Opposition Brief — Five Star Parking v. Union Local 723, International Brotherhood of Teamsters (No. 07-699)

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No. 07-699: sant

IN THE

Supreme Court of the United States

FIVE STAR PARKING,

Petitioner,

Vv.

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

BRIEF IN OPPOSITION

RAYMOND G. HEINEMAN *

KROLL HEINEMAN GIBLIN

Metro Corporate Campus |

99 Wood Avenue South, Suite 307

Iselin, New Jersey 08830

(732) 491-2100

* Counsel of Record Attorneys for Respondent

WiILSON-EPES PRINTING CO.. INC. — (202) 789-0096 — WASHINGTON, D.C. 20002

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TABLE OF CONTENTS

SSSR HHH ORES HERD OEE HEED

SSS SESS HESHEHESSHHEHESESESES SEER EERE SEE EH EEE RECEDES

SHEESH SHEE EES HEE SRE REE HEE EEE ESE HEHE SHEE EES

SEES SHEE HES HEE S SHEESH OEE ESHESES EEE OHHH HEHE SEE EES

Page

TABLE OF AUTHORITIES

CASES Page

Bricklayers, Local 4 v. Associated General

Contractors, 711 F. 2d 90 (8th Cir.1983).. 12

Colorado-Ute Electric Association, Inc. v.

NLRB, 939 F. 2d 1392 (10th Cir. 1991)... 9

Eastern Associated Coal Corp. v.. United

Mine Workers, District 17, 531 U.S. 57

Neen eas csvescesauanshennesnusosecane 6, 7

Electrical Workers Local 47 v. NLRB, 927

rE ERED, G70R', LODE). ...ccccrcrsasccscecscses 10

General Drivers Union, Local 554 v. Mid-

Continent Bottlers, Inc., 767 F. 2d 482

ED sca suscsssanccstssccasascevscncssasccesees 12

Hydrologics, Inc., 293 NLRB No. 129

Nee es cis nd canssnacnnsavansscascasscace 8

Laundry Workers, Local 93 v. Mahoney,

491 F. 2d 1029 (8th Cir. 1974).................. 12

Mayor League Baseball Players Association

vu. Garvey, 532 U.S. 504 (2001) ................. 7

Major League Umpires Association v.

American League of Professional Base-

ball Clubs, 357 F. 3d 272 (8rd Cir. 2004)... 7

Mulvihill v. Spalding Sports Worldwide

Inc., 184 F. Supp. 2d 199 (D. Mass.

recess ccaceiasessneqauncsasssssascecscesaces 11

Newspaper Guild of Salem v. Ottaway

Newspaper, Inc., 79 F. 3d 1273 (1st Cir.

Nee ic cank dns asasnensanadeassancdaccuss 8,10, 11

Paperworkers v. Misco, Inc., 484 U.S. 29

oy 6 re ete snces canganiancasds 7

Rubber Workers, Local 884 v. Bridgestone/

Firestone, Inc., 61 F. 3d 1347 (8th Cir.

iii

TABLE OF AUTHORITIES—Continued

Page

Saunders House v. NLRB, 719 F. 2d 683

CORI Tee SI cc cnhacdicnancecsnacncncreenanineaies 8

Speedrack, Inc., 293 NLRB No. 128 (1989).. 9

IN THE

Supreme Court of the Anited States

No. 07-699

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

BRIEF IN OPPOSITION

STATEMENT

Petitioner, Five Star Parking (“Five Star”) is en-

gaged in the management and operation of parking

lots at various locations in the United States, in-

cluding the parking lots and garages of the Port

Authority of New York and New Jersey at Newark

Liberty International Airport (herein “NLIA”). Five

Star is an employer within the meaning of the Labor

Management Relations Act, 29 U.S.C. §§152(2) and

185. Respondent, Local 723, a labor organization

within the meaning of the Labor Management Rela-

tions Act, 29 U.S.C. §§152(5) and 185, is the exclusive

collective bargaining representative of the employees

employed at the NLIA parking facility.

Five Star and Local 723 are parties to a collective

bargaining agreement (“CBA”), which is effective by

its terms from August 1, 2002 until July 31, 2008. In

the CBA, at Article 4, Grievance Procedure, the par-

ties broadly defined the grievances which may be

submitted to binding arbitration:

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 appli-

cation of any clause of this Agreement, or by a

breach or threatened breach of this Agreement. . .

