E. Atl. States Reg'l Council of Carpenters v. CMS Constr.

EASTERN ATLANTIC STATES REGIONAL COUNCIL OF CARPENTERS, UBCJA, Petitioner, v. CMS CONSTRUCTION, INC., Respondent.

Civ. No. 22-1615 (KM) (LDW)

United States District Court, D. New Jersey

December 29, 2022

OPINION

Hon Kevin McNulty United States District Judge

Presently before the Court is the petition of Eastern Atlantic States Regional Council of Carpenters, UBCJA (the “Union”) to confirm an arbitration award. (DE 1.)^[1] Respondent CMS Construction, Inc. (“CMS”) filed a brief in opposition and a cross-motion to vacate the arbitration award. (DE 8-4.) For the reasons set forth below the Union's motion to confirm the arbitration award is GRANTED and CMS's motion to vacate the arbitration award is DENIED.

I. BACKGROUND

A. Factual Background

CMS is a construction contractor that has been in business for about twenty years. (DaSilva Decl. ¶¶ 2-3.) Carlos DaSilva is the President of CMS. (Id. ¶ 1.) DaSilva's native language is Portuguese, and his second language is English. (Id. ¶ 4.) DaSilva states that he is able to speak English “enough to get by,” but has a difficult time reading in English. (Id.)

The Union is a labor organization organized under the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 152(5). (Pet. ¶ 2.) On July 10, 2020, Cyndie Williams, a Union representative, met with DaSilva at a CMS worksite and presented him with a Short Form Agreement, which DaSilva signed. (DaSilva Decl. ¶¶ 5, 8, 18.) The Short Form Agreement was written in English and was not translated to Portuguese. (Id. ¶ 9.)

In June and July 2021, Daniel Sebban, another Union representative, visited one of CMS's worksites and noticed that non-Union members were performing work covered by the Union's Collective Bargaining Agreement. (Arb. Op. p. 2; Pet. ¶¶ 9-10.) Believing that CMS had breached the Collective Bargaining Agreement, the Union filed a grievance on July 22, 2021, and initiated arbitration proceedings. (Arb Op. p. 2; Pet. ¶¶ 12-16.)

B. Arbitration Proceeding

The parties, represented by counsel, appeared virtually before arbitrator J.J. Pierson, Esq., on September 16 and October 18, 2021. (Arb. Op. 1.) During the hearings, the arbitrator heard the testimony of Cyndie Williams, Daniel Sebban, and Mr. DaSilva. (Id. pp. 7-12.) The arbitrator also determined that the Short Form Agreement incorporated by reference the Collective Bargaining Agreement at issue. (Id. p. 1.)

The Union asserted that CMS violated the Collective Bargaining Agreement by utilizing non-Union workers to perform work within the Union's trade jurisdiction. (Id. p. 2.) The Union sought “a monetary award for lost wage and benefits.” (Id.)

In response, CMS disputed the applicability of the Collective Bargaining Agreement. (Id.) According to CMS, Williams represented to DaSilva that the Short Form Agreement was for one CMS employee to join the Union solely for when he performed carpentry work. (Id.) CMS asserted that Williams misled DaSilva as to the scope and content of the Short Form Agreement to induce him to sign. (Id. p. 3.) Based on Williams' misrepresentations and DaSilva's inability to understand the terms of the English-written Short Form Agreement, CMS sought to void the Agreement based on fraud in the inducement, fraud in the execution, fraud, misrepresentation, and bad faith. (Id.)

The arbitrator issued his decision on February 20, 2022. The arbitrator found that he had jurisdiction pursuant to the Short Form Agreement. (Id. p. 1.)

The arbitrator also found that the Union established a prima facie case that CMS was a signatory to the Collective Bargaining Agreement via the Short Form Agreement. (Id. p. 10.) The arbitrator determined that DaSilva's testimony was “absent of any reference to coercive conduct by Ms. Williams” or any claim that a Union representative “insisted that he sign the Short Form Agreement without (or before) a review.” (Id. p. 12.) The arbitrator also found “nothing to establish that Mr. DaSilva was induced to execute the Short Form Agreement” or that DaSilva “relied on Union representations other than admitting his key employee to Union membership and providing his company access to a recognized apprentice training program.” (Id. pp. 12-13.)

