INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL UNION 269 v. FLYNN'S ELECTRIC, LLC AND D.L. FLYNN, INC.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4199-05T24199-05T2

INTERNATIONAL BROTHERHOOD

OF ELECTRICAL WORKERS

LOCAL UNION 269,

Plaintiff-Respondent,

v.

FLYNN'S ELECTRIC, LLC AND

D.L. FLYNN, INC.,

Defendants-Appellants.

 

Argued March 28, 2007 - Decided

 
Before Judges Cuff and Winkelstein.

On appeal from the Superior Court of New Jersey, Law Division, Mercer County, MER-L-2971-05.

Rudi R. Grueneberg argued the cause for appellants (Grueneberg Law Group, attorneys; Mr. Grueneberg, on the brief).

Andrew L. Watson argued the cause for respondent (Pellettieri, Rabstein & Altman, attorneys; Mr. Watson, on the brief).

PER CURIAM

Defendants are electricians who appeal from a decision of the Law Division confirming an arbitration award in favor of plaintiff Union, the International Brotherhood of Electrical Workers, Local 269 (IBEW). The award required defendants to pay the union fringe benefits for work they performed pursuant to a collective bargaining agreement. On appeal, defendants claim: they did not receive adequate notice of the arbitration proceeding; the trial judge improperly interpreted the collective bargaining agreement; and the judge failed to consider the parties' past conduct, which defendants claim absolved them from payment of the disputed benefits. We conclude that defendants' arguments are without merit and affirm.

D.L. Flynn, Inc., and Flynn's Electric, LLC, are business entities, electricians, operated by Daniel L. Flynn (Flynn) and his son, Daniel Flynn. Flynn operated his business as Flynn's Electric, LLC, from 1995 through 1999; D.L. Flynn, Inc. is the name under which the company has been incorporated since 2000. Daniel Flynn began as an apprentice and is now a company officer.

On October 1, 2001, the Mercer Division Southern New Jersey Chapter of the National Electrical Contractors Association (Mercer Division) entered into a collective bargaining agreement with the IBEW known as the Inside Agreement (Agreement). The Agreement applies not only to its signatories, but also "to all firms who sign a Letter of Assent to be bound" by its terms. On February 23, 1994, Flynn, as president of Flynn's Electric, signed a letter of assent authorizing Mercer Division as its collective bargaining representative "for all matters contained in or pertaining to the current and any subsequent approved" bargaining agreements between Mercer Division and the IBEW. In the letter of assent, Flynn agreed "to comply with, and be bound by, all of the terms and conditions contained in said current and subsequent approved labor agreements." Those terms included an agreement by employers to pay fringe benefits to the IBEW for work performed at bargaining sites.

Flynn claims that he only agreed to sign the letter of assent on the condition that the benefits would not be payable to the IBEW as a result of payroll earnings generated by either Flynn or his son, just on behalf of the company's other employees. Between 1995 and 2003, Flynn employed other electricians, and remitted benefits on their behalf. He claims that none of those payments reflected amounts generated by his or his son's earnings.

In September 2000, Flynn executed a "Wage and Fringe Benefit Bond" to guarantee payment of wages and fringe benefits to plaintiff. The bond was not renewed and expired in 2004. Plaintiff has not made a claim under the bond for payments due on payroll earnings by Flynn or his son.

Plaintiff asserts that it recently discovered that defendants had not made payments since 2003, when another contractor informed plaintiff that defendants were performing work at Princeton University, a bargaining site, but not remitting payroll payments. Plaintiff claims that it attempted to contact the Flynns regarding the matter, but the Flynns refused to communicate with union representatives. Thus, plaintiff claims that its inability to resolve the dispute regarding payment of benefits with defendants implicates section 2.13 of the Agreement, which requires that the dispute be submitted to mandatory arbitration.

In a letter dated August 15, 2005, plaintiff's Labor Management Committee (the Committee) Secretary, Joseph Knecht, informed defendants that a meeting would be held on August 19, 2005, to address "an alleged violation to the Collective Bargaining Agreement . . . by your company." The letter says:

Local 269 alleges that contrary to the [Inside Agreement], D.L. Flynn has two employees working at the Princeton University site with no benefits being paid.

