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INTERNATIONAL LONGSHOREMEN'S ASSN. v. DELTA S.S. L

May 22, 1986

In the Matter of the Arbitration between INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, AFL-CIO, Petitioner,
v.
DELTA STEAMSHIP LINES, INC. Respondent



The opinion of the court was delivered by: KRAM

MEMORANDUM OPINION AND ORDER

SHIRLEY WOHL KRAM, UNITED STATES DISTRICT JUDGE

FACTUAL BACKGROUND

 In September, 1983, the International Longshoremen's Association, AFL-CIO ("ILA"), which acts as the collective bargaining representative for substantially all longshoremen and related waterfront employees in 36 ports from Maine to Texas, entered into an agreement ("September Agreement") *fn1" with the New York Shipping Association, Inc. ("NYSA"). NYSA is a multiemployer bargaining association, whose members include stevedores, steamship carriers and other employers of longshore labor in the Port of New York. NYSA negotiates and administers collective bargaining agreements on behalf of employers engaged in longshore operations. Delta Steamship Lines, Inc. ("Delta"), which was a member of NYSA between 1978 and 1984, is a steamship carrier engaged in transporting cargo by sea in foreign and interstate commerce.

 ILA has traditionally entered into agreements with multiemployer bargaining associations. Since 1981, the ILA and multiemployer bargaining groups have reached agreements concerning seven "Master Contract" items: wages, hours, the term of the agreement, contribution to welfare and pension plans, containerization, and LASH. *fn2" With respect to the Master Contract, ILA acts as the collective bargaining representative for ILA locals in all 36 ports.

 ILA also negotiates non-Master Contract items, e.g., overtime, seniority, safety and holidays. These items are negotiated separately by local port associations and ILA locals after the Master Contract items are finalized. When agreements are reached on the local issues, both parts of the contract are presented to the local ILA membership for ratification. Thus, collective bargaining is conducted on both a coastwide and a port-by-port basis.

 Negotiations leading to the September Agreement began in March, 1983. Management associations representing 35 of 36 ports negotiated jointly with ILA. Delta was a member of three of those associations: NYSA, the New Orleans Steamship Association ("NOSA"), and the West Gulf Maritime Association ("WGMA") ILA and the management associations reached an agreement on the Master Contract items in April, 1983. NYSA signed that agreement on behalf of numerous employers, including Delta, on April 16, 1983.

 After reaching agreement on the Master Contract items, negotiations on the local level began. These negotiations were interrupted in early September when the parties reopened negotiations regarding the Master Contract items due to new developments in containerization litigation taking place in the federal courts. While the particulars of this litigation are irrelevant for resolving this motion, the parties abandoned the April 16, 1983 Agreement and a new Agreement concerning the Master Contract items was made on September 26, 1983. The final paragraph of the September Agreement provided an extension to January 15, 1984 to allow "Management and ILA in each of the Management-ILA ports to reach full and final agreement on local conditions."

 By January 15, 1984, the local agreements were not finalized. ILA and the employer associations, including NYSA, lengthened the extension to February 8, 1984, to give the individual ports additional time to complete the 1983-86 local contract negotiations. NYSA participated in the local negotiations affecting the port of New York, which were finally concluded in New York on January 26, 1984. Local negotiations were concluded in New Orleans on February 2, 1984, and in the West Gulf on February 6, 1984. By February 8, 1984, all local contracts were finalized and the entire package was ratified in all 35 ports. In resolving the instant motions, this Court must determine, inter alia, whether the September Agreement is binding on Delta and if so, whether that agreement requires Delta to arbitrate ILA's claims.

 In January, 1984, while bargaining over the local contracts was taking place, negotiations over another agreement began. These negotiations led to the formation of an agreement between ILA and the various management associations on January 25, 1984 ("January Agreement"). *fn3" The binding effect of, and the obligations arising from, the January Agreement, is also disputed.

 ILA's stated goal in implementing the January Agreement was to enlist carriers to subscribe directly (not merely through their collective bargaining representatives) to the various contracts which formed the collective bargaining agreement. ILA desired to bind those vessels which did not belong to any employer association, and thus, were not parties to the ten agreements ("enumerated agreements") listed in paragraph I of the January Agreement. Thus, the January Agreement was not created to bind carriers such as Delta, since such carriers were already bound to most, if not all, of the enumerated agreements by virtue of their membership in the management associations.

 After the January Agreement was formed, the individual carriers were asked to subscribe to the agreement. Delta refused, *fn4" and withdrew via telegram from NOSSA on February 2, 1984 and WGMA and NYSA on February 6, 1984. Thus, Delta withdrew from NYSA two days before the September Agreement was finally ratified.

 ILA challenged Delta's refusal to sign the January Agreement. On April 3, 1984, ILA filed a written grievance with the Management-ILA Emergency Hearing Panel ("the Panel") and requested a hearing. ILA alleged that Delta violated the terms of the January Agreement by, inter alia, failing to "subscribe to the Master Agreement and Agreements with the Local Port Associations." Additionally, ILA stated that Delta "ha[d] engaged in wilful violations of the batching provisions of the Rules on Containers and the Containerization Agreement."

