International Brotherhood of Electrical Workers, Local 291 et al v. Alloway Electric Co., Inc.
Filing
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MEMORANDUM DECISION granting in part and denying in part 14 Plaintiff's Motion for Summary Judgment; granting in part and denying in part 16 Defendant's Motion for Summary Judgment. This matter is hereby REMANDED to the Labor Man agement Committee of the International Brotherhood of Electrical Workers, Local 291, for further proceedings consistent with the Courts opinion. The Clerk is directed to close this case. Signed by Judge Candy W. Dale. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjm)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
INTERNATIONAL BROTHERHOOD
OF ELECTRICAL WORKERS,
LOCAL 291, and THE TRUSTEES OF
THE EIGHTH DISTRICT
ELECTRICAL PENSION AND
BENEFIT FUNDS,
Case No. 1-13-cv-00164-CWD
MEMORANDUM DECISION
Plaintiffs,
v.
ALLOWAY ELECTRIC CO., INC., an
Idaho corporation,
Defendant.
INTRODUCTION
This matter is before the Court on the parties’ cross motions for summary
judgment. (Dkt. 14, 16.) Plaintiffs International Brotherhood of Electrical Workers Local
291 and The Trustees of the Eighth District Electrical Pension and Benefit Funds
(collectively, the Union) seek judicial confirmation of an arbitration award dated
December 12, 2012, involving a dispute between the Union and Defendant Alloway
MEMORANDUM DECISION AND ORDER - 1
Electric Co., Inc. (Alloway) over an alleged violation of a Collective Bargaining
Agreement (CBA). The total award sought to be confirmed is $42,819.91. Alloway
contests the award, arguing the Court should set it aside.
The Court conducted a hearing on July 7, 2014, at which the parties appeared and
presented oral argument. After careful consideration of the parties’ briefs, their
arguments, and the relevant legal authorities, the Court enters the following order
granting in part and denying in part both Plaintiffs’ and Defendant’s motions for
summary judgment.
FACTS
The Union and Alloway are parties to a CBA that sets forth procedures to settle
grievances arising between the Union, employers, and Union members. The CBA,
entitled the Inside Wireman Agreement, (Dkt. 14-6 at 1), bound Alloway by virtue of its
Letter of Assent. (Dkt. 14-5 at 1.) The Letter of Assent designated the Idaho Chapter of
the National Electrical Contractors Association—Western Division (NECA) as
Alloway’s collective bargaining representative for all matters pertaining to the CBA.
According to the grievances section in the CBA, disputes between labor and
management would be resolved as follows:
Section 1.05. There shall be a Labor-Management Committee of three
representing the Union and three representing the Employers. It shall meet
regularly at such stated times as it may decide. However, it shall also meet
within 48 hours when notice is given by either party. It shall select its own
Chairman and Secretary. The Local Union shall select the Union
representatives and the Chapter shall select the management
representatives.
MEMORANDUM DECISION AND ORDER - 2
Section 1.06. All grievances or questions in dispute shall be adjusted by the
duly authorized representative of each of the parties to this Agreement. In
the event that these two are unable to adjust any matter within 48 hours,
they shall refer the same to the Labor-Management Committee.
Section 1.07. All matters coming before the Labor-Management
Committee shall be decided by a majority vote. Four members of the
Committee, two from each of the parties hereto, shall be a quorum for the
transaction of business, but each party shall have the right to cast the full
vote of its membership and it shall be counted as though all were present
and voting.
Section 1.08. Should the Labor-Management Committee fail to agree or to
adjust any matter, such shall then be referred to the Council on Industrial
Relations for the Electrical Contracting Industry for adjudication. The
Council's decisions shall be final and binding.
The CBA required Alloway to maintain a prescribed ratio of higher compensated
journeyman wiremen to lower compensated electrician apprentices. Specifically, the
CBA required that “each job site shall be allowed a ratio of two (2) apprentices for every
three (3) Journeyman Wireman….A job site is considered to be the physical location
where employees report for their work assignments. The employer’s shop (service center)
is considered to be a separate, single job site. All other physical locations where workers
report for work are each considered to be a single, separate job site.” CBA Section 5.12
(Dkt. 14-6 at 23).