As such, I have scheduled a Labor Management meeting for Friday, August 19th at 11:00 a.m. in the offices of Local Union 269.

It is advisable for your company to have a representative present at this meeting to address your position on these alleged charges. If you fail to have a representative present, your company will be represented by the Southern New Jersey Chapter [National Electrical Contractors Association], and you will be notified of the results.

Flynn claims he did not receive the letter until August 17, 2005 at about 3:30 p.m., less than 48 hours prior to the scheduled meeting. He asserts that when he called Knecht to ask what the subject of the meeting would be, Knecht did not tell him, but responded by referring him to the letter.

Knecht chaired the August 19, 2005 meeting. Flynn claims that the subject matter of the meeting, his failure to make payroll remissions for him and his son, was outside the scope of the notice letter. He claims that Knecht never informed him that the meeting was "an arbitration hearing, formal meeting or adjudication proceeding of any type pursuant to the terms of the Labor Agreement." Nor, Flynn claims, did Knecht tell him at the start of the meeting that he could have requested an adjournment.

During the meeting, Flynn stated that years earlier he had appeared before the Committee on the same issue, and he had not been told then that he was required to make payments for collective bargaining work that he or his son performed. After Daniel Flynn unsuccessfully demanded a copy of the letter of assent, he and his father became angry and left the meeting.

The Committee determined that, by leaving, the Flynns had completed their case and were waiving their right to participate further. The Committee rejected Flynn's claim as not credible that he was unaware that he had to make benefit payments for himself and his son. After taking testimony, the Committee found in favor of plaintiff. In part, it relied on a letter summarizing its prior decision regarding whether benefits were payable as a result of collective bargaining work done by a company owner or officer. The letter had been mailed to "all local 269 contractors" in April 1997. It indicated that

any company owner/officer performing any bargaining unit work subsequent to the effective date of this decision, is considered engaged in the business as a regular full-time employee of the company and is thus required to report no less than 40 hours per week for himself/herself on the monthly payroll report; and, remit all appropriate payments accordingly.

The Committee concluded that Flynn violated the collective bargaining agreement, and, after serving Flynn with its decision, the IBEW moved before the Superior Court to confirm the award.

The Agreement, to which Flynn assented to be bound, is a collective bargaining agreement that obligates its signatory employers to make certain payments to the IBEW's benefit funds. Those payments are required to be made when the employer performs "any onsite construction work of the type covered by" the Agreement. Section 2.13(A) of the Agreement provides that "[a]ll charges or violations of this Section shall be considered as a dispute and shall be processed in accordance with the provisions of this Agreement covering the procedure for handling of grievances and the final and binding resolution of disputes."

The dispute process is outlined in Article I of the Agreement. The pertinent provisions are sections 1.6, 1.7 and 1.8, which provide as follows:

1.6 All grievances or questions in dispute shall be adjusted by the duly authorized representatives of each of the parties to this Agreement. In the event that these two are unable to adjust any matter within 48 hours, they shall refer the same to the Labor-Management Committee.

1.7 All matters coming before the Labor-Management Committee shall be decided by a majority vote. Four members of the Committee, two from each of the parties hereto, shall be a quorum for the transaction of business, but each party shall have the right to cast the full vote of its membership and it shall be counted as though all were present and voting.

1.8 Should the Labor-Management Committee fail to agree or to adjust any matter, such shall then be referred to the Council on Industrial Relations for the Electrical Contracting Industry for adjudication. The Council's decisions shall be final and binding.

In sum, the Agreement outlines a three-step process to resolve "all grievances or questions in dispute." First, as is indicated in section 1.6, it calls for an informal adjustment of the matter between the parties. If that does not occur "within 48 hours," the grievance shall be referred to the Labor Management Committee, which shall decide the issue by majority vote. (Section 1.7). Should the Committee fail to agree, the issue shall then be referred to the Council on Industrial Relations for the Electrical Contracting Industry, which decision "shall be final and binding." (Section 1.8). These procedures are typical of grievance procedures available to signatories to collective bargaining agreements in the electrical contracting industry, where decisions of Labor Management Committees are considered to be the equivalent binding arbitration. See Lackey Elec., Inc. v. Int'l Bhd. of Elec. Workers, Local Union No. 226, 351 F. Supp. 2d 1208, 1212-13 (D. Kans. 2005) (Labor Management Committee awards constitute arbitration awards and are binding on the parties); Local Union 1253, Int'l Bhd. of Elec. Workers v. S/L Constr., Inc., 217 F. Supp. 2d 125, 132 (D. Me. 2002) (same). Here, therefore, the decision of the Labor Management Committee was the equivalent of a final, binding decision of an arbitrator.

