3-29-13 Murphy Letter to RMB (Doc. 1290)

7/28/2019 3-29-13 Murphy Letter to RMB (Doc. 1290)

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BY HANDHon. Richard M. BermanUnited States District JudgeDaniel Patrick MoynihanUnited States Courthouse500 Pearl StreetNew York, NY 10007-1312

Re: United States v.

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District Council, et al., 90 Civ. 5722 (RMB)Collective Bargaining Agreement Between the District Counciland the Association of Wall-Ceiling & Carpentry Industries of New York, Inc.Dear Judge Berman:

I write in response to the Court's Endorsed Memo Order of March 21,2013 (Doc.1281) regarding the fully executed successor collective bargaining agreement betweenthe District Council and the Association ofWall-Ceiling & Carpentry Industries of NewYork, Inc. ("WC&C"). Your Honor directed that "Mr. Walsh + Mr. Murphy are requested tosupply authorities for the proposition that this Court can approve a collective bargainingagreement where only a MOU has been approved by a delegate body."

I understand your request to be whether an approved memorandum ofunderstanding or agreement (here, "MOU") that modifies an expired collective bargainingagreement is materially the same as the fully executed successor collective bargainingagreement ("CBA"), which merges the terms and conditions of the expired CBA with thoseof the MOU. The answer is yes.

Case 1:90-cv-05722-RMB-THK Document 1290 Filed 04/01/13 Page 1 of 10
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Hon. Richard M. Berman United States District Judge Re: United States v. District Council, et al., 90 Civ. 5722 (RMB) March 29, 2013 Page 2

Review Officer Dennis M. Walsh in his March 19, 2013 letter to the Court at page 4(Doc 1279) succinctly stated the facts and the controlling law.

I understand that the position of the District Council is that theexecuted CBA is a mere technicality and that but for the need to petition theCourt to adjust the May 2009 Order of Judge Haight, the MOU terms wouldhave been implemented. I have not found any provision of the executedCBA that prevents the express terms of the MOU from being implemented.The MOU was approved by the WC&C and ratified by the delegate body.There was a meeting of the minds and both parties documented an intentionto be bound to mutual obligations. In my opinion, as a matter of black lettercontract law, the terms on the four pages of the MOU are enforceable byeither party against the other.The context here is summarized in the Review Officer's Fifth Interim Report (Dec.

3,2012) (Doc 1206 & 1210) at 8-9. The District Council and the WC&C would haveimplemented their successor CBA without involvement of the Court if the MOU ratified bythe District Council's Delegate Body on August 22,2012 and the integrated CBA did notpropose to alter the Court's 2009 Order setting the hiring ratio at 67:33. It is this proposedchange to the hiring ratio to provide for so-called full mobility, along with the enhancedanti-corruption compliance procedures developed by the District Council and the WC&C,in conjunction with the Review Officer and the Government. that requires the parties toseek the Court's approval of the CBA.

FACTSThe MOU here is the four-page document entitled "Agreement Between the New

York City District Council of Carpenters and the Association of Wall-Ceiling & CarpentryIndustries of New York, Inc." (including "ADDENDUM With Respect to Compliance Issuesto the Agreement"). The District Council's Delegate Body ratified it on August 22,2012. A



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copy of the MOU was provided to the Court as Exhibit A to my February 13, 2013 letter toYour Honor (Doc. 1223). The fully executed CBA with a term of July 1, 2011 to June 3D,2017 is the prior collective bargaining agreement (July 1, 2006 to June 3D, 2011) modifiedand updated by the MOU. A copy of the fully executed CBA was provided to the Courtwith my March 12,2013 letter to Your Honor (Doc. 1271).

The terms of the MOU are incorporated into the CSA as follows. The wage andbenefit package on the first page of the MOU are incorporated into the CSA at Article XII,Section 8.

The terms on the second page of the MOU are incorporated into the CBA asfollows. "Manning Provisions" are incorporated into the CSA at Article VI, Section 2. "Twoman jobs" are incorporated into the CBA at Article VI, Section 2(b). "Holidays" (daysbefore Christmas Day and New Year's Day added as paid holidays, with double time paidfor working them) is incorporated into the CBA at Article XI, Section 10. "Shift Work" isincorporated into the CBA at Article XI, Section 3 and Section 4. "Section 9(a)Agreement" (providing for majority representation rather than a construction industry prehire arrangement under NLRA 8(f is incorporated into the CBA at Article II, Section 2.And "Dues Check-off' is incorporated into the CBA at Article XII, Section 13.

The terms of the third page of the MOU are incorporated into the CBA as follows.Item number 1 signifies that wage and benefit increases are not tied to any benchmarks(such as total hours worked). It is incorporated into the CBA at Article XII, Section 8 (firstsentence). Item number 2 ensures that no "most favored nation's" clause will beincorporated into the CBA. The CBA's silence on that issue reflects the parties' agreement



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Hon. Richard M. Berman United States District Judge Re: United States v. District Council, et a/., 90 Civ. 5722 (RMB) March 29, 2013 Page 4

not to include such a provision. And Item number 3 regarding the parties cooperating todevelop flexible market recovery programs is not incorporated into the CBA because theparties' efforts with respect to market recovery is being done outside the CBA. In addition,the CBA contains a holdover provision from previous collective bargaining agreementsrelevant to item number 3. That is the provision for a Hardship and Advisory Committeeunder Article XIII, Section 1.

The terms of the fourth page of the MOU, which deal with the anti-corruptioncompliance features under the CBA and otherwise by the District Council, are codified inthe CSA at Article VII, Section 6 and Article XV. Those provisions, in fleshing out thebroad agreement on anti-corruption compliance contained on the fourth page of the MOU,were developed over many months with the guidance and approval of the Review Officerand the Government. In addition, and to further enhance the anti-corruption complianceprocedures, the District Council and the WC&C executed a side letter dated March 15,2013, a copy of which I provided to the Court that same date (Doc. 1272), that makesclear the remedial powers of an arbitrator for violations of the CBA under VII, Section 6,with reference to Article VII, Section 4.

DISCUSSION1The CSA is properly before Your Honor for approval because it substantially

reflects the material terms of the MOU. The MOU itself is a binding, enforceableagreement representing the terms of the District Council'S successor agreement with theWC&C. In other words, as described above, the substantive terms of the MOU and thematerial modifications of the parties' former collective bargaining agreement are the same.1 For the Court's convenience, copies of all cited cases are enclosed with this letter.



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Since the MOU is binding on the parties, so too is the CBA. That the substantivemodifications of the former CBA (which expired by its terms on June 30, 2011) by virtue ofthe MOU have now been incorporated into a new integrated CBA does not alter anythingabout the validity or enforceability of the parties' agreement. As discussed below, it is thesubstance of the agreement along with the parties actions-not the instrument or technicallanguage in which it is recorded-that determines whether a contract covering terms andconditions of employment is enforceable under Section 301 (a) of the Labor ManagementRelations Act ("LMRA"), 29 U.S.C. 185(a).

The enforceability of the MOU, like any contract between an employer and a labororganization, is determined by reliance on federal law, fashioned from our national laborpolicies. See Textile Workers Union of America v. Lincoln Mills of Alabama, 353 U.S. 448,456, 77 S.Ct. 912, 918 (1957). Given those prevailing policies, ordinary or historic rules ofcontract formation are not essential to finding an extant collective bargaining agreement.Am. Fed'n of Television & Radio Artists, v. Inner City Broad. Corp., 748 F.2d 884, 886-87(2d Cir. 1984) ("[T]he rule is well-established that technical rules of contract do not controlthe question of whether a collective bargaining agreement has been reached.") See alsoRetail Clerks Int'I Ass'n, Local Unions Nos. 128 & 633 v. Lion Dry Goods, Inc., 369 U.S.17, 28, 82 S. Ct. 541, 548, (1962) (When determining whether a "contract" existed forpurposes of Section 301 (a) of the LMRA, it was sufficient that the deal amounted to, "anagreement between employers and labor organizations significant to the maintenance oflabor peace between them."). An enforceable contract may be found in the terms of asimple letter of agreement appended to a traditional collective bargaining agreement.See, e.g., Aeronautical Indus. Dist. Lodge 91 of Int'I Ass'n of Machinists v. UnitedTechnologies Corp., 230 F.3d 569, 576 (2d Cir. 2000). See also, Hotel &Rest.



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Employees Union Local 217 v. J.P. Morgan Hotel, 996 F.2d 561, 563 (2d Cir. 1993) (Three-page "Memorandum of Agreement" covering the terms of a private agreement regarding union recognition enforceable under Section 301).

Even where an employer and union have settled on the terms of a collective bargaining agreement orally, but have yet to reduce it to writing; they can be bound to their agreed conditions. A CBA "need not be signed so long as the parties agree to its sUbstantive terms." Labarbera v. ASTC Laboratories Inc., 752 F. Supp. 2d 263, 271 (E.D.N.Y. 2010) (citing Inner City, 748 F.2d at 887); Mack Trucks, Inc. v. Int'I Union, UAW,856 F 2d 579, 592 (3rd Cir. 1988) ("Adoption of an enforceable labor contract does notdepend on the reduction to writing of the parties' intention to be bound.") (citing cases).Rather, the existence of a binding agreement is determined by an examination of theintent and conduct of the employer and union. So long as the parties have exhibited anintention to follow agreed-upon terms, they have sufficiently demonstrated that a collectivebargaining agreement is in effect. kL. See also, Teamsters Local 182 v. New York StateTeamsters Council Health & Hosp. Fund., 909 F. Supp. 102,107 (N.D.N.Y. 1995).

Here, the parties' differences over the exact contract language to be used in a finalintegrated writing memorializing their deal would not bar a finding that the substantiveterms and conditions were binding after the Delegate ratification vote. See Mack Trucks,856 F.2d at 593. While the District Council and WC&C may have lacked agreement on theprecise language, terminology, phraseology, or syntax to be used in the successor CBAwith respect to the anti-corruption compliance (until a signed document was presented toYour Honor on March 12, 2013), the terms of the MOU still remain valid and enforceable.Even if the parties had drafted no MOU in August 2012, the substantive terms ofthe CBA



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would be presently binding. Inner City, 748 F.2d at 887. ("[T]he evidence strongly suggests that although the parties contemplated eventually reducing their agreement to writing, they first intended to enter into some sort of enforceable oral agreement.")

Additional surrounding circumstances show that the District Council and WC&Chave bound themselves to the material terms of the MOU. Specifically, the parties havetaken significant steps toward implementation of the agreement. With the exception ofwage increases (which are to be implemented prospectively), the Iynchpin of the MOU is anew set of anti-corruption and electronic reporting measures. Those have beendeveloped, tested, and operated with the cooperation of both parties. By this conduct, theparties have plainly "demonstrated a meeting of the minds on the new labor agreement."Mack Trucks, 856 F.2d at 592.

Aside from the ratification vote taken by the Delegate Body on August 22,2012,which was authorized by the District Council bylaws, no other approval is necessary tobind the parties (with the exception of Your Honor's modification of the earlier Order onjob hiring ratios). "There is no independent requirement in federal law of ratification by aunion." Meyerson v. Contracting Plumbers Ass'n of Brooklyn & Queens, Inc., 606 F.Supp. 282, 287 (S.D.N.Y. 1985). And U[u]nion ratification is generally considered to be'the last act necessary . . . to create a meeting of the minds and an enforceableagreement.'" Mack Trucks, 856 F.2d at 592 (quoting NLRB v. Deauville Hotel, 751 F.2d1562, 1569 n.1 0 (11th Cir. 1985)). As mentioned above, with the exception of theCourt's prior Order setting the hiring ratio at 67:33, the parties would otherwise be freeto implement their agreement.



