Petition for Writ of Certiorari — Five Star Parking v. Union Local 723, International Brotherhood of Teamsters (No. 07-699)

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Supreme Sour, U5.

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1 07-699 KEV 25 2007

No. 07- OFFICE OF THE CLERK

IN THE

Supreme Court of the United States

FIVE STAR PARKING,

Petitioner,

UNION LOCAL 723, affiliated with the

INTERNATIONAL BROTHERHOOD OF TEAMSTERS,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES Court OF APPEALS

FOR THE THIRD CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

MICHAEL S. CRYAN

ARENT Fox LLP

1675 Broadway

New York, NY 10019

(212) 484-3900

Altorneys for Petitioner

QUESTION PRESENTED

Petitioner Five Star Parking filed a complaint in the

United States District Court for the District of New Jersey

challenging an arbitration award in favor of Respondent

Local 723, Affiliated with the International Brotherhood

of Teamsters that found that Petitioner’s imposition of a

wage after bargaining to an impasse in reopener

negotiations was a violation of their collective bargaining

agreement. The District Court vacated the award on

December 20, 2005, finding that the arbitrator had

exceeded his jurisdiction by deciding issues of unfair labor

practices governed by the National Labor Relations Act

and under the jurisdiction of the National Labor Relations

Board. Respondent appealed to the Third Circuit Court of

Appeals, which reversed the District Court’s decision and

reinstated the arbitrator’s award.

The question presented is this:

When parties to a collective bargaining agreement,

negotiating mandatory terms of bargaining pursuant to an

economic reopener provision in the agreement, reach an

impasse, is the employer's decision to implement its final

offer on impasse a right that is governed by the National

Labor Relations Act and falling under the primary

jurisdiction of the National Labor Relations Board, where

the reopener provision in agreement does not make such

implementation subject to arbitration?

STATEMENT PURSUANT TO RULE 29.6

Petitioner, Five Star Parking, has no parent

corporation and no publicly held company owns 10% or

more of its stock.

TABLE OF CONTENTS

Page

QUESTION PRESENTED .................. i

STATEMENT PURSUANT TO RULE 29.6 ... ii

Eanes OP CAPIVESGIN ED Ka scsrnescasacneeabs lil

TABLE OF APPENDICES ......scsccsssencs Vv

TABLE OF CITED AUTHORITIES ......... v1

CPP EIUEUPUNGE OMA iva krenadkac cud Me bab eee 2

STATEMENT OF JURISDICTION .......... 2

RELEVANT PROVISIONS INVOLVED ..... 3

STATEMENT OF THE CASE ...............

wo |

REASONS FOR GRANTING THE PETITION .. 9

A. Decisions of the First, Tenth and D.C.

Circuits Hold That An Employer’s Right

to Implement After An Impasse In

Reopener Negotiations Arises from the

NLA and Is Not Arbitrable ........... 10

1. Decisions of the United States

Supreme Court Define the Rights of

Parties after an Impasse is Reached

in Negotiating a CBA .............. 10

Contents

Page

Decisions of the D.C. Circuit and the

Tenth Circuit Hold that the Right to

Implement at Impasse Arises from

Se PHAGE ce vi 00k os Medaka ak esanes 11

Decisions of the First Circuit Hold

that the Right to Implement at

Impasse is Not Arbitrable ......... 14

B. Decisions of the Eighth Circuit Hold that

the Right to Implement at Impasse arises

from the CBA and is Arbitrable ........ 15

C. The Third Circuit Decision Holds that the

Right to Implement at Impasse arises

both from the CBA and the NLRA and is

PEE 4G a a ack aaah VERE Re vas 17

D. The Dispute in Five Star Parking Would

Not Be Arbitrable Under the Holdings of

the First, Tenth, and D.C. Circuits ...... 18

LMIPEGRTIENEEE, ce kas kaon saan eahanehesees 19

TABLE OF APPENDICES

Appendix A — Opinion Of The United States

Court Of Appeals For The Third Circuit Filed

SE le NS. ein eo hh eae ee er eneiae een ee

Appendix B — Opinion Of The United States

District Court For The District Of New Jersey

Dated December 23, 2005 ........cccccccces

Appendix C - Opinion And Award Of The New

Jersey State Board Of Mediation Dated

PRE Gy Oe Kia oe oko oe rec ke emeeees

Appendix D — Order Of The United States Court

Of Appeals For The Third Circuit Denying

Petition For Rehearing Dated August 29,

ORT E CE TT ECR Ne Ry PT eer ere ee pr hey

Page

TABLE OF CITED AUTHORITIES

Page

Cases

Bricklayers and Allied Crafts Union, Local No.

4 of Minn. v. Associated General Contractors

of Minn., 711 F.2d 90 (8th Cir. 1983) ......... 15

Colorado-Ute Elec. Ass’n, Inc. v. N.L.R.B.,

gee F.20 1392 (10th Cir. 1991) ............. 9, 13, 18

Five Star Parking v. Union Local 723, No. 06-

2012, Slip Copy, 2007 WL 2110716 (3d Cir.

SE wa Cras eve pec tah a bhanake cn ae

Five Star Parking v. Union Local 723, No. 05-

ev-3975, 2005 WL 3502936 (D.N.J. Dec. 23,

Re en a nck ths ees A eet eeas 2

General Drivers and Helpers Union, Local No.

554 v. Mid-Continent Bottlers, Inc. (Omaha

Division), 767 F.2d 482 (8th Cir. 1985) ....... 9,15

Laundry, Dry Cleaning & Dye House Workers

Int'l Union, Local 93 v. Mahoney, 491 F.2d

PRR OUR SFUNS BEE) 5505505 nsecnnsdnceecans 16

Litton Fin. Printing Div., A Div. of Litton Bus.

Sys., Inc. v. NLRB, 501 U.S. 190 (1991) ..... 10

Local Union No. 47, Int'l Bhd. of Elec. Workers

v. N.L.R.B., 927 F.2d 635 (D.C. Cir. 1991) ....9, 11, 18

Cited Authorities

Page

Newspaper Guild of Salem, Local 105 of the

Newspaper Guild v. Ottaway Newspapers,

Iuc., 79 F.3d 12738 (ist Cir. 1996) .......... 9,14, 18

NLRB v. Katz, 369 U.S. 736 (1962) ............ 10

NLRB v. Lion Oil Co. , 352 U.S. 282 (1957) ..10, 11, 12

Speedrack, Inc., 293 N.L.R.B. No. 128 (May 17,

1989)

United Steelworkers v. Warrior and Gulf

Navigation, 363 U.S. 574 (1960) .......... «16

Statutes

ee Bee Sad Sank ee ee ee 2

PAS 5 eae Be.) 4 Rear anE enya ey ere D NT Ore 5

Gis © om D7 .- . Ep ene ere rere 5

ee rs OE 6 56k ok od ee tw oan ee es 5

ee ies Oe Re oR Oh so Se ee ee 5

ee Bigs OE ns ce ck dean eke OLEe eee eee 3,13

Cited Authorities

Rules

Supreme Court Rule 13.1 ......

Miscellaneous

‘eS 4 2) Oo 4 +O 6 42S ED

Opinion and Award in the Matter of the

Arbitration Between Five Star Parking and

IBT Local 723 (Aug. 3, 2005)

Page

]

Five Star Parking (“Five Star”) respectfully

petitions that a Writ of Certiorari be issued to review

the judgment of the United States Court of Appeals for

the Third Circuit entered on July 24, 2007, in order to

resolve a conflict between the D.C. Circuit, the Tenth

Circuit and the First Circuit on the one hand and the

Third Circuit and the Eighth Circuit on the other. The

Eighth Circuit and now the Third Circuit have held that

the Employer’s ability to unilaterally impose its last offer

after an impasse in reopener negotiations is an arbitrable

contractual question. The D.C. Circuit and the Tenth

Circuit have held that under the National Labor

Relations Act (the “NLRA”) an employer has a right to

implement its final offer in reopener negotiations. And

the First Circuit has held that disputes over the right to

implement a final offer after an impasse in negotiations

over new or renewal agreements are not arbitrable

because that right arises under the NLRA and thus falls

under the primary jurisdiction of the National Labor

Relations Board (the “NLRB”). The Court is presented

with a holding that an arbitrator’s jurisdiction pursuant

to a rights arbitration clause includes determining

whether an impasse has been reached in reopener

negotiations. This Court should resolve this important

question of federal labor law.

OPINIONS BELOW

The opinion of the United States Court of Appeals

for the Third Circuit is dated July 24, 2007, and it is not

published in the Federal Reporter, but is published at

Five Star Parking v. Union Local 723, No. 06-2012, Slip

Copy, 2007 WL 2110716 (3d Cir. July 24, 2007) (the “Third

Circuit Decision”) (App. la). The opinion of the District

Judge William J. Martini, United States District Court

for the District of New Jersey is dated December 23,

2005, and it is not published in the Federal Reporter,

but is published at Five Star Parking v. Union Local

723, No. 05-ev-3975, 2005 WL 3502936 (D.N.J. Dec. 23,

2005) (the “District Court Decision”) (App. 13a). The

order of the Third Circuit denying the Petition for

Rehearing or Rehearing En Banc was issued on August

29, 2007. (Aug. 29, 2007 Order, App. 65a). The arbitration

award reviewed by the District Court and Third Circuit

in this matter was issued on August 3, 2005. Opinion and

Award in the Matter of the Arbitration Between Five

Star Parking and IBT Local 723 (Aug. 3, 2005) (App. 21a)

STATEMENT OF JURISDICTION

The judgment of the United States Court of Appeals

for the Third Circuit was entered on July 24, 2007.

(App. la). A Petition for Rehearing and for Rehearing

En Banc was timely filed, and was denied on August 29,

2007. (App. 65a). Pursuant to Supreme Court Rule 13.1,

this petition has been filed within 90 days of the denial

of rehearing

The jurisdiction of this Court is invoked pursuant. to

28 U.S.C. § 1254(1).

RELEVANT PROVISIONS INVOLVED

Section 301 of the Labor Management Relations Act,

29 U.S.C. § 185(a) states:

Suits for violation of contracts between an

employer and a labor organization representing

employees in an industry affecting commerce as

defined in this chapter, or between any such

labor organizations, may be brought in any

district court of the United States having

jurisdiction of the parties, without respect to the

amount in controversy or without regard to the

citizenship of the parties.

section 8 of the National Labor Relations Act, 29

U.S.C. § 158 states:

(a) It shall be an unfair labor practice for an

employer—

(1) to interfere with, restrain, or coerce

employees in the exercise of the rights

guaranteed in section 157 of this title;

x x *

(5) to refuse to bargain collectively with

the representatives of his employees, subject

to the provisions of section 159 (a) of this title.

* * *

(d) For the purposes of this section, to bargain

collectively is the performance of the

mutual obligation of the employer and the

representative of the employees to meet at

reasonable times and confer in good faith with

respect to wages, hours, and other terms and

conditions of employment, or the negotiation of

an agreement, or any question arising

thereunder, and the execution of a written

contract incorporating any agreement reached

if requested by either party, but such obligation

does not compel either party to agree to a

proposal or require the making of a concession:

Provided, That where there is in effect a

collective-bargaining contract covering

employees in an industry affecting commerce,

the duty to bargain collectively shall also mean

that no party to such contract shall terminate or

modify such contract, unless the party desiring

such termination or modification—

(1) serves a written notice upon the other

party to the contract of the proposed termination

or modification sixty days prior to the expiration

date thereof, or in the event such contract

contains no expiration date, sixty days prior to

the time it is proposed to make such termination

or modification;

(4) continues in full force and effect, without

resorting to strike or lock-out, all the terms and

conditions of the existing contract for a period

of sixty days after such notice is given or until

the expiration date of such contract, whichever

occurs later.

STATEMENT OF THE CASE

Five Star and Local 723, Affiliated with the

International Brotherhood of Teamsters (the “Union”)

are parties to a collective bargaining agreement,

effective August 1, 2002 through July 31, 2008 (the

“CBA”). The CBA pertains to Five Star operations at

Newark Airport for which Five Star employs, and the

Union represents, cashiers, attendants and lot checkers

Five Star is an employer in an industry affecting

commerce, as defined in Sections 501(1) and (3) and 2(2)

of the National Labor Relations Act (the “N LRA”)

(29 U.S.C. § 142(1), (3) and 29 U.S.C. § 152(2)), and within

the meaning of Section 301 of the NLRA (29 U.S.C.

§ 185). The Union is a labor organization representing

employees in an industry affecting commerce, as defined

in Sections 501(1), (3) and 2(5) of the NLRA (29 U.S.C.

§ 142(1), (3), and 29 U.S.C. § 152(5)), and within the

meaning of Section 301 of the NLRA (29 U.S.C. § 185).

The CBA sets forth a grievance procedure, including

provisions establishing specific jurisdictional standards

for arbitration. Article 4 of the CBA allows either party

to submit to arbitration any disputes “involving or

concerning the meaning, interpretation, operation, or

application of any clause of” the CBA. The CBA limits

the jurisdiction of the arbitrator to “the particular

dispute in question” and provides that the arbitrator

“shall not have jurisdiction or authority to add to, modify,

detract from, or alter in any way the provisions of this

Agreement or any amendment or any supplement

thereto.” (CBA Art. 4 at 2-3, see App. 23a). There are no

provisions in the CBA that give an arbitrator jurisdiction

to decide issues outside of the CBA. There are no

provisions in the CBA that give an arbitrator jurisdiction

to decide issues under the NLRA, such as whether an

“impasse” has occurred.

