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TTL DISTRIBUTION v. LOCAL 99

December 1, 1982

TTL DISTRIBUTION, INC., (Formerly Ups 'N Downs, Inc.), Plaintiff,
v.
LOCAL 99, OFFICE AND DISTRIBUTION EMPLOYEES UNION, INTERNATIONAL LADIES GARMENT WORKERS UNION, AFL-CIO, Defendant



The opinion of the court was delivered by: SAND

SAND, J.

 This case is before the Court on the motion of TTL Distribution, Inc. (formerly Ups 'N Downs, Inc.) ("Ups 'N Downs" or "the Employer") to vacate an arbitration award made in favor of the Office and Distribution Employees' Union Local 99, I.L.G.W.U. ("the Union"). The Union has moved for summary judgment against the Employer and to confirm the award pursuant to the United States Arbitration Act, 9 U.S.C. Section 9. Jurisdiction is predicated on Section 301(a) of the Labor Management Relations Act, 29 U.S.C. Section 185(a).

 Ups 'N Downs owned and operated a warehouse and distribution center where it employed approximately thirty-five members of the Union pursuant to a collective bargaining agreement. It also owned and operated a chain of approximately 170 retail stores. Prior to shipment to its retail stores, the Employer's merchandise was processed by the warehouse employees. At the end of December, 1981, Ups 'N Downs notified the Union that it had sold all of its retail stores. As a consequence, it decided to close its warehouse and terminate the employment of all the Union members.

 The Union sought to arbitrate the Employer's decision to terminate the warehouse employees without ensuring that the Employer's contractual obligations under the contract would be assumed by the buyer of its retail stores. In this regard, the bargaining agreement provided in relevant part:

 
CONTINUING OBLIGATIONS IN THE EVENT OF SALE OR TRANSFER
 
34. The Employer agrees that:
 
1. It will not nor will it permit its subsidiaries and/or affiliates to enter into any partnership, consolidate or merge with, or be absorbed by any person, firm or concern or sell or transfer its or their business, in whole or in part, to any other person, firm or concern unless (a) the new or purchasing firm agrees to be bound under this agreement for the duration hereof and assumes all of the obligations, accrued and otherwise, to the workers, the Union and the Benefit Funds hereunder, and (b) the work forces of the constituent selling or transferring firm and the new or purchasing firm, are merged without loss of employment to any worker, and such resultant work force be covered by all of the provisions of this agreement.

 Agreement between Office and Distribution Employees' Union Local 99, I.L.G.W.U. and Women's Apparel Chains Association (the "Agreement"), para. 34 (attached as Exhibit A, Defendant-Petitioner's Petition to Confirm).

 A hearing was held on the Union's complaint at which all parties participated. The arbitrator appointed under the Agreement issued a decision in favor of the Union, finding that the employer was required under paragraph 34 to ensure, upon the sale of all or part of its business, that all contractual obligations were assumed by the purchaser. The arbitrator made an award directing the employer to pay back pay, vacation pay, contributions to the Union's Health & Welfare Fund, and damages.

 The clause of the collective bargaining agreement allegedly empowering the arbitrator to decide the issues in this case reads, in relevant part, as follows:

 
All complaints, disputes or grievances arising directly or indirectly between the Union and the Employer or any of his subsidiary, auxiliary and affiliate firms or his or their successors and assigns, involving questions of interpretation, application, performance or operation of any clause of this agreement, or any acts, conduct or relations between them including, without limitation, any claims against an Employer arising out of any alleged dissolution or termination of his business prior to the expiration of this agreement or any claim against his successors or assigns arising out of any alleged merger with or purchase of assets from another Employer prior to the expiration of this agreement . . . . shall be referred to a permanent umpire to be known as the Impartial Chairman in the industry, and his decision shall be final and binding upon the Union and the Employer . . . .
 
It is the intention and agreement of the Union and the Employer that the procedure established in this agreement for the adjustment of disputes shall be the exclusive means for the determination of all disputes, complaints or grievances specified herein . . . .
 
If any issue should arise as to the validity of any provision of this agreement or the arbitrability of this Agreement, substantive or procedural, the Impartial Chairman shall have ...

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