The opinion of the court was delivered by: RAYMOND J. DEARIE
This is an action pursuant to Section 301 of the Labor Management Relations Act ("LMRA"), and the Federal Arbitration Act ("FAA"), to vacate a labor arbitration award. This action arises out of an industrywide economic strike of the building service employees union in New York in late April of 1991. Two members of Local 32B-32J (the "Union"), building service employees at the 470 Stratford Road premises in Brooklyn, New York, walked off their jobs pursuant to she April strike. Upon attempting to return to work three days later at the end of the strike, they discovered they had been permanently replaced. The Union then filed an arbitration demand requesting reinstatement, arguing that the employer had breached the collective bargaining agreement ("CBA"), by refusing to negotiate the terms of a new agreement in good faith after the old agreement expired on April 21, 1991. Ruling for the Union, the arbitrator reinstated the employees on different grounds -- namely, that the employees had been "unjustifiably discharged" in violation of a discharge provision in the CBA. This petition followed.
Defendant Union moves to dismiss this action for a lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1), or, in the alternative, for confirmation of the arbitration award. The Union alleges that this Court lacks subject matter jurisdiction because the employer-plaintiff, 470 Stratford Holding Company ("Stratford Holding"), is not engaged in "an industry affecting commerce" as that phrase is defined in the LMRA. The relevant industry to be examined here is the "building services industry," or the "residential apartment house industry." The Union represents superintendents, doormen, and other building service employees. The Union contends that despite the broad jurisdiction afforded district courts under section 301, Stratford Holding is a purely local enterprise not affecting interstate commerce, and that federal jurisdiction is therefore lacking. The Union additionally maintains that because this is a case where the National Labor Relations Board ("NLRB") would decline to exercise its own jurisdiction -- citing no authority for this proposition -- the district court should defer to the discretionary jurisdictional policies of the NLRB and dismiss this action.
In the alternative, the Union moves to confirm the arbitration award. Arguing that the authority of a district court to vacate such an award is limited, the Union relies primarily on this principle in urging confirmation. It contends that since the arbitrator appears to have based her decision on a particular provision in the CBA -- the discharge provision -- her ruling is grounded in an interpretation of the agreement and therefore must not be disturbed.
As discussed below, the defendant's motion to dismiss the complaint for lack of subject matter jurisdiction is denied; and the motion to confirm the arbitration award also is denied.
The following facts are undisputed. The Union is a labor organization in the building services industry engaged in interstate commerce. Its members are employed primarily in the City of New York, as well as on Long Island and in New Jersey. The Union negotiates collective bargaining agreements with multi-employer associations covering employees in the States of New York and New Jersey, and represents over 20,000 employees in those states.
The Union represented the building service employees at the 470 Stratford Road premises. Under the terms of the CBA covering Stratford Road, the agreement's provisions were to continue in full force and effect after the expiration date of the CBA, April 21, 1991, until a new agreement could be reached. See CBA, Article VI, § 1(c). Article VI also provided the terms under which a no-strike provision could be cancelled:
In the event the parties are unable to agree upon terms of a successor agreement, the Union, upon three (3) days oral or written notice to the Employer, may cancel Article IV of this agreement [the no-strike provision], and then engage in any stoppage, strike or picketing, without thereby causing a termination of any other provision of this agreement, until the successor agreement is concluded.
A separate provision of the CBA prohibited the employer from discharging an employee without justifiable cause:
Employees shall not be discharged by the Employer except for justifiable cause. If any employee is unjustly discharged, he shall be reinstated to his former position without loss of seniority or rank and without salary reduction. The Arbitrator may determine whether and to what extent, the employee shall be compensated by the employer for time lost.
CBA, Article III, § 3. A further provision requires that the parties submit any dispute or grievance to the Office of the Contract Arbitrator. See CBA, Article V.
Plaintiff Stratford Holding purchased the premises at 470 Stratford Road on April 11, 1991, ten days prior to the expiration date of the CBA, and agreed to comply with the terms of the CBA. On April 21, 1991, the Union commenced an economic strike in the borough of Manhattan. About one week later the strike was extended to encompass the boroughs of Queens and Brooklyn, and included the two employees at Stratford Road. The Union gave Stratford Holding no oral or written notice of the strike.
Three days later the strike ended, and the two striking employees returned to work to learn they had been permanently replaced by non-union workers. They did, however, retain certain recall rights if positions became available in the future. On May 8, 1991, the Union filed a demand for arbitration, ...