United States District Court, E.D. New York
L&M BUS CORP. et al., Plaintiffs,
BOARD OF EDUCATION OF THE CITY SCHOOL DISTRICT OF THE CITY OF NEW YORK d/b/a NEW YORK CITY DEPARTMENT OF EDUCATION, Defendant.
MEMORANDUM & ORDER
NICHOLAS G. GARAUFIS, UNITED STATES DISTRICT JUDGE.
the court is an application for a temporary restraining order
("TRO") and preliminary injunction by Plaintiffs
L&M Bus Corp.; B&F Skilled Inc.; Happy Child
Transportations LLC; Happy Day Transit Inc.; Iridium Services
Corp.; Penny Transportation, Inc.; Selby Transportation
Corp.; Smart Pick, Inc.; GVC Ltd.; Lessel Transportation
Corp.; Mar-Can Transport Co.; Phillip Bus Corp.; 21st Avenue
Transportation, Co.; Y&M Transit Corp.; Van Trans LLC;
Alina Services Corp.; and Montauk Student Transport LLC
(collectively, "Plaintiffs" or the "Bus
Companies"). (Compl. (Dkt. 1); Mem. of Law in Supp. of
Mot. for TRO and Prelim. Inj. ("Mem.") (Dkt. 3).)
Plaintiffs are bus companies who contract with Defendant New
York City Department of Education ("Defendant" or
the "DOE") for school-bus routes. (Compl. ¶
matter concerns the bidding process for bid No. B3182,
entitled "Transportation Services for Students with
Disabilities and Their Non-Disabled Peers"
("B3182"). (Id. ¶ 1.) As a
requirement of bidding, contractors must agree that, if they
are awarded the contract, they will abide by the terms of
contract Serial No. B3182 (the "Contract").
(Id. ¶ 2.) The DOE has stated that the period
during which they will accept bids for B3182 (the
"Bidding Process") concludes on April 6, 2018.
(Id. ¶ 48.) The Bus Companies seek a judgment
from this court (1) declaring that the Contract violates the
National Labor Relations Act ("NLRA"), 29 U.S.C.
§ 151 et seq., and the Employee Retirement Income
Security Act ("ERISA"), 29 U.S.C. § 1001 et
seq., and (2) enjoining the DOE from moving forward with the
Bidding Process until the alleged deformities in the Contract
are fixed. (Id. ¶¶ 2-3.)
reasons that follow, the application for a TRO is DENIED. The
court reserves judgment on the application for a preliminary
December 29, 2017, the DOE opened the bidding process for
B3182. (Compl. ¶ 40.) Through B3182, DOE is seeking 1600
vehicles to provide transportation services for students in
kindergarten through twelfth grade, beginning on or about
September 1, 2018, for a term of five years. (Id.
¶ 42.) Contractors seeking to bid on B3182 must, among
other requirements, agree to abide by the terms of the
Contract if they are successful. (Id. ¶ 40.)
According to the Bus Companies, the DOE issued the Contract
pursuant to its authority under state law to "approve,
" N.Y. Educ. Law § 2590-g(1)(g), and
"[d]evelop, " id. § 2590-h(36), a
procurement policy for the New York City School District.
(Compl. ¶ 41.) The only portion of the Contract tinder
dispute in this matter is Section 4.5, which sets forth a No.
of employment requirements for winning contractors. (See
id. ¶¶ 49-78; Amendment No. 2 to the
Contract (Dkt. 1 at ECF p.34).) The requirements in Section 4.5
fall into two categories: those arguably preempted by the
NLRA; and those arguably preempted by ERISA. The court
provides an overview of these provisions but does not
otherwise discuss any facts that are not necessary for or
relevant to this memorandum and order.
4.5.1 mandates the creation of "Experienced School Bus
Worker Lists" (the "ESBW Lists") from which
the winning contractors and their subcontractors must fill
"all positions for drivers and attendants who provide
services in connection with a School Age Bus Contract awarded
pursuant to" B3182 until the relevant ESBW List is
exhausted. (Compl. ¶¶ 56, 60 (quoting Section
4.5.1).) The Bus Companies claim that Section 4.5.1 would
require them to fire all employees who "currently work
on routes that are encompassed by the B3182 RFB" and
replace them with employees hired from the ESBW Lists.
(Id. ¶¶ 61-62.) In addition, the Bus
Companies point out that "employees, based on their
position on the ESBW Lists, [would] choose their employers,
" and that contractors would "have no right to
refuse to hire an individual as an employee once selected by
an individual." (Id. ¶¶ 63-64).
