2012 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

9-12-2012

NJ Regional Council of Carpent v. Jayeff

Construction Corp

Precedential or Non-Precedential: Non-Precedential

Docket No. 11-3872

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Recommended Citation

"NJ Regional Council of Carpent v. Jayeff Construction Corp" (2012). 2012 Decisions. Paper 454.

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1

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

__________

No. 11-3872

__________

NEW JERSEY REGIONAL COUNCIL OF CARPENTERS; NEW JERSEY 

CARPENTERS FUNDS and the TRUSTEES THEREOF,

Appellants

v.

JAYEFF CONSTRUCTION CORPORATION

__________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil No. 3:11-cv-00903)

District Judge: Hon. Joel A. Pisano

__________

Submitted under Third Circuit LAR 34.1(a)

September 10, 2012

Before: SMITH, CHAGARES and ALDISERT, Circuit Judges.

(Filed: September 12, 2012 )

__________

OPINION OF THE COURT

__________

ALDISERT, Circuit Judge

The New Jersey Regional Council of Carpenters, the New Jersey Carpenters 

Funds and the Trustees thereof (collectively, “the Funds”) appeal an order from the

.
2

United States District Court for the District of New Jersey, which denied the Funds’ 

motion to confirm an arbitration award and granted Appellee’s motion to vacate the same 

award. Appellants contend that the District Court erred by: (1) usurping the role of the 

arbitrator by interpreting the terms of the collective bargaining agreement (“CBA”) and 

(2) holding that Appellee was not bound by the CBA through its execution of remittance 

reports. For the reasons that follow, we will affirm the District Court’s order.

I.

Because we write primarily for the parties, who are familiar with the facts and the 

proceedings in the District Court, we will revisit them only briefly.

Jayeff Construction Corporation (“Jayeff”) is a commercial construction 

contracting company that hires subcontractors to work on its projects. Jayeff utilizes an 

open-shop work force, meaning it does not require employees to join or financially 

support a union as a condition to employment, and Jayeff has not entered into a statewide 

CBA with the Funds. It has, however, employed members of the Carpenters’ Union and 

has, at individual employees’ requests, remitted payment of their benefits to the Funds so 

that the employees could maintain their union benefits status. Between 2003 and 2009, 

Jayeff voluntarily remitted fringe benefits for five employees who were members of the 

Carpenters’ Union. None of these individuals performed carpentry work for Jayeff but 

were, instead, employed in managerial positions.

Jayeff used the remittance forms required by the Funds, which are standard fill-inthe-blank forms. Each form listed the names of the employees for whom amounts were 

being remitted. The forms also contained the following statement in fine print:

The Employer hereby acknowledges his or its agreement to the Collective

Bargaining Agreement which requires the payment of the fringe benefits 

forwarded herewith. The Employer further agrees to the Agreements and 

Declarations of Trust governing the New Jersey Carpenters’ Fringe 
3

Benefits Funds. Both Collective Bargaining Agreement and the 

Agreements and Declarations of Trust are hereby incorporated by reference 

and the Employer agrees to abide by said agreements.

App. 00082.

1

In June 2003, the Funds instigated a payroll compliance audit of Jayeff for the 

period beginning January 1, 2009, and ending March 31, 2010. On August 16, 2010, the 

auditor issued a report stating that Jayeff should have remitted payments for additional 

non-union employees. As a result, on December 8, 2010, the Funds notified Jayeff that a 

delinquency in the amount of $246,181.67 had been assessed against it. Jayeff took the 

position that, because it was not a signatory to the CBA with the Funds, no additional 

payment was due. Thereafter, the Funds communicated their intent to arbitrate the 

dispute. On December 21, 2010, Jayeff informed the Funds that it would not participate 

in the arbitration proceedings and, moreover, could not be compelled to participate in the 

proceedings because it had never signed the CBA or any arbitration agreement.

The remittance forms were signed and submitted by Jayeff’s personnel 

manager, Eloise DiGuglielmo, and not by the president of Jayeff.

The arbitrator conducted the proceedings without Jayeff on December 30, 2010. 

The arbitrator determined that Jayeff was bound to the CBA with the New Jersey Council 

of Carpenters and issued an order on January 3, 2011, directing Jayeff to pay $392,178.71 

to the Funds. After Jayeff failed to pay the amounts awarded, the Funds filed a motion in 

the District Court for the District of New Jersey requesting that the District Court confirm 

the award. Jayeff filed a cross-motion to vacate the award. On October 11, 2011, the 

District Court issued an order denying the Funds’ motion to confirm the award and 

granted Jayeff’s motion to vacate. The Funds timely appealed.

 1 The parties separated the page numbers of the Appendix into two groups: pages 

1-14 in Volume I and pages 1-157 in Volume II. We have combined the volumes 

to provide one, continuous pagination: App. 00001-00171.
4

II.

