UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
November 16, 1984
CORPORATE PRINTING COMPANY, INC., Plaintiff, against NEW YORK TYPOGRAPHICAL UNION NO. 6 and WALTER L. EISENBERG, Defendants.
The opinion of the court was delivered by: EDELSTEIN
OPINION AND ORDER
EDELSTEIN, District Judge:
This action was removed from the Supreme Court of the State of New York pursuant to 28 U.S.C. § 1441(a). Jurisdiction is conferred on this court by 29 U.S.C. § 185.
Plaintiff Corporate Printing Company, Inc. ("Corporate Printing") brought this action to stay an arbitration commenced by defendant New York Typographical Union No. 6 ("Union") before defendant Walter L. Eisenberg ("Eisenberg").
A second arbitration was commenced by Corporate Printing after this suit was filed.
The Union filed a motion for summary judgment on the original claim relating to the first arbitration and a motion for a preliminary injunction to stay the second arbitration. These motions were conditionally denied and a trial was commenced. The trial was terminated when it became apparent that no material issues of fact existed. It was determined at that time that the disputes regarding both arbitrations could be decided in the context of a single motion for summary judgment. The initial motions are deemed consolidated into the single motion for summary judgment considered herein. The parties have not submitted additional papers and none are needed. The facts are adequately presented in the submissions for the two original motions and the trial.
Corporate Printing was a member of an employees' association known as the Printer's League Section-Printing Industries of Metropolitan New York (the "League"). In 1975, the League, on behalf of its members, and the Union entered into a collective bargaining agreement ("1975 Agreement"). In February 1977 Corporate Printing expressly withdrew its collective bargaining authorization from the League. Corporate Printing later withdrew from the League. The withdrawal was before an agreement was entered into between the League and the Union which modified the 1975 agreement.
Corporate Printing did not adopt this agreement and is the only company still operating under the original 1975 Agreement.
The 1975 Agreement provides for the appointment of a "Designated Arbitrator" to resolve disputes arising under the agreement.
The 1975 Agreement also prescribes the procedure for the selection and removal of the Designated Arbitrator. Article 13 provides in relevant part:
The Desigfated Arbitrator (and any successor to a Designated Arbitrator) shall be selected by mutual agreement of the League and the Union; failing such mutual agreement, the selection shall be made in accordance with the Voluntary Labor Arbitration Rules of the American Arbitration Association except that no administrative appointment may be made pursuant to such rules. Either party, on 60 days notice to the other party, has the right to seek the selection of another Designated Arbitrator.
Defendant Eisenberg was the Designated Arbitrator under the 1975 Agreement.
The Union sought arbitration before Eisenberg of a dispute with Corporate Printing. The dispute related to contributions by Corporate Printing to the Benefit and Productivity Fund ("BAP Fund") which was established to provide payments to employees displaced because of automation of the printing industry. Corporate Printing refused to submit to arbitration before Eisenberg and sought to dismiss Eisenberg as the Designated Arbitrator. This suit was brought by Corporate Printing to stay the BAP Fund arbitration.
Following the commencement of this action, Corporate Printing notified the Union that Corporate Printing was invoking an arbitration pursuant to League Option A of the 1975 Agreement. League Option A provides that an arbitration may be sought by the League to challenge the cost of living increase provisions of the 1975 Agreement.
The Union counterclaimed to stay the League Option A arbitration.
A. Initial Arbitration
Corporate Printing seeks to stay the intial arbitration relating to the BAP Fund on three theories. First, Corporate Printing claims that the Designated Arbitrator, Eisenberg, has been dismissed pursuant to the procedure provided for in the 1975 Agreement. Second, Corporate Printing claims that Eisenberg will not be able to render an impartial determination. Finally, Corporate Printing claims that the Union has not complied the the express conditions precedent to arbitration as provided for in the 1975 Agreement.