(App. 23a). In their CBA, the parties agreed on the

wages to be paid to bargaining unit employees at

Article 20, Pay Schedule and Wage Rates, and Sched-

ule “A”, by providing a wage schedule for the first

year of the agreement; a 3% wage increase effective

August 1, 2003, and, thereafter, wage increases only

if either party sought to reopen the CBA as of August

1, 2004 or August 1, 2006, “solely for the purpose of

negotiating concerning rates of pay and other mone-

tary benefits”. (App.26-27a). In the absence of either

party seeking to reopen the CBA, the status quo

remains in effect. At Article 32, Term of Agreement,

the CBA references the re-opener negotiations and

limits the parties mght to resort to economic weapons:

This Agreement shall become effective August 1,

2002 and shall remain in effect to and including

July 31, 2008, and from year to year thereafter

unless notice of desire to amend or terminate is

given in writing 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 agree-

ment 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 pur-

pose. It is further agreed that during such

periods of reopener, 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.

(App. 26a). While Article 32 explicitly prohibits strikes

and lockouts during the re-opener negotiations, it

does not explicitly address whether Five Star can

unilaterally implement its position if re-opener nego-

tiations become deadlocked.

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

opener provision of the CBA. The parties met briefly

for two negotiation sessions during which the Com-

pany proposed to reduce labor costs by 12 2%. There-

after, Five Star declared an impasse and, on Septem-

ber 17, 2004, unilaterally implemented a 12%% re-

duction in the wages of bargaining unit employees.

On September 21, 2004, Local 723 filed a griev-

ance, contesting the Company’s unilateral imple-

mentation of the wage decrease as a violation of

Article 20 and Schedule “A” of the CBA. On May 4,

2005, the labor arbitrator selected by the parties

conducted a hearing, at which both parties attended

and had full opportunity to present evidence and

argument. At the hearing, the parties framed the

specific contractual articles to be considered by the

arbitrator, by stipulating 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 reduc-

tion? If so, what shall be the remedy?

In an Opinion and Award, dated August 3, 2005,

the arbitrator concluded that the Company did not

engage in negotiations, as required by the Agree-

ment. Accordingly, the arbitrator issued the follow-

ing award:

The grievance is sustained. The Employer’s uni-

lateral action of reducing the wages of bar-

gaining 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.

(App. 63a). In his supporting opinion, the arbitrator

specifically set forth the provisions of the Agreement

which he found to be relevant, including the re-

opener provisions at Schedule “A”, Section 2 and

Article 32, Term of the Agreement. (App. 23-27a).

The arbitrator made detailed factual findings, re-

solving various contested factual issues (App. 27-3la

and 58a) and gave detailed consideration to the

position and arguments of the parties. (App. 31-54a).

The Arbitrator’s review indicates that both parties

recognized that the contractually provided “negoti-

ating” process for wage re-openers incorporated the

concept of “impasse”.

The arbitrator specifically considered and rejected

Five Star’s argument that he was being asked to

apply and interpret the National Labor Relations Act

(“NLRA”) and found that the broad language of the

grievance procedure governed the issue at hearing.

(App. 54-58a). Thus, the arbitrator clearly disavowed

any interpretation of the NLRA and ruled that the

issue presented was within his contractual authority

to interpret the collective bargaining agreement.

After reviewing the factual record (App. 58-61a), the

Arbitrator concluded that the Employers conduct

breached the Agrcement:

Based on the facts in evidence, there is no ques-

tion that the Employer’s action on September 17,

2004, in reducing employees’ wages was violative

of the collective bargaining agreement.

(App. 58-61a). Implicit in his analysis was the rec-

ognition that the 2003 wages would remain in effect

absent the negotiations of a re-opener, pursuant to

Schedule “A”, Section 2(b). The arbitrator specifically

rejected the notion that Five Star’s conduct was con-

sistent with the “negotiating” required by the CBA.

(App. 61-62a). The arbitrator also rejected the Com-

pany’s contention that a valid impasse could exist

after only two or three hours of bargaining. (App. 59-

60a). Finally, the arbitrator was skeptical of whether

a valid impasse could even develop, under the terms

of the CBA, when it was unclear whether Five Star

was going to continue to manage the parking facility

for the Port Authority at NLIA. (App. 60a).

The Arbitrator crystalized his conclusion that Five

Star beached the parties’ agreement on wages, “The

simple fact is that they reduced employees’ wages

without negotiations”. (App. 6la). Based on his fac-

tual findings and his interpretation of the process of

negotiations mandated by Schedule “A” and Article

32, the Arbitrator concluded that Five Star breached

the CBA.

