Opinion
02CV0333.
March 19, 2004
Report Recommendation
Before the Court is the defendants' motion for summary judgment (Docket No. 26).
Background
This case arises under the Employee Retirement Income Security Act of 1974 ("ERISA") as well as the Labor Management Relations Act of 1947 ("LMRA"). The plaintiffs in this case are Thomas L. Panek, as an Administrator of several pension funds, including the Laborers-Employers Cooperation and Education Trust Fund ("LECET") and the New York Laborers Political Action Committee ("NYLPAC") [the represented funds are collectively referred to herein under the name of their Administrator, "Panek"], as well as Laborers Local 210, Laborers International Union of North America (referred to as the "Union"). The plaintiffs assert that defendants Cimato Bros. Construction, Inc. and Cimato Bros. Inc. (referred to collectively as "Cimato") failed to make contributions as required under certain collective bargaining agreements.
More specifically, Panek alleges that Cimato was a member of the Council of Utility Contractors ("CUC"). The plaintiffs assert that Cimato authorized the CUC to negotiate labor agreements on behalf of Cimato (as well as the other members of the CUC). According to the Amended Complaint, the CUC negotiated successive collective bargaining agreements with the Union effective through 2005 ("the Agreements") which were binding on Cimato. These collective bargaining agreements allegedly required that Cimato make monetary contributions to various funds based upon all work performed by its employees within the trade and geographical jurisdictions of the Union as well as to remit dues to the Union and NYLPAC. (Docket No. 25 at ¶ 14). In addition, the Agreements purportedly obligate Cimato to furnish certain periodic reports relating to various payroll and employment tax issues. The Agreements also provide for auditing rights, including penalties if Cimato failed to produce the books and records necessary for the audit. (Docket No. 25 at ¶ 15).
The plaintiffs claim that Cimato has refused to cooperate with an audit attempt by refusing to produce the necessary records. The plaintiffs also seek to have Cimato Bros. Construction, Inc. and Cimato Bros., Inc. treated as the same entity for purposes of the Agreements inasmuch as they allegedly have common ownership and utilize the same space, equipment, facilities and work force.
Discussion
By way of the instant motion, Cimato seeks to have the Amended Complaint dismissed on the grounds that it raises representational issues "falling withing the exclusive or at least primary" jurisdiction of the National Labor Relations Board ("NLRB").The instant action was commenced in this Court on May 3, 2002. On September 4, 2002, the Union filed charges against Cimato Bros. Inc. with the NLRB alleging (1) that Cimato interfered with its employees in the exercise of their rights to self-organization by physically assaulting an employee, Brian Stewart on two occasions and threatening to kill him; (2) that Cimato wrongfully terminated the employment of Brian Stewart; (3) that Cimato has refused to allow its books to be audited by the Buffalo Laborer's Benefit Fund; (4) that Cimato has refused to bargain collectively; and (5) that Cimato has failed to pay wages and fringe benefits owing to Brian Stewart. (Docket No. 20 at Exhibit B).
On October 8, 2002, the Union filed an additional charge with the NLRB, this time the Union identified Cimato Bros. Construction as the alter ego of Cimato Bros. Inc., but otherwise stated the same charges as that were set forth in the September 4, 2002 filing. Other than the fact that Cimato was noted to have an "alter ego" in the "Name of Employer" box on the complaint form, there is nothing to suggest that this issue was presented as a substantive issue for the NLRB to determine.
Subsequently, the Union withdrew its charges relating to the alleged failure by Cimato to allow the audit from the complaint before the NLRB. On October 30, 2002, the Acting Regional Director of the NLRB acknowledged and accepted the withdrawal of the audit related charges by the Union, dismissed the charges relating to the allegations that Cimato had assaulted and threatened to kill Brian Stewart, but did not dismiss the charge that Cimato had failed to pay contractually required wages and fringe benefits to Stewart. (Docket No. 20 at Exhibit E). Notably, this decision by the NLRB did not make any findings or otherwise discuss the alter ego issue or any of the other issues raised in the Amended Complaint in this Federal Court action. On November 4, 2002, an appeal was filed by the Counsel to the General Counsel of the NLRB, which stated that Cimato Bros. Inc. and Cimato Bros. Construction Inc. were alter egos, and sought to continue the charges that the Cimato entities failed to bargain collectively as required, and that Brian Stewart had not been paid wages and fringe benefits owing to him. (Docket No. 20 at Exhibit F).
