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Teamsters Local 814 Welfare Fund v. Dahill Moving & Storage Co.

May 30, 2007

TEAMSTERS LOCAL 814 WELFARE FUND, TEAMSTERS LOCAL 814 PENSION FUND, TEAMSTERS LOCAL 814 ANNUITY FUND, AND DENNIS FARRELL, STEPHEN MCINERNEY, GEORGE DANIELLO AND JAMES O'MARA, AS TRUSTEES, PETITIONERS,
v.
DAHILL MOVING & STORAGE CO., INC., RESPONDENT.



The opinion of the court was delivered by: Sifton, Senior Judge.

MEMORANDUM

OPINION AND ORDER

Petitioners Teamsters Local 814 Welfare Fund, Teamsters Local 814 Pension Fund, Teamsters Local 814 Annuity Fund (the "Funds"),*fn1 and Dennis Farrell, Stephen McInerney, George Daniello and James O'Mara as Trustees initiated this action against Respondent Dahill Moving and Storage Co. on May 16, 2007 pursuant to Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 ("LMRA"),*fn2 and the Federal Arbitration Act, 9 U.S.C. § 1 et. seq. ("FAA"),*fn3 to confirm an arbitration award in the amount of $242,947.76, plus interest and damages, and "reasonable attorneys' fees and audit fees." Now before this Court is (1) (1) petitioners' motion to confirm the award*fn4 and (2) petitioners' motion for a preliminary injunction, requiring respondent to post a bond to secure the arbitration award or to escrow a sufficient amount of the proceeds of a pending sale of its warehouse to secure award. For the reasons stated below, the motion to confirm the arbitration award is granted and the motion for preliminary injunction is denied.

Background

The following facts are taken from plaintiffs' petition and the submissions of the parties in connection with this motion. Disputes are noted.

Respondent Dahill, a moving and storage company, is a party to a collective bargaining and related agreements (the "CBA") dealing with Dahill's employment of members of Local 814, International Brotherhood of Teamsters (the "Union"). Pursuant to the CBA, Dahill is obligated to make contributions to the Funds on behalf of certain of its employees. Under a clause in the CBA referred to as the "50/50 Rule," Dahill is permitted to employ a number of "Casual Employees" equal to (but not greater than) the number of "Industry Employees" employed on a given work day.*fn5 Casual Employees are paid a lower hourly rate than Industry Employees and Dahill is required to make fewer benefit contributions to the Funds for Casual Employees.

In September 2004, the Funds informed Dahill that they would be performing an audit to ensure that Dahill was complying with the 50/50 Rule and that it was not employing more Casual Employees than Industry Employees. The Funds further informed Dahill that, if Dahill had violated the 50/50 Rule, Dahill would be liable for any benefit contributions it should have made for Industry Employees, plus an amount equal to the difference in hourly wages between Casual Employees and Industry Employees for the number of Industry Employees Dahill should have employed. The subsequent audit revealed that Dahill had in fact violated the 50/50 Rule during the period of December 20, 2002 to March 28, 2004 by hiring 1,033 more Casual Employees than contractually permitted and that Dahill therefore owed the Funds $242,947.76 as a result; of that amount, $85,324.24 was for unpaid benefits contributions and the remaining $157,623.52 was for the difference in wages (the "wage assessment").

When Dahill failed to pay the audit amount due, the Funds demanded the amount due and, when Dahill failed to make payment, demanded arbitration for the amount due, plus any other monies (such as liquidated damages, interest, and attorneys fees) entitled to be paid under the CBA.*fn6

Arbitration hearings were held on November 13, 2006 and March 6, 2007 before a mutually agreed upon arbitrator. Both parties were given an opportunity to call witnesses, present oral argument and provide evidence to support their case. Both parties also submitted post-hearing briefs. On May 9, 2007, the arbitrator found that Dahill had violated the 50/50 Rule, that the amount due had been computed correctly, that the Funds were entitled to collect the entire amount of $242,947.76 as damages, and that Dahill was not entitled to any offset of that amount.*fn7

Accordingly, the arbitrator awarded the Funds $242,947.76 plus interest and liquidated damages, as well as "reasonable attorneys' fees and costs, including the cost of the audit."*fn8

Dahill has not paid any portion of that award which petitioners now seek to enforce.

Discussion

I. Confirmation of the Arbitration Award

There exists a "federal policy in favor of enforcing arbitration awards" that is "particularly strong with respect to arbitration of labor disputes." New York Hotel & Motel Trades Council, AFL-CIO v. Hotel St. George, 988 F.Supp. 770, 774 (S.D.N.Y. 1997). In a case such as the present one, the arbitrator's decision should be upheld so long as it "draws its essence from the collective bargaining agreement." Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593, 597 (1960). "[A]s long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision." United Paperworkers Intern. Union, ...


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