The District Court had jurisdiction under § 301(a) of the Labor Management 

Relations Act (“LMRA”), 29 U.S.C. § 185(a) and § 520 of the Employee Retirement 

Income Security Act (“ERISA”), 29 U.S.C. § 1132. We have jurisdiction pursuant to 9

U.S.C. § 16(a). We exercise plenary review over the District Court’s legal conclusions 

concerning the applicability and scope of an arbitration agreement. See Harris v. Green 

Tree Fin. Corp., 183 F.3d 173, 176 (3d Cir. 1999) (citing Pritzker v. Merrill Lynch, 7 

F.3d 1110, 1113 (3d Cir. 1993)). “Despite the liberal policy in favor of enforcing 

arbitration agreements . . . , a party cannot be forced to arbitrate unless ‘that party has 

entered into a written agreement to arbitrate that covers the dispute.’” U.S. Small Bus. 

Admin. v. Chimicles, 447 F.3d 207, 209 (3d Cir. 2006) (quoting Bel-Ray Co. v. Chemrite

(Pty) Ltd.

III.

, 181 F.3d 435, 440 (3d Cir. 1999)).

The Funds first contend that it was error for the District Court to vacate the 

arbitration award because the Court impermissibly usurped the role of the arbitrator by 

interpreting the terms of the CBA. Jayeff, however, is not challenging the validity of the 

CBA nor the meaning of any of its provisions. Rather, the issue is whether a contract to 

arbitrate was ever entered into by the parties. In such a case, the court—not the 

arbitrator—has the power to adjudicate the issue. See Buckeye Check Cashing v. 

Cardegna

The Federal Arbitration Act (“FAA”) creates a strong presumption in favor of 

enforcing arbitration awards. 

, 546 U.S. 440, 444 n.1 (2006). 

See Brentwood Med. Assocs. v. United Mine Workers of 

Am., 396 F.3d 237, 241 (3d Cir. 2005). Pursuant to the FAA, a district court may vacate 

an arbitration award only under a limited number of circumstances, including:
5

(1) where the award was procured by corruption, fraud, or undue means;

(2) where there was evident partiality or corruption in the arbitrators, or 

either of them;

(3) where the arbitrators were guilty of misconduct in refusing to postpone 

the hearing, upon sufficient cause shown, or in refusing to hear evidence 

pertinent and material to the controversy; or of any other misbehavior by 

which the rights of any party have been prejudiced; or

(4) where the arbitrators exceeded their powers, or so imperfectly executed 

them that a mutual, final, and definite award upon the subject matter 

submitted was not made.

9 U.S.C. § 10(a)(1)-(4). “As long as the arbitrator’s award ‘draws its essence from the

collective bargaining agreement,’ and is not merely ‘his own brand of industrial justice,’ 

the award is legitimate.” United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 36 

(1987) (quoting United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 

597 (1960)). Thus, “as long as the arbitrator is even arguably construing or applying the 

contract and acting within the scope of his authority, that a court is convinced he 

committed serious error does not suffice to overturn his decision.” Misco

It is well-settled, however, that “arbitration is a matter of contract and a party 

cannot be required to submit to arbitration any dispute which he has not agreed so to 

submit.” 

, 484 U.S. at 38.

United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 

582 (1960). “Unless the parties clearly and unmistakably provide otherwise, the question 

of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator.” 

AT&T Techs. v. Commc’ns Workers of Am.

IV.

, 475 U.S. 643, 649 (1986).

Because courts—not arbitrators—must determine whether the parties ever agreed

to arbitrate, we must now analyze whether the District Court erred by vacating the award 

after finding that Jayeff did not intend to enter into the CBA. To determine whether a 

dispute is arbitrable, “a court must address two issues: (1) whether the parties formed an 

agreement to arbitrate; and (2) whether the dispute in question falls within the scope of 
6

that agreement.” Nationwide Mut. Ins. Co. v. Cosenza, 258 F.3d 197, 202 (3d Cir. 2001) 

(citation omitted); see also Medtronic AVE, Inc. v. Advanced Cardiovascular Sys., Inc.

It is undisputed that Jayeff was not a signatory to the CBA. The lack of a signed 

CBA does not, however, end our inquiry. Although, “[o]rdinarily, binding a nonsignatory to a CBA runs afoul of the fundamental premise that ‘a party cannot be 

required to submit to arbitration any dispute which he has not agreed [to so] submit,’” 

, 

247 F.3d 44, 54-55 (3d Cir. 2001).

Local Union No. 38, Sheet Metal Workers’ Int’l Ass’n v. Custom Air Sys., Inc., 357 F.3d 

266, 268 (2d Cir. 2004) (alteration in original) (quoting Warrior & Gulf Navigation, 363 

U.S. at 582), “‘a collective bargaining agreement is not dependent on the reduction to 

writing of the parties’ intention to be bound,’ . . . rather ‘[a]ll that is required is conduct 

manifesting an intention to abide and be bound by the terms of an agreement,’” 

Bricklayers Local 21 of Ill. Apprenticeship & Training Program v. Banner Restoration, 

Inc., 385 F.3d 761, 766 (7th Cir. 2004) (quoting Gariup v. Birchler Ceiling & Interior 

Co., 777 F.2d 370, 373 (7th Cir. 1985)). To determine whether a non-signatory may be 

bound by a CBA, a court must examine whether there is: (1) a writing that clearly refers 

to the CBA and (2) conduct of the defendant that “evidences an intent to be bound by the 

[CBA] despite a lack of written consent.” Residential Reroofers Local 30-B Health & 

Welfare Fund v. A & B Metal & Roofing, Inc.

