In re Arbitration between Reif & Williams Sportswear, Inc.
This case addresses whether a corporation is bound by an arbitration clause in a collective bargaining agreement ratified by its predecessor partnership. The petitioner, Local 169 of the Amalgamated Clothing Workers of America, initiated arbitration against the respondent, Williams Sportswear Co., Inc., for defaulting on payments to employee funds. The corporation, formed by the same partners who ran the predecessor partnership, continued the same business in the same location and sought to stay arbitration, arguing it was not a party to the agreement. While the Special Term denied the stay, the Appellate Division reversed, absolving the corporation of the obligation. The higher court, however, reversed the Appellate Division's decision, holding that the corporation acts as an 'alter ego' of the original promoters and is thus bound by the collective bargaining agreement, emphasizing that a change in corporate form does not negate pre-existing contractual obligations when the underlying business remains unchanged. Therefore, arbitration was deemed enforceable.