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Application of Port Authority of New York and New Jersey v. Union of Automotive Technicians

Supreme Court, New York County

July 3, 2013


Unpublished Opinion




The Port Authority of New York and New Jersey ("Port Authority" or "Petitioner") moves the court by notice of Verified Petition dated October 19, 2012 to vacate an arbitrator's opinion and award on the grounds the arbitrator exceeded the authority granted under the arbitration clause between the parties. The Union of Automotive Technicians ("UOAT" or "Respondent") opposes this motion to vacate and cross-moves to confirm the arbitrator's opinion and award with certain modifications.

The Port Authority and the Union of Automotive Engineers entered into a Memorandum of Agreement ("MOA") in which the parties would arbitrate complaints and or disputes arising under the MOA. This arbitration agreement is subject to Article XXVII of the Grievance Arbitration Procedure (Verified Petition, 3). The arbitration agreement states: "the arbitrator shall not have the power to add to, subtract from, or modify the provisions of the Memorandum of Agreement and shall confine his decision solely to interpretation and application of the Memorandum of Agreement. The arbitrator shall confine himself to the precise issue presented for arbitration and shall have no authority to determine any other issue presented to him nor shall he submit observations or declarations of opinion which are not essential in reaching the determination" (id. at ¶4).

On or about May 8, 2009, the UOAT and Port Authority executed a MOA which was effective from August 23, 2006 to August 22, 2011. Pursuant to Article XLIV of the MOA, Port Authority implemented an E-Z Pass program for employees to use Port Authority facilities (id. at ¶ 6). The E-Z Pass program allowed active and retired Port Authority employees to receive free passages on tunnels and free use of parking lots (Memorandum of Agreement, Section XLIV 2A). On November 18, 2010, the Port Authority Board of Commissioners voted to discontinue the E-Z Pass program for non-represented retirees and retirees, effective January 1, 2011 (Verified Petition, ¶ 8). On January 1, 2011, Port Authority discontinued the E-Z Pass program for all retirees including those formerly in the UOAT bargaining unit (id. at ¶9).

On January 7, 2011, the UOAT filed a grievance alleging that Port Authority violated the parties' MOA when they "unilaterally acted to eliminate the number of free passages at Port Authority tunnel and bridge facilities and the free use of parking lots at Port Authority airports for bargaining unit employees who upon retirement from Port Authority service are eligible to carry this contractual benefit into retirement under the terms of the negotiated agreement in effect at the time of their retirement" (id. at 10). This matter then proceeded to a hearing on October 31, 2011 before Arbitrator Earl Pfeffer, Esq. The arbitrator issued an Opinion and Award on July 24, 2012 finding that "Port Authority's unilateral decision to discontinue the E-Z Pass program for retirees, effective January 1, 2011 violated Section XLIV of the MOA" (id. At ¶13).Consequently, Arbitrator Pfeffer ordered that Port Authority restore the benefits to all retirees, including those who retired under predecessor MOA's (id. at ¶ 14).

Pursuant to CPLR 751 l(b)(i)(iii): Vacating or modifying an award-- an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made. There are three grounds for challenging an arbitrator's determination of the controversy: (I) the arbitrator has exceeded a specifically enumerated limitation on his authority; (2) the decision is totally irrational; or (3) the award violates a strong public policy Board of Education of the Dover Union Free School Dist. v. Dover-Wingdale Teachers 'Ass 'n, 61 N.Y.2d 913 (1984). An arbitrator exceeds his power when he gives a totally irrational construction to the contractual provisions in dispute, and thus makes a new contract for the parties Riverbay Corp. v. Local 32-E, 91 A.D.2d 509, 510 [1st Dept. 1982].

In order to better address the issues raised herein, a brief recitation of collective bargaining history is in order.