On December 16, 2011, the CBA was amended. Addendum (Dkt. 14-7 at 1). The
ratio requirement was amended to require “Three (3) Journeymen to Two (2) Apprentice,
MEMORANDUM DECISION AND ORDER - 3
CW, CE. 1 Contractor using this amendment shall maintain an Apprentice (Indentured)
ratio of Five (5) Journeymen to One (1) Apprentice (Indentured) ratio shop wide.” But,
the terms of the Addendum allowed the Business Manager discretion to consider a
variance to the ratio requirement “to enhance the competitive position of the parties” to
the Addendum.
Marc Bernsen is the Executive Director of NECA. In that capacity, Bernsen
received a letter dated December 3, 2012, from Aaron White, the Union’s business
manager, requesting a meeting of the Labor Management Committee (LMC) regarding
Alloway’s alleged violation of the Addendum of the CBA. (Dkt. 14-11, 14-12). Attached
to the letter was Alloway’s current roster of Journeyman Wireman and Apprentices.
Bernsen confirms receiving the letter. Bernsen Decl. ¶ 6 (Dkt. 14-4).
Bernsen later informed Mr. Miles Elletson, Vice President of Alloway, of the
grievance and the upcoming LMC meeting by telephone. Bernsen does not know the
exact date or time of the call, but believes it occurred sometime between December 3,
2012, and December 10, 2012. Elletson informed Bernsen that Alloway would not be
sending its own representative to the LMC meeting, but would permit its NECA
representatives to advocate for Alloway. Elletson Aff. ¶ 21 (Dkt. 15-2). Elletson asserts
that Bernsen did not inform him of the ratio violation grievance, but only spoke to him
1
CW is shorthand for construction wireman, while CE is shorthand for construction electrician. Construction
Electricians are workers who have a journeyman licenses with the State of Idaho, but have not completed testing
required by the Union to qualify as Journeymen with the Union. Construction Wiremen are apprentices registered
with the state of Idaho, but have not completed the apprenticeship program through the Union’s training program.
CWs and CEs are electricians that can be hired pursuant to the CBA, but are non-union employees and are paid
lower wages than either Journeymen electricians or Apprentices placed through the Union training program. Decl. of
White ¶ 5 (Dkt. 14-10).
MEMORANDUM DECISION AND ORDER - 4
about a grievance filed by an employee who had been terminated from employment.
Elletson Aff. ¶ 18 (Dkt. 15-2). Elletson did not receive any written confirmation of the
grievances to be presented to the LMC, although written notice had occurred on prior
occasions. Id. at ¶ 18. Elletson was not asked to provide information to NECA or the
Union prior to the LMC meeting. Id. at ¶ 20.
The LMC met on December 10, 2012. Decl. of Bernsen ¶ 8 (Dkt. 14-4); but see
Minutes (Dkt. 14-8). 2 Two grievances were addressed. Present at the meeting were four
members representing Management, including Bernsen, and four members representing
Labor, including Aaron White. The first grievance involved a wrongful termination claim
brought by one of Alloway’s employees. The second grievance concerned Alloway’s
violation of the ratio requirement under Article 5, Section 5.12 of the CBA. During the
time the LMC meeting was held, Bernsen called Elletson to discuss issues relating to the
wrongful termination grievance, and permitted Elletson to communicate Alloway’s
position on the matter. Elletson Aff. ¶ 22. Elletson was not asked to provide any
information about the grievance regarding the ratios. Id.