The CBA sets wage rates for the time period from

August 1, 2002 until July 31, 2004. The CBA does not set

wage rates for the period from August 1, 2004 through

the expiration of the CBA on July 31, 2008. The CBA

also contains a reopener provision that allows either

party, by giving written notice, to reopen the terms of

the CBA “solely for the purpose of renegotiating

concerning wages and monetary fringe benefits, but for

no other purpose.” On June 18, 2004, the Union gave

Five Star notice of wage reopener bargaining pursuant

to the reopener provision. Five Star agreed to negotiate

with the Union and the parties commenced a series of

negotiations concerning wage rates.

Five Star proposed a 12-and-one-half percent

(12.5%) reduction in wage rates, explaining that

operational costs necessitated the downward wage

adjustment. The Union rejected the offer. Negotiations

continued. The Union demanded confidential financial

data from Five Star covering all Five Star facilities (not

limited to Newark Airport). Five Star made financial

informa* on concerning Newark Airport available to the

Union but declined to provide data for facilities other

than Newark Airport. The Union refused to continue

participating in the negotiations and purported to

withdraw its request for wage reopener. Having rejected

Five Star’s proposal at several meetings and through

correspondence, the Union never changed its position

or exhibited any willingness to alter its position on wage

rates or even to engage in further discussions. Five Star

determined that the parties had reached an impasse and

implemented its last and final offer, the 12.5% wage rate

reduction, on September 17, 2004.

The Union submitted the alleged unfair labor

practice charge to the National Labor Relations Board

(the “NLRB”). The Union withdrew its charge before

the NLRB.

The Union then invoked the grievance procedure of

the CBA and pursued arbitration. From the outset of

the arbitration, Five Star maintained that the arbitrator

lacked jurisdiction to decide issues under the NLRA.

Five Star specifically stated that the arbitrator lacked

jurisdiction to decide the question of whether an

“impasse” occurred.

The Award was issued on August 3, 2005. While in

some parts of the Award, the arbitrator disclaimed any

authority or intention to determine the issue of

“impasse,” the text of the award and the issue decided

make clear that the only issue determined in the

arbitrator’s opinion was that no “impasse” existed under

the NLRA. After stating this labor-law determination,

the Award simply declares in conclusory terms that Five

Star breached the CBA, never identifying any provision

of the CBA that Five Star allegedly violated.

On August 11, 2005, Five Star filed in the District

Court a Complaint and a motion to vacate the Award.

On December 20, 2005, the District Court issued an

Order granting Five Star’s motion to vacate the Award,

denying Five Star’s motion for attorneys’ fees, and

denying the Union’s motion in its entirety, on the grounds

that the “arbitrator exceeded his jurisdiction” by

“failling| to ground his decision in any provision of the

CBA.” (App. 17a-18a). The District Court found that the

arbitrator had based his decision entirely on whether

an impasse had been reached and not on a construction

of any term or provision of the CBA, and that whether

an impasse had been reached was a question of federal

labor law to be decided by the NLRB. (App. 17a-19a).

The Union filed a notice of appeal to the Third Circuit

on January 19, 2006. The Third Circuit issued an opinion

on July 24, 2007 rcinstating the arbitrator’s award.

(App. 12a). The Third Circuit decision held that the

arbitrator had the authority to determine whether an

impasse existed. (App. 10a-12a). A timely petition for

Pancl Rehearing and Rehcaring En Banc was denied on

August 29, 2007. (App. 65a-66a).

This Court should now consider the Petitioner’s

claim that a CBA that allows for rights, but not interest,

arbitration does not permit an arbitrator to decide

whether an impasse has been reached in economic

reopener negotiations. The Court is now presented with

the opportunity to clarify the law attendant Lo reopener

negotiations and the arbitrability of disputes that arise

thereunder.

REASONS FOR GRANTING THE PETITION

The Third Circuit Decision highlights a disagreement

among the Circuit Courts of Appeals on several issues

related to the arbitrability of disputes concerning

economic reopener negotiations. The D.C. Circuit and

the Tenth Circuit, as well as the NLRB, have held that

when an employer and a union negotiate pursuant to an

economic reopener provision in the CBA, the NLRA

allows the employer to unilaterally implement its final

offer after bargaining to a good faith impasse. Local

Union No. 47, Int'l Bhd. of Elec. Workers v. N.L.R.B.,

927 F.2d 635, 643-644 (D.C. Cir. 1991); Colorado-Ute Elec.

Ass’n, Inc. v. N.L.R.B., 9389 F.2d 1392, 1404 (10th Cir.

1991). The First Circuit has held that after negotiating

over new or renewal agreements to an impasse, the

employer's right to implement is not arbitrable because

it falls under the jurisdiction of the NLRB. Newspaper

Guild of Salem, Local 105 of the Newspaper Guild v.

Ottaway Newspapers, Inc., 79 F.3d 1278, 1283-84 (1st

Cir. 1996).

In contrast, the Eighth Circuit in General Drivers

and Helpers Union, Local No. 554 v. Mid-Continent

Bottlers, Inc. (Omaha Division), 767 F.2d 482, 485 (8th

Cir. 1985), and the Third Circuit in this case, both held

that the operation of reopener agreements and the

remedies thereunder arise from the CBA and are

arbitrable.

Decisions of the First, Tenth and D.C. Circuits

Hold That An Employer’s Right to Implement

After An Impasse In Reopener Negotiations

Arises from the NLRA and Is Not Arbitrable

1. Decisions of the United States Supreme Court

Define the Rights of Parties after an Impasse

is Reached in Negotiating a CBA

This Court has held that when parties negotiate

mandatory terms of a new or renewal CBA to a good

faith impasse, the NLRA grants the employer the right

to unilaterally implement its last offer. See, e.g., Litton

Fin. Printing Div., A Div. of Litton Bus. Sys., Ine. v.

NLRB, 501 U.S. 190, 198 (1991) (employer may

unilaterally implement after impasse when negotiating

a replacement for an expired CBA); NLAB v. Katz, 369

U.S. 736, 745 (1962) (employer may unilaterally

implement after impasse when negotiating the terms of

an initial CBA). This Court has also held that when an

impasse has been reached in reopener negotiations, the

Union retains its right to strike unless the CBA

expressly waives that right. NLRB v. Lion Oil Co., 352

U.S. 282, 2938-294 (1957). However, this Court has not

yet extended its decision in Lion Oil to its logical

conclusion that when parties to a CBA negotiating

pursuant to a reopener provision reach a good faith

impasse, both parties retain all of their economic

weapons including the employer’s right to unilaterally

implement its final offer.

2. Decisions of the D.C. Circuit and the Tenth

Circuit Hold that the Right to Implement at

Impasse Arises from the NLRA

In international Brotherhood of Electrical Workers,

the D.C. Circuit extended the holding of Lion Oil to

include the rights of employers. It held that an

employer’s right to implement its final offer after an

impasse in reopener negotiations arises from the NLRA

and that in order to waive that right, the CBA must

evidence a “clear agreement” to preclude the use of such

“economic leverage.” 927 F.2d at 642-644.

In that case, an employer and union entered into

negotiations pursuant to a wage reopener provision in

their CBA, and after reaching an impasse, the employer

implemented its final offer. Jd. at 639-40. After the union

filed an unfair labor practice complaint, an

administrative law judge (“ALJ”) and the NLRB both

found that the employer had a right, under Section &(d)

of the NLRA, that after an impasse in reopener

negotiations the parties could resort to any of the

economic weapons available to them when bargaining

for a new or renewal agreement, including the right to

lock-out, strike, or unilaterally implement final offers.

Id. On appeal to the D.C. Circuit Court of Appeals, the

union argued that the contractual language of the

reopener provision precluded the right to implement.

Id. at 643. The union pointed to the language of the

reopener which provided for reopening “only for the

purpose of negotiating ... changes” and that

“{algreement reached as a result of such reopening shall

become effective as of January 1.” Jd. The union argued

that because the provision required “negotiating” and

A bent

provided for an effective date for the subsequent

“agreement”, the reopener provision merely allows the

renegotiation of terms “while leaving the existing terms

and conditions fully effective until mutual agreement on

a modification is reached.” /d. at 643-44. The D.C. Circuit

disagreed with the union and upheld the orders of the

ALJ and NLRB.

The D.C. Circuit found that “the employer’s

obligation to bargain over a reopened wage term carries

with it the right to implement a final wage offer upon

genuine impasse” and that “curtailing the right...

‘would turn reopencr bargaining into little more than a

charade that would barely differentiate it from the kinds

of discussion that may lawfully occur even in the absence

of a reopener.’” /d. at 644 (quoting Speedrack, Inc., 293

N.L.R.B. No. 128, at 4-5 (May 17, 1989) (emphasis

added)). The D.C. Circuit drew a distinction between the

discussions that parties can engage in throughout the

course of their relationship and negotiations pursuant

to areopener provision that are governed by the NLRA.

The D.C. Circuit followed the reasoning of the NLRB in

Speedrack, which in turn followed the reasoning of this

Court in Lion Ol. Id. at 642-45. In Lion Oil, this Court

construed the term “expiration date” in Section 8(d)(1)

and (4) of the NLRA as applying both to expiration of

fixed-term contracts and to date on which the terms of a

contract are opened pursuant to a reopener provision.

Lion Oil, 352 U.S. at 289-90. The NLRB in Speedrack,

relied on that construction to find that when a reopencr

provision is invoked, the CBA is effectively terminated

with respect to the reopened terms and the parties may

then resort to the same economic weapons available to

them when bargaining a new or renewal agreement.

Speedrack, 293 N.L.R.B. No. 128, at 2. The D.C. Circuit

adopted the NLRB’s presumption that reopener

bargaining is the functional equivalent of bargaining in the

absence of a contract with respect to the reopened terms,

and as such, the parties retain the same leverage.

In Colorado-Ute, the Tenth Circuit also held that an

employer’s right to implement its final offer after reaching

a good faith impasse in reopener negotiations arises from

the NLRA. 939 F.2d at 1404-05. In that case, after

bargaining to an impasse in reopener negotiations the

employer implemented its final offer and the union initiated

a strike. /d. at 1398-1400. The parties continued to bargain

after the impasse and the union then filed a complaint

alleging that the employer had violated Section 8(a)(5) of

the NLRA by, inter alia, “unlawfully implementing the

terms of its wage offer during negotiations.” Jd. The ALJ

found that the employer acted within its rights, but the

NLRB found that though the employer had the right to

implement at impasse, that the substance of this final offer

was one that could not be implemented unilaterally.

Id. at 1399-1400.

The Tenth Circuit reversed, finding that there were

no such restrictions on an employer’s right to implement

on impasse. /d. at 1403-05. Further, it found that the right

to implement arose from the NLRA, limited only by the

NLRA’s requirement that the employer bargain in good

faith. Jd. at 1404, 29 U.S.C. § 158(d). The Tenth Circuit's

decision not only held that the employer has the right to

implement at impasse in reopener negotiations and that

the right arises from the NLRA, but also that operation of

that right—whether negotiations were in good faith—

is also governed by standards set by the NLRA. /d. at

1404-05.

3. Decisions of the First Circuit Hold that the

Right to Implement at Impasse is Not

Arbitrable

While the decisions of the D.C. and Tenth Circuits

discussed above establish the right to implement after

an impasse in reopener provisions, they do not address

the arbitrability of disputes over those rights or ove

the operation of reopener provisions in general.

However, “[ilt is well-settled that the NLRB enjoys

primary jurisdiction over disputes involving unfair labor

practices... .” Ottaway Newspapers, 79 F.3d at 1283. The

First Circuit has held, in a dispute involving negotiating

a renewal CBA, that a dispute over the right to

implement at impasse was not arbitrable because it

arises solely from the NLRA and not from the CBA itself.

Id. at 1283-1284.

In Ottaway Newspapers, the parties negotiated a

renewal to an expired CBA. /d. at 1275-76. After an

underwhelming employer proposal that included

proposed layoffs, the union filed a demand for arbitration

with the American Arbitration Association, a complaint

in the U.S. District Court for the District of Massachusetts

seeking an order to compel arbitration, and an unfair

labor practice complaint with the NLRB. /d. at 1276.

The District Court denied the union’s request because

no layoffs had been made and stated that if layoffs were

made after the conclusion of negotiations, that could

constitute an unfair labor practice under the jurisdiction

of the NLRB. Jd. A week after the District Court’s

decision, the union appealed to the First Circuit. Jd. at

1277. A week after the appeal, the employer declared an

impasse and stated an intent to implement its last offer.

Id. The union then amended its complaint with the

NLRB to challenge the unilateral implementation by the

Employer. /d.

On appeal, the union argued that pursuant to a rights

arbitration provision, an arbitrator could determine the

scope of negotiations over a renewal agreement. In doing

so, the union contended, “the arbitrator would not be

dictating the terms of the successor agreement; instead

it would be determining whether [a provision governing

negotiating successor agreements] imposes an obligation

to negotiate in good faith.” Jd. at 1280-81. The First

Circuit disagreed, finding that there is no “meaningful

distinction” between arbitrating the scope of negotiations

and arbitrating the terms. Both are interest arbitration.

Id. at 1281. The First Circuit went on to hold that

questions of whether an impasse had been reached and

whether the employer bargained in good faith arise all

“fall squarely within the NLRB’s primary jurisdiction

as they are essentially extra-contractual claims” that

arise under the NLRA. /d. at 1285.