According to the Bureau of Labor Statistics, collective bargaining is the method whereby representatives of employees (unions) and employers negotiate the conditions of employment, normally resulting in a written contract setting forth the wages- hours, and other conditions to be observed for a stipulated period (e.g., 3 years). The term also applies to union-management relations during the term of the agreement. The collective bargaining movement developed further as part of the legislation evolving through the New Deal. In 1935 Congress passed the National Labor Relations Act ("Act"), the first piece of legislation establishing the basic right of private sector employees to organize trade unions, engage in collective bargaining agreements and engage in collective actions which include striking, if deemed necessary. The Act made it illegal for employers to discriminate against or terminate employees who have union membership. Under the process of collective bargaining, employers and employees negotiate wages, hours and benefits without relying on litigation. Once the workers' committee and management have agreed on a contract, it is put to a vote by all the workers in the workplace. If the contract is approved, it is in effect for the requisite fixed number of years; when that time period has expired the terms of the contract are then renegotiated by the employees and management. If there is a dispute with the union contract, the matter goes to arbitration.

The Federal Arbitration Act (hereinafter "FAA") was passed in 1925. The Act was enacted to give arbitration the same status as litigation. After World War II, arbitration became substantially important to labor management relations because-25% of the workforce was unionized. Consequently, in 1947, Congress passed the Taft-Hartley Act (Labor Management Relations Act of 1947) to restrict the power and the activities of labor unions. The Taft- Hartley Act imposed limits on the labor unions' right to strike. The Act was amended to include a list of prohibited actions such as jurisdictional strikes, boycotts, political strikes, mass picketing and monetary donations by unions to federal campaigns. The amendments also gave the General Counsel of the National Labor Relations Board discretionary power to seek injunctions against employers or unions who violate the Act. The Taft-Hartley Act retained federal court jurisdiction over collective bargaining agreements. Congress initially passed this section of the Act to empower federal courts to hold unions liable for damages in strikes; however, it later became a catalyst of federal common law which favored arbitration over litigation when resolving labor disputes. The U.S. Supreme Court upheld arbitration as the primary vehicle when resolving labor issues by limiting the judiciary's role. For example, in Southland Corp. v. Keating, 465 U.S. 1, 3 (1984) the court held in part: "since the overwhelming proportion of civil litigation in this country is in the state courts, Congress could not have intended to limit the [Federal] Arbitration Act to disputes subject only to federal court jurisdiction. In creating a substantive rule applicable in state as well as federal courts, Congress intended to foreclose state legislative attempts to undercut the enforceability of arbitration agreements." This holding written for the majority by Chief Justice Warren Burger, laid out the intent of Congress that the FAA was enacted as a national policy favoring arbitration.

Since Southland Corp., numerous collective bargaining agreements have proceeded to arbitration in order to solve union- management disputes. Of particular interest to the parties herein, on January 7, 2011 at the offices of the American Arbitration Association in Philadelphia, Pennsylvania, an arbitration hearing was held between the Delaware River Port Authority (DRPA), its subsidiary Port Authority Transit Corporation (PATCO) and three unions: IBT Local 676, FOP Lodge 30 and IUOE Local 542 (hereinafter "the Unions"). DRPA/PATCO is composed of 16 Commissioners, eight appointed by the Governor of New Jersey and eight appointed by the Governor of Pennsylvania. According to statute, two of the appointees from Pennsylvania must be the State Treasurer and the State Auditor.

On July 29, 2008, Governor Chris Christie of New Jersey sent a letter to John H. Estey, Chairperson of the DRPA and to Jeffrey L. Nash, Vice Chair of the DRPA. The letter stated in part: "As you know, I had previously called for the abolition of DRPA employee car allowances for E-Z Pass and other perks not available to the toll paying private citizens of New Jersey and Pennsylvania. I am pleased to see that Governor Rendell supports reform at DRPA as well. We jointly agree that the following reform should be adopted immediately: Eliminate all free fare perks for employees and retirees. Eliminate all car allowances. " Governor Edward Rendell of Pennsylvania also sent a letter to John H. Estey and Jeffrey L. Nash supporting Governor Christie's sentiments: "The continuing controversy surrounding the issuance of free rides and other perks demanded that additional steps must be taken to restore public confidence in the administration of DRPA. I understand that the DRPA 's management is supportive of these proposals and I urge you to enact the reforms outlined herein 'as quickly as possible. "

The "free rides and other perks" referred to by the governors consisted of a past practice and contractual provision that granted retired and active employees 100 free E-Z Pass trips on bridges and up to 10 free freedom card trips on PATCO; as well as 100 freedom card trips on PATCO and up to 10 free E-Z Pass trips on DRPA bridges. These free passages were limited within one hour of the time designated to report to duty and within one hour of the end of the employee's ...

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