Opinion
105978/2010.
Decided on September 13, 2010.
Joy M. Kelly, New York, NY, For Petitioner.
Franklin N. Meyer, Esq., P.C., New York, NY, For Respondent.
In this Article 75 proceeding, petitioner Waterfront Commission of New York Harbor ("Commission") petitions this Court by order to show cause pursuant to CPLR 7503(b) to stay an arbitration proceeding and vacate the demand for arbitration made by respondent Anna Marie Gattullo ("Gattullo").
Factual Background
This proceeding stems from a grievance-arbitration procedure initiated by Gattullo after the Commission terminated her position as a switchboard operator/receptionist, which she had held for over eighteen years. The Commission asserts that Gattullo's position was eliminated on December 8, 2009 in accordance with Section 18 of the Collective Bargaining Agreement (the "CBA") between the Commission and the Civil Service Employees Association, Inc., Local 066 ("CSEA"), of which Gattullo is a member. Section 18 is titled "Protection of Employees" and provides in part that the "[c]ommission has the right to relieve its employees from duty for reasons of economy, consolidation or abolition of functions, curtailment of activities or otherwise." On December 8, 2009, the Commission's executive director Walter Arsenault ("Arsenault") informed Gattullo that her position was being eliminated for safety needs and cost reduction. Arsenault sent Gattullo a letter on December 9, 2009 confirming her termination.
On January 28, 2010, Gattullo filed a grievance with the Commission pursuant to Step One of the grievance-arbitration procedure set forth in Section 15 of the CBA. Gattullo alleged that she had been terminated in violation of various provisions of the CBA, specifically referencing Section 18 and Section 23 — which concerns tenure. Gattullo sought reinstatement at the Commission and requested back pay and compensation for benefits and pension credits she would have received had she not been terminated.
In accordance with Section 15 of the CBA, Arsenault sent a letter to Gattullo on February 2, 2010 denying Gattullo's grievance claim and explaining the Commission's position that her termination was proper under Sections 18 and 23 of the CBA. In this letter, Arsenault maintained that, pursuant to Section 2 of the CBA, Gattullo's grievance was not within the scope of collective negotiations. Section 2, titled "Matters Not Within the Scope of Collective Negotiations," provides in relevant part:
[I]t is the responsibility of the Commission to . . . relieve its employees from duty for reason of economy, consolidation or abolition of functions, curtailment of activities or otherwise. . . . Decisions of the Commission on these matters are not within the scope of collective negotiations . . . provided, however, that not withstanding any other provision of this paragraph, tenure, disciplinary procedures and the order and procedures of any layoff shall be subjects of collective negotiations.
On February 8 and 9, 2010, Gattullo — through the CSEA — sent a demand for arbitration via certified mail to the Waterfront Commission Employment Relations Panel (the "Panel") in accordance with the Step Two grievance-arbitration procedure set forth in Section 15(c) of the CBA. Subsequent to this demand, the Panel scheduled a conference at the office of the Commission on April 5, 2010. The CSEA and the Commission were notified of this conference via a letter dated February 24, 2010 from Philip Maier ("Judge Maier"), an arbitrator and member of the Panel. This letter identified the members of the Panel as Judge Maier, Monte Klein, and Lorraine Tesauro.
On March 12, 2010, Gattullo's counsel, Franklin Meyer ("Meyer") sent a discovery demand to Joy Kelly ("Kelly"), deputy general counsel of the Commission. The demand requested documentation setting forth the reasons for Gattullo's termination, as well as a list of documents and witnesses the Commission intended to utilize at the arbitration hearing. The Commission responded to Meyer's request with a letter from its general counsel on March 16, 2010, indicating that the Commission was responding in good faith to the discovery demand, despite the fact that the exchange of discovery prior to a grievance hearing was not required under the CBA. The Commission provided Meyer with a copy of Gattulo's job description and indicated that the Commission would not be introducing any documentary evidence at the hearing. The Commission confirmed that its only witness at the hearing would be Arsenault. Additionally, the Commission requested that Meyer provide the Commission with the identity of the witnesses Gattullo intended to call at the hearing.