B. Decisions of the Eight Circuit Hold that the Right

to Implement at Impasse arises from the CBA and

is Arbitrable

The Fighth Circuit, alternatively, has found that

implementation at impasse is a creature of the CBA, and,

as such, is arbitrable. See, e.g., Mid-Continent Bottlers,

767 F.2d at 485; Bricklayers and Allied Crafts Union,

Local No. 4 of Minn. v. Associated General Contractors

of Minn., 711 F.2d 90 (8th Cir. 1983). In Mid-Continent

Bottlers, the parties reached an impasse after

negotiating pursuant to a reopener provision. /d. at 484.

After the employer unilaterally implemented its final

offer, the union brought an action for breach of the

contract in the U.S. District Court for the District of

Nebraska. /d. After the District Court’s decision in favor

of the union, the employer appealed, claiming that

District Court lacked jurisdiction because the claim was

subject to a broad rights arbitration provision in the

CBA. Id. The Eighth Circuit agreed with the employer

that the right to implement “existed under the contract”

and “presented a controversy over interpretation of or

adherence to the bargaining agreement.” Jd. at 485. In

allowing an arbitrator to address the employer’s

implementation after impasse, the Eighth Circuit did not

once mention the NLRA.

In Laundry, Dry Cleaning & Dye House Workers

Int'l Union, Local 93 v. Mahoney, after the parties

negotiated wages to an impasse pursuant to a reopener

provision, the union sought arbitration. 491 F.2d 1029,

1030 (8th Cir. 1974). The CBA contained provisions for

resolving grievances, including through arbitration, and

also contained a limitation that an arbitrator did not have

the authority to “add to, subtract from, or change the

terms of the contract.” /d. at 1031. The Eighth Circuit

in this case upheld the decision of the District Court that

the wage dispute was arbitrable. Citing this Court’s

decision in United Steelworkers v. Warrior and Gulf

Navigation, 363 U.S. 574 (1960), the Eighth Circuit held

that absent any express provision excluding a matter

from arbitration, any disputes arguably under a CBA

containing an arbitration provision are arbitrable.

Mahoney, 491 F.2d at 1032. The Eighth Circuit

recognized concerns that its decision will make all mid-

term wage disputes arbitrable, but points out that

parties seeking to exclude this type of dispute from

arbitration can include language to that effect in the

CBA. Id. at 1033. The decision did not once mention the

NLRA.

C. The Third Circuit Decision Holds that the Right

to Implement at Impasse arises both from the

CBA and the NLRA and is Arbitrable

The Third Circuit’s decision in Five Star Parking

diverges from those of the First, Tenth and D.C. Circuits

by finding that disputes over the operation of reopener

provisions arise both from the NLRA and the CBA, thus

converting the primary jurisdiction of the NLRB into

concurrent jurisdiction. (App. 11a-12a). In this case, after

Five Star implemented its final offer after declaring an

impasse in reopener negotiations, the parties agreed to

arbitrate whether the CBA had been breached.

(App. 22a). Five Star made clear, however, that it was

not willing to arbitrate the existence of an impasse,

because that was a matter of federal labor law and not a

question under the CBA. (App. 15a). After the arbitrator

found that Five Star had breached the CBA by failing to

negotiate to an impasse, the District Court vacated the

Award, holding that the only issue decided by the

arbitrator was the existence of an impasse, a term to be

interpreted by the NILRB and not by an arbitrator

operating under a rights arbitration clause. (App. 17a-

19a). The Third Circuit reversed. (App. 12a). While it

agreed with the District Court that “the concept of

impasse and whether the parties bargained in good faith”

raised questions of unfair labor practices, it also believed

that the terms of the reopener provision itself were in

dispute and provided an independent basis for the

arbitrator’s jurisdiction. (App. lla-12a). The Third

Circuit held that because the reopener clause

contemplated that the parties “negotiate”, the arbitrator

could decide that a failure to negotiate was a violation of

the CBA. Id.

D. The Dispute in Five Star Parking Would Not Be

Arbitrable Under the Holdings of the First, Tenth,

and D.C. Circuits

In Five Star Parking, the Third Circuit found that

an arbitrator operating under a rights arbitration

provision had the authority to interpret the word

“negotiation” in an economic reopener provision to

require something different than what the NLRA

requires. Applying the standards discussed in

International Brotherhood of Electrical Workers,

Colorado-Ute and Ottoway Newspapers, the meaning of

the terms within the reopener provision are governed

by the NLRA. The requirement to negotiate in good faith

arises from the NILRA, and the text would need to

evidence a clear agreement to limit the rights provided

to the parties under the NLRA. Since the text

demonstrates no such agreement to limit Five Star’s

right to implement at impasse or to modify the good

faith requirement, the dispute over Five Star’s

implementation at impasse is a question for the NLRB

and not within the jurisdiction of an arbitrator.

CONCLUSION

Based on the conflicting decisions of the Circuit Courts

described above, employers and unions are placed in an

untenable position that requires resolution by this Court.

Employers and unions need guidance concerning the

applicability of federal labor law to the context of reopener

negotiations. This Court has made clear that when

employers and unions bargain to impasse, the parties are

entitled to resort to their respective economic weapons,

the employer to implementing its most recent offer and

unions to the right to strike. Many courts find that these

rights arise under the NLRA and fall under the primary

jurisdiction of the NLRB and that arbitration of these

rights amounts to impermissible interest arbitration, while

other courts find that because the reopener provision

appears in the CBA, its language, and thus rights attendant

to the negotiations, is arbitrable even in the absence of an

interest arbitration provision. This issue presents a

question of overriding importance because it affects

reopener bargaining nationwide. Indeed, absent resolution

by this Court, reopener bargaining may become a

“charade” rather than an important part of the collective

bargaining process. Finally, clarity is needed concerning

the status of reopener provisions and the respective rights

and obligations of employers and unions under these

widely-used occasions of collective bargaining.

For the foregoing reasons a writ of certiorari should

be granted.

Respectfully submitted,

MICHAEL 8. CRYAN

ARENT Fox LLP

1675 Broadway

New York, NY 10019

(212) 484-8900

Attorneys for Petitioner

APPENDIX

APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE THIRD CIRCUIT

FILED JULY 24, 2007

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 06-2012

FIVE STAR PARKING

UNION LOCAL 728, affiliated with the

International Brotherhood of Teamsters,

Appellant.

Argued March 28, 2007

Filed July 24, 2007

Before RENDELL, BARRY and CHAGARES, Circuzt

Judges.

OPINION OF THE COURT

CHAGARES, Circuit Judge.

Appellant International Brotherhood of Teamsters

Union Local 723 (the “Union”) appeals from an Order of

the United States District Court for the District of New

Jersey entered on December 21, 2005 which vacated an

arbitration award favorable to the Union. For the reasons

expressed below, we will reverse the District Court and

remand with instructions to confirm the award. |

Appendix A

Appellee Five Star Parking (“Five Star”) manages

and operates parking lots at Newark Liberty

International Airport. The Union represents employees

at Five Star’s Newark Airport parking facilities. Five

Star and the Union are parties to a collective bargaining

agreement (“CBA”). The CBA provides that unresolved

grievances may be submitted to arbitration for final,

binding resolution. Article 4 Section 1 of the CBA defines

the scope of arbitration as including: “Any controversy,

claim, dispute or grievance arising between the Company

and the Union or any Employee, involving or concerning

the meaning, interpretation, operation, or application

of any clause of this Agreement, or by a breach or

threatened breach of this Agreement.” A101. An

arbitrator’s power to resolve grievances, found at Article

4(i), is

limited to the particular dispute in question

and [the arbitrator] shall be bound and

governed by the provisions of this contract and

restricted to its application to the facts

presented to him. ... The arbitrator shall not

have jurisdiction or authority to add to, modify,

detract from, or alter in any way the provisions

of this Agreement or any amendment or any

supplement thereto.

A102. In other words, an arbitrator is limited to resolving

disputes over “rights” in the CBA and shall not engage

in what is known as “interest” arbitration—the creation

of new rights not previously contemplated by the parties.

Appendix A

The CBA does not include procedures to resolve an

“impasse.” Impasse is not mentioned in the CBA.

Five Star and the Union negotiated specific wages

for cashiers, traffic attendants, valet attendants and lot

checkers. These wage rates are reflected in Schedule A

of the CBA and were in effect from August 1, 2002 to

July 31, 2003. After the first year, the CBA provided for

3% wage increases across the board to commence on

August 1, 2003 and continue until July 31, 2004.

Thereafter, the CBA was silent as to wage increases;

presumably wages were to remain static unless further

wage negotiation took place. To this end, the CBA

contained a “re-opener” provision which permitted the

parties to re-negotiate wages as of August 1, 2004 and

again as of August 1, 2006 with 60 days notice to the

other party. The Union agreed that “during such periods

of re-opener, the no-strike, no lockout provisions of this

Agreement shall remain in full force and effect.” A117.

On June 18, 2004, the Union invoked the re-opener

provision. The Union sought a $1.00 per hour wage

increase in each succeeding year of the CBA-2004 to

2008. The parties met briefly on July 20, 2004 for their

first negotiation session. At the July 20 meeting, which

lasted about one hour, Five Star indicated that its labor

costs were exceeding the budget provided to the Port

Authority of New York and New Jersey (“Port

Authority”) and that the Port Authority was going to

request new bids for the management of the Newark

facilities. Five Star sought a 12.5% reduction in labor

costs.

Appendix A

The parties met again on August 3, 2004 for

approximately one hour. The Union indicated it was not

interested in negotiating a regressive contract and

sought financial data from Five Star as proof that it was

operating over budget. On August 9, 2004, counsel for

Five Star responded by sending the Union a letter

summarizing Five Star’s financial condition, but without

supporting financial data. In the letter, Five Star stated

that it “wants to avoid any unilateral action consequent

to a good faith impasse in negotiations .” A123.

The Union replied by letter dated August 13, 2004,

in which it reiterated that it would not “bargain against

itself.” A128. Addressing Five Star’s contention that the

Port Authority might replace Five Star as manager of

the Newark Airport parking facilities, the Union stated,

“(ijn several months, it is possible that Five Star Parking

will not be at this facility. Thus, it is hard, as indicated

at the meeting, for Local 723 to negotiate concessions to

the collective bargaining agreement for a Company that

may no longer be at this facility and then be left with

those concessions for the new vendor coming in.” /d. The

Union further stated that Five Star was obligated to

bargain in good faith and to date, no bargaining had

occurred—only Five Star’s unilateral demand that labor

costs be reduced by 12.5%. Finally, the Union made a

second request for financial information covering the

period from July 2002 to August 2004. Ultimately, it

appears that financial information pertaining to the

Newark facility was made available to the Union, but

not financial information concerning Five Star’s other

operations.

Appendix A

On August 27, 2004, in writing, Five Star reiterated

its proposal for wage reductions and indicated that “[ilf

the Union continues to insist upon conditioning

negotiations upon receiving financial information that it

is not by law entitled to, and declines to resume

negotiations on September 3, 2004, a date offered by the

Union, the Company will deem the parties to be at an

impasse. Accordingly, it will be free to implement

unilaterally its pending and oft repeated proposal to

reduce rates of pay.” A29.

On September 1, 2004, the Union wrote to Five Star

indicating that it was withdrawing its request for re-

opener and would file an unfair labor practice charge

with the National Labor Relations Board (“NLRB”) and

file for arbitration if Five Star unilaterally implemented

a wage reduction.

On September 2, 2004, Five Star declared an

impasse. On September 14, 2004, the Union filed an

unfair labor practice charge with the NLRB alleging that

Five Star violated section 8(a)(1) and (5) of the National

Labor Relations Act (“N LRA”). Prior to a ruling by the

NLRB, however, the Union voluntarily withdrew its

charge.

On September 17, 2004, Five Star implemented a

12.5% wage reduction for all employees. On September

21, 2004, the Union filed a grievance contesting Five

Star’s unilateral implementation of the wage decrease

as a violation of Article 20 and Schedule A of the CBA.

The grievance stated, “On September 17, 2004, Five Star

Appendix A

Parking unilaterally, without negotiations, without

‘impasse’ in negotiations, implemented a [12.5%] wage

reduction.” A137. The case proceeded to arbitration.

At the arbitration hearing, the parties stipulated to

the issue to be decided: “Did the Employer violate

Article 20 and Schedule A’ of the Agreement when on

September 17, 2004, Five Star Parking implemented a

wage reduction?” A238. Five Star argued that the

arbitrator lacked jurisdiction over the dispute because

resolution required a determination of whether an

impasse occurred. According to Five Star, determining

whether an impasse occurred requires interpretation of

the NLRA, something only the NLRB can do.

1. Article 20 states, in pertinent part: “Section 1: The rates of

pay shall be in accordance with [Schedule] A annexed hereto and

made a part hereof.” A112.

Schedule A list rates of pay for the different job classifications.

A118.

Seetion 2(a) of Schedule A is entitled “Future Pay Increases”

and states: “For the period commencing August 1, 2003 and

continuing until July 31, 2004, all employees shall receive an across-

the-hoard increase in their respective personal hourly rates of pay

equal to three percent (3%). It is agreed, however, that the actual

effective date shall be the first day of the first pay period falling on

or after August 1, 2003.” 7d. Section 2(b) states: “In accordance

with the provision of Article 12 of this Agreement, this Agreement

may be reopened by either party as of August 1, 2004 and August 1,

2006, but solely for the purpose of negotiating concerning rates of

pay and other monetary benefits, but for no other purposes, without

exception.” /d.

Appendix A

The arbitrator sustained the grievance by an Opinion

and Award dated August 38, 2005. The arbitrator

concluded that “[b]ased on the facts in evidence, there

is no question that the Employer’s action of September

17, 2004, in reducing the employer’s [sic] wages was

violative of the collective bargaining agreement.” A55.