The Flynns argument that they did not receive adequate notice of the arbitration proceeding is without merit. The August 15, 2005 letter advised them that the meeting scheduled for August 19 would concern the failure to pay fringe benefits based upon the employment of two of Flynn's employees working at the Princeton University site. The Flynns were certainly aware that they, as having worked at the site, were the employees to which the letter referred. The letter further indicated that it was "advisable for your company to have a representative present at this meeting to address your position on these alleged charges." We agree with the trial judge that the letter sufficiently explained the subject matter to be discussed at the August 19 meeting and put the Flynns on notice that they should be prepared to address the charges.

The Flynns also assert that they did not receive forty-eight hours notice as is required by the Agreement. As the trial judge noted, however, even allowing for their claim that they did not receive the letter until the afternoon of August 17, "they had a good 36 hours" to prepare for the meeting. If defendants had insufficient time to prepare for the meeting, they could have requested a postponement; instead, they simply walked out. We conclude, as did the trial court, that the Flynns received adequate notice of what was to be discussed at the meeting in sufficient time to prepare.

That takes us to whether the Committee's award should be set aside. We agree with the trial court that no basis exists to do so.

A court shall vacate an arbitration award only in cases

a. Where the award was procured by corruption, fraud or undue means;
 
b. Where there was either evident partiality or corruption in the arbitrators, or any thereof;
 
c. Where the arbitrators were guilty of misconduct in refusing to postpone the hearing . . . or in refusing to hear evidence, pertinent and material to the controversy, or of any other misbehaviors prejudicial to the rights of any party;
 
d. Where the arbitrators exceeded or so imperfectly executed their powers that a mutual, final and definite award upon the subject matter submitted was not made.
 
[N.J.S.A. 2A:24-8.]

"Arbitration is a favored means of settling labor-management disputes. Resolution through arbitration should be the end of the labor dispute, not a way-station on route to the courthouse. Accordingly, courts limit their review of arbitration awards." N.J Office of Employee Relations v. Commc'ns Workers of Am., 154 N.J. 98, 111 (1998) (internal citations omitted). Federal labor policy also strongly encourages arbitration as a means to settle labor disputes. United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 37, 108 S. Ct. 364, 370, 98 L. Ed. 2d 286, 298 (1987). "[T]he word 'arbitration' need not appear in the collective bargaining agreement for the means chosen by the parties for settlement of their differences to be given 'full play.'" Lackey Elec., supra, 351 F. Supp. 2d at 1212 (quoting Gen. Drivers, Warehousemen & Helpers, Local Union No. 89 v. Riss & Co., 372 U.S. 517, 519, 83 S. Ct. 789, 791, 9 L. Ed. 2d 918, 920 (1963)).

Here, defendants have presented no basis upon which to set aside the award of the Committee. They have not proved partiality, corruption, or misconduct by the arbitrators, nor have they proved that the arbitrators exceeded or "imperfectly execute[d]" their powers. See N.J.S.A. 2A:24-8. While the Flynns claim that the Agreement did not address whether they were to make payments for themselves as the owners of the business, and that the union understood this because it did not seek payments for the fringe benefits for approximately twelve years before it instituted the grievance against the them, those issues go to the merits of their defense, and the place to raise the defense was before the Committee, not the court. When the Flynns walked out of the Committee meeting, and the Committee resolved the dispute in their absence under the terms of the Agreement, the decision was final.

We affirm substantially for the reasons expressed by Judge Innes in his February 10, 2006 oral decision.

 

(continued)

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12

A-4199-05T2

April 19, 2007