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LONGSTREET ASSOCS., L.P. v. BEVONA

January 21, 1998

LONGSTREET ASSOCIATES, L.P., PEMBROOK MANAGEMENT, INC., and CORPORATE PROPERTY INVESTORS, Plaintiffs,
v.
GUS BEVONA, PRESIDENT, LOCAL 32B-32J, SERVICE EMPLOYEES INTERNATIONAL UNION, and REALTY ADVISORY BOARD ON LABOR RELATIONS, INC., Defendants.



The opinion of the court was delivered by: JONES

OPINION & ORDER

 BARBARA S. JONES

 UNITED STATES DISTRICT JUDGE

 This case involves the claims of sixteen security guards recently dismissed from their jobs at the General Motors Building in Manhattan. At issue, is the arbitrability of the security guards' claims under a Collective Bargaining Agreement ("RAB Agreement") between Local 32B-32J of the Service Employees International Union ("Union") and the Realty Advisory Board on Labor Relations, Inc. ("RAB"), of which Pembrook Management, Inc. ("PMI"), managing agent for Longstreet Associates, L.P. ("Longstreet"), is a signatory member.

 Plaintiffs PMI, Longstreet, and Corporate Properties Investors ("CPI"), brought this action to enjoin an arbitration proceeding brought by the Union under the RAB Agreement. On January 9, 1998, the Court issued a Temporary Restraining Order staying arbitration. on January 13, 1998, the Court held an evidentiary hearing on plaintiffs' motion for a preliminary injunction, and on January 16, 1998, the Court heard oral argument.

 Plaintiffs contend that the dismissed security guards were employed by a cleaning and maintenance contractor, and that they, therefore, are expressly excluded from coverage under the RAB Agreement. At first blush, this argument appears persuasive, and, in past cases in this Circuit, the same cleaning and maintenance exclusion has been found to justify a temporary injunction against arbitration, even in the face of the RAB Agreement's broad arbitration clause.

 The Union, however, claims that the exclusion does not apply in this case because the security guards were employed not only by the cleaning and maintenance contractor, but also by PMI. Under this joint employer theory, the Union claims, the security guards are covered by the RAB Agreement.

 For the following reasons, the Court agrees with the Union and concludes that plaintiffs are obligated to arbitrate under the RAB agreement. Accordingly, plaintiffs' motion for a preliminary injunction is denied and the Temporary Restraining Order is dissolved.

 BACKGROUND1

 The General Motors Building ("Building"), located at 767 Fifth Avenue in Manhattan, was purchased by CPI in 1991. At that time, CPI formed Longstreet to assume ownership of the Building, and designated PMI the Building manager. *fn2" Since 1991, all cleaning and maintenance work, as well as security work, has been contracted out by PMI to Temco Services Industries, Inc. ("Temco"), an independent contractor. Temco has a collective bargaining agreement with the Union ("Temco CBA").

 On January 1, 1995, PMI entered into a new three-year contract with Temco, under which Temco agreed to continue to provide services for the Building. The contract provided that Temco would provide security services for the Building through Spartan Security Services, Inc. ("Spartan"), a Temco subsidiary. Spartan had been created by Temco sometime in 1993, apparently in response to a New York State law that mandated certain requirements for employers of security personnel.

 As of December 31, 1997, sixteen security guards designated as Temco/Spartan employees were employed in the Building. *fn3" All of the security guards were members of the Union.

 On December 17, 1997, PMI notified Spartan that it would not renew its contract for security services, meaning that Temco/Spartan's contract would expire at midnight on December 31, 1997. Starting January 1, 1998, PMI would contract for security services with OCS Security of Long Island, Inc. ("OCS").

 Upon receiving the security contract, OCS sent representatives to the Building to offer the security guards employment. While OCS promised to maintain the guards' current wages, as a non-union shop, it did not offer the same benefits. In the end, one security guard accepted OCS's offer of employment. All the other security guards were locked out at midnight on December 31, 1997. *fn4"

 On December 31, 1997, the Union provided PMI with a demand for arbitration under the RAB Agreement, to which both the Union and PMI are parties. The Union alleged that PMI had violated the RAB Agreement by subcontracting the security services to a company that was not required to hire all incumbent employees and maintain their benefits.

