Monday, July 30, 2012

Statute of Limitations to enforce arbitration award; six months, one year or six years?

The U.S, District Court for the Eastern District of Michigan has issued a decision enforcing an arbitration award, rejecting the employer’s claim that the action was barred by the statute of limitations. IBEW LOCAL 58 v. Metro Electric Engineering.

The Union had filed a grievance claiming that Metro Electric had violated the exclusive referral procedures of its combined bargaining agreement. On October 27, 2010, the Labor-Management Committee upheld the grievance and ordered Metro to make whole employees who had been improperly bypassed. Metro did not seek to set aside the award.

On July 13, 2011 the Union demanded payment of $408,086.33 as compensation for the affected employees. Metro again objected to the LMC decision on substantive and procedural grounds but did not challenge the calculation. Metro failed to comply with the award and on September 30, 2011 the Union filed a complaint seeking confirmation of the award. The parties thereafter filed cross motions for summary judgment.

Metro maintained that the Union’s action was untimely, arguing for a six month limitations period. The Union countered that the appropriate limitations period was one year.

The Court rejected both positions. Noting that while the law was clear on the limitations period for actions to vacate an arbitration award (three months in the Sixth Circuit), it found the law less clear on the period for enforcing an award. Analogizing the action to one for breach of contract, the court ultimately relied on the Supreme Court’s decision in Automobile Workers v. Hoosier Cardinal Corp. and concluded that the appropriate limitations period was six years, the state law limitations period for breach of contract. “Just as the United States Supreme Court applied Indiana’s six-year statute of limitations for a breach of a contract, the Court applies Michigan’s six year limitations period for a breach of contract claim to the instant Sec. 301 claim to enforce the LMC Decisions under the CBA.”

Because the employer had never timely filed to vacate the award it was precluded from challenging the award on procedural or substantive grounds.

1 comment:

  1. Metro Electrics should give what are the right treatment and benefits for their employees. For the Union, please continue to seek and get what are for you.