On December 20, 2005, the District Court issued

an Order granting Five Star’s motion to vacate the

award, accepting Five Star’s argument that the arbi-

trator had not construed any term or provision of the

CBA. (App. 18-19a). The Third Circuit applied the

deferential standard set forth in Eastern Associated

Coal Corp. v. United Mine Workers, District 17,

531 U.S. 57, 62 (2000), and upheld the arbitrator’s

decision, since he had acted within the scope of his

authority and committed no error,in applying the

collective bargaining agreement. (App. 9-10a). The

Circuit Court concluded that Five Star’s agreement to

the issue to be submitted to the arbitrator indicated

both its agreement that the dispute was arbitrable

and that it related to Article 20 and Schedule “A” of

the CBA, “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”. (App. lla). The

Third Circuit Court recognized that the stipulated

issue presented a bona fide contractual dispute as to

the Company’s contractual obligation under Article

20 to “negotiate concerning rates of pay”:

The arbitrator declared an intent to decide

whether there was a breach of contract, and in so

deciding found that the parties failed to nego-

tiate pursuant to the express terms of Schedule

A of the CBA.

(App. 12a). As the award resolved an arbitral contrac-

tual issue under the terms of the CBA, the Circuit

"Court held that it should not be disturbed. Jd.

ARGUMENT

The case presents the mundane and repetitive

scenario of a party to a contractual labor dispute

attempting to circumvent the grievance/arbitration

process by seeking to vacate an arbitration award

rendered by the labor arbitrator it chose. See Major

League Baseball Players Association v. Garvey, 532

U.S. 504 (2001); Eastern Associated Coal Corp., supra;

Paperworkers v. Misco, Inc., 484 U.S. 29 (1987); Major

League Umpires Association v. American League of

Professional Baseball Clubs, 357 F. 3d 272 (3rd Cir.

2004). In the instant case, Five Star is seeking

to bypass the well-established standard of review,

which focuses on whether the arbitrator could ration-

ally derive his authority from the terms of the CBA,

by arguing that the arbitrator considered issues re-

served for the NLRB. In its petition, Five Star labors

mightily to create the illusion of a split among the

Circuit Courts and the NLRB in enforcing and

administering the NLRA. Despite its effort, however,

the asserted conflict is no more than an illusion to

obfuscate a simple labor dispute over the meaning of

the parties’ CBA. A review of the cases relied upon

by Five Star indicates nothing more than the Circuit

Courts considering various disputes under differing

contractual language and arriving at varying out-

comes.

The petition for certiorari should be denied.

1. Despite the arbitrator’s rejection of any sugges-

tion that he was interpreting and applying the NLRA

(App. 57-58a), Five Star nevertheless has argued that

the arbitrator interpreted the term “impasse” under

the NLRA. The NLRB’s consideration of whether

an employer is privileged to unilaterally implement

terms and conditions of employment at impasse nor-

mally arises during negotiations for an initial agree-

ment, Saunders House v. NLRB, 719 F. 2d 683

(3rd Cir. 1983) (impasse after 19 meetings), or for a

successor agreement. Newspaper Guild of Salem v.

Ottaway Newspapers, Inc., 79 F. 3d 1273 (lst Cir.

1996). However, unfair labor practice issues un-

questionably may arise in bargaining over wage and

benefit re-openers, as recognized by the Third Circuit

in its decision in the instant case. (App. 10-12a).

In Hydrologics, Inc., 293 NLRB No. 129 (1989), the

NLRB recognized that a union’s right to strike during

midterm re-opener negotiations was not waived by a

general no-strike clause that did not address the re-

opener situation. The NLRB, in Speedrack, Inc., 293

NLRB No. 128 (1989), applied its reasoning to recog-

nize the rights of an employer following an impasse

in re-opener negotiations, absent an agreement be-

tween the parties constraining the right to unilateral

implementation:

the policies of the [NLRA] with regard to collec-

tive bargaining make it reasonable to read a

contract re-opener provision as permitting the

parties to respond to disputes over re-opened

subjects by resort to the course of action nor-

mally allowed them when a contract has expired

... By agreeing to a re-opener, the parties mani-

fest their agreement to permit such measures .

unless they include language to the contrary.

Speedrack, 293 NLRB at 9-10. As recognized by the

NLRB, the parties in their agreement may clearly

limit the resort to economic weaponry during re-

opener negotiations, including the right to unilater-

ally impose terms at impasse. In this regard, an

employer’s right to impose terms at impasse and a

union’s right to strike are both self-help measures

which are integral to the collective bargaining proc-

ess regulated by the NLRB, in the absence of a

collective bargaining agreement.