Later in the opinion, the arbitrator reiterated that “[t]he

Employer’s unilateral action of reducing the wages of

bargaining unit members was in violation of the

Agreement.” A58. Five Star was ordered to pay back

pay to all employees whose wages were reduced.

In dealing with Five Star’s jurisdiction argument,

the arbitrator identified the “gravemen [sic] of the

Union’s argument [as being] that the Employer

unilaterally implemented a 12.5% wage reduction. All

other issues of a statutory nature are not before me....

My only determination will be whether or not the

contract was violated.” A52-A53. However, the arbitrator

commented, “I find it extremely difficult to accept the

Employer’s argument that an impasse existed after

approximately two, maybe three, hours of bargaining,”

and “[bJased upon all of the evidence and voluminous

documentation presented by both parties, I am not

convinced that an impasse existed.” A54. Finally, the

arbitrator explained,

When an employer proposes a wage reduction

that is agreed to by a Union that is a

concession. Concessionary bargaining

produces some interesting results. However,

in the instant matter, the Employer never

Appendix A

allowed the negotiations process to really

move forward or to pick up steam to see where

they could reach some type of common ground.

They simply said, we will not give you the

additional financial information you are asking

for, and if you do not show up for the

September 3, 2004 negotiating session we are

declaring an impasse. Accordingly, they

declared an impasse and reduced the wages

of the employees.

What is before me is that the Employer’s

action breached the Agreement. I have

already determined that it did.

It breached the Agreement because there was

no impasse. ... I can’t accept the limited time

spent in bargaining as a basis for the

Employer’s authority to reduce the wages of

the bargaining unit members.

A56-A57.

Five Star moved to vacate the arbitration award

before the District Court. The Union cross-moved for

summary judgment to confirm the award. The District

Court vacated the arbitration award, concluding that

“the arbitrator exceeded his jurisdiction in granting the

arbitral award. An arbitrator’s role is to interpret the

terms of the CBA rather than to decide issues of unfair

Appendix A

labor practices. The latter is governed by the NLRA and

under the jurisdiction of the NLRB.” A6 (citation

omitted). Here, according to the District Court, the

arbitrator failed to ground the decision in any provision

of the CBA. Instead, the arbitrator decided that the

parties had not reached an impasse and therefore Five

Star violated the CBA by instituting a wage reduction.

The District Court held that the arbitrator’s decision

rested improperly and exclusively on its interpretation

of the concept of “impasse.” The Union appealed.

Il.

The District Court exercised jurisdiction pursuant

to section 301 of the Labor Management Relations Act

(“LMRA”), 29 U.S.C. § 185 and 28 U.S.C. § 1331. The

final order of the District Court vacating the arbitration

award disposed of all the Union’s claims. Our jurisdiction

is premised upon 28 U.S.C. § 1291.

We exercise plenary review over the District Court’s

ruling. Major League Umpires Ass'n v. Am. League of

Prof’l Baseball Clubs, 357 F.3d 272, 279 (3d Cir.2004).

Arbitration awards enjoy a strong presumption of

correctness. We will uphold an arbitration award that

“draws its essence from the collective bargaining

agreement.” /d. at 280 (citations omitted). Although an

arbitrator’s interpretation of a collective bargaining

agreement is accorded substantial deference, it may be

vacated if the arbitrator demonstrates manifest

disregard for the collective bargaining agreement. /d.

“Manifest disregard for the CBA is established when

10a

Appendix A

the arbitrator’s award is totally unsupported by

principles of contract construction.” /d. (internal

quotations and citations omitted). As long as 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, 5381 U.S. 57, 62, 121 S.Ct. 462, 148 L.Ed.2d 354

(2000) (quoting United Paperworks Int'l Union AFL-

CIO v. Misco, Inc., 484 U.S. 29, 38, 108 S.Ct. 364, 98

L.Ed.2d 286 (1987)). Here, it is clear that the arbitrator

acted within the scope of his authority and committed

no error in construing and applying the CBA.

Consequently, we will uphold his decision.

ITf.

The District Court vacated the arbitration award

based on its perception that the arbitrator lacked

jurisdiction to decide the issue of whether impasse

existed and also because it concluded that the arbitrator

“failed to ground his decision in any provision of the

CBA.” A7. The District Court rightly recognized that

“[wlhile it is true that, for purposes of efficiency and

economy, an arbitrator may at times hear issues

pertaining to unfair labor practices, this is only

permissible when the arbitrator decides NLRA issues

in addition to issues of contract interpretation.” /d.

(citing Carey v. Westinghouse Electric Corp., 375 U.S.

261, 271, 84S8.Ct. 401, 11 L.Ed.2d 320 (1964)). There was

clearly an unfair labor practice issue here dealing with

lla

Appendix A

the concept of impasse and whether the parties bargained

in good faith. Because the District Court seemingly

understood that the issue of impasse could have been

decided by an arbitrator if there were also issues of

contractual interpretation in dispute, the outcome of this

appeal depends on whether there was an arbitrable

contractual issue at stake rather than merely on whether

the arbitrator could or could not decide the issue of impasse.

By stipulating to the issue to be decided by the

arbitrator, “Did the Employer violate Article 20 and

Schedule A of the Agreement when on September 17, 2004,

Five Star Parking implemented a wage reduction?,” it is

abundantly clear that Five Star agreed from the outset that

the grievance was arbitrable and that it related to Article

20 and Schedule A of the CBA. The arbitration clause

broadly provides for arbitration of “[a]ny controversy,

claim, dispute or grievance arising between the Company

and the Union or any Employee, involving or concerning

the meaning, interpretation, operation or application of any

clause of this Agreement, or by a breach or threatened

breach of this Agreement.” The wage re-opener provision

in Schedule A of the CBA expressly requires that the

parties negotiate; a refusal or failure to negotiate therefore

would be a breach of the CBA.

The fact that the parties did not provide for even cost-

of-living adjustments to salaries after July 31, 2004, but

instead provided for wage re-opener negotiations is

compelling evidence that they considered negotiation to

be the sine qua non of that contractual provision. Although

declaring an impasse in bad faith implicates the NLRA,

l2a

Appendix A

the statutory requirement to negotiate in good faith

overlaps the parties’ express contractual agreement to

“negotiat{e] concerning rates of pay.” [t therefore fell upon

the arbitrator to interpret the meaning of “negotiat[e]

concerning rales of pay” in the wage renegotiation context

because this involved or concerned “the meaning,

interpretation, operation or application of [a] clause of this

Agreement, or... a breach or threatened breach of this

Agreement.” Thus, we conclude that there was a bona fide

contractual dispute and the issue was properly before the

arbitrator. See Carey, 375 U.S. at 271; see also Collyer

Insulated Wire, 192 N.L.R.B. 887 (1971).

The arbitrator declared an intent to decide whether

there was a breach of contract, and in so deciding, found

that the parties failed to negotiate pursuant to the express

terms of Schedule A of the CBA. The award merely returns

the salaries to the status quo by ordering Five Star to pay

back the amounts wrongly deducted therefrom. It does not

set new salaries for the parties. The arbitrator did not

engage improperly in interest arbitration, see

Pennsylvania Power Co. v. Electrical Workers, Local 272,

886 Fi2d 46, 48-49 (3d Cir.1989), but rather acted within the

scope of his authority to construe and apply the CBA.

For the foregoing reasons, we conclude that the

arbitration award draws its essence from the CBA and

should not be disturbed. Accordingly, we will reverse the

District Court’s Order of December 20, 2005, and remand

to the District Court with instructions to confirm the

arbitration award in favor of the Union.

l3a

APPENDIX B — OPINION OF THE UNITED

STATES DISTRICT COURT FOR THE DISTRICT

OF NEW JERSEY DATED DECEMBER 23, 2005

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

No. 05-CV-3975 (WJM)

FIVE STAR PARKING,

Plaintiff,

LOCAL 723,

Defendant.

December 23, 2005

OPINION

MARTINI, J.

THIS MATTER comes before the Court on Plaintiff

Five Star Parking’s (“Five Star’s”) motion to vacate an

arbitration award and Defendant Local 723’s (“the

Union’s”) cross-motion for summary judgment to

confirm the arbitration award. This Court heard oral

arguments on November 3, 2005. For the reasons stated

below, this Court GRANTS Plaintiff’s motion to vacate

and enjoin enforcement of an August 3, 2005 arbitration

award, DENIES Plaintiff’s motion for attorney’s fees,

and DENIES Defendant’s motion in its entirety.

l4a

Appendix B

I. Background:

This is a labor dispute between Five Star, which

operates parking garages, and the Union, an employees

union representing cashiers, traffic attendants, valet

attendants, and lot checkers employed by Five Star at

Newark Airport.

The parties are signatories to a Collective Bargaining

Agreement (“CBA”), which governs the period from August

1, 2002 until July 31, 2008. Although the CBA set specific

wage rates for the period from August 1, 2002 until July

31, 2004, it did not set wage rates for the period after August

1, 2004. Thus, on June 18, 2004, pursuant to terms in the

CBA, the Union requested wage reopener bargaining.

Negotiations did not go smoothly. Five Star expressed

its intention to reduce wages in light of the fact that its

operating costs far exceeded the budget approved by the

Port Authority of New York and New Jersey. The Union

rejected Five Star’s proposal. Further, in a letter dated

August 18, 2004, the Union demanded disclosure of Five

Star’s financial documents and stated its intention to file

an unfair labor practice charge with the National Labor

Relations Board (“NLRB”) should Five Star unilaterally

reduce wages. Five Star took the position that the parties

had reached an “impasse,” and on September 17, 2004,

implemented a 12.5% wage reduction.’ In response, on

1. Under the NLRA, when negotiations reach an impasse,

the employer is free to implement changes in employment terms

unilaterally so long as the changes have been previously offered

to the Union during bargaining. Saunders House v. NLRB, 719

F.2d 683 (3d Cir.1983). Otherwise, if no impasse exists, such a

unilateral change constitutes a violation of sections &(a)(1) and

(5) of the NLRA. NLAB v. Katz, 369 U.S. 736, 748 (1962).

lSa

Appendix B

September 21, 2004, the Union submitted a grievance to

the NLRB, alleging unfair labor practices.

According to Five Star, the NLRB reviewed the

Union’s grievance and expressed its intention to rule

against the Union. Five Star also alleges that, in lieu of

receiving an adverse decision, the Union withdrew its

grievance and commenced an arbitration proceeding.

The Union does not dispute either of these allegations.

Upon commencement of the arbitration proceeding,

the parties jointly submitted to the arbitrator the issue

of whether Five Star had violated the CBA. At the same

time, Five Star contested the arbitrator’s jurisdiction

to decide on the question of whether the parties had

reached an impasse. Five Star argued that, since the

issue of impasse arose under the National Labor

Relations Act (“N LRA”), it fell under the jurisdiction of

the NLRB. The arbitrator disagreed and instead found

that the arbitration clause of the CBA was far-reaching

enough to give him jurisdiction to decide the issue.”

In deciding on the merits of the Union’s claim, the

arbitrator found that the parties had not reached a

bargaining “impasse,” and that therefore Five Star had

not been free to implement a unilateral wage reduction.

He concluded that Five Star had violated the CBA by

2. Article 4, Section 1 of the CBA, the arbitration clause of

the agreement, covers “la]ny controversy, claim, dispute or

grievance arising between the Company and the Union or any

employee, involving or concerning the meaning, interpretation,

operation or application of any clause of this agreement, or by a

breach or threatened breach of this agreement.”

16a

Appendix B

decreasing wages. The arbitrator issued a cease and

desist order and further awarded the Union employees

back pay for the period during which wages had been

reduced.

Five Star has not complied with the award. Instead,

it has moved to vacate the award on the following

grounds: (1) the arbitrator exceeded the scope of his

authority in deciding on the issue of impasse; (2) even if

Five Star had agreed to arbitrate disputes involving the

NLRA, the arbitrator misinterpreted the statute in

finding the parties had not reached an impasse; and

(3) the arbitrator incorrectly found that the CBA

required Five Star to pay a set wage after August 1, 2004.

II. Standard of Review

As a general matter, district courts have little

authority to upset arbitrators’ awards. United Transp.

Union Local 1589 v. Suburban Transit Corp., 51 F.3d

376, 379 (3d Cir.1995). When dealing with a labor dispute,

if an arbitration award is not in “manifest disregard” of

the contract and “draws its essence” from the contract,

it should be enforced by a reviewing court. Major League

Baseball Players Ass’n v. Garvey, 532 U.S. 504 (2001);

WR. Grace & Co. v. Local Union 759, 461 U.S. 757 (1983).

Where an arbitrator’s decision fails to draw its essence

from the CBA, however, the award must be vacated.

See Citgo Asphalt Refining Co. v. Paper, Allied-Indus.,

Chem. & Energy Workers Int'l Union, 385 F.3d 809, 815

(3d Cir.2004).

17a

Appendix B

III. Analysis

Turning first to jurisdictional issue, the record

before this Court demonstrates that the arbitrator

exceeded his jurisdiction in granting the arbitral award.

An arbitrator’s role is to interpret the terms of the CBA

rather than to decide issues of unfair labor practices.