After discussion, the LMC issued a determination that Alloway “adhere to the
terms and conditions of the current Inside Wireman’s Agreement and come into ratio as
stated in Article 5 section 5.12. In the event Alloway does not come into ratio by
December 13, 2012, all Construction Electricians (CE) must be paid the full wage and
2
The meeting minutes are dated December 12, 2012, but the declaration of Mr. Bernsen, who was present at the
meeting, indicates that the meeting occurred on December 10, 2012. Due to the timing of later phone calls and the
contents of later correspondence, it appears the meeting occurred on December 10, and the meeting minutes contain
a typographical error as to the date. The actual date of the LMC meeting is not material, however, for summary
judgment purposes.
MEMORANDUM DECISION AND ORDER - 5
benefit package equal to an Inside Wireman, 3 commencing on December 13, 2012.”
Bernsen was directed to prepare a letter notifying Alloway of the LMC’s action.
Bernsen informed Elletson, by telephone, of the LMC’s decision on December 11,
2012. Bernsen Decl. ¶ 9 (Dkt. 14-4 at 3); Elletson Aff. ¶ 23 (Dkt. 15-2). Bernsen again
informed Elletson by letter dated December 14, 2012. Bernsen Decl. ¶ 9; Elletson Aff.
¶ 24. The December 14, 2012, letter addressed to Elletson informed Alloway that the
LMC found Alloway in violation of Article 5, Section 5.12, and suggested various
solutions to the issue, such as hiring additional Journeymen; laying off Construction
Electricians; or paying the currently employed Construction Electricians the current wage
and benefits of an Inside Wireman commencing December 13, 2012. The letter did not
contain information about any penalty that would be assessed against Alloway, nor did it
attach a copy of the minutes from the December 10, 2012, LMC meeting. (Dkt. 14-8 at
3.)
Aaron White states that Alloway did not return to ratio or pay the appropriate
salary and benefits required by the LMC decision. White Decl. ¶ 13 (Dkt. 14-10). As a
result, in “early January, 2013,” White sent a letter to Elletson informing him that the
LMC decision was final, but that Alloway could seek review at the Council on Industrial
Relations. 4 This letter indicates that a copy of the minutes from the December 10, 2012,
LMC meeting was attached. (Dkt. 14-14.) However, the copy of the letter Elletson
received on January 16, 2013, did not include a copy of the December 10 LMC meeting
3
The CBA contained a chart outlining the wages paid to CWs and CEs. For example, a Construction Wireman Step
1 was paid 30% of the Journeyman Wireman Rate. See Inside Wireman Agreement CW and CE Addendum (Dkt.
14-6 at 2-3).
4
The undated January 2013 Letter is attached to White’s Declaration as Exhibit D. (Dkt. 14-14.)
MEMORANDUM DECISION AND ORDER - 6
minutes. (Dkt. 15-4.) Elletson received a second undated letter on January 16, 2013, from
Aaron White requesting copies of payroll records for the period December 13, 2012
through January 11, 2013, for all employees covered by the CBA and the Addendum.
(Dkt. 15-4.) Elletson attempted to contact White to discuss the issue. Id. However, White
did not return Elletson’s phone calls. Elletson Aff. ¶ 36 (Dkt. 15-2 at 12.) Alloway did
not seek review by the Council on Industrial Relation, and according to White, Alloway
did not compensate the CE’s/CW’s as required by the LMC award. White Decl. ¶ 15
(Dkt. 14-10).
Article X, Section 4 of the Pension Fund Trust Agreement governs collection of
delinquencies by the Pension Fund from participating employers. (Dkt. 14-16 at 3). The
Trust Agreement states that, when a participating employer is delinquent, the Trustees
“shall have the authority to take all reasonable steps necessary as appropriate to redress
the delinquency….” If the Trust’s administrative manager receives information indicating
that a participating employer has failed to report employees, or hours, or any other
reporting irregularity, the Administrative Manager may send a citation and require the
employer to appear before the Trustees and present evidence relative to his fringe benefit
accounts. (Dkt. 14-16 at 6; 14-16 at?).
