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TEAMSTERS LOCAL UNION NO. 533

July 14, 1982

TEAMSTERS LOCAL UNION NO. 533, AFFILIATED WITH the INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, Plaintiff,
v.
HERBERT FUEL OIL & TRUCKING CO., Defendant



The opinion of the court was delivered by: GLASSER

MEMORANDUM AND ORDER

This action was commenced by Teamsters Local Union No. 553 ("the Union"), for the purpose of enforcing a labor arbitration award issued on November 19, 1979. The arbitration was initiated by the Union pursuant to a collective bargaining agreement allegedly in effect between the parties. The Union contended that the defendant, Herbert Fuel Oil & Trucking Co. ("Herbert Fuel"), had violated the agreement by shifting much of its work to a newly formed corporation, Herbert Petroleum Transport, Inc. ("Herbert Petroleum"), which corporation did not abide by the terms of the collective bargaining agreement. The Union alleged that the new corporation was a sham created by the defendant for the purpose of avoiding its obligations under the agreement.

 The defendant did not object to arbitration and submitted three issues to the arbitrator. First, the employer argued that Herbert Fuel had never signed the agreement for the period in question-1976-1978. Second, the employer argued that by ignoring the agreement for many years, the Union had waived its rights. Third, the employer argued that it had not violated the agreement because the new company was a separate entity not subject to the agreement's provisions.

 As to these allegations, the arbitrator, Professor Lewis Kaden, after a full hearing determined (1) that the employer had signed the collective bargaining agreement for the 1976-1978 term, (2) that the union had not waived its rights under this contract, and (3) that the newly formed corporation was so closely related to the defendant partnership that the employees of this corporation were covered by the provisions of the agreement. The arbitrator went on to determine that the defendant had breached the collective bargaining agreement by failing to provide these employees with all of the benefits provided for in the contract. Although the arbitrator observed that a full hearing regarding the specific benefits denied these employees had not been held at the arbitration, he ordered the defendant to "make whole all drivers employed during the contract term for all benefits provided in the contract." The arbitrator also ordered the defendant to notify the union within two weeks of all persons employed during the 1976-1978 contract term.

 The defendant subsequently submitted the required list of employees to the plaintiff, but failed to abide by the other terms of the award. Consequently, the plaintiff filed this suit for confirmation and enforcement pursuant to Section 301 of the Labor Management Relations Act. The complaint seeks a judgment against the defendant in an amount sufficient to make whole all employees covered by the award, demands that the defendant make available to the plaintiff records and documents necessary to determine the amount of the award, and finally seeks attorneys' fees. The plaintiff now moves for summary judgment on all of the relief requested in the complaint.

 Discussion

 At the outset it should be noted that there is a strong federal policy in favor of settling labor disputes through arbitration. See, e.g., Boys Markets, Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235, 90 S. Ct. 1583, 26 L. Ed. 2d 199 (1970); United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S. Ct. 1343, 4 L. Ed. 2d 1403 (1960); United Steelworkers of America v. Warrior & Gulf. Nav. Co., 363 U.S. 574, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960); Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957). In furtherance of this policy, the Supreme Court has promulgated a deferential approach to judicial review of an arbitrator's award, cautioning that "(t)he federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards." United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 596, 80 S. Ct. 1358, 1360, 4 L. Ed. 2d 1424 (1960). Therefore, under existing law, the courts may not review the merits of an arbitrator's award, but rather must enforce the award unless it fails to "draw ( ) its essence from the collective bargaining agreement," id. at 597, 80 S. Ct. at 1361, or fits into some other narrow exception to the principal of deference to arbitration, such as fraud, action in excess of the arbitrator's powers or complete disregard of the law, Local 771, I. A. T. S. E. v. RKO General, Inc., 546 F.2d 1107, 1113 (2d Cir. 1977).

 It is against this background that the plaintiff's action to enforce the arbitrator's award, and the defendant's attempts to resist such enforcement, must be viewed. Both sides concede that an arbitral award was rendered pursuant to a collective bargaining agreement, and that the defendant has failed to abide by that award. Unless the defendant can support its claim that a ground for denial of enforcement exists, or at least demonstrate that a genuine issue as to a material fact must be resolved before it can be determined if the award should be enforced, under the preceding authorities it is clear that the plaintiff would be entitled to judgment as a matter of law. Thus, summary judgment in plaintiff's favor would be appropriate pursuant to Fed.R.Civ.P. 56(c).

 The defendant raises five arguments as to why enforcement should be denied. These will be treated seriatim.

 I.

 The defendants first ground for denying enforcement contains two components, both relating to the validity of the underlying agreement. First, the defendant once again asserts that it was not a signatory to the collective bargaining agreement during the time period in question. The basis of this aspect of the defendant's argument is that the plaintiff is in possession only of an undated signature page containing the signature of one of the defendant's principals, Anthony Guidice. The affidavit of Mr. Guidice recites that he does not remember whether he signed this page in 1976, or whether it is a signature page from an earlier contract. This same argument was made to and rejected by the arbitrator.

 The threshold legal question posed by this argument is whether the decision of the arbitrator must be accepted by this Court, or, in the alternative, whether a de novo determination is now appropriate. Unlike the typical labor arbitration case wherein the decision of the arbitrator will be accepted "so long as it draws its essence from the collective bargaining agreement," U. S. Steelworkers v. Enterprise Wheel Car Corp., 363 U.S. 593, 597, 80 S. Ct. 1358, 1361, 4 L. Ed. 2d 1424 (1960), the interesting question posed here is whether the arbitrator was empowered to determine the issue of the existence of the very contract from which his authority was initially derived.

 In arguing that the arbitrator lacked this authority, the defendant relies primarily on ILGWU v. Ashland Industries, Inc., 488 F.2d 641 (5th Cir.), cert. denied, 419 U.S. 840, 95 S. Ct. 71, 42 L. Ed. 2d 68 (1974). In Ashland, a union brought suit against an employer for breach of a collective bargaining agreement. The employer successfully stayed the suit, arguing that arbitration was the sole remedy provided for under the contract. When the employer reached arbitration, however, it argued that the entire contract was invalid because it had been induced by fraud. The arbitrator agreed and held the contract unenforceable. The union then moved to vacate the award on the theory that the arbitrator had exceeded his authority, and the district court granted the union's motion. The Fifth Circuit affirmed this decision, concluding:

 
It is our view that (the employer's) attack upon the validity of the underlying contract goes to the heart of whether there is anything to arbitrate-not just what there is to arbitrate-and thus poses a legal question for the Court rather than the arbitrator. The arbitrator who derives his power ...

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