The latter is governed by the NLRA and under the

jurisdiction of the NLRB. United Steelworkers of

America v. Enterprise Wheel and Car Corp., 363

U.S. 593, 597 (1960) (“an arbitrator is confined to

interpretation and application of the collective

bargaining agreement”); Graphic Arts Int'l v. Haddon

Craftsmen, 796 F.2d 692 (3d Cir.1986) (finding arbitrator

properly decided only claims arising under CBA and

declining jurisdiction on “naked” NLRA claim). With

regard to the issue of whether parties involved in labor

negotiations have reached an impasse, courts have found

that the question of impasse arises under the NLRA and

should be decided by the NLRB. See Newspaper Guild

of Salem v. Ottoway Newspapers, Inc., 79 F.3d 1273 (1st

Cir.1996) (finding no error in district court refusal to

order arbitration of whether impasse existed because

allowing arbitration would allow party to circumvent

NLRB); Local Union No. 884 v. Bridgestone/Firestone,

Inc., 61 F.3d 1347 (8th Cir.1995) (finding question of

impasse not covered by CBA arbitration clause and

therefore not to be raised before arbitrator); see also

U.A. 198 Health & Welfare, Education & Pension Funds

v. Rester Refrigeration Service, Inc., 790 F.2d 423 (Sth

Cir.1983) (expressing view that NLRB is “particularly

qualified,” because of specialized expertise, to decide

18a

Appendix B

whether parties have reached an impasse).’? While it is

true that, for purposes of efficiency and economy, an

arbitrator may at times hear issues pertaining to unfair

labor practices, this is only permissible when the

arbitrator decides NLRA issues in addition to issues of

contract interpretation. See Carey v. Westinghouse

Electric Corp., 375 U.S. 261 (1964); Int'l Harvester Co.,

138 N.L.R.B. 923 (1962). To permit otherwise would

render the NLRB largely superfluous.

In this case, the arbitrator failed to ground his

decision in any provision of the CBA. Upon deciding the

parties had not reached an impasse, he simply concluded

that Five Star had violated the CBA by instituting a wage

reduction.’ The arbitrator’s decision, as far as this Court

3. The Union cites a number of cases which purportedly

stand for the proposition that an arbitrator can decide the issue

of impasse. Ilowever, none of those cases apply here, either

because the arbitrator in those cases grounded his decision in

specific provisions of the CBA, e.g., Edna H. Pagel, Inc., v.

Teamsters Local Union 595, 667 F.2d 1275 (9th Cir.1982), or

because the NLRB had issued a decision on the impasse issue

prior to arbitration, e.g., Yorkaire, Inc. v. Sheet Metal Workers

Int'l Ass’n, 758 F.Supp. 248 (F.D.Pa.1990).

4. “I find it extremely difficult to aecept the

Employer’s argument that an impasse

existed after approximately two, maybe

three, hours of bargaining.

I cannot accept the limited time spent in

bargaining as a basis for the Employer's

(Cont'd)

19a

Appendix B

ean discern, rested wholly on his interpretation of the

NLIRA term “impasse” and the effect of Five Star’s wage

reduction given his finding there was no impasse. There

is no indication that the arbitrator grounded his decision

on an interpretation of provisions within the CBA.

Based on this holding, this Court finds it unnecessary

to address Five Star’s other arguments.

V. Conclusion:

This Court finds that the arbitrator did not have

jurisdiction to decide the issue of impasse, and that his

decision otherwise failed to draw its essence from the

CBA. Accordingly, this Court grants Five Star’s motion

to vacate the award of the arbitrator and to enjoin

enforcement of the award. It also denies the Union’s

motion in its entirety. See AFGE v. FLRA, 850 F.2d 782

(D.C.Cir.1988) (affirming vacatur of arbitral award

where arbitrator did not have jurisdiction to hear a

(Cont’d)

authority to reduce the wages of the bargaining

unit members. Accordingly, there is no question

in my mind that the Employer’s action

breached the agreement.”

Five Star Parking v. IBT Local 723, No. 04-0250, 32, 35 (2005)

(Restaino, Arb.).

5. This Court is mindful of the broad language of the

arbitration clause in the CBA. It nevertheless finds the clausc is

not broad enough to confer jurisdiction upon an arbitrator to

decide on a naked NLRA claim.

20a

Appendix B

dispute). Further, this Court, finding that the Union did

not litigate in bad faith, vexatiously, or for oppressive

’

reasons, denies Five Star’s request for attorney’s fees.

Kane Gas Light and Heating Co. v. Int'l Bhd. of Firemen

and Oilers, Local 112, 687 F.2d 673 (3d Cir.1982).

2la

APPENDIX C - OPINION AND AWARD OF THE

NEW JERSEY STATE BOARD OF MEDIATION

DATED AUGUST 3, 2005

NEW JERSEY STATE BOARD OF MEDIATION

CASE NO. 04-0250

In the Matter of the Arbitration Between

FIVE STAR PARKING,

EMPLOYER

AND

IBT LOCAL 728,

UNION

OPINION AND AWARD

PROCEDURAL BACKGROUND

The parties in this dispute are signatories to a

collective bargaining agreement dated August 1, 2002,

through July 31, 2008. The grievance filed by IBT Local

723, hereinafter referred to as the Union, on behalf of

all bargaining unit employees, alleges that Five Star

Parking, hereinafter referred to as the Employer/FSP

violated the terms of the Agreement.

The grievance was timely processed through the

grievance procedure, and a request was made to the New

22a

Appendix C

Jersey State Board of Mediation to submit a panel of

arbitrators. On January 3, 2005, the undersigned was

appointed arbitrator.

A hearing was held on May 4, 2005, at the offices of

the NJSBM. At the hearing, each party had a full and

complete opportunity to present evidence and testimony

on their behalf, to examine and cross-examine witnesses

under oath and to argue their respective positions.

Capable, competent counsel represented each party and

both parties elected to submit post-hearing briefs.

Due to business and personal circumstances, the

parties were granted extensions to submit their

respective briefs. Both briefs were received on June 22,

2005. The hearing was officially closed on June 27, 2005.

ISSUE

The parties stipulated to the following issue:

Did the Employer violate Article 20 and Schedule A

of the Agreement when on September 17, 2004, Five Star

Parking implemented a wage reduction? If so, what shall

be the remedy?

23a

Appendix C

RELEVANT CONTRACTUAL PROVISIONS

ARTICLE 4 -GRIEVANCE PROCEDURE

Section 1: Any controversy, claim, dispute or

grievance arising between the Company and the Union

or any Employee, involving or concerning the meaning,

interpretation, operation, or application of any clause of

this Agreement, or by a breach or threatened breach of

this Agreement, shall be settled in the following manncr:

(i) The arbitrator shall be limited to the

particular dispute in question and shall be

bound and governed by the provisions of this

contract and restricted to its application to the

facts presented to him involved in the

grievance. The arbitrator shall not have

jurisdiction or authority to add to, modify,

detract from, or alter in any way the provisions

of this Agreement or any amendment or any

supplement thereto.

ARTICLE 9- MANAGEMENT RIGHTS

Section 1: The management of the Company and the

discretion of the working force are vested solely and

exclusively in the Company and shall not in any way be

abridged except by specific restrictions as are set forth

in this Agreement.

Section 2: The Union recognizes that the

management of the Company’s business includes, but is

24a

Appendix C

not limited to, the assignment and direction of the

working force, the determination of the number and

qualifications of Employees to be employed or retained

by the Company, the right to hire, suspend, discharge,

discipline, promote, demote or transfer Employees, to

make operational improvement, to maintain reasonable

and proper discipline and the right to release Employees

because of lack of work or for other proper reasons are

vested exclusively in the Company. It is understood that

the Union does not waive its rights, under the grievance

procedure, to question any arbitrary action deemed

unjust. It is understood that a position or classification

of employment may be abolished.

Section 3: The Union recognizes that in

consideration of the commitments assumed by the

Company in this contract the management has, among

others, the right to require from all employees efficient

service in the performance of their dutics.

Section 4: The Union agrees that its officers, agents

and members shall not oppose or interfere, directly or

indirectly, with the legitimate or reasonable efforts of

the Company to train Employees, to improve the skill

and ability of the Employees, to make operational

improvement to maintain reasonable and proper

discipline and efficiency, and to make economic

improvements in the operation of its business.

Section 5: Management may do bargaining unit

work during meal periods, breaks or for training

purposes or emergencies, provided the manager uses his/

her own bank when in a cashier’s lane.

25a

Appendix C

Section 6: Employees may be required to perform

temporary work other than their primary jobs.

Employees must perform all such duties assigned to

them. When employees are assigned to perform a job in

a higher paying classification, the affected employee

shall receive the higher rate of pay for the day. When

employees are assigned to perform a job in a lower

paying classification, the affected employee shall receive

the higher rate of pay for the day.

Section 7: If at any time during the term of the

Company’s Agreement with the Port of New York and

New Jersey Authority to operate the parking facility

mentioned in Article 2 is terminated, Company shall have

the right to terminate the employment of all of the

Employees covered under this Agreement without

liability.

Section 8: The foregoing enumeration of

management rights shall not be deemed to exclude other

rights of management not specifically set forth, the

Company therefore retaining all rights not otherwise

specifically covered by this Agreement, irrespective of

whether or not the same have been heretofore exercised.

ARTICLE 12 -STRIKES AND LOCKOUTS

Section 1: During the term of this Agreement, the

Union will not strike (including sympathy strikes),

engage in work stoppages, slow down, picketing at or

near the Company’s premises. The Company during the

life of this Agreement, will not lock out any Employee.

26a

Appendix ©

ARTICLE 32 -TERM OF AGREEMENT

This Agreement shall become effective August 1,

2002 and shall remain in effect to and including July 31,

2008, and from vear to year thereafter unless notice of

desire to amend or terminate is given in waiting by one

party to the other sixty (60) days prior to the expiration

date of this Agreement. It is agreed, however, that as of

August 1, 2004, and August 1, 2006, this agreement may

be reopened by either party (upon sixty (60) days of

written notice) solely for the purpose of renegotiating

concerning wages and monetary fringe benefits, but for

no other purpose. It is further agreed that during such

periods of re-opener, the no strike, no lockout provisions

of this Agreement shall remain in full force and effect

as shall all other non-monetary terms and conditions

hereof.

SCHEDULE ‘A’

(Per Hour)

2(a) Future Pay Increases: For the period

commencing August 1, 2003 and continuing until July

31, 2004, all employees shall receive an across-the-board

increase in their respective personal hourly rates of pay

equal to three (3%) percent. It is agreed, however, that

the actual effective date shall be the first day of the first

period falling on or after August 1, 2003.

(b) In accordance with the provision of Article 12 of

this Agreement, this Agreement may be reopened by

either party as of August 1, 2004 and August 1, 2006,

27a

Appendix C

but solely for the purpose of negotiating concerning rates

of pay and other monetary benefits, but for no other

purposes, without exception.

SUMMARY OF FACTS

On August 1, 2002, the Employer became the

contractor for the New York/New Jersey Port Authority

(Port Authority) to manage parking lots and garages at

Newark Liberty International Airport. FSP’s

responsibility is to manage the parking lots and collect

revenues, which are submitted to the Port Authority.

Article 32, Schedule A of the Agreement indicates

that there would be a wage reopener effective August 1,

2004, and provides that either party could reopen the

contract upon sixty (60) days written notice for the

purposes of renegotiating wages and monetary benefits.

On June 18, 2004, counsel for the Union sent a letter

to counsel for FSP requesting a wage reopener. This was

introduced as Joint Mxhibit 4. On July 20, 2004, a meeting

was held concerning negotiations for the wage reopener.

Present for the Unicon were Union counsel, David

Grossman, Union Secretary-Treasurer, John Humphrey,

and Shop Stewards, Daisy Cruz and Ross Lynch.

Representing the Company was Allen G. Siegel, counsel

for the Employer, District Manager, Jermane Sahoe,

Regional Manager, Ken Oldum, and Operations Manager,

Michael Joseph.

28a

Appendix C

At that meeting, Mr. Siegel as the spokesperson for

FSP indicated that the Port Authority was about to

request bids for the parking lot manager at Newark

Liberty International Airport (NLIA). He further

indicated that the operational costs of FSP at NLIA were

greater than the budget that was being provided from

the Port Authority.

Another negotiation session was scheduled for

August 3, 2004. Mr. Siegel indicated that the Employer

was rejecting the Union’s wage reopener proposal. He

further indicated that FSP was operating at

approximately twelve percent (12%) over the budget that

they had received from the Port Authority.

Lisa Caldwell, who has been working at NLIA as a

cashier and is also a shop steward for the Union took

contemporaneous notes of the August 3, 2004 negotiating

session. Those notes were introduced as Union

Exhibit 1.

At the August negotiating session, Mr. Humphrey

indicated that the Union was not interested in

negotiating a recessive contract because that recessive

contract would be the starting point for a new bidder/

vendor. He suggested that negotiations be placed on hold

until sometime in late September 2004 so the parties

would know whether or not FSP had been selected by

the Port Authority to remain as the parking lot manager.

29a

Appendix C

Based upon the fact that the Employer was raising

an issue that its operating budget was higher than the

money received from the Port Authority, the Union

requested the financial data of FSP.

On August 13, 2004, Mr. Grossman sent a letter to

Mr. Siegel indicating that the Union was seeking FSP’s

financial information covering the period of January 1,

2002, through August 138, 2004.

Mr. Siegel responded that case law is legion that the

Employer is obligated to submit information only about

the facility in question. Therefore, the Employer,

through Mr. Siegel, indicated they would not comply with

any financial information beyond NLIA.

On August 26, 2004, the Union again reiterated its

request for the Employer’s financial information.

On August 27, 2004, Mr. Siegel (see Joint Exh. 11)

indicated, “The Company Is not pleading an inability

to pay. However, the Company is no longer willing to

sustain the cumulative losses that it is experiencing at

Newark”. In order to curtail these unreasonable losses,

the Company proposed and is again proposing an

across-the-board reduction of twelve and one half

percent (12'2%) in all of the wage rates and other

monetary items that are within the scope of the pending

reopener, be made effective as of the first day of the first

pay period falling on or after September 1, 2004.”