Gus Sand, a principle of Gus Sand & Associates, an auditing and accounting firm,
prepares audits for multi-employer pension and benefit funds, including the Eighth
District Pension Fund, and has done so for 38 years. Decl. of Sand ¶ 2 (Dkt. 14-2). In
July of 2013, Sand examined the books and payroll records of Alloway to determine the
number of hours worked and gross wages paid to Alloway employees from December 13,
MEMORANDUM DECISION AND ORDER - 7
2012, to April 30, 2013. “Consistent with the LMC award, [Sand] reviewed Alloway’s
payroll records and adjusted the salary and fringe benefit contributions Alloway reported,
and paid, for CW/CE’s.” Id. ¶ 5. Sand calculated the wages due CW/CE’s for the period
December 13, 2012, through April 30, 2013, 5 to be $13,045.95. Sand further calculated
the contributions to the benefit fund based upon those wages to be $21,415.94; interest at
$2,043.20; and liquidated damages and audit fees of $5,148.94, bringing the total liability
to $42,819.91. Id. ¶¶ 6-10.
Alloway’s Vice President, Miles Elletson, explained that Alloway has, at all times,
understood and complied with the CBA’s ratio requirements for Journeymen and
apprentices. Alloway hires based upon its project needs. The number of employees it has
depends upon the number of contract projects Alloway has in progress, and journeymen
and CW/CE’s are hired for specific projects. Elletson Aff. ¶ 7 (Dkt. 15-2). Elletson stated
that sometimes, a variance to the ratio requirement was granted pursuant to the CBA
Addendum. Id. ¶ 8. Elletson understood that the Union had the authority to allow
Alloway to deviate from the ratio so long as the Union business manager gave approval.
Alloway was granted such a variance as recently as October of 2012, for a particular job.
Id. ¶ 9. Alloway contends that the Union never asked for or examined documentation
from Alloway which would have demonstrated Alloway’s ratio of journeymen to
CW/CE’s on a jobsite specific basis, which is what Alloway contends the CBA requires.
Id. ¶¶ 11-15. Alloway blames its inability to comply with the jobsite specific ratios in
5
Apparently, Alloway corrected its ratios by April 30, 2013. However, the record does not indicate who made that
determination or what it was based upon.
MEMORANDUM DECISION AND ORDER - 8
2012 and February 2013 upon union electricians who quit without notice, walked off the
job, or were the subject of termination for cause. Id. ¶¶ 15-17.
ANALYSIS
The Union and the Pension Plan seek confirmation of the LMC award under
Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a), contending that
the arbitration award is enforceable. The Union argues Alloway did not move to vacate or
modify the award within 90 days as required by Idaho Code § 7-911. Additionally, the
Union claims it is entitled to enforcement of the award under a breach of contract theory,
because Alloway breached the terms of the CBA by failing to maintain the required ratio,
as determined by the LMC. As for the Pension Fund, the Union explains that the Funds
have an independent statutory right under 29 U.S.C. § 1145 to enforce the contribution
obligations imposed under a CBA, and also to collect contributions owed pursuant to an
arbitration award.
In response and in support of its own motion, Alloway argues the LMC award is
unenforceable under the Idaho Uniform Arbitration Act, because certain procedural
requirements were not met, including a writing evidencing the award, mailed via
registered mail to the employer. Alloway further argues that the LMC award was
procured by undue means, and the process was conducted so as to prejudice Alloway’s
rights. As an example, Alloway notes that it was not given advance notice of the
grievance, was not asked to provide testimony or evidence at the LMC meeting, nor was
it notified promptly that it would be subjected to penalties if the situation was not
corrected. Because the award was not properly delivered, Alloway argues the 90 day time
MEMORANDUM DECISION AND ORDER - 9
period to move to vacate the award never begun. Alloway relies upon the provisions of
the Idaho Uniform Arbitration Act for its arguments.
Alloway asserts that the Sand Affidavit, upon which the LMC award depends,
lacks foundation and does not identify how Sand calculated the ratios and amounts owed.
