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New York Bus Tours Inc. v. Kheel

decided: December 21, 1988.

NEW YORK BUS TOURS, INC., PAROCHIAL BUS SYSTEMS, INC., D/B/A NEW YORK BUS SERVICE, PLAINTIFFS-APPELLANTS, CROSS-APPELLEES,
v.
THEODORE W. KHEEL, DEFENDANT, SONNY HALL, AS PRESIDENT OF THE TRANSPORT WORKERS UNION OF AMERICA, LOCAL 100, INTERVENOR-DEFENDANT-APPELLEE, CROSS-APPELLANT



Appeal from a judgment of the United States District Court for the Southern District of New York (Owen, J.) which 1) granted the application of the union to confirm and enforce an arbitration award; 2) ordered the employer to pay the union; and 3) denied the union's application for attorneys' fees. Vacated and remanded to the district court with instructions to remand to the arbitrator for clarification of the award. Denial of attorneys' fees affirmed.

Kearse and Pierce, Circuit Judges, and Stewart, District Judge.*fn*

Author: Pierce

PIERCE, Circuit Judge :

This is an appeal from a judgment of the United States District Court for the Southern District of New York (J. Owen) which 1) grants the application of Local 100 of the Transport Workers Union of America ("the Union") to confirm and enforce an arbitration award, and 2) orders New York Bus Service ("the Company") to pay the award to the Union on behalf of 83 of the Company's bus operators. The Union appeals that part of the judgment which denied the Union's application for attorneys' fees.

Since the arbitration award does not make clear whether the Company must pay the bus operators, we vacate so much of the judgment as orders the Company to pay the Union on behalf of these employees and we remand to the district court with instructions to remand to the arbitrator for clarification of the award. We affirm the district court's denial of the Union's application for attorneys' fees.

BACKGROUND

New York Bus Service operated buses for the transportation of students for the New York City Board of Education ("the Board"). In 1979, the Company decided to cease operations for almost three months when members of the Amalgamated Transit Union, Local 1181, engaged in a wildcat strike. The Company claims that the threat of violence from the strikers prevented it from operating its buses. The Company's bus operators, members of the Transport Workers Union of America, Local 100, were not involved in the strike. After the strike, the operators, claiming they were ready, willing and able to work, sought to be paid for the nearly three-month period in which they were out of work. The Company, which received no compensation from the Board for the period of the shutdown, refused to pay the operators until it received payment from the Board. The Union and the Company entered arbitration over the matter pursuant to their collective bargaining agreement.

On October 18, 1979, Theodore Kheel, the arbitrator, issued his opinion and award. Kheel found that in the past, when both the Company and the operators were willing to provide service but were prevented from doing so because of events beyond their control, the Board compensated the Company for the period of the shutdown and the Company paid the employees. Kheel ended the penultimate paragraph of his opinion as follows:

Since the practice of the parties . . . is clear and established by the record and the conditions under which the Company becomes entitled to compensation are present, I must and do hereby hold that the employees are entitled to be paid for the time they lost during the wild-cat strike.

The last paragraph of the award reads:

Since my decision is based on the practice established by the parties pursuant to the Board's obligation to the Company, I hereby stay enforcement of my award pending satisfaction of the Board's obligation to the Company. I have been assured by the Company that it will proceed promptly to enforce its claim against the Board, that it has filed notice of its claim with the Board and that it is commencing suit against the Board. Nevertheless, I am retaining jurisdiction to make certain that all measures are taken to assure prompt enforcement.

After Kheel issued his decision, the Company, on November 8, 1979, sued the Board in New York state court for payment for the period of the wildcat strike. On January 4, 1983, the Appellate Division, First Department, held that the Board did not owe the Company payment since the Company had not been justified in ceasing operations. Parochial Bus Systems, Inc. v. Board of Educ., 91 A.D.2d 13, 18, 457 N.Y.S.2d 285, 288 (1983). On December 15, 1983, the New York Court of Appeals affirmed the judgment of the Appellate Division, but on the ground that the action was barred because the Company failed to notify the Board properly of the action. Parochial Bus Systems, Inc. v. Board of Educ., 60 N.Y.2d 539, 548, 470 N.Y.S.2d 564, 568, 458 N.E.2d 1241 (1983).

During the course of the litigation against the Board, the Company brought suit to have Kheel removed as arbitrator. On December 15, 1982, the Company and the Union resolved this issue when they agreed that Kheel would resign as arbitrator on May 31, 1983, and that Kheel would "conclude and decide all arbitration proceedings pending before him on May 31, 1983 or within seven days after such date, if possible."

On January 6, 1984, three weeks after the New York Court of Appeals affirmed the dismissal of the Company's claim against the Board, the Union asked Kheel to vacate the stay in his arbitration award. Four days later, the Company wrote to Kheel, arguing that he lacked authority to modify the award. On February 14, 1984, in a document entitled "Response To Requests," Kheel wrote that the stay was no longer valid. On May 21, 1985, over a year later, at the Union's ...


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