satisfaction with the results. New York Air Brake sought to be relieved of the back pay obligation; Local 761 wanted to ensure that transferring employees did not receive a higher rate of pay than those New York Air Brake employees already covered by the existing labor agreement; and Local 761A desired to secure the right of nontransferring employees to go on an out-of-work list in order of seniority. Each party foresaw difficulties with the arbitrator's award, and entered this meeting with the intention of resolving those difficulties.
It must first be determined whether the parties possessed the authority to settle this grievance subsequent to a final and binding arbitration award being issued. For without that authority, even an intended and clearly expressed settlement could not survive.
The language of the collective bargaining agreement made explicit reference to the parties' authority to settle disputes, stating, "Nothing contained herein shall be construed as preventing the Company and the Union from settling by mutual agreement prior to final decision, any dispute or grievance submitted to arbitration hereunder." (Def. 761A's Cross-Mot. for Sum. J., Ex. A at 24; Agreement Between New York Air Brake and the International Association of Machinists & Aerospace Workers, Lodge No. 761, District 137, Effective April 10, 1990).
No "final decision" existed because at the time of the Good Friday Meeting, the award had not yet been confirmed by a federal court. "Under the Federal Arbitration Act, decisions by arbitrators must be confirmed by a federal court in order for it to be enforceable. Indeed, an arbitrator's decision is not final until it is confirmed." Hatzlachh Supply, Inc. v. Moishe's Elec., Inc., 848 F. Supp. 25, 28 (S.D.N.Y. 1994) (citations omitted) (citing Morelite Constr. Corp. v. New York City Dist. Council Carpenters Benefit Funds, 748 F.2d 79, 82 (2d Cir. 1984)); contra Florasynth, Inc. v. Pickholz, 750 F.2d 171, 176 (2d Cir. 1984) ("The confirmation of an arbitration award is a summary proceeding that merely makes what is already a final arbitration award a judgment of the court.").
Finally, it is inherent in the adversarial system in which this country operates, that parties to litigation or dispute hold the authority to settle that litigation or dispute outside the confines of the court at any time before, during, or after the conduct of the proceedings. Basic contract principles mandate such a view. Judicial economy mandates such a view. Justice mandates such a view. Contract principles point to the view that any executory contract may be modified or rescinded, upon mutual agreement, even on the eve of execution. Why then should these three parties be bound to a decision not yet final, which all mutually agree cannot stand? Likewise, binding parties to a mutually unacceptable decision or award and virtually guaranteeing future litigation time and expense flies in the face of judicial economy. Finally, where parties to a dispute have the capacity and wherewithal to reach an acceptable solution, and neither views the system's attempt at a solution to be acceptable, to then hold the parties to such an attempt would do a double injustice. For in such a situation, not just one party or another, but all, fail to achieve justice.
In addition, all of the participants in the Good Friday Meeting (see footnote 2) had express or implied authority to settle and bind their principals to an agreement. The by-laws of Local No. 761 - the only party opposing the implementation of this agreement - expressly provide for a general committee, comprised of the president, vice president, and one committeeman, "to adjust all grievances that may arise between members and the foremen or other officials of the company. They shall have the power to make settlement in all cases where it is possible to do so." (Def. Local 761A Mem. of Law at 23). "A union does not act unfairly when if (sic) fails to consult with or advise a grievant of its bargaining activities, nor in the legitimate exercise of its discretion, need it obtain the employee's consent before settling a grievance." Caputo v. National Ass'n of Letter Carriers, 730 F. Supp. 1221, 1230 (E.D.N.Y. 1990) (cites omitted). The representatives participating in the Good Friday Meeting were the duly elected or appointed officers and attorneys for each party and possessed the authority to settle this dispute.
Neither is there a need for a settlement agreement to be in writing, signed by the parties. The Second Circuit, in determining whether an oral settlement agreement was enforceable, stated:
Under New York law, parties are free to enter into a binding contract without memorializing their agreement in a fully executed document. This freedom to contract orally remains even if the parties contemplate a writing to evidence their agreement. In such a case, the mere intention to commit the agreement to writing will not prevent contract formation prior to execution.