The Funds contend that the parties formed an agreement to be bound by the CBA 

when Jayeff executed the remittance forms.

, 976 F. Supp. 341, 344 (E.D. Pa. 1997) 

(citation omitted).

2

 2 Section 302 of the LMRA, 29 U.S.C. § 186, prohibits payments by employers to labor 

organizations. The “written agreement requirement,” however, operates as an exception, 

making payments to an employee benefit plan lawful where the payments are made 

pursuant to a written agreement. Therefore, to legally provide payments to the Funds, 

The District Court found the language in the 
7

forms to be “ambiguous,” adding that “the extent to which the clause purports to bind the 

employer is unclear.” App. 00008. The District Court went on to hold that the 

surrounding context “clearly shows that Jayeff had no intent to be bound to the entire 

CBA as to all of its employees, and that it was reasonable for Jayeff to believe that it was 

not so bound merely by submitting the standard remittance forms.” 

We conclude that the District Court did not err in finding that Jayeff’s conduct did 

not indicate an intent to be bound by the CBA. The remittance forms were expressly 

limited to “payment of fringe benefits forwarded herewith” for the five designated 

employees who requested the contributions. App. 00082. The Funds drafted the 

remittance forms to permit payment to the Funds, in accordance with the LMRA, not 

only by parties who were signatories to the CBA but also by parties like Jayeff, who were 

only contributing for certain employees. There is no precedent to support the Funds’ 

position that an employer that has not signed a CBA can nevertheless be bound by all of 

the provisions of the CBA solely from signing remittance forms. Although a signed 

remittance forms is entitled to some weight, it is but one factor that must be examined in 

analyzing a defendant’s conduct; the form, alone, is not enough to bind a non-signatory 

employer to a CBA. 

Id.

See Operating Eng’rs Local 139 Health Benefit Fund v. Gustafson 

Constr. Corp., 258 F.3d 645, 650 (7th Cir. 2001) (“[T]he monthly remittance reports 

accompanying these payments contained a declaration signed by the defendant . . . . 

Boilerplate it was, but it was entitled to some weight.” (citation omitted)); see also Del 

Turco v. Speedwell Design

 

Jayeff must have executed a written agreement detailing the basis for the payments. Here, 

the remittance forms satisfy the written agreement requirement. See Moriarty v. Larry G. 

Lewis Funeral Directors Ltd., 150 F.3d 773, 775 (7th Cir. 1998). However, the express 

language in § 302(c)(5)(B) is silent as to whether the act of making payments pursuant to 

the written agreement automatically binds the employer to the CBA.

, 623 F. Supp. 2d 319, 346 (E.D.N.Y. 2009) (concluding that 
8

the funds could seek contributions from the employer based on the existence of a signed 

CBA as well as remittance reports).

Not only are the remittance forms, by themselves, not enough to bind Jayeff to the 

CBA, but moreover its conduct does not evidence an intent to be bound by the CBA:

Jayeff never signed the CBA; it contributed to the funds on behalf of five individuals

only after those individuals requested that it do so; and all other individuals employed by 

Jayeff were non-union employees. See Firesheets v. A.G. Bldg. Specialists, Inc.

Even looking at the Funds’ interaction (or lack thereof) with Jayeff, there is no 

evidence that Funds believed Jayeff was bound by the CBA: for seven years, until the 

accounting in 2010, the Funds never attempted to enforce any of the numerous provisions 

of the CBA against Jayeff. And even when the Funds tried to enforce the CBA’s 

arbitration provision, Jayeff not only contested the arbitrator’s jurisdiction prior to the 

arbitration proceedings, but it also refused to appear before the arbitrator. 

, 134 

F.3d 729, 731 (5th Cir. 1998) (concluding that employer’s conduct in hiring nonunion 

carpenters, setting wages and making contributions to a trust fund “only for those 

employees who asked for contributions” was inconsistent with an intent to be bound by 

the CBA). 

See Bricklayers 

Local 21

Based on the record, we conclude that the District Court did not err when it found 

that Jayeff’s conduct did not indicate an intent to be bound by the CBA. We therefore 

reject the Funds’ position and will affirm the District Court’s order vacating the award.

, 385 F.3d at 767-768 (concluding employer was bound by the CBA after 

examining numerous factors including evidence that the employer “took no action to 

challenge jurisdiction after the Joint Arbitration Board found it guilty of labor violation 

charges under the CBA”).
9

* * * * *

We have considered all of the arguments advanced by the parties and conclude 

that no further discussion is necessary. The judgment of the District Court will be 

AFFIRMED.