Alloway contends that any award should take into account ratios of journeymen to
CW/CE’s by jobsite, and not on a shopwide basis. Because the Union has not presented
evidence setting forth the ratios by jobsite, Alloway contends the LMC award is
unenforceable under the terms of the CBA. Finally, Alloway argues the Union prevented
Alloway’s performance under the CBA, because union electricians walked off the
jobsites without notice to Alloway, yet Alloway was obligated to finish its contracts with
its customers regardless of its personnel issues.
In reply, the Union contends that, other than the 90 day period within which to
vacate an award, Idaho law does not apply to this dispute. Rather, the Court must affirm
the LMC award under the deferential standard of 29 U.S.C. § 185(a). In other words, the
Court may not correct errors of fact or misinterpretation of the contract. The Union
asserts appropriate notice under the CBA was given to NECA, Alloway’s bargaining
representative, and thus the 90 day period for contesting the award expired and Alloway
is time-barred from challenging the decision. Finally, the Union contends that Alloway’s
defense of impossibility of performance is to no avail because interpretation of the CBA
is a matter of ambiguity which the LMC, as the arbiter of the dispute, resolved and which
the Court cannot review.
MEMORANDUM DECISION AND ORDER - 10
1.
Summary Judgment Standards
Summary judgment is properly granted when no genuine and disputed issues of
material fact remain, and when, viewing the evidence in a light most favorable to the
non-moving party, the movant is clearly entitled to prevail as a matter of law. Fed. R.
Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). The moving party
bears the burden of showing that there is no material factual dispute, and the court must
draw all reasonable inferences in favor of the party against whom summary judgment is
sought. Celotex, 477 U.S. at 324. Material facts which would preclude summary
judgment are those which may affect the outcome of the case. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). The relevant substantive law will determine which facts
are material for purposes of summary judgment. Anderson, 477 U.S. at 248. “[T]he mere
existence of some alleged factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment; the requirement is that there be no
genuine issue of material fact.” Id. at 247–48.
When cross-motions for summary judgment are filed, the Court must
independently search the record for issues of fact. Fair Housing Council of Riverside
County, Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir.2001). The filing of crossmotions for summary judgment—where both parties essentially assert that there are no
issues of material fact—does not vitiate the court’s responsibility to determine whether
disputed issues of material fact are present. Id.
MEMORANDUM DECISION AND ORDER - 11
2.
Labor Management Relations Act Standards
29 U.S.C. § 185 gives the Court jurisdiction to enforce agreements to arbitrate
disputes under collective bargaining contracts between labor organizations and
employers. Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 562-63 (1976). There is a
strong policy favoring judicial enforcement of collective-bargaining contracts. Hines, 424
U.S. at 562.
Collective bargaining agreements commonly provide grievance procedures to
settle disputes between the union and the employer concerning the interpretation and
application of the agreement. United Paperworkers v. Misco, Inc, 484 U.S. 29, 36 (1987).
The grievance procedure underlies the collective bargaining agreement, and arbitration is
the preferred method to solve disputes arising under a collective bargaining agreement.
United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 581 (1960); United
Paperworkers, 484 U.S. at 36.
The Court is not to undertake a review of the merits of an arbitration award, but
should defer to the tribunal chosen by the parties under their agreement. Hines, 424 at
563. This is because final adjustment by a method agreed upon by the parties under the
terms of their agreement is “declared to be the desirable method for settlement of
grievance disputes.” Hines, 424 at 562. So 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, 484 U.S. at 36. Thus,
the function of the Court is limited---it is not permitted to substitute its interpretation of
MEMORANDUM DECISION AND ORDER - 12
the contract for that of the arbitrator, and has no business weighing the merits of the
grievance itself. United Paperworkers, 484 U.S. at 37.