On February 13, 2003, a settlement was reached under which Cimato agreed to pay Brian Stewart $10,000 in back wages and that certain benefits would be paid to the Union as well. See the "Settlement Agreement" attached as Exhibit H to Docket No. 20). The Settlement Agreement expressly stated:
No determination on the existence of the collective bargaining agreement, parties free to pursue any other appropriate remedies. Cimato Brothers Construction, Inc. contends it is not a signatory as bound by a collective bargaining agreement with Local 210. Local 210 contends Cimato Brothers Construction, Inc. is bound by a collective bargaining agreement with Local 210. Cimato Brothers Construction Inc. contends that Cimato Brothers Construction Inc. is not a member of the Council of Utility Contractors, Inc. and Local 210 contends that Cimato Brothers Construction Inc. is a member of the Council of Utility Contractors, Inc.
Settlement Agreement at ¶ 2.
The Settlement Agreement was signed by party representatives and approved by Administrative Law Judge Bruce D. Rosenstein over the objection of the Counsel for the General Counsel of the NLRB. The Counsel for the General Counsel of the NLRB then filed a motion for special permission to appeal the ALJ's approval of the Settlement Agreement. (Docket No. 20 at Exhibit I). In that appeal, the Counsel for the General Counsel of the NLRB argues that the ALJ erred in approving the Settlement Agreement because there were at least three other identifiable persons who were similarly situated to Brian Stewart who did not receive a remedy as a result of the purported settlement. The Counsel for the General Counsel of the NLRB argued that the Settlement Agreement was unreasonable because it did not provide a remedy to these individuals and did not preclude Cimato from continuing the unlawful practice of paying disparate wages to union and non-union workers in the same bargaining unit. Id. Although the appeal described the two Cimato entities as "alter egos," neither that issue nor any of the other issues raised in the instant Federal Court action were raised as the subject of the appeal in the administrative proceedings.
On August 14, 2003, the NLRB affirmed the ALJ's approval of the Settlement Agreement and denied the appeal of the Counsel to the General Counsel of the NLRB. Once again, the issues in the instant action were not implicated in the decision of the NLRB. See August 14, 2003 Decision of the NLRB attached to the August 18, 2003 Letter from Plaintiff's Counsel.
Exclusive or Primary Jurisdiction of the NLRB
Cimato made the instant motion to dismiss arguing that the NLRB has exclusive or primary jurisdiction with respect to the representational issues raised in the instant action. It is well-settled that the NLRB does not have exclusive jurisdiction over the types of issues present in this case. The Court addressed a similar argument in Local 812 GIPA v. Canada Dry Bottling Co. 1999 WL 301692, *5 (S.D.N.Y.,1999). In that case the Court held:
Canada Dry is incorrect in its assertion that the NLRB has exclusive jurisdiction over these claims. It is true that the Supreme Court has held that "[w]hen an activity is arguably subject to § 7 or § 8 of the [NLRA] . . . the federal courts must defer to the exclusive competence of the National Labor Relations Board." San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 245 (1959). LMRA § 301(a), however, grants district courts jurisdiction over suits for the violation of contracts between an employer and a labor organization representing employees. 29 U.S.C. § 185(a). It is well established, therefore, that the federal courts and the NLRB have concurrent jurisdiction over representational issues involved in the resolution of a contract dispute under § 301(a). See Hotel Rest. Employees Union Local 217 v. J.P. Morgan Hotel, 996 F.2d 561, 565 (2d Cir. 1993) ("[I]t is wrong to say . . . that the NLRB has exclusive jurisdiction over representation issues. Rather, § 301(a) grants courts concurrent jurisdiction over representation issues arising under a contract."); Mason Tenders, 1997 WL 678164, at *6 (NLRB does not have exclusive jurisdiction over representation issues involved in resolution of contract dispute); Messinger v. Bldg. Contractors Ass'n, Inc., 703 F. Supp. 320, 323, (S.D.N.Y. 1989) (noting exception to NLRB's exclusive jurisdiction over representation matters where activity also constitutes breach of collective bargaining agreement). In addition, federal courts may decide labor law questions that emerge as collateral issues in suits brought under independent federal remedies. See Connell Constr. Co. v. Plumbers and Steamfitters Local Union No. 100, 421 U.S. 616, 626 (1975) (court had jurisdiction to decide NLRA § 8(e) question emerging as collateral issue in antitrust suit); accord Kaiser Steel Corp. v. Mullins, 455 U.S. 72, 83-85 (1982). ERISA has been held to provide such an independent federal remedy. See Pratt-Farnsworth, 690 F.2d at 519. Local 812, 1999 WL 301692, *5.