30a

Appendix C

Mr. Siegel indicated that, this proposal was made to the

Union at the August 3, 2004, meeting and again in his

letter to Mr. Grossman of August 5, 2004.

Mr. Siegel further indicated, “/fthe Union continues

to insist upon conditioning negotiations upon receiving

financial information that it is not by law entitled to,

and declines to resume negotiations on September 3,

2004, a date offered by the Union, the Company will

deem the parties to be at an impasse. Accordingly, it

will be free to implement unilaterally its pending and

oft repeated proposal lo reduce rates of pay, and all other

monetary items encompassed by the reopener, effective

with the first day of the first pay period on or after

September 1, 2004, by twelve and one half percent

(121%) across-the board.”

Mr. Siegel indicated that he urges the Union to bear

in mind that the Agreement does not give the Union the

right to strike. Moreover, “The Union’s continued

insistence upon being given financial information that

it is not entitled to, as a condition of meeting, constitutes

a violation of Section 8(b)(3) ofthe NLRA. The Company

has no desire to engage in any dispute with the Union,

and has made every good faith effort to avoid such a

confrontation. Regrettably, the Union does not appear

to share this sentiment.”

On September 1, 2004, Mr. Grossman wrote to Mr.

Siegel and indicated that the Union’s notice given for

the wage reopener was defective. The Union withdrew

its request for the reopener (see Joint Exh. 14) and

3la

Appendix C

indicated that it intended to file an unfair labor practice

charge with the NLRB and file for arbitration, if FSP

unilaterally implemented a wage reduction.

On September 2, 2004, Mr. Siegel sent a letter to

Mr. Grossman indicating that the parties were at a

bargaining impasse. (See Joint Exh. 14).

On September 17, 2004, the Employer implemented

a twelve and one half percent (122 %) reduction in wages

only. It did not reduce everyone’s wages. The wage

reduction was effective for the pay period beginning

September 5, 2004. FSP only reduced wages for

employees making more than $9.00 per hour.

On September 21, 2004, the Union submitted a

grievance concerning the unilateral implementation of

the wage decrease without bargaining. (See Joint Exh.

2).

These are the essential uncontroverted facts in the

matter at bar and the issue now comes to me for

resolution.

POSITIONS OF THE PARTIES

For the Employer

The Employer boldly asserts that “The grievance

should be dismissed as there 1s no award that the

arbitrator could issue in this matter that would ‘draw

its essence’ from the Agreement.”

32a

Appendix C

The Employer takes the position that the grievance

does not rise under the Agreement. The grievance form

on its face asserts that the grievance arises because the

parties were at a lawful bargaining impasse. In other

words, the Employer contends that the arbitrator is not

being asked to apply or interpret the parties’ collective

bargaining agreement, but rather to interpret and apply

the National Labor Relations Act.

The Employer also contends that impasse is a legal

term that is interpreted and applied by the NLRB unless

an arbitrator is given contractual authority to rule on

that subject matter. Such is not the case here.

The Employer contends that, “The correct, 7f not

legally mandated, resolution of this matter 2s for the

arbitrator to dismiss it.” The Employer takes that

position because it was made manifest by the Union itself

when it framed the issue to be resolved by the Arbitrator.

The Employer argues that they stipulated to the issue

as presented by the Union and offered no objections.

From the outset, it should be emphasized that the

gravemen of the Union’s grievance is that FSP

implemented the wage reduction “without impasse in

negotiations.”

The Employer strongly argues that “whether an

impasse existed or not, is not a matter of contract

interpretation, rather it is a matter addressed to the

National Labor Relations Act, Section 8(a)(5) to be

interpreted by the National Labor Relations Board.”

33a

Appendix C

The Employer argues that the language of the

Agreement at Article 4, Section 1 establishes that, “Any

controversy, claim, dispute or grievance arising between

the Company and the Union or any employee, involving

or concerning the meaning, interpretation, operation

or application of any clause of this Agreement or by a

breach or threatened breach of this Agreement, shall be

settled in accordance with the contracted grievance

procedure, which procedure includes arbitration.”

However, the Employer contends that the arbitration

provision precludes the arbitrator from addressing the

issue stipulated to by the parties. The Employer

contends that the language of the Agreement at

subsection 1(i) indicates that, “The arbitrator shall be

limited to the particular dispute in question and shall

be bound and governed by the provisions of this contract

and restricted to its application to the facts presented

to him involving the grievance. The arbitrator shall not

have jurisdiction or authority to add to, modify, detract

from or alter in any way the provisions of this

Agreement or any amendment or supplement thereto.”

FSP argues that there is no reference in the

Agreement to impasse or to any authority granted to

the arbitrator to apply or interpret the law that is applied

in cases of impasse. The Employer argues that it is not

uncommon for parties to a collective bargaining

agreement to grant to an arbitrator the authority to

interpret or apply the law or matters outside the four

corners of the parties’ Agreement. However, that was

not done in this case.

34a

Appendix C

Moreover, the grievance submitted by the Union as

Exh. J-2 does not require the Arbitrator to interpret any

provisions of the Agreement. It simply asked him only

to interpret the National Labor Relations Act and

specifically Section 8(a)(5) thereof and to assess conduct

in that framework alone.

The Employer strongly argues that all of the conduct

involved in the instant matter occurred outside the

Agreement. Moreover, should the arbitrator award the

Union any relief, he would be engaging in interest

arbitration, which he manifestly cannot do without the

consent of the parties.

On April 20, 2004, Mr. Siegel submitted a motion for

the instant matter to be dismissed, or in the alternative,

that there be a summary award in favor of FSP.

On April 25, 2005, the undersigned wrote to

Mr. Siegel with a copy to Mr. Grossman stating in part

that, “J am not willing to be liberal and grant your

motion based upon an ex parte partial record. At the

hearing scheduled for May 4, 2005, you certainly have

the right to amplify your extensive documentation.

Moreover, the Union must be given an opportunity to

present its case in chief and quite possibly refute your

arguments. Accordingly, your motion to dismiss the

instant matter is denied as is your motion for summary

judgment.”

The Employer argues that any arbitration award

must draw its essence from the Agreement. This

35a

Appendix C

principle and its vitality are not novel and FSP

references the seminal U.S. Supreme Court decision in

Steelworkers v. Enterprise Wheel and Car Corp., 363

U.S. 593 (1960) in which the court said, “An arbitrator

is confined to interpretation and application of the

collective bargaining agreement; he does not sit to

dispense his own brand of industrial justice. He may,

of course, look for guidance from many sources, yet his

award is legitimate only so long as it draws it essence

from the collective bargaining agreement. When the

arbitrator’s words manifest an infidelity to this

obligation, courts have no choice but to refuse

enforcement of the award.”

The Employer argues that at the outset of the

hearing, the Union urged the Arbitrator to consider the

issue of the Union’s failure to comply with Section 8(d)

of the NLRA. In other words, the Union is asking for

relief because it did not comply with Section 8(d) and,

therefore, FSP as well, did not comply with Section 8(d).

Thus, the Union argues that there is no valid reopener.

The Employer contends, “This is an astounding

contention in light of the fact that the Union is urging

relief based on its own non-compliance with the statute.

In essence, the Union is contending that it should be

allowed to benefit from its own mistakes.”

The Employer argues that case law developed by

the NLRA and the Court of Appeals established that

the burden of complying with Section 8(d) rests

exclusively with the party initiating negotiations and that

the other party is not similarly obligated. “Jt is

36a

Appendix C

undisputed that it was the Union that commenced the

bargaining process and, thus, it Is clear that the Union

cannot now complain or seek comfort from the fact that

neither it nor FSP may have technically complied with

the provisions of Section 8(d).”

“The Employer contends that this is the identical

contention made to the NLRB when the Union filed

Section 8(a)(5) and (1) charges against FSP. Those

charges were, at the request at the NLRB, withdrawn

in lieu of dismissal.”

Moreover, the issue of impasse is equally apposite

for this contention since the arbitrator would not be

interpreting the Agreement or the conduct of the parties

in applying the Agreement, but would, rather, be

interpreting and applying the National Labor Relations

Act. “This authority is not granted to the arbitrator by

the agreement or the parties. Hence, no award based on

Section 8(d) could possibly draw its essence from the

Agreement.”

The FSP argues, “Assuming, arguendo, that the

arbitrator could decide the issue of impasse, the

undisputed facts established that such an impasse’ was

reached by the parties.”

The Employer argues that the record contains all of

the correspondence of parties and Minutes of the two

bargaining sessions. The Employer argues that the

charges filed by the Union with the NLRB were

withdrawn by the Union because the withdrawal was

37a

Appendix C

requested by the Board in lieu of dismissal. “Jn any

event, it is obvious that the Board, on the facts in the

record here, declined to issue a complaint or initiate

any proceedings against FSP in connection with the

wage reduction.”

The Employer contends that while the NLRB was

making its investigation, the agent assigned contacted

Mr. Siegel and stated that the Unions charges were

based essentially on two grounds: (1) FSP did not comply

with the provisions of Section 8(d) requiring various

notices attendant to contract negotiations; and (2) FSP

failed and refused to give the Union its company-wide

financial statements, though FSP readily agreed to give

such information limited to its operations at Newark

Airport and its relationship with the Port Authority of

New York and New Jersey.

The Employer argues that, “Jn advance of the

arbitration hearing convened on Wednesday, May 5,

2005, in its motion to dismiss papers, the Employer

submitted voluminous exhibits and arguments in

support of its position that there was indeed and in law

a bargaining impasse that allowed the Employer to

institute its last and final ‘offer’ to reduce wages by

twelve and one half percent (12'42%).”

The Employer contends that it was the Union’s

position in its refusal to engage in good faith negotiations

that led to the instant issue because the Union

conditioned further bargaining sessions on receiving

company-wide financial statements.

38a

Appendix C

At the hearing of May 4, 2005, the Employer

contends that the Union made a new and fanciful

contention that must be addressed and refuted. The

Union contended anew that FSP was not legally

permitted to institute its last and final offer because

there was an alleged agreement at the negotiating

meeting of August 3, 2004, to the effect that the parties

would maintain the status quo pending further

negotiations following the decision made by the Port

Authority as to the identity of the parking operator

following its bidding process.

The Employer strongly argues that it should be

immediately born in mind that this contention on its face

is absurd. The record reflects that there was undisputed

testimony that the bidding process would take at least

six months, and the Employer was sustaining a direct

cash loss of at least $100,000.00 per month out of its own

pocket. It is illogical and bizarre to think that the

Employer would have agreed to continue this stiff cash

loss of nine more months and incur an; “ditional loss of

close to $900,000.00.

The Employer strongly contends that the “whole

purpose for proposing the wage cut was to curtail these

gigantic cash losses.”

The Employer contends that, “To substantiate ils

position, the Union proffered two employee witnesses,

both shop stewards. One witness claims that she made

contemporaneous notes, which were admitted into

evidence. The Employer suggests that these Minutes

39a

Appendix C

were either inauthentic or were not made

contemporaneously. This conclusion is manifest by

several factors:

(1) Management notes are consistent and

unambiguous as well as largely undenied.

The notes of management were kept by the

undersigned counsel and were promptly

transcribed following the negotiation

SESSIONS;

(2) The Union’s witnesses, to be

charitable, were vague with virtually no

recollection of anything else that was said at

the meeting.”

On cross-examination “both witnesses frequently

admitted that they could not remember any of the

critical or material content of the discussions that

occurred at the meeting. The most frequent responses

were ‘I don’t know or I don’t remember’. They only

remember the single report that was the basis for the

Union’s newest assertion concerning the agreement for

a negotiating hiatus that would have generated an

additional cash loss of at least $900,000.00. On the other

hand, FSP submitted its notes of the meeting which

directly contradict the Union’s position; notes that were

maintained by counsel.”

Moreover, FSP witness Kenneth Oldum, the

Company’s Regional Manager, who was present at the

negotiations, had clear and unambiguous recollection of

the comments that were made.

40a

Appendix C

Furthermore, assuming arguendo, that such an

agreement was in fact made, it is black letter law that

there is no enforceable agreement on any single issue

unless and until there is an agreement on the entire

package or a lawful impasse. Ilence, “F'S?’ was

empowered to withdraw the alleged agreement that the

parties wait until the Port Authority completed the bid

process, because an impasse was eventually reached that

did not include that alleged understanding. It is

familiar law that the duty to bargain in good faith does

not mean that agreement must be reached.”

The Employer argues that when bargaining to

impasse fails to produce an agreement on a particular

matter, management is allowed to take unilateral action

consistent with its proposal in bargaining.

The Employer contends that in numerous

communications with Mr. Grossman, FSP told the Union

that it was interested unconditionally in continuing the

bargaining and finding some solution to their impasse.

The Union adamantly refused all such entreaties unless

and until FSP provided to the Union the financial

statement of the Company at large. This was stated as a

condition precedent to any meeting. Nevertheless,

another meeting was indeed scheduled for September

3, 2004, in a last-ditch effort to reach an accommodation.

The Union summarily canceled this meeting and

repeated its refusal to meet in the absence of the

I;mployer’s company-wide financial information to which

it was not entitled.

4la

Appendix C

The record clearly and unequivocally reflects that

FSP’s agreement to continue negotiations at the

September 3™ meeting was unconditional.

The Employer argues that this course of negotiations

established that the parties were clearly at impasse. The

testimony and documentation in the record amply

demonstrates that the impasse in fact did exist.