1. Dismissal of the Designated Arbitrator
a. Plain Meaning of the Agreement
The effectiveness of the dismissal of Eisenberg as Designated Arbitrator rests on Corporate Printing's power to exercise the procedure for dismissal set forth in the 1975 Agreement.Corporate Printing presents various theories to support their exercise of this power. First, they claim that the term "party" in the paragraph of Article 13 relating to the dismissal of the Designated Arbitrator includes "each employer, not a League member, which is bound to [the] agreement." This definition would include Corporate Printing. This definition of the term "party" is found in the preamble to Article 14 which is set forth below.
The application of this definition of the term "party" to Article 13 is rejected. The term "party" in Article 13 clearly refers to the League and the Union and not to the employers. Further, in order to interpret all of the provisions of the agreement consistently, the term "party" in Article 13 must apply to the League and the Union. A provision in Article 14 that relates to the dismissal of the Designated Arbtrator states that "either the League or the Union, upon sixty (60) day advance written notice to the other and to the Designated Arbitrator, shall have the right to seek the selection of another Designated Arbitrator. . . ." Therefore, the plain meaning of the 1975 Agreement does not grant the right to dismiss the Designated Arbitrator to employers such as Corporate Printing. This power is expressly granted to the League.
b. Can Corporate Printing Stand in the Shoes of the League?
Corporate Printing's second contention is that the League was the agent of employers such as Corporate Printing for purposes of the 1975 Agreement and that by withdrawing from the League and thereby terminating the agency, Corporate Printing may now exercise those powers granted to the League, as agent, in the 1975 Agreement. Corporate Printing relies on a number of cases involving the withdrawal of an employer from an employers' association and whether the employer is bound to a subsequent agreement between the association and the union. In this case, there is an agreement entered into between the League and the Union prior to the withdrawal from the League. The cases relied on by Corporate Printing are therefore inapposite to the present dispute.
Companies that withdraw from associations are generally bound by agreements entered into by the association prior to the withdrawal, see Chicago Magnesium Castings Co. v. N.L.R.B., 612 F.2d 1028, 1035 (7th Cir. 1980), absent language that limits the applicability of the agreement to association members, see Western-Pacific Contractor's Material Co., 243 N.L.R.B. 1078 (1979). There is no such language in the 1975 Agreement. Thus, Corporate Printing is bound to the terms of the 1975 Agreement.
The question is therefore whether the League's power to dismiss under the 1975 Agreement was in its capacity as agent for the employers and as such can be exercised by the employers once the agency is terminated. The 1975 Agreement provides: "This Contract and Scale of Prices is made and entered into by and between the Printers League Section, Printing Industries of Metropolitan New York, Inc. . . . as the authorized representative of the firms, corporations and individuals listed herewith. . . ." The League was thus designated as the employers' agent for purposes of negotiating the contract and binding its members to the contract that it entered into with the Union. The power to dismiss the Designated Arbitrator does not fall within this grant of authority to negotiate and bind the employers; the League's power to dismiss and select the Designated Arbitrator arises out of the express terms of the contract. The employers remain bound to these express contractual terms whether or not they remain in the League once the 1975 Ageement was entered into.
To accept Corporate Printing's contention would permit an employer to alter the provisions of a contract simply by withdrawing from an association. This result, if desired by the parties, may be drafted into the agreement, see Western-Pacific Contractor's Materials Co., 243 N.L.R.B. 1078 (1979) (terms of agreement expressly applied only to association), but without such express language, this result cannot be considered to have been the intent of the parties to the agreement and cannot be permitted.
The power to dismiss the Designated Arbitrator is not related to the League's capacity as the employer's agents for collective bargaining and may not be invoked by an employer that terminates the unrelated agency.
Corporate Printing apparently has dealt directly with the Union since February 1983. Corporate Printing asserts that by this conduct, the Union has acquised to Corporate Printing's status as the subrogee of the League under the 1975 Agreement. As subrogee, Corporate Printing would thus be able to exercise any power granted to the League in the 1975 Agreement. The Union does not dispute the fact that the Union has dealt directly with Corporate Printing, but the Union notes that the treatment of Corporate Printing was no different than that of other non-League employers who were bound by the terms of either the original 1975 Agreement or under the agreement as it existed after 1982. Corporate Printing has not established that the direct dealings between the Union and Corporate Printing was different from the dealings that the Union had with others bound by the agreement. Corporate Printing has also failed to demonstrate how the fact that it has dealt with the Union directly in other circumstances affects the duties under the clauses of the 1975 Agreement that are the focus of this action.
