New York City & Vicinity District Council of the United Brotherhood of Carpenters & Joiners of America v. Association of Wall-Ceiling & Carpentry Industries of New York, Inc.
2016 U.S. App. LEXIS 11069
| 2d Cir. | 2016Background
- The District Council (regional union) and WCC (employers’ association) negotiated a CBA containing a two-man job provision requiring 1:1 matching of out-of-town carpenters with District Council referrals and assignment of a shop steward for two-person crews.
- A prior RICO consent decree required court approval of changes to the union’s hiring/referral rules; the district court approved the 2013 CBA after hearings emphasizing wage concessions and anti-corruption measures, but the International Agreement between WCC and the national UBC was not disclosed to the court.
- The International Agreement permits an employer to bring two “key” traveling employees without local matching; it does not require matching for two-man jobs as the CBA does.
- An arbitrator ruled that the CBA did not foreclose invoking the International Agreement for two-man jobs, relying on past practice and negotiating history; the District Council sought vacatur of the award.
- The district court vacated the award, holding the arbitrator’s decision did not draw its essence from the CBA and that it conflicted with the court’s May 8, 2013 order approving the CBA.
- The Second Circuit reversed: it held the arbitrator’s construction was at least arguably derived from the CBA and did not plainly conflict with the approval order; the case was remanded to permit the district court to reconsider approval in light of the arbitrator’s interpretation (limited to assessing consistency with the Consent Decree’s anti-corruption goals).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitrator’s award drew its essence from the CBA | The CBA’s two-man provision is clear and unambiguous; arbitrator exceeded authority by allowing invocation of the International Agreement | Arbitrator construed CBA using negotiating history and past practice; award is arguably based on the CBA | The award is arguably derived from the CBA and survives the narrow judicial review of arbitral interpretation |
| Whether the award violated public policy by disobeying the district court’s approval order | Approval order made the CBA’s two-man matching a bargained-for term; the award frustrates that order | The approval order did not expressly rest on the matching clause; court cannot substitute its interpretation for the arbitrator’s | No explicit conflict between the award and the approval order; public-policy vacatur inapplicable |
| Whether the district court’s approval could be revisited given the arbitrator’s interpretation | The court’s approval assumed the CBA prohibited the challenged practice and thus should control | The arbitrator’s interpretation changes what the approved CBA means; district court must not supplant arbitrator on contract interpretation | District court may revisit approval only to decide whether the CBA, as interpreted, is consistent with the Consent Decree’s anti-corruption objectives |
| Remedy and remand scope | Vacatur of award proper; confirmation improper | Vacate district court judgment and remand for limited reconsideration | Vacate district court’s vacatur of the award and remand for limited proceedings to assess consistency with Consent Decree goals |
Key Cases Cited
- Nat’l Football League Mgmt. Council v. Nat’l Football League Players Ass’n, 820 F.3d 527 (2d Cir. 2016) (sets deferential standard for reviewing labor arbitration awards)
- United Bhd. of Carpenters v. Tappan Zee Constructors, LLC, 804 F.3d 270 (2d Cir. 2015) (award vacated if it does not draw its essence from the CBA)
- W.R. Grace & Co. v. Local Union 759, 461 U.S. 757 (U.S. 1983) (arbitral awards conflicting with judicial orders may violate public policy)
- Local 97, Int’l Bhd. of Elec. Workers v. Niagara Mohawk Power Corp., 196 F.3d 117 (2d Cir. 1999) (public-policy vacatur is extremely limited and focuses on explicit conflict)
- United States v. Int’l Bhd. of Teamsters, 954 F.2d 801 (2d Cir. 1992) (arbitration awards inconsistent with consent-decree implementation orders are governed by the decree)