Section 4.5.4 states that "[n]othing herein shall be
interpreted to require any contractor or subcontractor to
enter into a collective bargaining agreement with any union,
nor shall it prohibit any contractor or subcontractor from
entering into a collective bargaining agreement with any
union." (Section 4.5.4.)
4.5.2 requires the contractor or subcontractor to pay
employees hired from the ESBW Lists "based upon the
highest wage scale pursuant to which such ESBW Hiree was paid
for work performed ... in connection with a School Age Bus
Contract [or] Subcontract since June 30, 2010." (Compl.
¶ 66; Section 4.5.2.) "Contractors and
subcontractors may pay a wage higher than previously paid,
but not one lower than the employees' prior wages."
(Compl. ¶ 66.) Section 4.5.3 additionally requires that
the contractor or subcontractor "contribute at least $l,
252.48/month towards health and welfare benefits on behalf of
each employee who elects family benefit coverage and
$780.77/month for employees who select individual
coverage." (Id. ¶ 67.) These amounts are
"based on the amount that an employer must contribute
for health insurance coverage under" the collective
bargaining agreement of Local 1181 of the Amalgamated Transit
Union. (Id. ¶ 68.) If a contractor is able to
provide health benefits for less than the contractually
required amount, the contractor is still required to
"use the excess funds 'to provide additional or
improved health/welfare benefits.'" (Id.
¶ 69 (quoting Second Amended Round 1 Questions &
Answers ("Round 1 Q&As") (Dkt. 1 at ECF p.41)
¶ 115).) Section 4.5.4 requires a contractor or
subcontractor to contribute to the pension fund or plan that
the hiree most recently participated in unless the hiree
affirmatively opts out of the prior plan. (Id.
¶ 70.) The contractor or subcontractor's
contribution is calculated using "the majority of
employees of equivalent seniority in the job function for
which the ESBW hiree was hired ... participating in such
Prior Plan." (Id. ¶ 72 (quoting Section
4.5.4).) Section 4.5.4 also requires the contractor or
subcontractor to "enter into a participation
agreement" with the prior plan which "imposes no
greater obligations than those imposed on a majority of the
other contributing employees in such Prior Plan."
(Section 4.5.4; see Compl. ¶ 73.)
the opening of the Bidding Process on December 29, 2017, the
DOE held a pre-bid conference on January 19, 2018, at which
contractors who were interested in bidding could ask
questions of the DOE. (Compl. ¶ 43.) The DOE has also
answered three rounds of questions submitted by the
contractors, and variously amended the terms of the Contract
and extended the bid submission dates. (Id.
¶¶ 45-48; see Round 1 Q&As; Amended Questions
& Answers-Round 2 (Dkt. 1 at ECF p.89); Questions &
Answers-Round 3 (Dkt. 1 at ECF p. 104).) The final deadline
for submission of bids is April 6, 2018. (Compl. ¶ 48.)
The DOE intends to publicly read the submitted bids on April
9, 2018. (Id.)
Companies filed the instant action on March 29, 2018.
(Compl.; Mem.) At that time, the Bus Companies noted that it
was not necessary for the court to issue a ruling on the
application for a TRO before April 6, 2018. (Mar. 29, 2018,
Def. Letter (Dkt. 9).) The DOE submitted a response
memorandum of law on April 2, 2018. (Def. Opp'n (Dkt.
12).) The court held a show-cause hearing on April 3, 2018,
at which counsel for both sides appeared.
"is an 'extraordinary and drastic remedy, one that
should not be granted unless the movant, by a clear showing,
carries the burden of persuasion.'" Free Country
Ltd v. Drennen, 235. F.Supp.3d 559, 565 (S.D.N.Y. 2016)
(Rakoff, J.) (quoting JBR. Inc. v. Keurig Green Mountain.
Inc.,618 Fed.Appx. 31, 33 (2d Cir. 2015)). "The
standards for granting a temporary restraining order and
preliminary injunction are the same." J.Z. v. N.Y.C.
Dep't of Educ.,281 F.Supp.3d 352, 359 (S.D.N.Y.
2017). A party seeking a TRO, like a party seeking a
preliminary injunction, "must generally show a
likelihood of success on the merits, a likelihood of
irreparable harm in the absence of preliminary relief, that
the balance of equities tips in the party's favor, ...