Friday, January 25, 2013

Most Favored Nation provision violation remedies

On May 3, 2012, Arbitrator Rosemary Townley issued a decision finding that the New York District Council of Carpenters breached the Most Favored Nation provision of its cba with the Manufacturing Woodworkers Association. That award is discussed here.  Arbitrator Townley has now issued her decision on the remedy phase of that dispute.

Arbitrator Townley has rejected the MWA's claim for almost  60 million dollars in damages, which the Union claimed is a sum approaching its total net assets. The MWA calculated that number using a damages period running from that date the Union entered into the more favorable contract. It also sought a return of excess contributions to the Union Funds, as well as reimbursement for excess payroll taxes paid and an award of one million dollars in punitive damages.

Arbitrator Townley determined that she was without authority under the cba to address the issue of the Union Funds, since the cba directed those disputes to a different panel of arbitrators. She also concluded that the cba limited consequential damages to "conforming" the agreement to the more favorable terms, and contained no language authorizing an award of punitive damages.

While noting that her original award had stated that the MWA was entitled to retroactive damages  "to April 1, 2009" (the date the more favorable contract was entered into), Arbitrator Townley found "after a full review of the damages evidence, and the arguments in the post hearing briefs" that that conclusion was premature and inconsistent with the parties agreement to bifurcate the damages phase of the hearing from the merits. Reviewing the issue anew, she concluded that retroactive damages should be limited to a period beginning 30 days prior to the filing of the grievance (i.e. 30 days prior to July 12, 2011).

However the Arbitrator did conclude (subject to verification of the calculation) that an award of slightly in excess of 8 million dollars was appropriate.

Local 157blogspot has the Arbitrator's remedy award here.

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