Nor is the Court sitting in an appellate capacity when asked to review an
arbitration award in the context of a collective bargaining dispute. United Paperworkers,
484 U.S. at 37. Rather, it is the arbitrator’s view of the facts and the meaning of the
contract that the parties agreed to accept, and the Court is not permitted to entertain
claims of factual or legal error. United Paperworkers, 484 U.S. at 37-38. The Court may
not reject an award on the ground that the arbitrator misread the contract. Id. at 38. Nor
can the Court overturn the remedy even if it disagrees with the arbitrator’s judgment. Id.
So long as the arbitrator’s award “draws its essence from the contract,” the Court must
enforce the decision even if the Court is convinced the arbitrator committed serious error.
Id. See also Local Union No. 38, Sheet Metal Workers' Int'l Ass'n, AFL-CIO v.
Hollywood Heating & Cooling, Inc., 1 Fed.Appx. 30, 33 (2d Cir. Jan.5, 2001) (court will
uphold an award that it views as incorrect if that award merely has “a barely colorable
justification” or is merely “plausibly grounded in the parties’ contract.”).
3.
The Arbitration Award Is Final
In this case, the CBA states that the LMC will decide and adjust any dispute that
representatives of the employer and the Union cannot settle. Sections 1.05 through 1.08
of the CBA, to which Alloway signed an assent, set forth specific procedures to follow to
resolve grievances between the parties. The CBA’s dispute provisions are similar to
dispute resolution provisions found enforceable in Int’l Bhd. of Elec. Workers, Local
Union No. 226 v. Wichita Elec. Co., Inc., No. 04-4028-JAR, 2005 WL 466206 (D. Kan.
MEMORANDUM DECISION AND ORDER - 13
Feb. 4, 2005). Proceedings before a labor management committee constitute final and
binding arbitration, and labor management committees are authorized to issue arbitration
awards entitled to judicial enforcement. Wichita, 2005 WL 466206 at *3.
Alloway first argues that it was not properly notified of the ratio grievance, nor
given an opportunity to present testimony and evidence at the LMC meeting on its own
behalf. However, there is no dispute that Alloway’s designated bargaining representative,
NECA representative Marc Bernsen, received notice on December 3, 2012, and was
present at the LMC meeting on behalf of Alloway. The December 3 letter had attached
Alloway’s roster of journeymen to apprentices upon which the grievance relied. Bernsen
notified Elletson of the December 10, 2012, meeting. Nothing in the Labor Management
Relations Act or the CBA requires a representative of the employer to be present. Rather,
so long as the “proper bargaining representative has been given the opportunity to be
present at such adjustment,” there is no procedural flaw. ILWU Local 142 v. Land &
Constr. Co., Inc. 498 F.2d 201, 205 (9th Cir. 1974).
Alloway next cites Idaho’s Uniform Arbitration Act as support for its argument
that additional procedural irregularities existed to invalidate the award. But state law
relating to arbitration awards is entirely preempted by federal law if the suit seeks to
enforce a collective bargaining agreement. See Fristoe v. Reynolds Metals Co., 615 F.2d
1209, 1212 (9th Cir. 1980) (“State law does not exist as an independent source of private
rights to enforce collective bargaining contracts.”) (citation omitted). See also Wichita
Electric Co., Inc., 2005 WL 466206 *4 (finding the Kansas Arbitration Act inapplicable
MEMORANDUM DECISION AND ORDER - 14
to the Union’s action to enforce arbitration award). Alloway’s arguments relying upon
the Idaho Uniform Arbitration Act are unavailing.
Finally, Alloway contends that, because it never received a proper written
confirmation of the award, the applicable statute of limitations period has not begun to
run. Alloway attempts to avoid the rule that renders the award final if there is no
challenge to the award within the applicable limitations period. Sullivan v. Gilchrist, 87
F.3d 867, 871 (7th Cir. 1996). If the relief sought is to nullify or otherwise attack the
arbitration award, the only remedy is a timely suit to vacate. Id.