In the instant case, the parties’ negotiations were

pursuant to the re-opener provision of Appendix “A”,

Section 2. As noted by the arbitrator, Article 32

of the CBA explicitly limited the parties’ resort to

strikes and lockouts during re-opener negotiations.

The contract expressly indicated that, during re-

opener negotiations, the parties would not enjoy the

usual full bargaining rights attendant upon expira-

tion of the contract, contrary to the NLRB’s normal

presumption of full bargaining rights. The remaining

issue of contract interpretation is whether and to

what extent the Employer retained the economic

weapon to unilaterally implement its last offer to

decrease wages under the limited negotiations pro-

cedure provided by Article 20 and Schedule “A”,

Section 2. See Rubber Workers, Local 884 uv.

Bridgestone/ Firestone, Inc., 61 F.3d 1347 (8th Cir.

1995) (waiver of right to strike supported pre-

sumption of arbitrability over unilateral change in

contractual health benefits). The arbitrator’s award

addressed the issue by concluding that the contrac-

tual limits on the strike weapon limited Five Star’s

corollary economic weapon of implementing terms at

impasse.

The cases cited by Five Star, for the proposition

that a split exists among the circuits on the issue

in the instant case, are factually inapposite. In

Colorado-Ute Electric Association Inc. v NLRB, 939

F. 2d 1392 (10th Cir. 1991), the Circuit Court set

aside the NLRB’s determination that an employer

had unlawfully implemented mid-term merit in-

creases, after twelve bargaining sessions with the

union, under an agreement which provided “either

party may elect to negotiate wages in {the agreement]

by giving notice to the other party.” In Electrical

Workers, Local 47, 927 F.2d 635, 645 (D.C. Cir. 1991),

the Circuit Court for the District of Columbia con-

cluded that an employer did not. commit an unfair

labor practice by implementing a final wage offer

in re-opener negotiations following multiple negotia-

tions sessions over a six month period. The CBAs in

both Colorado-Ute Electrical and Electrical Workers

Local 47, unlike the CBA in the instant case, did not

limit the parties’ resort to full economic weapons

during re-opener negotiations. In both cases, the

NLRB had applied its precedent that the parties to

re-opener bargaining may resort to the full range of

economic weaponry, including the imposition of terms

at impasse, in the absence of contract language to the

contrary. Further, none of the parties in cither

Colorado-Ute Electrical and Electrical Workers Local

47 contended that the employer’s unilateral imple-

mentation of changes in term and conditions of

employment violated their CBA.

In the instant case, Five Star and Local 723 have

agreed in their CBA to constrain the use of economic

weaponry during re-opener negotiations, at Article 32

of the CBA. In contrast to the NLRB’s presumption

of full bargaining rights attendant during re-opener

negotiations, as in Colorado-Ute and _ Electrical

Workers, Five Star and Local 723 specifically contem-

plated that the use of economic weaponry would be

prohibited in their re-opener negotiations.

Similarly, the First Circuit’s ruling in Newspaper

Guild of Salem v. Ottaway Newspapers, Inc., supra,

relied upon by Five Star for its proposition that a

split among the Circuits exists, is readily distin-

guished from the facts at bar. In Ottaway, during

contract negotiations following a CBA’s expiration,

the Employer declared impasse. The Union sought to

compel the Employer to submit the contract renewal

to arbitration. The First Circuit concluded that the

dispute did not raise “a colorable claim” of a con-

tractual violation because the parties’ contractual

grievance/arbitration procedure specifically precluded

arbitration over renewal of the agreement. In the

absence of a colorable claim of a contract violation,

the First Circuit found that the Union’s requested

relief amounted to an extra-contractual claim falling

specifically within the NLRB’s primary jurisdiction.

In Mulvihill v. Spalding Sports Worldwide, Inc., 184

F. Supp. 2d 199 (D. Mass. 2002), affd. 335 F. 3d 15

(Ist Cir. 2003), the First Circuit affirmed a District

Court’s application of its holding in Ottaway to a

plaintiffs allegation of an unfair labor practice and

a breach of a collective bargaining agreement. The

District Court, applying Ottaway, had exercised its

concurrent jurisdiction under Section 301 because the

plaintiff had alleged a colorable claim of a breach of a

CBA. As recognized by the First Circuit, the results

under its analysis in Ottaway is dependent on the

language of the parties’ CBA and is not dictated by

the presence of a potential unfair labor practice issue.

