Trustees Of The New York City District Council Of Carpenters Pension Fund v…

Background

The petitioners, referred to collectively as the Funds, had agreements with Everlast requiring contributions to employee benefit funds for covered work. Those agreements included project labor agreements, a collective bargaining agreement, and the Funds’ collection policy. The agreements allowed the Funds to audit Everlast’s payroll records and required Everlast either to pay amounts identified as owing or to challenge the audit with supporting documents within 14 days.

An outside accounting firm audited Everlast for work performed from February 1, 2021, through March 27, 2022. The audit identified $267,551.83 in unpaid principal contributions, with additional interest, assessments, and costs. The Funds sent Everlast the audit on March 10, 2023. Everlast did not pay the claimed amount or submit documents challenging the audit during the 14-day period.

The Funds began arbitration. The arbitration hearing was ultimately held on September 7, 2023, after several postponements. The Funds and the arbitrator gave Everlast additional opportunities to provide documents supporting a challenge to the audit. The parties disagreed about what they had agreed to at the September hearing: the Funds said the award would be held temporarily only if Everlast both paid $50,000 and supplied rebuttal documents by October 1; Everlast said only the $50,000 payment was required before another hearing on November 2. Everlast made the $50,000 payment but did not submit the requested rebuttal materials by October 1.

On October 17, 2023, the arbitrator issued an award for $361,680.82. The award included the unpaid principal, interest, liquidated damages, contributions, attorneys’ fees, audit costs, court costs, and arbitration fees, less the $50,000 payment. Everlast later filed documents supporting its position that some audited work involved non-project-labor-agreement jobs and did not require payments to the Funds.

Motions and Legal Standard

The Funds petitioned under Section 301 of the Labor Management Relations Act to confirm the award. Everlast cross-moved to vacate it, arguing that the audit included amounts for work that did not require contributions and that the arbitrator improperly declined to hold another hearing.

The court explained that review of a labor arbitration award is very limited. A court generally does not reconsider the arbitrator’s factual findings or interpretation of the parties’ agreement. Instead, the court asks whether the arbitrator acted within the authority granted by the collective bargaining agreement and provided at least a minimally plausible justification for the award. The party seeking to vacate an award faces a very high burden.

Timeliness of Everlast’s Motion

The court first ruled that Everlast’s motion to vacate was untimely. It applied a 90-day deadline for challenging a labor arbitration award. Even assuming the deadline did not begin when Everlast’s counsel learned of the award on October 18, 2023, the court concluded that the award was delivered to Everlast no later than October 26, 2023, when the Funds sent it to Everlast by certified mail and email. The 90-day deadline therefore expired no later than January 24, 2024. Everlast filed its motion on April 5, 2024.

Merits of Confirmation

The court also addressed the substance of Everlast’s challenge. It held that the arbitrator acted within the authority granted by the collective bargaining agreement. The arbitrator considered Everlast’s payment obligations, the audit procedures, the parties’ communications, the September 7 hearing, and Everlast’s failure to provide timely supporting documents.

The court found that the arbitrator had a sufficient basis for concluding that Everlast had not adequately challenged the audit. Everlast had more than five months to provide relevant documentation, did not timely submit the required materials, and did not provide the materials by October 1 after receiving the additional opportunity described by the arbitrator. The court also held that declining to hold another hearing on November 2 did not make the proceeding fundamentally unfair because Everlast had multiple opportunities to submit evidence and arguments.

The court rejected Everlast’s reliance on documents submitted with its federal court motion. Because the collective bargaining agreement made the arbitrator’s decision final and binding, and because the arbitrator had acted within the agreement’s scope, the court would not reconsider the audit’s factual issues or the evidence Everlast submitted after the award.

Disposition

The court granted the Funds’ petition to confirm the arbitration award and denied Everlast’s cross-motion to vacate the award. The court directed the Funds to submit a fee application and billing records by April 8, 2025. The opinion did not itself award the requested additional fees. The Clerk was directed to terminate the motions and close the case.