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PATTERSON v. NEWSPAPER & MAIL DELIVERERS' UNION

May 14, 1993

JOHN R. PATTERSON, et al., Plaintiffs,
v.
NEWSPAPER AND MAIL DELIVERERS' UNION OF NEW YORK AND VICINITY, et al., Defendants. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. NEWSPAPER AND MAIL DELIVERERS' UNION OF NEW YORK AND VICINITY, et al., Defendants. In the Matter of the temporary transfer of the former regular situation holders and Group I employees of IMPERIAL NEWS COMPANY, now bankrupt, to other companies in the industry, pursuant to the terms of the Settlement Agreement, 73 Civ. 3058 (WCC) and 73 Civ. 4278 (WCC), U.S.D.C., S.D.N.Y.



The opinion of the court was delivered by: WILLIAM C. CONNER

 CONNER, D.J.:

 In 1973 a class of private plaintiffs and the Equal Employment Opportunity Commission ("EEOC") brought two civil rights actions against the Newspaper and Mail Deliverers' Union of New York and Vicinity ("NMDU" or "Union") and more than fifty news publishers and distributors within the Union's jurisdiction. Both suits charged that the Union, with the acquiescence of the publishers and distributors, had historically discriminated against minorities, and that the structure of the collective bargaining agreement, combined with nepotism and cronyism, had perpetuated the effects of past discrimination in violation of Title VII of the Civil Rights Act of 1964. Each lawsuit sought an affirmative action program designed to achieve for minorities the status they would have had in the newspaper delivery industry but for the alleged discriminatory practices.

 On September 19, 1974, then-District Judge Lawrence W. Pierce issued an Opinion and Order approving a settlement between the parties and incorporating the Settlement Agreement into a Consent Decree, familiarity with which is presumed. See Patterson v. Newspaper and Mail Deliverers' Union, 384 F. Supp. 585 (S.D.N.Y. 1974) aff'd, 514 F.2d 767 (2d Cir. 1975), cert. denied, 427 U.S. 911, 49 L. Ed. 2d 1203, 96 S. Ct. 3198 (1976). The Settlement Agreement implements an affirmative action program which modifies the hiring procedures for newspaper deliverers under the industry-wide collective bargaining agreement, with the objective of attaining 25% minority employment. See Settlement Agreement at P 7. Under the Consent Decree, each employer maintains a work force of regular situation holders for its minimum delivery needs. To accommodate fluctuations in circulation, the publishers are permitted to supplement their work force with daily shapers.

 The daily shapers are divided into three groups with descending hiring priorities. Those shapers on the Group I list have first priority, after the regular situation holders, in order of their shop seniority. The next priority belongs to Group II shapers. Group II consists of all persons holding regular situations or Group I positions with other employers in the industry. Last in order of priority are the Group III shapers.

 The Settlement Agreement also establishes an Administrator, appointed by the Court, to implement the provisions of the Consent Decree and supervise its performance. The Consent Decree authorizes the Administrator to hear claims concerning violations of the Decree. Appeals from his decisions are heard in this Court.

 Its goals having been reached, the Consent Decree was vacated by a July 8, 1992, Opinion and Order of this Court. See Patterson v. Newspaper and Mail Deliverers' Union, 797 F. Supp. 1174 (S.D.N.Y. 1992). However, the Administrator retained jurisdiction over all claims instituted under the Consent Decree before July 29, 1992. *fn1" Pursuant to this grant of authority, on January 29, 1993, Administrator William S. Ellis, Esq. (the "Administrator") issued an order in denominated "Claim 277" (the "Order"). In accord with the Settlement Agreement, defendants Evening Journal Assoc. (EJA), Hudson County News Co. (Hudson), Daily News (the News), Newark Morning Ledger Co. (NML), City & Suburban Delivery Systems (C&S), and Imperial Delivery Service, Inc. (IDS) seek review of this order. The Court has reviewed the memoranda submitted by the parties, and for the reasons set forth below, the Administrator's decision is vacated and remanded for an evidentiary hearing.

 BACKGROUND

 In early 1991, Imperial News Co. (Imperial), a signatory to the Patterson Settlement Agreement, sold its assets to Magazine Distributors, Inc. (MDI). This transaction resulted in a number of NMDU-represented Imperial employees being laid off. *fn2" At present, there are two proceedings which might result in the placement of these workers. First Claim 274 is pending before the Administrator and will determine whether MDI is a successor in interest to Imperial and therefore a party to the Consent Decree. This claim has been adjourned at the request of the parties in an attempt to settle the matter. The Administrator's instant opinion predicts that any such settlement will make some provision for the former Imperial employees. Order at 5. The claim at bar is an attempt to transfer these workers under P 18 of the consent decree which allows the reassignment of workers displaced by several types of corporate transactions. *fn3"

 DISCUSSION

 The employers challenge both the Administrator's jurisdiction and the adequacy of the procedures below. We uphold the Administrator's jurisdiction to act under P 18 of the Consent Decree, but find that he exceeded his discretion in ordering this relief without a hearing at which the employers might have presented evidence to support their position. Therefore, the order of the Administrator is vacated and remanded for an evidentiary hearing.

 I. The Administrator's Jurisdiction

 There are two challenges made to the Administrator's jurisdiction. First, appellants claim the Administrator's power under P 18 was limited by our termination of the Consent Decree. Second, one appellant claims that the Administrator lacks jurisdiction over it because the claim was not ...


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