The present matter is procedurally distinct from

Ottoway because the parties were conducting re-

opener negotiations under the terms of their CBA,

as opposed to post-expiration negotiations, governed

solely by the NLRA. Further, the claims presented

by the Union to the arbitrator were not extra-

contractual. As the Circuit Court held in this matter,

the statutory requirement to negotiate in good faith

overlaps ‘he contractual agreement, under Article

2(b) of the CBA, to “negotiat[e] concerning rates of

pay”. Thus, it was proper for the arbitrator to inter-

pret the contractual term of “negotiat[e] concerning

rates of pay”, under his authority to resolve disputes

over “the meaning, interpretation, operation or appli-

cation of [a] clause of this Agreement”. Local 723's

claim, as presented to the arbitrator, was not extra-

contractual. Rather, Local 723 asked the arbitrator to

act within the scope of his authority, construe the

terms of the collective bargaining agreement and

return the parties to the status quo, provided by

Appendix “A”, Section 2(a) of the CBA. Because this

dispute involved contract interpretation under the

parties’ unique re-opener provision, this dispute does

not implicate the primary jurisdiction of the NLRB,

unlike the scenario presented in Ottaway.

Rather than indicating a split among the Circuit

Courts, the Eighth Circuit cases relied upon by Five

Star merely further illustrate the unremarkable fact

that the results in specific cases in disputes over

contractual re-openers are a function of the language

of the disputing parties’ CBAs. In Laundry Workers,

Local 93 v. Mahoney, 491 F.2d 1029 (8th Cir. 1974),

the Eighth Circuit affirmed an order submitting a

wage dispute under a re-opener to binding arbitra-

tion, where the CBA prohibited strikes or lockouts

during its term and the Employer was resistant to

any change in wages. The Eighth Circuit in Brick-

layers, Local 4 v. Associated General Contractors, 711

F.2d 90 (8th Cir. 1983), relied on a broad arbitration

clause and a no-strike clause prohibiting strikes in

advance of arbitration to order the submission of

a dispute over a wage re-opener to arbitration, prior

to either parties unilateral imposition of changes in

terms and conditions of employment or resort to

economic weaponry. The parties dispute in General

Drivers Union, Local 554 v. Mid-Continent Bottiers,

Inc., 767 F.2d 482 (8th Cir. 1985), concerned the issue

of whether the unilateral change implemented by the

Employer, following an impasse in re-opener negotia-

tions, was permitted by a CBA which limited the re-

opener to certain portions of the agreement if the

employer went to an “advance sell-system” for route

drivers.

There is simply no split among the Circuit Courts.

The results in the cases cited by Five Star are de-

pendent on the facts of each case, and, most impor-

tantly, the language of the arbitration provisions, re-

opener provisions and no-strike clauses of the par-

ticular CBAs at issue, all of which are distinguish-

able from this matter.

2. The award in the instant case drew its essence

from the CBA and resolved an issue within the con-

tractual authority of the arbitrator. The parties’

jointly submitted issue in the instant case asked the

arbitrator the simple and pointed question:

Did the Employer violate Article 20 and Schedule

A of the Agreement when on September 17, 2004,

Five Star Parking implanted a wage reduction?

If so, what shall be the remedy?

(App. 22a). This jointly submitted issue focused the

arbitrator’s attention on the specific language of the

CBA at issue in their dispute. The arbitrator was

asked specifically whether the Employer’s actions

violated the identified contractual provisions. In an-

swering the issue in the affirmative, the arbitrator

firmly grounded his award in the CBA between Five

Star and ‘Local 723. The arbitrator cited the specific

contractual provisions upon which he relied. (App.

23-27a). After a lengthy review of evidence before

him, he concluded by interpreting the requirement

for negotiations set forth in Schedule “A”, “The

simple fact is that they reduced employees’ wages

without negotiations.” (App. 61a). Accordingly, in the

absence of bona fide re-opener negotiations required

by the CBA, as he interpreted it, the arbitrator

concluded that Five Star breached the CBA. (App.

63a).

In the instant case, the arbitrator's award was

limited to the dispute in question. The arbitrator was

governed by the CBA and restricted himself to the

facts presented during the hearing by the parties.

Based on his interpretation of the CBA, the arbitra-

tor merely held that the Employer’s unilateral reduc-

tion in wages breached the agreement and, accord-

ingly, he awarded a return to the status quo wage

levels established by the parties at Schedule “A”,

Section 2(a). As the arbitrator’s award drew its

essence from the CBA, the Circuit Court properly

upheld the award consistent with the applicable

standard of review.

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted,