Aurora Contractors, Inc. v. Construction and General Building Laborers Local 79

Background

Aurora Contractors, Inc. asked the court to stay, or stop, arbitration requested by Construction and General Building Laborers Local 79. The dispute concerned Aurora’s hiring of Alba Demolition to perform demolition work at a jobsite in Brooklyn, New York. The union alleged that this violated the subcontracting provision of a 2002–2005 Master Independent Collective Bargaining Agreement between Aurora and the Mason Tenders District Council of Greater New York and Long Island, which entered into agreements for its constituent unions, including Local 79.

Article X of the agreement allowed disputes involving the interpretation or application of any agreement provision to proceed through a grievance process and, if unresolved, to arbitration. Article XII contained an evergreen provision stating that the agreement would renew each year unless a party provided written notice of a desire to modify, amend, or terminate it by certified mail between 60 and 90 days before the expiration date.

Aurora’s counsel orally notified the union in January 2015 that Aurora would not renew the agreement. On April 30, 2015, Aurora mailed a letter that referred to “ABZ Contracting Inc.” and “Laborers Local No. 66,” rather than the parties identified in this case. On May 12, 2015, Aurora sent a correction letter stating that Aurora Contractors, Inc. would not renew its collective bargaining agreement effective July 1, 2015. The court noted that the correction letter was outside the notice period in Article XII and that neither letter was sent by certified mail.

In 2020, the union submitted a grievance alleging that Aurora violated the subcontracting provision, and the Mason Tenders District Council’s legal department sent Aurora a notice of intent to arbitrate. Aurora then filed the petition to stay arbitration.

Issue and Governing Standard

The issue was who should decide whether the agreement had been terminated: the court or an arbitrator. Under the Federal Arbitration Act, written arbitration agreements generally are enforceable. A court ordinarily decides whether the parties agreed to arbitrate, unless the agreement provides clear and unmistakable evidence that the arbitrator should decide that question.

Court’s Analysis

The court held that the agreement showed a clear and unmistakable intent to submit all disputes arising from the agreement to arbitration, including disputes about termination. Article X covered disputes involving questions of interpretation or application of “any clause” of the agreement. The court concluded that this language included Article XII, the provision governing termination and renewal.

Aurora argued that the arbitration provision was no longer operative because the agreement had expired and that there was no reasonable basis to conclude otherwise. The court rejected that argument. Article XII established specific termination procedures, including certified-mail notice during a particular 60-to-90-day period. Aurora did not use certified mail. Its first letter also identified a different company and laborers’ local, while its correction letter was sent outside the required notice period.

Because Aurora did not comply with the agreement’s stated termination procedures, the court found at least a reasonable basis to conclude that the agreement had not been terminated. The court therefore ruled that the arbitrator should decide the agreement’s arbitrability, including whether the agreement remained in effect.

Disposition

The Petition to stay arbitration was denied. The Clerk of Court was directed to close the case.