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LOCAL 144

March 25, 1986

LOCAL 144, HOTEL, HOSPITAL, NURSING HOME & ALLIED SERVICES UNION, SEIU, AFL-CIO, Petitioner,
v.
AMERICAN NURSING HOME, BRUCKNER NURSING HOME/BNH MGT., CLOVE LAKES NURSING HOME, FORT TRYON NURSING HOME, FRANKLIN NURSING HOME, LYDEN NURSING HOME, and WILLIAMSBRIDGE MANOR, Respondents


Conner, William C., D. J.


The opinion of the court was delivered by: CONNER

CONNER, WILLIAM, D. J: OPINION AND ORDER

Petitioner Local 144, Hotel, Hospital, Nursing Home & Allied Services Union, SEIU, AFL-CIO ("Local 144" or "the union") brought this action pursuant to section 301(a) of the Labor Management Relations Act of 1947, as amended, 29 U.S.C. § 185(a) (1982), and section 9 of the United States Arbitration Act of 1925, as amended, 9 U.S.C. § 9 (1982), to confirm an arbitration award enforcing the provisions of a collective bargaining agreement. For the reasons set forth below, Local 144's petition to confirm the arbitration award is granted.

 Background

 Local 144 is a "labor organization" within the meaning of section 301(a) of the Labor Management Relations Act. It maintains its principal office in Manhattan. Respondents are residential health care facilities, or nursing homes. They are located in New York City, and they employ members of Local 144.

 The respondent nursing homes are members of the Southern New York Residential Health Care Facilities Association, Inc. ("Southern New York"). On November 30, 1984, Southern New York entered into an agreement with Local 144 extending a previous collective bargaining agreement. See Agreement dated November 30, 1984, Exh. A to Petition [hereinafter cited as "1984 agreement"]. The 1984 agreement incorporated a broad arbitration clause of the predecessor contract that required the parties to submit any dispute between them involving questions of interpretation of the agreement to an "Impartial Chairman" for resolution. Id. P I; 1981-1984 Blue Book, para. 8(G), Exh. B to Petition.

 The 1984 agreement also provided for Local 144's members to receive a 6.5% wage increase retroactive to July 15, 1984. In paragraph II(J), however, the parties expressly recognized that the nursing homes had to "receive full [Medicaid] reimbursement from the State of New York . . . for all [their] labor costs in order to implement the economic terms and conditions of this Agreement." 1984 agreement para. II(J). The parties indicated that they had negotiated the wage and benefit increases "with specific reference to the labor trend factor set forth by the State of New York in calculating reimbursement rates." Id. The State had represented to the parties that the "labor trend factor" for 1984 would be 5.5%. Accordingly, the parties agreed that if a nursing home's labor costs were reimbursed at less than the labor trend factor, or if a nursing home's labor costs increased in excess of the trend factor, the nursing home could seek a reduction in the wages and benefits it had agreed to pay equal to the amount of its unreimbursed labor costs. Id. The agreement established a "Reimbursement Review Panel" to hear and determine all claims for relief arising out of the reimbursement clause. Id. P II(K).

 Local 144 has submitted an affidavit from a certified public accountant stating that the labor trend factor for 1984 for each of the respondents was 5.51%. See Affirmation of Simon Schwarz para. 8. However, respondents claimed that their labor costs for the year had increased in excess of that factor, and refused to pay the 6.5% wage increase. On April 26, 1985, Local 144 filed a grievance and demanded arbitration of the dispute before Impartial Chairman Lois A. Rappaport ("Rappaport"). On May 9, 1985, respondents notified Local 144 that they intended to petition the Reimbursement Review Panel for relief pursuant to paragraphs II(J) and II(K) of the 1984 agreement.

 On July 10, 1985 and July 17, 1985, Rappaport convened hearings on Local 144's grievance. Respondents contended that, given the pendency of their petitions for reimbursement relief, the Impartial Chairman had no authority to hear the union's grievance. In short, they argued that since the Reimbursement Review Panel had exclusive jurisdiction to decide questions arising from the reimbursement clause, the Panel, and not the Impartial Chairman, should decide whether respondents were required to pay the wage increase. See Impartial Chairman's Award, Exh. C to Petition at 5-6. Local 144, on the other hand, argued that the arbitration clause of the 1984 agreement gave the Impartial Chairman the jurisdiction to decide "all disputes between the parties." The union conceded that the Reimbursement Review Panel had exclusive jurisdiction to decide questions arising out of the reimbursement clause; however, it argued that while respondents had the right to petition the Panel for reimbursement relief, they were still obliged to abide by the terms of the collective bargaining agreement while such proceedings were pending. Thus, Local 144 asserted that the Impartial Chairman had the jurisdiction to enforce the terms of the 1984 agreement, including payment of the wage increase. Id. at 6.

 In an award and decision dated September 13, 1985, Rappaport concluded that in view of the broad arbitration clause, she did have jurisdiction over Local 144's grievance. She reasoned that while the Reimbursement Review Panel should hear and determine respondents' claims for relief, she had jurisdiction to decide whether respondents had failed to honor the terms of the contractual provision for the implementation of the wage increase. Id. at 7.

 Rappaport also concluded that respondents had violated the terms of the wage increase. She recognized that the agreement clearly stated that each nursing home must receive full reimbursement for all of its labor costs as a condition precedent to the wage increase specified in the agreement. Id. at 8. On the other hand, she noted that respondents did not contend that they had received no reimbursement whatsoever, only that they had not received full reimbursement. She reasoned that whatever monies were received by respondents should have been earmarked for the wage increase, and concluded that respondents "are not free to collect the reimbursement which they had agreed under the collective bargaining agreement was to pay wage increases and to delay the payment of those increases until they get a pronouncement from the Reimbursement Review Panel as to the amount of relief they would receive, if any." Id. at 9.

 Accordingly, Rappaport declared that

 
the amount received as reimbursement, up to and including 5.5%, should have been paid as part of the negotiated 6.5% July 1984 wage increase and is due and owing and must be paid. . . . Furthermore, no question has been raised before the Impartial Chairman as to the payment of the difference between [the] 6.5% wage increase and the 5.5% labor trend factor, i.e. 1.0%. If this 1.0% has not been paid to the employees, then, it too is due and owing and is to be paid.

 Id. at 10. Rappaport directed respondents to pay this money forthwith. She further directed that "if the monies are not paid within thirty (30) days from the date of this Award, interest at the current legal rate will accrue as of the date of this Award." Id.

 Respondents did not move to vacate the award, but also did not comply with its terms. As a result, on January 2, 1986, Local 144 petitioned the Court for an order confirming the award and directing respondents to comply with it. As indicated above, Local 144 has submitted an affidavit from a certified public accountant stating that the labor trend factor for 1984 for each of the respondents was 5.51%. Respondents have not disputed that statement. Accordingly, Local 144 argues that under the terms of ...


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