The Employer argues that the issue of impasse is

significantly impacted, if not disposed of by the Union’s

insistence on being supplied with the overall company-

wide financial statements of FSP.

As indicated and argued in the FSP motion to

dismiss, the Union is not entit'ed to financial statements

at all unless the Employer pleads poverty or an inability

to pay. The record clearly and unequivocally establishes

that this is not the case and the Employer has never

said that they had an inability to pay. “They specifically

said that they were over the budget within NLIA and

they needed to make a reduction of twelve and one half

percent (124%) on all wages and monetary benefits as

established in the wage reopener in the Agreement.”

The Employer argues that if special circumstances

exist, the Union has the right to demand further financial

information from the Employer. Here, there has been

no showing that any special circumstance existed. In

other words, the Union is attempting to boot strap its

request for financial information about the NLIA facility

and review the Employer’s company-wide financial data.

42a

Appendix C

The Employer contends that based on the largely

“undisputed record evidence and exhibits submitted

into evidence, it is manifest that this case addresses only

statutory interpretation and that respectfully, the

arbitrator has not been granted authority under the

parties’ Agreement to construe the statutory law, bul is

restricted to the controversy arising out of the

Agreement itself. Moreover, assuming arguendo that the

arbitrator can determine the issues of impasse and are

in compliance with NLRA’s Section 8(d), the largely

undisputed record evidence and authorities establish

that there was a lawful impasse.”

Accordingly, the Employer asks that the grievance

be dismissed in its entirety.

For the Union

The Union argues that the grievance submitted on

September 21, 2004, on behalf of all bargaining unit

members is arbitrable. The Agreement between the

Union and the Employer contains a very broad grievance

and arbitration clause.

Article 4, Section 1 specifically provides:

“Any controversy, claim, dispute or

grievance arising between the Company and

the Union or any employee involving or

concerning the meaning, interpretation,

operation or application of any clause of this

Agreement, or by a breach or threatened

43a

Appendix C

breach of disagreement, shall be settled in the

following manner...”

Considering the breadth of the grievance clause,

which includes alleged breaches of the collective

bargaining agreement, the arbitrator is empowered to

devermine arbitrability and determine that this

grievance concerning a unilateral implementation of a

wage decrease was a breach of the collective bargaining

agreement.

In support of this position, the Union references U.S.

Supreme Court decision United Steelworkers of America

v. Warroor Gulf Navigation Co., 363 U.S. 574, 582-583,

880 S.Ct. 1347, 4 L.Ed.2d 1409 (1960) which states:

“In order to arbitrate, the particular

grievance should not be denied unless it can

be sard with positive assurance that the

arbitration clause is not susceptible of an

interpretation that covers the asserted

dispute. That should be resolved in favor of

coverage. Absent an express provision

excluding a particular grievance from

arbitration or the most forceful evidence of a

purpose to exclude the claim ... the matter

should go to arbitration.”

The Union asserts that arbitration is the quid pro

quo for not being able to strike during the wage reopener

44a

Appendix C

period. The Union argues that the language of the wage

reopener found in Article 32 specifically states that:

“It is further agreed that during the

periods of the reopener, the no-strike, no-

lockout provisions of this Agreement shall

remain wn full force and effect as shall all

other non-monetary terms and conditions

thereof.”

In the normal case where there is a wage reopener,

at the conclusion of negotiations and impasse is reached,

the Union would then be free to engage in a strike.

However, based upon the above-referenced language, the

Union was not able to engage in a strike because a

no-strike clause remained in effect during the period of

the reopener.

The Union’s letter of September 3, 2004, indicated

that it “believed that it had the right to strike at the

implementation of the wage decrease. The Union

contends that the Employer’s argument is misplaced

that they would be precluded from engaging in a strike

when the Company implemented its wage decrease.”

The Union contends that the guid pro quo for any

no-strike or no-lockvut provision is arbitration, which

clearly places the instant dispute within the arbitrator’s

jurisdiction to determine the appropriate wage reopener.

The Union argues that the fact that it filed an unfair

labor practice with the National Labor Relations Board

45a

Appendix C

concerning the Employer’s unilateral implementation of

the wage decrease and then subsequently withdrew

same, does not constitute a waiver or an estoppel of

arbitration.

The Union contends that the filing of an unfair labor

practice charge against the Employer does not abrogate

the right of arbitration of a dispute under a collective

bargaining agreement.

The Arbitrator has jurisdiction over a grievance

relating to the amount of wages due employees under

alleged promise by the Employer, despite the fact that a

charge of a violation of the NLRA by the Employer was

filed with the NLRB, where the Board has dismissed

the charge on the ground that the alleged violation

occurred more than six (6) months prior to the filing of

the charge; moreover, the subject of the dispute involves

an issue that by its nature does not fall peculiarly within

the province of the NLRB.

The Union contends that when a “Union files with

the NLRB with a claim that an Employer has refused

to bargain a mandatory subject of bargaining, the

normal practice of the NLEB is to defer the matter to

arbitration. The Union argues that most parties, in the

interest of settling their dispute as speedily and

efficiently as possible, choose to by-pass the NLRB and

place the matter before an Arbitrator.”

The Union references a series of cases where

arbitrators have determined that an employer has

46a

Appendix C

breached the collective bargaining agreement by

unilaterally implementing a change to a mandatory

subject of bargaining.

The Union strongly argues that the “E’mployer

failed to bargain in good faith, improperly declared

impasse and improperly implemented a wage reduction

in bad faith. The Union argues that they are not asking

the Arbitrator to find that the Company engaged in a

violation of the NLRA, they willingly concede that is

within the exclusive jurisdiction of the NLRB. However,

even though a matter may be deemed to be an unfair

labor practice charge within the scope of the NLRB, the

Arbitrator has the authority to address a unilateral

implementation concerning a mandatory subject of

bargaining that is part of the collective bargaining

agreement.”

The Union agrees the Arbitrator must first turn to

the Agreement itself. However, the Arbitrator may refer

to external law to supplement if contract ambiguities or

uncertainties arise. Bad faith in bargaining must be

inferred from a party’s conduct at or away from the

bargaining table. The Union argues that it is well settled

that unilateral decisions made by an Employer during

the course of a collective bargaining relationship

concerning matters that are mandatory subjects of

bargaining are regarded as per se refusals to bargain.

The Union references the fact that the duty to

bargain in good faith does not mean that an agreement

must be reached. In citing NLRB cases developing labor

47a

Appendix C

law and other citations, the Union agrees that where

bargaining to impasse fails to produce an agreement on

a matter, management is privileged to take unilateral

action consistent with its proposals in bargaining. To that

extent, the “Union contends that the existence or non-

existence of impasse is normally put in issue when, after

negotiations have been carried on for a period of time,

the positions of the parties become fairly fixed and talks

reach a point of stalemate. Therefore, before an employer

may lawfully make unilateral changes, impasse must

exist. Impasse, according to the Union, occurs after

good-faith negotiations have exhausted the prospects of

concluding an agreement.”

In the matter at bar, at best, the parties met for two

(2) hours. There was a meeting on July 20, 2004, wherein

the Union gave its proposals. There was a meeting on

August 3, 2004, wherein the Employer rejected the

Union’s proposal and discussed items, including a need

to reduce costs, but made no counter-proposal.

The Union strongly argues that it was the consensus

of both Local 723 and FSP that negotiations be held in

abeyance until mid-September to find out whether FSP

would have continued in the bid as the contract for the

parking services at NLIA. In support of this, the Union

references the testimony of Mr. Oldam, the Regional

Manager of FSP who specifically testified that he

anticipated negotiations to be face-to-face. Additionally,

he admitted that FSP did not make a counter-proposal

at the August 3, 2004, meeting, that he anticipated that

48a

Appendix C

the next meeting would be face-to-face negotiations in

mid-September of 2004.

The Union argues that Instead of that occurring,

counsel for the Employer, through correspondence,

attempted to negotiate a wage reduction of twelve and

one half percent (124%%) on all monetary benefits. The

Union refused to bargain via correspondence. Moreover,

the Union demanded financial information, which FSP

refused to provide.

Regardless of how this matter is viewed, the Union

strenuously argues that there was no bargaining

concerning the Company’s twelve and one half percent

(122%) counter-proposal.

The Company, by letter dated September 2, 2004,

declared an impasse, even though there was no

bargaining. The Company then, on September 17, 2004,

implemented a twelve and one half percent (12%%)

reduction on wages only. That was not what the Company

proposed. The Company only impacted those employees

who were making more than $9.00. That was not

proposed. The wage reduction that FSP implemented

on September 17, 2004, was greater than the wage

increase that they had provided to the employees for

their collective bargaining agreement for the first two

(2) years of the collective bargaining agreement. In fact,

it reduced the wages below the rates that were

established when FSP came into the facility in August

of 2002.

49a

Appendix C

The Union contends that FSP improperly declared

impasse on this matter and unilaterally implemented the

wage reduction.

Additionally, the Union argues that FSP has engaged

in bad faith bargaining and implemented the wage

reduction in bad faith.

The Union argues that the notice sent to the

Employer on June 18, 2004, for a reopener for August 1,

2004, was not within the sixty (60) day notice as

established in Article 32 of the Agreement. The Union

contends, “/t is a maxim of contract interpretation that

the language which is clear and unequivocal must be

given effect even though the parties may disagree as to

its meaning. The parties to a contract are charged with

full knowledge of its provisions and the significance of

its language. Thus, unambiguous language must be

enforced even if the result is contrary to the expectation

of one of the parties.”

The Union argues that their notice was defective and,

furthermore, no notice was provided to either the New

Jersey State Board of Mediation or the Federal

Mediation and Conciliation Service. Clearly, the notice

was defective and negotiations for reopener should not

have occurred.

The Union argues that the grievance was timely filed

and that arbitrators have held that one cannot expect to

file a grievance until one is aware of the action upon

which the grievance is based. In this respect, the Union

50a

Appendix C

argues that a party sometimes announces its intention,

“To do a given act, but does not do so or culminate the

act until a later date. In such situations, arbitrators

have held that the occurrence, for purposes of applying

the time limits, is the date upon which the action is

actually taken.”

The Union argues that even though there were

announcements in the correspondence of August of 2002

of F'SP’s intent to reduce monetary benefits by twelve

and one half percent (12'2%) across-the-board, it is not

until September 17, 2004, when they actually reduced

the wages. At that point in time the incident occurred

giving rise to the filing of the grievance.

The Union argues that the Employer had ample

opportunity to challenge arbitrability through the

grievance steps but did not do so until the hearing. While

there is no specific contract language on this point, the

Union contends that it is “a well-established principle

in similar circumstances that the failure to raise the

arbitrability issue until the hearing is a waiver of that

argument. The Union argues that most arbitrators rule

that a Company’s failure promptly to object to the lack

of timeliness, and indeed the Company going forward

with the grievance procedure amounts to a waiver of

the procedural time requirements.” Thus, any argument

concerning arbitrability or untimeliness must be deemed

waived because it was not raised prior to the hearing.

The Union argues that the instant matter should be

deemed a class action in a continuing grievance. The

Sla

Appendix C

grievance was filed on behalf of the entire bargaining

unit that was affected by this wage decrease, except for

those who are making $9.00 or less as new hires. The

Union contends that the wage decrease implemented was

discriminatory because it only impacted upon those

Union members who were employed with FSP when the

original collective bargaining agreement was negotiated

in August of 2002. Moreover, the Union strongly argues

that FSP never proposed to impact only those wage

earners making more than $9.00 per hour. The

Employer’s proposal was an across-the-board decrease

for all members of the bargaining unit.

The Union argues that the matter at bar is a

continuing grievance. It is the Union’s position that

every day that FSP continues to pay the decreased wage

rate, it is violating the collective bargaining agreement.

Thus, the grievance is a continuing grievance. The Union

argues that the instant matter applies to all affected

employees, who were, or are, employed by FSP from

September 5, 2004 to the present.

The Union contends that the Arbitrator has a

remedial authority to grant damages. The Union

suggests that cmpowering the Arbitrator to resolve

disputes, the parties are generally considered to have

given authority to grant adequate monetary relief for

contract violations where the Arbitrator finds the

gricvance has merit, even though the contract does not

specifically authorize that remedy.

52a

Appendix C

Monetary damages in arbitration normally

correspond to specific monetary losses. Make whole

awards may include recovery of lost wages.

Compensatory awards have also been used where an

employer unilaterally institutes changes to the terms and

conditions of employment or in the benefits established

by the Agreement, or where an employee improperly

subcontracts or contracts out bargaining unit work.

The principle that empowered the “Arbitrator to

resolve disputes cloaks the Arbitrator with the authority

to make the aggrieved party whole has been well

established by arbitrable precedent as far back as 1974.

To restrict arbitrators to remedies specifically set forth

in a contract would negate arbitration as a method of

dispute settlement or result in cluttering contracts with

numerous liquidated damage provisions that would

invite more trouble than they would prevent. Even

though the contract is silent, the arbitrator has the

authority to award monetary damages to employees for

F'SP’s breach of the Agreement.”

The Union contends that the Employer’s transcribed

notes from the July 20, 2004, meeting and the August 3,

2004, meeting must be dismissed. There was no tape

recording in the negotiations conference room to the

Union’s knowledge. The Union did not authorize a tape

recording at the negotiation sessions. The idea that there

are notes that are being transcribed is disturbing to the

Union.

S3a

Appendix C

The Union argues that the Employers counsel has

submitted his notes as part of its motion to dismiss.

“Those notes do not indicate whose notes they are and

they do not indicate that they were made

contemporaneously. There was no testimony offered at

the hearing concerning the notes. There was no motion

by FSP during the hearing for the admission of those

notes as evidence.”

The Union contends that while the “Arbitrator has

great leeway regarding granting applications for

submission of evidence — it is clear that without any

foundation laid as to who took the notes, whether or not

they were made contemporaneously, and how they were

transcribed and from what — questions are raised as to

the content and accuracy of the information and

statements contained in those notes. The Union argues

that the notes submitted are merely self-serving

statements that could have been created long after the

actual meetings. Moreover, the actual notes were not

produced to verify the accuracy of the transcribed notes.

Accordingly, the Union objects to those transcribed notes

of the negotiating sessions.”

By way of relief, the Union asks that the grievance

should be granted in its entirety. FSP should be ordered

to immediately cease and desist from paying the

decreased wage rate, which became effective September

17, 2004. All employees’ wages that were affected,

including those employees who have left employment

since the effective date, should be restored to the rate

they were prior to September 17, 2004. The Arbitrator

54a

Appendix C

should award back pay to each of these employees for

the full amount from September 5, 2004, to the date that

FSP actually gives the employees the award of back pay.

The Arbitrator should order interest on the back pay

amounts.

It is specifically requested that the Arbitrator retain

jurisdiction should there be a dispute concerning the

calculation of the back pay award and who may be

entitled to same.

DISCUSSION AND OPINION

As is typically the case in an issue that deals with

contract interpretation, both parties insist that the

language is clear and unambiguous, but disagree as to

the meaning of that clear and unambiguous language.

In the instant matter, the Employer has raised the

issue that the Arbitrator is being asked to interpret and

apply the NLRA. In that context, FSP argues that under

the terms of the Agreement the Arbitrator is not

authorized to rule on that subject matter. Accordingly,

the Employer strongly argues that the Arbitrator cannot

issue an award that would draw its essence from the

Agreement.

To determine if the Agreement grants the Arbitrator

any authority in the instant matter, it is necessary and

appropriate to review the definition of a grievance as

found in Article 4, Section 1. That provision states:

Appendix C

“Any controversy, claim, dispute or

grievance arising between the Company and

the Union or any employee, involving or

concerning the meaning, interpretation,

operation or application of any clause of this

Agreement, or by any breach or threatened

breach of this Agreement shall be settled in

the following manner...”

Additionally, Section 1(i) states:

“The Arbitrator shall be limited to the

particular dispute in question and shall be

bound and governed by the provisions of this

contract and restricted to its application to

the facts presented to him involved in the

grievance. The Arbitrator shall not have

jurisdiction or authority to add to, modify,

detract from or alter in any way the

provisions of this Agreement or any

amendment or any supplement thereto.”

The Employer raises a novel argument that since

the word impasse does not appear in the collective

bargaining agreement and that the parties have not

granted the Arbitrator any authority to apply or

interpret the law that is applied in cases of impasse, the

instant grievance must fail. The Employer has a high

degree of comfort in espousing that position and pursued

that argument throughout its motion to dismiss as well

as in its post-hearing brief. However, a careful review of

case law and the particular language in the Agreement,

56a

Appendix C

clearly establishes that that comfort level has a short

life expectancy.

The continued vitality of the Employer’s argument

concerning the Arbitrator’s authority in the instant

matter has been set aside by two cases decided by the

United States Supreme Court. The first case, which is

the seminal case within the Steelworkers trilogy,

Steelworkers v. Enterprise Wheel and Car Corp., supra,

clearly states the following:

“An arbitrator is confined to

interpretation and application of the

collective bargaining agreement; he does nct

sit to dispense his own brand of industrial

justice. He may, of course, look for guidance

from many sources, yet his award is

legitimate only so long as it draws its essence

from the collective bargaining agreement.

When the arbitrator’s words manifest an

infidelity to this obligation, courts have no

choice but to refuse enforcement of the award.”

The second case is Alexander v. Gardner/Denver Co.,

415 U.S. 36 (1974), wherein the Court, citing the trilogy

observed (415 U.S. 36 at 53-54):

“If an arbitrable decision is based solely

upon the arbitrator's view of the requirements

of enacted legislation, rather than on an

interpretation of the collective bargaining

agreement, the ‘arbitrator has exceeded the

S7a

Appendix C

scope of the submission’ and the award will

not be enforced. Thus, the arbitrator has the

authority to resolve only questions of

contractual rights, and this authority

remains regardless of whether certain

contractual rights are similar to, duplicative

of, the substantive rights secured by statute.”

The language of the grievance procedure referenced

above speaks of a breach or threatened breach of this

Agreement, and restricts an arbitrator to apply the

Agreement to the facts in evidence clearly are

controlling factors in the instant matter. (emphasis

supplied)

Those highlighted words clearly mean that any

action taken by the Employer with respect to any

language in the Agreement or the application and

interpretation of any language in the Agreement is a

grievable matter subject to binding arbitration. In the

instant matter, the facts presented to me as defined in

Article 4, Section 1(i) clearly and unequivocally establish

that I must review all of those facts to determine whether

or not the contract has been violated. Regardless of the

argument advanced by the Employer, I have the

contractual authority, as set forth by two United States

Supreme Court decisions, to determine whether or not

the contract has been violated in the instant matter.

In fact, at page 3 of its post-hearing brief, in

paragraph 3, the Employer states, “Rather, he is solely

bound and governed by the provisions of the

58a

Appendix C

Agreement.” The determination I reach in the instant

matter is governed by the definition of a grievance and

the facts presented to me as defined within the grievance

procedure.

The gravemen of the Union’s argument is that the

Employer unilaterally implemented a twelve and one half

percent (124%) wage reduction. All other issues of a

statutory nature are not before me. Any argument raised

as to whether or not the reopener was defective or not

properly submitted is irrelevant to the proceedings

before me. My only determination will be whether or

not the contract was violated.

At the July 20, 2004, negotiating session, the Union

submitted its wage reopener proposals in accordance

with Article 32. Those proposals included a dollar per

hour increase each of the remaining years of the

Agreement, a reinstatement of the wage progression

frozen in the second year of the Agreement, health,

welfare and pension increases.

On August 3, 2004, the Employer rejected that

proposal and explained its financial circumstances to the

Union. On August 9, 2004, the Employer sent a three-

page letter to Mr. Grossman in which they indicated their

financial circumstances. They also proposed to reduce

the costs associated with the collective bargaining

agreement by a minimum of twelve and one half percent

(124%).

59a

Appendix C

The Union has the right to demand financial

information based upon the position advanced by the

Employer. The Employer argues that they do not have

an inability to pay, but their circumstances at NLIA are

at such a nature that they cannot continue to sustain a

loss of over $1,000,000.00 per year. Moreover, the

Employer strongly argues that they never agreec to hold

negotiations in abeyance until it was determined if they

would receive the bid to be the manager for the parking

lots at NLIA.

The Union claims that the Employer did agree to

hold negotiations in abeyance. Unfortunately, there is

no written document to offer credence to either position

that the Employer refused to hold negotiations in

abeyance or, in fact, did agree to hold negotiations in

abeyance. Therefore, the only thing that I can look at is

the fact pattern that is before me.

The Union argued that the Employer did not

implement Its proposal of a twelve and one half percent

(12'%%%) decrease across-the-board for all wage rates, and

that way only reduced the wages of employees making

more than $9.00 per hour.

To that extent, the Union has a valid point. If the

wage reduction proposal of the Employer was for all

wage rates as referenced in its October 9, 2004, letter to

Mr. Grossman, then reducing the wage rate of those

making more than $9.00 per hour was disingenuous at

best. Moreover, I find it extremely difficult to accept the

60a

Appendix C

Employer’s argument that an impasse existed after

approximately two, maybe three, hours of bargaining.

If the Employer believed that the Union exceeded

its request for financial information, then the Employer

had legal avenues to appeal that position of the Union.

Logic dictates that if the Union agreed to the Employer’s

proposal of a twelve and one half percent (122%) across-

the-board wage reduction and subsequently FSP lost as

the operator of the parking lots at NLIA, the Union

would have been in a very precarious situation. I fully

agree that the Union would not have accepted that type

of position if they did not know whether or not ISP was

going to continue to be the operator of the parking lots

at NLIA.

Based upon all of the evidence and voluminous

documentation presented by both parties, I am not

convinced that an impasse existed. The fact that the

Union would not agree to the Employer’s wage proposal

of a twelve and one half percent (12'2%) reduction in the

wage rates does not mean that an impasse existed. It

means that the Employer had a financial situation that

they were trying to stop the hemorrhaging, but they

were then required to give information to the Union. The

Employer only gave infcrmation to the Union for NLIA.

Whether they are required to give any information

beyond that is not for me to determine. What is for me

to determine is whether or not the Employer’s action of

implementing a wage reduction breached the collective

bargaining agreement.

6la

Appendix C

Based on the facts in evidence, there is no question

that the Employer’s action of September 17, 2004, in

reducing employer’s wages was violative of the collective

bargaining agreement. The Union asserted that the wage

reducticn impacted only those employees making more

than $9.00 per hour. There is no testimony in the record

to substantiate that position. However, for the purpose

of my Award it does not make any difference if the

Employer’s wage reduction was for employees making

$7.00 per hour, $9.00 per hour or $10.00 per hour. The

simple fact is that they reduced cmployees’ wages

without negotiations.

Think of the enormity of the instant matter. The

Union proposes in accordance with the wage reopener

specific proposals of an economic nature. Subsequently,

the Employer makes a counter-proposal of a wage

reduction. Quite frankly, that is nothing new, novel or

unique in labor relations in the United States. Any

Employer will be asking for wage reductions,

concessions, and rollbacks. That is exactly what has been

occurring for the last 10 or 15 years, especially in the

areas of health insurance. Emnloyers are constantly

asking for concessions or rollbacks.

When an employer proposes a wage reduction that

is agreed to by a Union that is a concession.

Concessionary bargaining produces some interesting

results. However, in the instant matter, the Employer

never allowed the negotiations process to really move

forward or to pick up steam to see where they could reach

some type of common ground. They simply said, we will

62a

Appendix C

not give you the additional financial information you are

asking for, and if you do not show up for the September

3, 2004, negotiating session we are declaring an impasse.

Accordingly, they declared the impasse and reduced the

wages of the employees.

That is the most contorted definition of negotiations

I have ever heard. The negotiations process is a give

and take process. It is a fascinating process that has ups

and downs, hills and valleys, but one that reaches

resolution of the issues to be negotiated. Typically, in

the private sector, when the employer takes the type of

action as presented in the instant matter, Unions usually

call for a strike. The Employer argued that there is a

no-strike clause in the contract, and the Union has no

right to go on strike.

The Employer is correct that Article 12 is a no-strike,

no-lockout clause. However, whether or not the Union

has the right to call for a strike because the itsmployer

breached the Agreement is not for me to determinc. That

matter is not before me. What is before me is that the

Employer’s action breached the Agreement. I have

already determined that it did.

It breached the Agreement because there was no

impasse. The Employer simply said, “we are going to

reduce the wages by twelve and one half percent

(124%). If you don’t agree, we are going to declare an

impasse and implement that wage reduction.” That is

not negotiations. I can’t accept the limited time spent in

63a

Appendix C

bargaining as a basis for the Employer’s authority to

reduce the wages of the bargaining unit members.

Accordingly, there is no question in my mind that

the Employer’s action breached the Agreement. The

question becomes what type of remedy can be developed

based upon the facts in the instant matter.

For the foregoing reasons and having duly heard the

proofs and allegations of the parties, I Award the

following:

AWARD

The grievance is sustained. The Employer’s

unilateral action of reducing the wages of bargaining unit

members was in violation of the Agreement. Five Star

Parking shall cease and desist from paying the decreased

wage rate, which became effective September 17, 2004.

All employees whose wages were reduced, including

those who have left employment since September 17,

2004, shall be awarded back pay for the full amount of

reduction of their salary that was in effect on September

5, 2004, to the day they receive their retroactive pay.

{ am denying the Union’s request for interest.

[I shall retain jurisdiction should there be a dispute

concerning the calculation of the back pay money and

who may be entitled to it.

64a

Appendix C

Gerard G. Restaino

Gerard G. Restaino, Arbitrator

Dated: August 3, 2005

State of New Jersey )

County of Middlesex ) ss:

On this 3" day of August 2005, before me personally

came and appeared GERARD G. RESTAINO to me

known to be the person who executed the foregoing

instrument and he auly acknowledged to me that he

executed the same.

65a

APPENDIX D — ORDER OF THE UNITED

STATES COURT OF APPEALS FOR THE THIRD

CIRCUIT DENYING PETITION FOR

REHEARING DATED AUGUST 29, 2007

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 06-2012

FIVE STAR PARKING

UNION LOCAL 723, affiliated with the

INTERNATIONAL BROTHERHOOD

OF TEAMSTERS,

Appellant

SUR PETITION FOR REHEARING

Present: SCIRICA, Chief Judge, SLOVITER,

McKEE, RENDELL, BARRY, AMBRO, FUENTES,

SMITH, FISHER, CHAGARES, JORDAN, and

HARDIMAN, Circuit Judges

The petition for rehearing filed by appellee in the

above entitled case having been submitted to the judges

who participated in the decision of this court and to all

the other available circuit judges of the circuit in regular

active service, and no judge who concurred in the

decision having asked for rehearing, and a majority of

the circuit judges of the circuit in regular active service

66a

Appendix D

not having voted for rehearing by the court en banc, the

petition for rehearing is denied.

By the Court,

MICHAEL A. CHAGARES

Circuit Judge

DATED: August 29, 2007

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.