Following this initial exchange of discovery, the parties had a dispute over various items requested in Meyer's discovery demand. Meyer contacted Arsenault regarding the absence of documents demonstrating that Gattullo was fired pursuant to sections 2, 18, and 23 of the CBA. Additionally, Meyer contested the Commission's failure to detail the safety and economic concerns that the Commission used to justify Gattulo's termination. By letter to Judge Maier dated April 14, 2010 Meyer requested that Judge Maier direct the Commission to comply with the discovery demand.
By letter dated April 15, 2010, Arsenault informed Judge Maier that Meyer had been provided with all relevant documents in the dispute and that the Commission did not have any additional documents to be disclosed in connection with Meyer's request. In this letter, Arsenault reiterated the Commission's position that its reasons for Gattullo's termination were proper under the CBA and that he would "be testifying to those same reasons." Meyer responded with a letter to Judge Maier on April 16, 2010, further outlining the need for details regarding the economic and safety reasons the Commission used as its rationale for firing Gattullo.
Ultimately, the parties did not participate in a grievance conference before the Panel. The grievance conference was adjourned to May 7, 2010 and the Commission filed the present petition prior to that date.
The Commission now petitions the Court pursuant to CPLR 7503(b) to stay the arbitration and to vacate the arbitration demand. The Commission argues that Gattullo did not meet the requirements of either CPLR 7503(c) or Section 15 of the CBA with respect to serving proper notice of the arbitration demand on the Commission. The Commission asserts that due to Gattullo's failure to conform to the notice provisions of CPLR 7503(c), the twenty-day limitation for filing an application to stay under CPLR 7503 is inapplicable and therefore, the Commission's application before the Court is timely. The Commission further argues that Gattullo failed to comply with the notice requirements of Section 15 of the CBA in that CSEA's letters to the Panel were not served upon the Commission and therefore, Gattullo is precluded from pursuing arbitration under the CBA.
Moreover, the Commission argues that the arbitration proceeding is barred by Section 2 of the CBA, which provides that the Commission's decisions to "relieve its employees from duty for reasons of economy, consolidation or abolition of functions, curtailment of activities or otherwise" are not subject to collective negotiations. Additionally, the Commission notes that the CBA is subject to the provisions of the Waterfront Commission Labor Relations Instruction ("Instruction"). The Commission points to Article VIII(D) of the Instruction, which contains identical language to Section 2 of the CBA declaring that the Commission's decisions with respect to relieving employees for economic and other reasons are outside the scope of collective bargaining. The Commission argues that, according to those provisions of the CBA and the Instruction, Gattulo's termination is not an arbitrable matter.
Finally, the Commission argues that its actions did not constitute "participation" in the arbitration proceedings in that it did not select an arbitration panel, filed no brief with the Panel, and did not set a date for the hearing. The Commission asserts that it was merely responding in good faith to Gattullo's discovery requests despite having no legal obligation to do so.
In opposition, Gattullo argues that the Commission's petition is defective and should be denied because the Commission failed to bring the petition against the CSEA, which Gattullo maintains is the party bringing the arbitration proceeding against the Commission. Gattullo further argues that she and the CSEA satisfied the requirements for the arbitration demand pursuant to Section 15 of the CBA and that fulfilling the notice requirement under CPLR 7503(c) is unnecessary in order to effectively initiate an arbitration proceeding before the Panel.
Gattullo also contends that the dispute between the parties is arbitrable pursuant to the CBA. Gattullo argues that because there is no clear language in the CBA barring the arbitration of her termination, New York law's presumption of arbitrability mandates finding the issue to be arbitrable. Gattullo also refutes the Commission's use of Section 2 of the CBA and Article VIII(D) of the Instruction to demonstrate that its decision is not arbitrable. Gattullo highlights the qualifying language in these provisions that "notwithstanding any other provision of this paragraph, tenure, disciplinary procedures and the order and procedures of any layoff shall be subjects of collective negotiations." Gattullo argues that, because her grievance was brought under the provisions of the CBA concerning tenure and layoff procedures, her grievance comes within this qualifying clause and is therefore arbitrable.
