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TUDOR FASHIONS LTD. v. ROMNEY

May 5, 1986

TUDOR FASHIONS LTD., a New York Corporation, and DAVID MERYL, INC., A New York Corporation, Plaintiffs,
v.
EDGAR ROMNEY, as Manager of BLOUSE, SKIRT & SPORTSWEAR WORKERS' UNION, LOCAL 23-25, INTERNATIONAL LADIES GARMENT WORKERS' UNION, Defendants



The opinion of the court was delivered by: GOETTEL

GOETTEL, D.J.:

The plaintiffs in this action, Tudor Fashions Ltd. ("Tudor") and David Meryl, Inc. ("David Meryl") seek what is commonly known as a Boys Markets injunction, enjoining the defendant Blouse, Skirt & Sportswear Workers' Union, Local 23-25, International Ladies Garment Workers Union ("the Union") from striking or otherwise interfering with the business of the plaintiffs. The Court is now prepared to rule on this matter, both parties having declined the Court's invitation to hold an evidentiary hearing. The plaintiffs' request for injunctive relief is denied pursuant to the Court's findings of fact and conclusions of law that follow.

 I. Findings of Fact

 Except where otherwise noted, the following facts are not in dispute.

 A. The Parties and the Collective Bargaining Agreement

 Tudor is a New York corporation that for many years engaged in the manufacture and sale of garments. Although Tudor has not manufactured or sold garments within the past year, it hopes to resume production and sales in the future. Plaintiff David Meryl is another New York corporation in the apparel business. The Union is an unincorporated labor organization with offices in the state of New York.

 For many years, Tudor and the Union have been parties to successive collective bargaining agreements which regulate the terms and conditions of employment of those Tudor

 employees whom the Union represents. Their current collective bargaining agreement ("the Agreement") expires on May 1, 1988.

 Article 44 of the Agreement provides that, "[a]ll complaints, disputes, claims or grievance between the Union and Tudor "or any of its subsidiary auxiliary and affiliated firms or their successors and assigns ... that directly or indirectly arise under, out of or in connection with or in any manner relate to or involve questions or interpretation or application of any ARTICLE of this agreement or any of the acts, conduct or relations between them ..." shall be resolved through a multi-step grievance procedure culminating in final and binding arbitration. Affidavit of Albert S. Lewis, Exhibit A at 52. The Agreement also contains a so-called "no-strike clause," that prohibits a "strike, stoppage or lockout" during the term of the Agreement. Id. at 50. This prohibition applies during the pendency of an arbitration proceeding, but does not apply in favor of a party who does not comply with a decision of the arbitrator within twenty-four hours of rendition. Id.

 B. The Underlying Dispute

 In mid-1985, the Union learned that David Meryl and Tudor had exhibited several indicia of close affiliation. David Meryl's owners and officers were the son and grandson of Tudor's owner, and many of David Meryl's employees were former Tudor employees. Based on this and other information, the Union demanded that Tudor acknowledge David Meryl as its subsidiary, auxiliary, or affiliate bound by the terms of the Agreement pursuant to Article 8 which states that "[s]ubsidiary, auxiliary, and affiliated firms or corporations of [a corporation bound by the Agreement] shall, for purpose of this agreement be ... bound by all of the terms of this agreement. Id. at 6. Both Tudor and David Meryl emphatically denied any such connection to the other. The Union then commenced an arbitration against Tudor and David Meryl alleging that David Meryl was Tudor's alter-ego or affiliate. All parties concede that this dispute is arbitrable under the second paragraph of Article 8 of the Agreement, which states that "[t]he Impartial Chairman shall have the right to determine whether any firm or corporation is a subsidiary, auxiliary or affiliate of an Employer...."

 C. The Arbitration Proceedings

 A dispute over the scope of discovery available against David Meryl has thus far delayed the progress of the arbitration proceedings. On August 28, 1985, the Union served David Meryl with a subpoena demanding production of any books and records that would bear on the issues before the arbitrator. At a September 5, 1985 hearing before the arbitrator, David Meryl appeared by counsel and moved. to quash the subpoena. On September 12, 1985, the arbitrator issued an "interim determination" in which he found that "the Union ... [had] demonstrated a relationship between Tudor and David Meryl sufficient to warrant an examination of the David Meryl, Inc. books and records for evidence material and relevant to the issues in this proceeding." Affidavit of Arthur Lewis, Exhibit D at 8. Since the "evidence adduced thus far raise[d] a real possibility that [an alter-ego or affiliate] relationship may in fact exist," id., the arbitrator concluded that a subpoena for certain books and records was warranted. However, he declined to sanction the breadth of the subpoena already issued and instead outlined the scope of an allowable subpoena. Counsel for the Union then issued a new subpoena to which Meryl again refused to comply. The Union thereafter successfully moved in the Supreme Court of the State of New York for an order ...


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