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I would be remiss in not pointing out the following. The authority of the U.S. DistrictCourts to determine questions of contract formation under LMRA Section 301 (a) wereseverely curtailed by the Supreme Court's jurisdictional ruling in Textron LycomingReciprocating Engine Div.! Avco Corp. v. UAW, 523 U.S. 653, 118 S.Ct. 1626 (1998). TheTextron Court limited the jurisdictional reach of Section 301 by narrowly holding that itdoes not apply to "suits that claim a contract is invalid, but [only to] suits that claim acontract has been violated." Id. at 523 U.S. at 657, 118 S.Ct. at 1629. Nevertheless, asdiscussed above, the federal courts have continued to rule on questions involving the veryexistence of collective bargaining agreements.

Moreover, bargaining parties also have a statutory obligation to execute a finalcollective bargaining agreement under Sections 8(a)(5), and 8(b)(3) of the National LaborRelations Act, 29 U.S.C. 158(a)(5), 158(b)(3). That obligation "does not arise unless theparties have reached a meeting of the minds as to all substantive issues." Buschman Co.,334 N.L.R.B. 441, 442 (2001).

Therefore, the National Labor Relations Board from time to time also answersquestions of contract formation. Its inquiry similarly focuses on whether the parties' havereached an accord (or "meeting of the minds") in light of a manifest intent to be bound.See Teamsters Local 287 (Granite Rock Co.), 347 N.L.R.B. 339, 344 (2006) (Board notbound by traditional contract rules when determining "whether underlying oral agreementhas been reached"); Las Vegas Sands, 324 N.L.R.B. 1101 (1997) (Where partiesreached terms of contract and put terms into MOA, employer was obligated to executememorialized agreement and abide by its terms); Teamsters Local 251 (McLaughlin &Moran, Inc.), 299 N.L.R.B. 30, 32 (1990) ("Because parties clearly came to a 'meeting of



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the minds' . . . the parties had a contract beginning on that date . . . "); Trojan Steel Corp.,222 N.L.R.B. 478. 483 (1976) (Where parties reached substantive terms of a contract, thefact that "some additions or alterations in the agreement submitted" were required, "doesnot relieve the parties of the obligation to execute the bargaining contract agreed to.")

CONCLUSIONUnder the relevant statutory and case law, the Court is authorized to find the CBA

to be the collectively bargained agreement to which the parties agreed under the MOUthat was ratified by the District Council's Delegate Body on August 22, 2012.

Respectfully s U b m i t t ~ . r1 ~ f r .

Enclosures (copies of cited cases)



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cc: BY E-MAILDennis M. Walsh, Esq., Review Officer The Law Office of Dennis M. Walsh 415 Madison Avenue, 11 th Floor New York, NY 10017 Bridget M. Rohde, Esq. Counsel to the Review Officer Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P .C. 666 Third Avenue New York, NY 10017 Benjamin H. Torrance, Esq. Assistant United States Attorney Civil Division Office of the United States Attorney for the Southern District of New York 86 Chambers Street New York, NY 10007 John DeLollisExecutive DirectorAssociation of Wall-Ceiling & Carpentry Industries of New York, Inc.125 Jericho Turnpike, Suite 301Jericho, New York 11753-1022Mark A. Rosen, Esq.Counsel for the Association of Wall-Ceiling & Carpentry Industries of New York, Inc.McElroy, Deutsch, Mulvaney & Carpenter, LLP1300 Mount Kemble AvenueMorristown, NJ 07962-2075


Documents

3-29-13 Murphy Letter to RMB (Doc. 1290)