Even assuming arguendo that the Union'a treatment of Corporate Printing was different than that of other employers, the estoppel argument must fail. The requirements of establishing an estoppel have not been alleged. In order for the Union to be estopped from contesting Corporate Printing's excercise of the right to dismiss the Designated Arbitrator, Corporate Printing must demonstrate that the Union has acquiesced to this precise conduct in the past. There has been no showing that Corporate Printing has exercised the power to dismiss the Designated Arbitrator in the past. Further, in order to establish an estoppel, the party against whom the estoppel is set must have acquiesced in such a manner that to allow the party to repudiate such conduct would be contrary to equity and good conscience. See Emeco Indust., Inc. v. United States, 485 F.2d 652, 657, 202 Ct. Cl. 1006 (Ct. Cl. 1973); Redington v. Hartford Accident and Indemnity Co., 463 F. Supp. 83, 86 (S.D.N.Y. 1978) ("[T]he sin qua non of an estoppel is some inequitable or fraudulant conduct engaged in by the party sought to be estopped which is reasonably relied upon by the other party to his detriment."). No such showing has been made based on the undisputed facts regarding the course of conduct between the parties since February 1983. The estoppel argument, therefore, is rejected.
2. Bias of Arbitrator
Corporate Printing seeks to stay the initial arbitration based on the Designated Arbitrator's alleged inability to render an impartial decision. This is based on what Corporate Printing calls "institutional partiality" resulting from Corporate Printing's withdrawal from the League. The presentation of this issue is premature. The determination of arbitrator bias is best raised on a petition to vacate the arbitration award, Sunrise Undergarment Co. v. Undergarment & Negligee Workers' Union, 419 F. Supp. 1282, 1286 (S.D.N.Y. 1976); see Marc Rich & Co. v. Transmarine Seaways Corp. of Monrovia, 443 F. Supp. 386, 387 (S.D.N.Y. 1978) (decision of disqualification left to arbitrator, decision subject to judicial review after award is made),
pursuant to the power to vacate an award based on bias found in the United States Arbitration Act, 9 U.S.C. § 10.
Therefore, the initial arbitration relating to the BAP Fund will not be stayed based on a claim of bias on the part of the Designated Arbitrator.
3. Failure to Comply with Procedures
Finally, Corporate Printing seeks to stay the initial arbitration based on a failure by the Union to comply with the procedures set forth in the 1975 Agreement as condition precedents to arbitration. The 1975 Agreement requires that disputes be submitted to the Joint Standing Committee as a first step in resolving disputes under the 1975 Agreement.Corporate Printing contends that the Union has not submitted the dispute to the Joint Standing Committee. Procedural disputes such as this, because they often develop in the context of the actual dispute sought to be arbitrated, are best left to the arbitrator. John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 556-57, 11 L. Ed. 2d 898, 84 S. Ct. 909 (1964); Bressette v. International Talc Co., 527 F.2d 211, 215 n.6 (2d Cir. 1975). The Designated Arbitrator, based on his familiarity with the 1975 Agreement, is best able to consider any objections based on procedural defects. Therefore, the BAP Fund arbitration will not be stayed by this court based on the alleged procedural defect.
B. League Option A Arbitration
The Union seeks to enjoin the arbitration sought by Corporate Printing pursuant to League Option A. Corporate Printing claims the right to seek League Option A arbitration, which by the terms of the 1975 Agreement is granted to the League, based on its ability to step into the shoes of the League.This is the same argument presented by Corporate Printing to support the dismissal of the Designated Arbitrator in the initial arbitration discussed above. The argument is rejected based on the reasoning above. Corporate Printing may not simply step into the shoes of the League with regard to rights expressly granted to the League in the 1975 Agreement. The League Option A arbitration is therefore stayed.
For the reasons stated herein, the BAP Fund arbitration will not be stayed nor will the Designated Arbitrator be dismissed. The League Option A arbitration is hereby stayed.