 Under the RAB Agreement, unionized employees have certain rights with respect to building managers and owners who belong to the RAB. *fn5" By joining the RAB on behalf of the Building, PMI had "committed [the] building to be bound for the remainder of the term of the current Commercial Building Agreement between the RAB and [the Union]." (Application for Commercial Building Membership, Submitted as Exhibit A to Affidavit of Kevin O. McCulloch ("McCulloch Aff."); see also August 12, 1994 Letter from the RAB to the Union, Submitted as Exhibit A to Reply Affidavit of Roderick Johnson ("Johnson Reply Aff.") (notifying Union of Building's membership in RAB).)

 The most recent RAB Agreement, which is at issue in this case, is effective January 1, 1996, to December 31, 1998.

  DISCUSSION

 I. Preliminary Injunction

 To obtain a preliminary injunction, plaintiffs must demonstrate (1) irreparable harm and (2) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in plaintiffs' favor. International Dairy Foods Ass'n v. Amestoy, 92 F.3d 67, 70 (2d Cir. 1996); Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979) (per curiam).

 A. Irreparable Harm

 Plaintiffs make out a showing of irreparable harm, because if the Union's claim is not arbitrable, plaintiffs would be "forced to expend time and resources arbitrating an issue that is not arbitrable, and for which any award would not be enforceable." Maryland Casualty Co. v. Realty Advisory Bd. on Labor Relations, 107 F.3d 979, 984-85 (2d Cir. 1997). Accordingly, the Court now turns to the merits of plaintiffs' claim.

 B. Likelihood of Success on the Merits

 The merits of this preliminary injunction action concern the arbitrability of the dispute between plaintiffs and the Union. There is no dispute that PMI is a signatory member of the RAB. The parties, however, disagree over whether the underlying dispute involving the security guards is covered by the RAB Agreement.

 1. The Court's Jurisdiction

 As a preliminary matter, the Court must determine whether it has jurisdiction to determine the arbitrability of the Union's grievance. The Union contends that this preliminary question is within the sole authority of the arbitrator. The Court disagrees.

 In three cases known as the Steelworkers Trilogy, *fn6" the Supreme Court established the basic principles governing the adjudication of arbitrability disputes in the federal courts. These are: (1) "'arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed to submit,'" (2) "'the question of arbitrability--whether a collective-bargaining agreement creates a duty for the parties to arbitrate the particular grievance--is undeniably an issue for judicial determination,'" and (3) "in deciding whether the parties have agreed to submit a particular grievance to arbitration, a court is not to rule on the potential merits of the underlying claims.'" Maryland Casualty, 107 F.3d at 982 ( quoting AT&T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643, 648-50, 89 L. Ed. 2d 648, 106 S. Ct. 1415 (1986) (internal quotations and citations omitted)).

 Furthermore, where the collective bargaining agreement contains an arbitration clause, there is a presumption favoring arbitrability, especially where the clause is broad, such as the one at issue in this case. See AT&T Techs., 475 U.S. at 650; Maryland Casualty, 107 F.3d at 982; see also, infra RAB Agreement, at Art. VIII, ยง 1. "However, even when the agreement contains a broad arbitration clause, a dispute is not arbitrable if (1) an express provision in the collective bargaining agreement excludes the particular grievance from arbitration, or (2) 'forceful evidence of a purpose to exclude the claim from arbitration' is presented." Maryland Casualty, 107 F.3d at 982 (quoting AT&T Techs., 475 U.S. at 650).

 Applying these principles to this case, it is clear that the Court, and not the arbitrator, must decide the arbitrability of this controversy and whether plaintiffs can be compelled to arbitrate. This necessarily includes resolution of the issue of whether PMI was a joint employer of the security guards, because, if so, plaintiffs would be contractually obligated to arbitrate the dispute under the RAB Agreement. See Newmark & Lewis, Inc. v. Local 814, International Brotherhood of Teamsters, 776 F. Supp. 102, 106 (E.D.N.Y. 1991); see also Kansas City S. Transp. Co. v. Teamsters Local Union # 41, 126 F.3d 1059, 1063-64 (8th Cir. 1997); Metropolitan Detroit Bricklayers Dist. Council v. J.E. Hoetger & Co., 672 F.2d 580, 583 (6th Cir. 1982). *fn7"

 2. Interpretation of the RAB Agreement

 The RAB Agreement provides, in relevant part:

 
Article I. 1. This agreement shall apply to all classifications of service employees employed by the Employer, excluding, except as otherwise provided herein, employees ...

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