Finally, Gattullo argues that the Commission's application is barred because it actively participated in the arbitration, by scheduling the grievance conference and involving itself in the pre-arbitration discovery process. Gattullo points to Meyer's correspondences with the Commission, which referenced the proceeding as an "arbitration" on numerous instances and evidenced the Commission's active participation in arbitration preparations. Meyer avers that in his conversations with Kelly and others at the Commission, the Commission never argued that the issue was not arbitrable. Gattullo therefore argues that, because a party may only petition a Court to stay an arbitration under CPLR 7503(b) where it has not participated in the arbitration, the Commissions has forfeited its right to bring the present petition.
Discussion
A party may bring an application to stay arbitration only if it has not participated in the arbitration proceeding. CPLR 7503(b); see also Tucker Anthony, Inc. v. Blunt, Ellis Loew, Inc., 260 AD2d 386 (2nd Dept. 1999); Kidder, Peabody Co. v. Marvin, 161 Misc 2d 12 (Sup. Ct. NY Co., 1994). In particular, a party's opposition to an arbitration discovery demand can constitute participation and bar its right to petition for a stay of the arbitration. See Unicon Mgmt. Corp. v. Pavcrete Constr. Corp., 23 AD2d 837 (1st Dept. 1965) (finding that petitioner participated in arbitration proceeding where, among other things, petitioner wrote a letter to arbitrator contesting the relevancy of certain discovery requests). Here, the Commission responded to portions of Meyer's discovery request, which specifically indicated that the request was being made in connection with a pending arbitration. After further discussion between the parties, Arsenault actively opposed elements of the discovery demand in a letter to Judge Maier. This letter from Arsenault — which sought to have an issue between the parties resolved by the arbitrator handling the dispute — establishes the Commission's participation in the proceeding.
Moreover, the Commission demonstrated its acceptance of arbitration as the forum to settle the dispute over Gattullo's termination. A party's petition to stay an arbitration is barred where its "participation in the arbitration process manifested a preference clearly inconsistent with [its] present effort to stay arbitration." Greenwald v. Greenwald, 304 AD2d 790, 791 (2nd Dept. 2003). Here, although the Commission maintains in its petition that it was only made aware of Gattullo's demand for arbitration on April 19, 2010, the documents submitted by both parties establish that the Commission was affirmatively preparing for a grievance-arbitration hearing prior to this date. The March 16, 2010 letter from the Commission's general counsel to Meyer indicated that the Commission "[did] not intend to present any documents at the hearing" and requested that Meyer provide the Commission with "the identity of all witnesses that you intend to introduce at the hearing." In two of the letters written by the Commission — one of which was sent to Judge Maier — it was confirmed that Arsenault would be testifying at the hearing. The Commission's preparation for the hearing further demonstrates its active involvement in the arbitration process.
The Commission's argument that it reserved its right to bring this petition by participating in the proceeding while maintaining that it was under no legal obligation to do so is meritless. In its discovery response, the Commission merely argued that the grievance-arbitration procedure set forth in the CBA did not require the parties to exchange discovery prior to a hearing; at no point did the Commission argue that it was responding to Meyer's demand despite having no obligation to arbitrate the matter.
Further, there is no merit to the Commission's assertion that Gattullo's failure to conform to the provisions of CPLR 7503(c) constitutes an independent basis for vacating the demand for arbitration under the CBA. While the Commission is correct that CPLR 7503(c) serves an important notice function in arbitration proceedings, "[r]eceipt of the notice to arbitrate is significant only for the purpose of starting the adversary's time to serve his notice to stay." Knickerbocker Ins. Co. v. Gilbert, 28 NY2d 57, 65 (1971). As a result, Gattullo's failure to satisfy CPLR 7503(c) merely would have allowed the Commission to bring a petition to stay the arbitration beyond the twenty-day limitation period had it not participated in the arbitration. Here, the adequacy of Gattullo's arbitration demand is governed by the CBA. Because Gattullo has submitted evidence that her demand for arbitration was timely served upon the Panel as set forth in Section 15(c) of the CBA, the proceeding was properly initiated in accordance with the parties' agreement.
In light of the foregoing, the parties' remaining contentions are moot.
In accordance with the foregoing, it is
ORDERED that the petition of Waterfront Commission of New York Harbor to stay an arbitration proceeding and vacate respondent Anna Marie Gattullo's demand for arbitration is denied.
This constitutes the decision and order of the Court.