The defendant also argues that the Court should defer primary jurisdiction to the NLRB. Courts generally consider four factors in deciding whether an agency has primary jurisdiction: (1) whether the question at issue is within the conventional experience of judges or whether it involves technical or policy considerations within the agency's particular field of expertise; (2) whether the question at issue is particularly within the agency's discretion; (3) whether there exists a substantial danger of inconsistent rulings; and (4) whether a prior application to the agency has been made. National Comm. Ass'n v. AT T Co., 46 F.3d 220, 222-23 (2d Cir. 1995).
The primary questions at issue in this action are whether the two Cimato entities are alter egos and whether a violation of certain contractual obligations has taken place. These questions are within the conventional experience of judges and do not involve technical or policy considerations within the NLRB's particular field of expertise. See Mason Tenders Dist. Council Welfare Fund v. Itri Brick and Concrete Corp., 1997 WL 678164 (S.D.N.Y. 1997). The defendants' reliance on Local 812 on this issue is inapposite. In that case, two difference unions had already initiated representational proceedings with respect to the two corporate entities alleged to be alter egos in that case. There, the Court acknowledged that the facts in that case distinguished it from the typical case involving a question of primary jurisdiction over an alter ego issue. Local 812, 1999 WL 301692 at *6. The remaining cases cited by the defendants are similarly unpersuasive on this issue.
Cimato has not presented any authority to suggest that the issues in this matter are within the NLRB's discretion. Moreover, there is no possibility of inconsistent rulings in this matter inasmuch as the issues in the instant matter were either not substantively placed before the NLRB, or were withdrawn from those proceedings. Moreover, those administrative proceedings were concluded without any findings regarding the issues in this case. The defendants contend that the Union's withdrawal of the audit issue from the NLRB constitutes a prejudicial admission that such a claim lacks merit. Although the NLRB guidelines allow for a party to voluntarily withdraw claims which are determined to lack merit, it does not logically follow that any time a party withdraws a claim from an NLRB charge it is an admission that the claim lacked merit. Cimato has presented the Court with no authority for such a position. The Court is similarly unpersuaded by the defendants' argument that the NLRB determination is somehow res judicata, collateral estoppel or requires some other form of deference to the NLRB. (Docket No. 36 at ¶ 3). As noted above, the NLRB made no findings going to the merits of either the issue of whether the two Cimato entities were alter egos or whether a breach of the contractual audit obligations occurred. Further, the Court notes that neither Panek, nor any of the funds which are parties to this action, were parties to the administrative proceedings.
The Court finds that the NLRB does not have exclusive or primary jurisdiction with respect to the issues in the Amended Complaint.
Conclusion
Based on the above, it is recommended that the motion to dismiss (Docket No. 26) be denied in its entirety.
Pursuant to 28 U.S.C. § 636(b)(1), it is hereby ordered that this Report Recommendation be filed with the Clerk of the Court and that the Clerk shall send a copy of the Report Recommendation to all parties.
ANY OBJECTIONS to this Report Recommendation must be filed with the Clerk of this Court within ten(10) days after receipt of a copy of this Report Recommendation in accordance with 28 U.S.C. § 636(b)(1), Rules 6(a), 6(e) and 72(b) of the Federal Rules of Civil Procedure, as well as WDNY Local Rule 72(a)(3). FAILURE TO FILE OBJECTIONS TO THIS REPORT RECOMMENDATION WITHIN THE SPECIFIED TIME, OR TO REQUEST AN EXTENSION OF TIME TO FILE OBJECTIONS, WAIVES THE RIGHT TO APPEAL ANY SUBSEQUENT ORDER BY THE DISTRICT COURT ADOPTING THE RECOMMENDATIONS CONTAINED HEREIN. Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed2d 435 (1985); F.D.I.C. v. Hillcrest Associates, 66 F.3d 566 (2d. Cir. 1995); Wesolak v. Canadair Ltd., 838 F.2d 55 (2d Cir. 1988); see also 28 U.S.C. § 636(b)(1), Rules 6(a), 6(e) and 72(b) of the Federal Rules of Civil Procedure, and WDNY Local Rule 72(a)(3).
Please also note that the District Court, on de novo review, will ordinarily refuse to consider arguments, case law and/or evidentiary material which could have been, but was not, presented to the Magistrate Judge in the first instance. SeePatterson-Leitch Co. Inc. v. Massachusetts Municipal Wholesale Electric Co., 840 F.2d 985 (1st Cir. 1988).
Finally, the parties are reminded that, pursuant to WDNY Local Rule 72.3(a)(3), "written objections shall specifically identify the portions of the proposed findings and recommendations to which objection is made and the basis for such objection and shall be supported by legal authority." Failure to comply with the provisions of Rule 72.3(a)(3)may result in the District Court's refusal to consider the objection.
So ordered.