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September 30, 1981

In the Matter of the Application of ORIENTAL REALTY CORP., d/b/a Manhattan Beach Hotel, Petitioner, For an Order Staying Arbitration Commenced by LOCAL 144, ASSOCIATED HOTEL, HOSPITAL, NURSING HOME AND ALLIED SERVICES UNION, SEIU, AFL-CIO, Respondent

The opinion of the court was delivered by: NEAHER


Petitioner ("Oriental") commenced these actions in State court to stay arbitration proceedings instituted by respondent Local 144 ("union"). The parties' controversy arose out of the union's demand that Oriental make pension contributions and severance pay awards to former employees at the Manhattan Beach Hotel, formerly owned and operated by Oriental. Following removal to this Court, the union moved for summary judgment compelling arbitration of the issues in dispute pursuant to § 4 of the Federal Arbitration Act, 9 U.S.C. § 4. On its part, Oriental moved to enjoin the union's efforts to pursue or conduct arbitration. For the reasons that follow the Court concludes that Oriental, and not the union is entitled to summary judgment and enjoins the latter from pursuing arbitration.

 Oriental owned and operated the Manhattan Beach Hotel, located in Brooklyn, from 1953 to November 26, 1980, when it was sold to the Jewish Association for Services for the Aged ("JASA"). In May 1969 Oriental joined Associated Hotels & Motels, Inc., a multi-employer bargaining association whose successor in interest is Metropolitan Hotels & Motels, Inc. ("Association"). The Association and the union, which at least since 1969 has been the collective bargaining representative for the Manhattan Beach Hotel's employees, have had a collective bargaining relationship from 1969 to date.

 The collective bargaining agreement ("Master Agreement") in effect after Oriental joined the Association provided that it would be effective from June 1, 1969 through May 31, 1973, and that after March 1, 1973, the parties would negotiate terms and provisions of an agreement to be effective thereafter. See Master Agreement, Article XXII(1), (3). By stipulation dated December 1, 1972, the Association and the union provided that except as thereby modified the Master Agreement would continue in full force through May 31, 1976 (First Stipulation, dated 12/1/72, P 12). A second stipulation dated March 9, 1976, further extended the duration of the Master Agreement to May 31, 1978, with reopening on April 1, 1977 for discussion of wage and other benefits (Second Stipulation, dated 3/9/76, P 10). Paragraph 7 of this second stipulation provided in part as follows:

"The Union and the Association shall appoint a joint committee to study, review and resolve the following issues which, when agreed upon, shall be reduced to writing as an addendum to the contract: ... (b) The establishment of a schedule for severance pay."

 A third stipulation dated October 20, 1977, revised the Master Agreement and earlier stipulations in certain respects and continued its duration for two more years, retroactively from June 1, 1977 to May 31, 1979. Most recently, on April 1, 1980, the union and the Association entered into a further stipulation extending the Master Agreement, effective retroactively from June 1, 1979 to May 31, 1982. This stipulation provided for an award of severance pay for covered employees "in the event that they are permanently laid off for any reason" (Fourth Stipulation, dated 4/1/80, P 14), and increased employer contributions to the pension fund. It also granted as "additional paid holidays" the employee's birthday and Martin Luther King's birthday, raised the wages of non-tipping employees by $ 10.00 per week retroactive to June 1, 1979,.$ 7.00 retroactive to December 1, 1979 and a further $ 10.00 effective June 1, 1980, gave four weeks' vacation to employees of over fifteen years' standing, and three days' sick leave with pay for the period June 1, 1980 to May 31, 1981.

 It is undisputed that during 1977 Oriental withdrew from the Association, rejoined on October 27, 1977, withdrew again in March 1979 and rejoined on May 8, 1979. This latter date was three weeks before the stated expiration of the Third Stipulation on May 31, 1979. On February 29, 1980 Oriental informed the Association it wished to resign and that the Association was no longer authorized to represent it in any labor contracts.

 During March, April and May and through the summer and early fall, the union sought to have Oriental execute a collective bargaining agreement. After these attempts failed because Oriental was negotiating sale and transfer of title to JASA, the union filed notices of intention to arbitrate the pension fund and severance pay disputes on September 16 and December 4, 1980, respectively. These notices prompted Oriental's present actions to stay arbitration. On March 17, 1981, the union filed unfair labor practice charges with the NLRB against Oriental, and on May 21, 1981 the Board issued a consolidated complaint against Oriental and its successor, Manhattan Beach Housing Development Fund Corp., d/b/a Manhattan Beach Hotel. The NLRB complaint alleged that Oriental had engaged in unfair labor practices by refusing to bargain collectively in violation of § 8(a)(5) of the National Labor Relations Act, 29 U.S.C. § 158(a) (5), and by interfering with, restraining and coercing its employees in the exercise of rights guaranteed by § 7 of the Act, in violation of § 8(a)(1), 29 U.S.C. § 158(a)(1). The complaint set February 8, 1982 as the hearing date.

 The underlying dispute between the parties concerns Oriental's responsibility to make the severance pay awards and pension fund contributions called for in the Master Agreement, as extended by the April 1, 1980 stipulation. The immediate question presented by the parties' motions, however, involves whether an arbitrator should determine the scope of Oriental's obligations, including, as the union contends, whether Oriental is subject to a collective bargaining agreement, or whether the union should be enjoined from pursuing arbitration.

 The "courts have long recognized that "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.' " McAllister Brothers, Inc. v. A & S Transportation Co., 621 F.2d 519, 522 (2d Cir. 1980), quoting United Steelworkers of America v. Warrior and Gulf Navigation Co., 363 U.S. 574, 582, 80 S. Ct. 1347, 1352, 4 L. Ed. 2d 1409 (1960). Moreover, "the question whether the parties have entered into a contract imposing a duty to arbitrate is one that must be decided by the court, not by an arbitrator." Rochdale Village, Inc. v. Public Service Employees Union, Local No. 80, 605 F.2d 1290, 1294 (2d Cir. 1979). The union argues, however, that whether Oriental is subject to a collective bargaining agreement calling for arbitration is in this case an issue for the arbitrator to decide. It relies on Rochdale Village, supra, where the Court of Appeals stated:

"If a court finds that the parties have agreed to submit to arbitration disputes "of any nature or character,' or simply "any and all disputes,' all questions, including those regarding termination, will be properly assigned to the arbitrator: "with that finding the court will have exhausted its function, except to order the reluctant party to arbitration.' United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564, 571 (80 S. Ct. 1343, 1364, 4 L. Ed. 2d 1403) (1960)." 605 F.2d at 1295.

 While the arbitration clause in the Master Agreement required arbitration of "(all) complaints, disputes or grievances arising between the parties hereto involving questions of interpretation or application of any clause of this Agreement, or any acts, conduct or relations between the parties," Master Agreement P VIII(a), the difficulty with the union's reliance on Rochdale is that Oriental was bound to arbitrate only by the Third Stipulation, which expired by its terms on May 31, 1979 (Third Stipulation, dated 10/20/77, P 4). The situation here thus differs in a critical aspect from that in Rochdale : there the duration clause of the parties' collective bargaining agreement provided that the contract

"shall continue in effect until the 31st day of October 1978, and thereafter shall be automatically renewed for successive yearly periods unless written notice is given, by either party to the other, of its desire to modify, amend or terminate this Agreement. Such notice shall be given not more than seventy-five (75) days nor less than thirty (30) days prior to the expiration date of this agreement or of any annual extension thereof."

 Because the parties disagreed as to when the notice period began and whether the employer's notice had been timely, the court held that these were questions arising "under" the collective bargaining agreement and ...

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