Winston v. Mediafare Entertainment Corp., 777 F.2d 78, 80 (2d Cir. 1985), cited in Grupo Sistemas Integrales De Telecomunicacion S.A. De C.V. v. A.T. & T. Communications, Inc., No. 92- CV-7862, 1994 WL 463014 at *2 (S.D.N.Y. Aug. 24, 1994). The Second Circuit outlined four factors to examine in determining the intent of the parties to be bound without a signed writing. They are: (1) whether there was an express reservation of the right not to be bound in the absence of a writing; (2) whether there has been partial performance of the contract; (3) whether all of the terms of the alleged contract have been agreed upon; and (4) whether the agreement at issue is the type of contract usually committed to a writing. Winston 777 F.2d at 80. None of the four factors enumerated call for any conclusion but that a contract was entered into by the parties.
The Supreme Court in Retail Clerks International Assoc., Local Nos. 128 and 633 v. Lion Dry Goods, Inc., 369 U.S. 17, 7 L. Ed. 2d 503, 82 S. Ct. 541 (1962), dealt with a labor dispute allegedly settled when the parties, through a mediator, compiled an unsigned "Statement of Understanding" containing the points of settlement. In determining whether this agreement fell within the definition of "contract" so as to be enforceable under § 301(a) of the Labor Management Relations Act, the Court stated "it is enough that this is clearly an agreement between employers and labor organizations significant to the maintenance of labor peace between them. . . . 'Federal courts should enforce these agreements on behalf of or against labor organizations and . . . industrial peace can be best obtained only in that way.'" Id. at 28 (quoting Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 455, 1 L. Ed. 2d 972, 77 S. Ct. 912 (1957).
Since the parties possessed the authority to settle the grievance, and signatures were not required to bind them, the Court must next determine if the Good Friday Meeting culminated in a settlement in the form of the Good Friday Agreement. The July 21, 1994 hearing uncovered several factors supporting the conclusion that there was a mutual agreement and that this Good Friday Agreement, although couched in the framework of an order to implement the arbitration award, held at its core a settlement of the dispute that reached beyond the realm of the award.
Specifically, several factors pointed to the existence of an enforceable settlement. The meeting itself took over eight hours to conclude. Back pay, originally awarded in the arbitration award, was absent from the agreement as unworkable. Significant details and other matters were agreed upon which were never even submitted to or considered by the arbitrator. Prior to conclusion, New York Air Brake Vice President for Human Resources, Dan Brownell, reviewed one by one, the nine items over which the participants had negotiated; and one by one all of the participants individually agreed to the solutions reached. The meeting concluded with handshakes between the participants. The participants spent the next several days modifying the wording of the proposed order effectively reducing the agreement to writing. Based upon the above, the court finds that a valid agreement was reached between the parties - the so called "Good Friday Agreement." This Good Friday Agreement was then submitted to Judge Scullin for approval in the form of a proposed order. Local No. 761 objected solely upon the grounds that the court lacked jurisdiction to alter an arbitration award and that the parties lacked authority to enter into such an agreement. Local No. 761 did state however, that if jurisdiction was found, they would honor the agreement.
Having determined that the Good Friday Agreement was authorized and approved by all parties, and was intended as a settlement, the only remaining issue is the Court's jurisdiction to enforce that settlement. Local 761A argues that Section 301(a) of the Labor-Management Relations Act gives a court the power to decide the enforceability of a contract settling all disputed issues arising out of the implementation of an arbitration award. They point to the Third Circuit which stated:
Although the majority of cases brought under Section 301 are actions to enforce contractual promises to arbitrate or to enforce arbitration awards already rendered, it is indisputable at this point that any means chosen by the parties for settlement of their differences under a collective bargaining agreement can be judicially enforced in federal court as long as the settlement is final and binding under the contract.