Furthermore, the arbitrator found no support for the proposition that DaSilva's signing of the Short Form Agreement was the result of duress. (Id. p. 13.) The arbitrator found that “credible evidence neither established nor supported the assertion of fraud in the execution or fraud in the inducement.” (Id.) In the view of the arbitrator, DaSilva had “an ample and uncoerced opportunity to review the agreement” and “cannot reasonably claim fraud in the inducement, given his asserted failure to request and read the referenced [Collective Bargaining Agreement]” or to request “time for review by an attorney.” (Id. p. 14.) The arbitrator recognized that DaSilva was less fluent in English than in Portuguese, but found it more likely that any alleged “lack of understanding related to his belief that he would be able to utilize the Agreement as he saw fit and that the [Union] would not pursue his compliance.” (Id.)

The arbitrator thus concluded that the Collective Bargaining Agreement was “valid and enforceable, without restriction or limitation” and that CMS violated that Agreement. (Id. p. 15.) The arbitrator awarded damages for lost wages and benefits totaling $182,882.30. (Id.) The arbitrator also ordered CMS to reimburse the Union $6,250, representing half the arbitrator's fee. (Id. p. 16.)

C. Post-Arbitration Motions

The Union filed its petition to confirm the arbitration award on March 22, 2022. (DE 1.) On April 18, 2022, CMS opposed the Union's petition to confirm and filed a cross-motion to vacate the arbitration award. (DE 8.) The Union filed its opposition on May 2, 2022 (DE 10), to which CMS replied on May 9, 2022 (DE 11). The Union's petition to confirm and CMS's cross-motion to vacate the arbitration award are now before the Court.

II. STANDARD OF REVIEW

This Court possesses jurisdiction over this action under § 301 of the LMRA, 29 U.S.C. § 185. See Screen Actors Guild - Am. Fed'n of Television & Radio Artists, AFL-CIO v. Sheridan Broad. Networks, 841 Fed.Appx. 369, 372 n.4 (3d Cir. 2020).

The Federal Arbitration Act evinces a strong presumption in favor of enforcing arbitration awards. Brentwood Med. Assocs. v. United Mine Workers of Am., 396 F.3d 237, 241 (3d Cir. 2005). Section 9 of the FAA states, in relevant part:

If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title.

9 U.S.C. § 9. In short, unless the arbitration award is vacated pursuant to Section 10 or modified or corrected under Section 11 of the FAA, the award “must” be confirmed.

Assuming the matter was arbitrable in the first place, “[t]he Supreme Court has held that ‘the courts play only a limited role when asked to review the decision of an arbitrator.'” Wilkes Barre Hosp. Co. v. Wyo. Valley Nurses Ass'n PASNAP, 453 Fed.Appx. 258, 260 (3d Cir. 2011) (quoting United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 36 (1987)). “The courts are not authorized to reconsider the merits of an award even though the parties may allege that the award rests on errors of fact or on misinterpretation of the contract.... As long as the arbitrator's award ‘draws its essence from the collective bargaining agreement,' and is not merely ‘his own brand of industrial justice,' the award is legitimate.” Misco, 484 U.S. at 36 (quoting Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593, 596-97 (I960)). This is because “arbitration is a matter of contract,” United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960), so if an “‘arbitrator is even arguably construing or applying the contract and acting within the scope of his authority,' the fact that ‘a court is convinced he committed serious error does not suffice to overturn his decision.'” Eastern Associated Coal Corp. v. United Mine Workers of Am., Dist. 17, 531 U.S. 57, 62 (2000) (quoting Misco, 484 U.S. at 38). The moving party bears the burden of proving that the arbitration award at issue should be vacated, and the courts must “accord arbitration decisions exceptional deference.” Handley v. Chase Bank USA NA, 387 Fed.Appx. 166, 168 (3d. Cir. 2010).

Section 10(a) provides the grounds upon which a district court may vacate an arbitration award:

(1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them;

(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or

(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

9 U.S.C. § 10. Further, an arbitration “award is presumed valid unless it is affirmatively shown to be otherwise.” Brentwood Med. Assocs., 396 F.3d at 241. The Supreme Court has held that these are the “exclusive grounds” for moving to vacate an award. Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 584 (2008).

III. DISCUSSION

CMS seeks to vacate...