Update: The MWA Arbitration

Below is an excerpt from the Fifth Interim Report of the Review Officer, covering June 4, 2012, to December 3, 2012.

The MWA Arbitration

The District Council and the MWA await a decision -- from the arbitrator who decided last May in favor of the MWA’s claim that a trade show display contractor, Gilbert Displays, was a competitor of the MWA’s members (who make and install fine millwork in residences and offices) and thus the MWA was entitled to the more favorable contract temis given to Gilbert in August 2009 -- on the question of calculation of damages and the applicability of the Consent Decree and Stipulation and Order.

I attended a meeting with the arbitrator and the parties at the American Arbitration Association offices in July 2012 at which the parties posed arguments and the arbitrator agreed to further submissions, which were made in late September.

As a result of the arbitrator’s May 2012 decision, the MWA has asserted that it is entitled to some $60 million in damages, has unilaterally reduced its payment of fringe benefit contributions to the Benefit Funds and intends to sue the Funds for the return of some $27 million already contributed to the Funds. The Benefit Funds’ attempt in the District Court to enjoin the reduced payment of fringe benefits was denied in August by Judge Louis Stanton.

The Benefit Funds’ trustees who do not have a conflict of interest must now reduce or end certain fringe benefits (including healthcare) for hundreds of MWA employees, and are in the process of providing notice of this imminent change.

I disagree with the arbitrator’s decision, which has unleashed a torrent of unintended consequences (including litigation) and a good deal of suffering upon innocent workers struggling to provide for their families.

Further, I have already stated as a matter of public record that I will move to protect the District Council from any damage award that materially harms the finances of the District Council and thereby interferes with the goals of the Consent Decree and Stipulation and Order or stymies the District Council in meeting its responsibilities pursuant to orders of the Court.

The arbitrator’s decision is currently expected on or about December 31, 2012.

(John's note: The briefs submitted by the parties in September are attached below)


briefs submitted by the parties in September