attempted withdrawal was untimely and that it would hold the Employer to the 1975 Agreement. In an affidavit tendered on this motion, the Employer's president represents that he was unaware of the commencement of negotiations on March 19, 1975. However, it is not disputed that the Union had requested the commencement of negotiations with the Association as early as March 3, 1975.

 Following five further negotiating sessions, the Union and the Association concluded an agreement on June 23, 1975. While there have been informal direct communications between the Employer and the Union following the execution of the 1975 Agreement, there has been no individual bargaining between the parties. According to the affidavit of the Employer's president, the Employer resigned from the Association to end "constant harassment" at the hands of the Union, and because the Employer felt that the Association did nothing to protect its smaller members. The employees of the Employer are still all members of the Union.

 Finally, there is some dispute as to the intent of the Employer's notice of withdrawal. The Employer states that it intended to withdraw effective March 31, 1975; the Union states that the notice evidences an intention to withdraw as of June 30, 1975. Since on this motion the Court must resolve all inferences in favor of the Employer, the notice will be considered as an attempt at withdrawal as of March 31, 1975. However, the differing inferences are ...


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