 Delta refused to attend the hearing, stating that it was not bound to the January Agreement. ILA responded on April 9, 1984 by filing a petition to compel Delta to arbitrate, which is presently before the Court. *fn5" In its petition to compel arbitration, ILA argues that arbitration is mandated by the Work Incentive Agreement of June 19, 1981, which is incorporated by reference in the January Agreement. Specifically, ILA relies on paragraph 6 of the Work Incentive Agreement, which provides:

 F. Charges of alleged violations of the Master Agreement involving more than one port shall be referred directly to the Management-ILA Emergency Hearing Panel for final determination.

 In its petition, ILA also relies on paragraph III of the January Agreement, which binds all steamship carriers to determinations made by the various management and labor tribunals named in the Master Agreement or any of the local agreements Paragraph III continues that any such determination shall have the effect of an arbitration decision and may be enforced by either party in any federal district court having jurisdiction over the parties

 Meanwhile, on April 8 and 9, 1984, Delta ships entered a port facility in Jacksonville, Florida. Delta used the non-ILA stevedoring services of its sister company, Terminal Operators ("TOPS"). On April 10, 1984, ILA sought a temporary restraining order enjoining Delta from using non-ILA labor to unload its vessels in Jacksonville or any of the other ports covered by the January Agreement. This Court denied ILA's application on April 10, 1984 and three days later, ILA withdrew its motion for a preliminary injunction.

 Additionally, on April 9, 1984, ILA filed the second of numerous grievances *fn6" against Delta, pursuant to the January Agreement. ILA alleged that Delta violated the Amended Containerization Agreement of July 29, 1983, incorporated by reference in the January Agreement, by using non-ILA labor to unload its ships in Jacksonville. ILA invoked the procedures of the Amended Containerization Agreement, which allowed ILA and NYSA to submit grievances to the Executive Committee of the Panel on an expedited basis.

 The Committee scheduled a hearing for April 11, 1984. Delta again refused to attend, stating that it was improper for the Panel to conduct a hearing while ILA's petition to compel arbitration was pending before this Court. Delta did not move for a stay at this time. (See footnote 6, supra). The Panel met in Delta's absence and issued an award, assessing liquidated damages of $ 172,000 against Delta and directing Delta to comply with the Containerization Agreement. ILA now moves to confirm and enforce this arbitration award.

 In sum, ILA moves to compel Delta to arbitrate ILA's outstanding claims and to confirm an arbitration award. ILA later moved for summary judgment regarding its motion to confirm the arbitration award. Delta moves to dismiss or, in the alternative, for summary judgment with respect to both motion. *fn7"

 DELTA'S CLAIMS

 Delta vigorously contests the binding nature of both the September and January Agreements. Delta primarily contends that since it never signed the January Agreement, no binding contract exists which requires Delta to arbitrate ILA's claims. By refusing to sign the January Agreement, Delta maintains it rejected the enumerated agreements, including the September Agreement.

 Delta also argues that NYSA is incapable of binding Delta to the January Agreement since the Agreement provides that the "undersigned Steamship Carriers" must execute the Agreement. Delta contends that even if NYSA could bind Delta to this Agreement, Delta withdrew from NYSA in a timely fashion, *fn8" thereby eliminating the binding effect of NYSA's ratification of the January Agreement. In short, Delta maintains that the January Agreement was a substitute for all preexisting agreements; it abrogated all earlier contracts, including the September Agreement.

 Delta argues that even if its failure to subscribe to the January Agreement did not abrogate the September Agreement, the September Agreement never applied to Delta. Delta argues that the September Agreement did not become effective until February 8, 1984, when the Master Contract items were ratified along with the local agreements. Since Delta withdrew from NYSA on February 6, 1984, Delta argues that it was never bound to the September Agreement. Since NYSA's bylaws provide that a member's timely withdrawal from NYSA relieves the member from agreements negotiated by NYSA, Delta maintains NYSA was powerless to bind Delta to any agreement.

 Delta asserts that even if the September Agreement is binding on Delta, the Agreement fails to contain any provision requiring Delta to arbitrate ILA's claims. Specifically, Delta argues that ILA has not shown how the September Agreement incorporates the Work Incentive Agreement or the Amended Containerization Agreement -- the alleged sources of Delta's duty to arbitrate.

 Delta also raises a host of affirmative defenses. *fn9" Delta argues, inter alia, that the Arbitration Act does not apply to collective bargaining agreements Involving workers engaged in foreign or interstate commerce; that the January 1984 contract was an illegal "pre-hire" agreement; that Delta was not an employer of ILA workers; that the Panel was incapable of reaching an impartial decision since it was biased against Delta; that the Panel committed prejudicial misconduct by conducting a hearing while ILA's petition to compel arbitration was pending and by issuing damage awards disproportionate to the alleged injuries sustained; and that both the January and September Agreements violated numerous ...


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