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NATIONAL CLEANING CONTRS., INC. v. LOCAL 32B-32J

October 15, 1993

NATIONAL CLEANING CONTRACTORS, INC., Plaintiff,
v.
LOCAL 32B-32J, SERVICE EMPLOYEES INTERNATIONAL UNION, REALTY ADVISORY BOARD ON LABOR RELATIONS INC., and COHEN BROTHERS REALTY CO., Defendants.


Leval


The opinion of the court was delivered by: PIERRE N. LEVAL

PIERRE N. LEVAL, U.S.D.J.

 The motions before the court relate to the arbitration of a grievance filed over the discharge of one Roy McKenzie, an office maintenance worker. The arbitrator's Opinion and Award found that defendant Cohen Brothers, managers of an office building where McKenzie worked at the time of discharge, violated its collective bargaining agreement with McKenzie's union by improperly discharging him. The arbitrator found that National Cleaning Contractors, which previously had been McKenzie's employer, did not transfer McKenzie or otherwise violate its agreement with McKenzie's union. However, the arbitrator found that National Cleaning bore some of the responsibility for Cohen Brothers' wrongful discharge. The arbitrator's award ordered that Cohen Brothers pay 85% of McKenzie's back wages; that National pay 15% of McKenzie's back wages, and that National reinstate McKenzie.

 Defendant Cohen Brothers moves to vacate the arbitration award. Plaintiff National Cleaning cross-moves for summary judgment modifying or vacating the award. Defendant union Local 32B-32J cross-moves to confirm the arbitration award.

 Background

 In the first part of 1992, National provided contractual cleaning services at 805 Third Avenue; McKenzie was a National employee assigned to that site. The parties to the cleaning contract agreed to terminate it as of May 31, 1993 and Cohen Brothers, Managing Agent of 805 Third Avenue, assumed responsibility for cleaning as of that date.

 Two days before the termination of the National Cleaning contract, the building manager, an employee of Cohen Brothers, asked National to transfer McKenzie from the site for alleged wrongdoing. National sent a replacement for McKenzie over the next few days, which the manager took to mean that his transfer request had been granted. However, McKenzie was in fact out sick those days. When McKenzie returned to work June 3, Cohen Brothers asserted he was an employee of National, and National insisted he was an employee of Cohen Brothers. Neither gave him employment.

 One question at issue in the arbitration was whether National transferred McKenzie from 805 Third Avenue to other employment at National on May 29. This was important for several reasons. The collective bargaining agreement that the Union asserts it had with Cohen Brothers provided that, when a cleaning function was passed from one covered contractor to another, the workers at the site would become the employees of the successor contractor. Accordingly, if McKenzie was employed by National at the 805 Third Avenue site on June 1, he became Cohen's employee and Cohen violated its collective bargaining agreement (assuming the agreement alleged was in force) by failing to accept McKenzie as an employee on that date. On the other hand, if McKenzie was transferred from 805 Third Avenue, National violated its collective bargaining agreement by summarily transferring him.

 The collective bargaining agreement that allegedly binds Cohen Brothers is between the Realty Advisory Board on Labor Relations (RAB) and the Union. RAB is a multi-employer organization authorized by its members to enter into a collective bargaining agreement for the employers' workers who are represented by the Union. The Union and National assert that Cohen Brothers is a member of RAB and thus bound by its contract with the Union; Cohen Brothers denies membership in RAB. National is a member of a different multi-employer group, Service Employers Association (SEA). SEA members are all building services contractors. SEA, like RAB, is authorized by its member employers to enter into a collective bargaining agreement with the Union, which represents the employers' workers. It is undisputed that National is bound by SEA's contract with the Union.

 After McKenzie's discharge, the Union sent a notice of intent to arbitrate to both National Cleaning and Cohen Brothers on June 24, 1991. *fn1" The SEA contract and the RAB contract each provided for arbitration of such disputes.

 The arbitrator resolved these disputes as follows: The arbitrator found that National had not transferred McKenzie to other employment on May 29. Thus on June 1, when Cohen Brothers took over National's cleaning work at 805 Third Avenue, McKenzie was still employed at 805 Third Avenue and became Cohen Brothers' employee. National was thus found not to have breached the collective bargaining contract. Cohen Brothers, on the other hand, was found to have breached its contract by refusing to honor McKenzie's employment. Cohen Brothers was thus liable for back pay. However, the arbitrator assessed some liability against National for its failure to make clear to Cohen Brothers its refusal to transfer McKenzie. On that basis, the arbitrator ordered National to pay 15% of McKenzie's back pay. Further, the arbitrator declined to order Cohen Brothers to reinstate McKenzie because Cohen Brothers "entertained suspicions about McKenzie's integrity," and ordered National to hire McKenzie in a position comparable to that he had lost at 805 Third Avenue.

 Discussion

 National Cleaning's motion for summary judgment.

 National moves under 11 U.S.C. §§ 10-11 to vacate or modify the award. National advances its motion on two grounds: (1) the arbitrator had no jurisdiction to impose a remedy against National after he found that National did not violate its collective bargaining agreement; and (2) the arbitrator's award was based on authority derived from the collective bargaining agreement between the Union and RAB, ...


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