In Idaho, the Uniform Arbitration Act sets a 90-day limitations period for
challenging an arbitration award. Idaho Code § 9-111; 9-112. This ninety day period
imposed by Idaho law is appropriate to apply here. United Parcel Serv., Inc. v. Mitchell,
451 U.S. 56 (1981) (affirming decision to apply 90-day period imposed by New York law
for the brining of an action to vacate an arbitration award under Section 301 of the
LMRA); Bhd. of Teamsters Local 70 v. Celotex Corp., 708 F.2d 488, 490 (9th Cir. 1983)
(borrowing limitations period under California state law). Both parties agree that the 90
day limitations period of Idaho Code § 9-111 applies.
Alloway’s bargaining representative, NECA’s Marc Bernsen, received notice of
the award. He communicated the LMC’s findings to Elletson. Even assuming Elletson’s
version of events, Elletson received on January 16, 2013, a letter from White that,
although not attaching the minutes from the December 10, 2012 LMC meeting, described
the findings of the LMC. But Elletson received also a letter on December 14, 2012,
informing Elletson of the outcome of deliberations on December 10, 2012. The letter
MEMORANDUM DECISION AND ORDER - 15
indicated that the LMC found Alloway in violation with Article 5, Section 5.12 of the
CBA. Regardless of the form the notice came in, there is no dispute that Elletson knew
the LMC had met; deliberated; and rendered a finding under the CBA. Yet Alloway
never moved to vacate the award or otherwise seek clarification in writing from the
Union. Failure to petition to vacate the award is fatal, and bars the party from asserting
any affirmative defenses in a later proceeding to confirm the award. Bhd. of Teamsters
Local 70, 708 F.2d at 490.
Turning now to the award, the Court finds that the LMC award is enforceable. The
LMC found Alloway in violation of Section 5.12’s ratio requirement, which required a
specified number of journeymen to apprentices/CWs/CEs on each job site, and further
explained that job sites include both the physical location where employees report for
work, and also the employer’s shop. It is not for the Court to determine how the LMC
interpreted Section 5.12 and the evidence it considered. 6
But, there is validity to Alloway’s argument that the award is ambiguous. Alloway
argues that the award does not identify in what way Alloway was out of ratio---on a per
jobsite, or shop wide basis. Section 5.12 indicates that the “job site” is defined both as the
physical location where the employees report for work, and the employer’s shop, or
service center. It is not clear from the LMC’s determination what provision of Section
5.12 it found Alloway violated.
At the hearing, Plaintiffs clarified that the only ratio reviewed was the ratio of
CW/CEs to Journeymen, shopwide, and that there was no jobsite analysis. However, this
6
Presumably, the LMC interpreted also the impact of the Addendum upon Section 5.12.
MEMORANDUM DECISION AND ORDER - 16
conclusion is not evident from the language of the LMC award. The Award simply stated
that Alloway was “out of ratio” as set forth in Article 5, Section 5.12 of the CBA. The
Award did not differentiate whether the ratio was considered on a shopwide or per jobsite
basis, which Section 5.12 clearly differentiated. Further, the Award in referencing
Section 5.12 of the CBA does not appear to consider the effect of the Addendum upon
Section 5.12 of the CBA, which incorporates a ratio of five journeymen to one apprentice
(indentured) “shop wide,” and “three journeymen to two apprentices, CW, CE.” The
LMC’s award lacks clarity as to what ratio Alloway violated, and how it was violated.
Further, the award has no end date, although by implication one could infer that, when
the ratio was corrected, the penalty would end. But that proviso is not explicitly stated.
The lack of clarity renders the award ambiguous, but enforceable nonetheless. 7 See
Sheet Metal Workers Internat’l Assoc. Local Union #420 v. Kinney Air Conditioning Co.,
756 F.2d 742, 745 (9th Cir. 1985) (“the mere fact that the decision underlying the award
is ambiguous does not reduce the deference to which the award itself is entitled.”). When
the Court finds the meaning of an award to be uncertain, the Court in its discretion may
remand the matter to the arbitrator. San Francisco Elec. Contractors Assoc., Inc. v.
Internat’l Bhd. Of Elec. Workers, Local No. 6, 577 F.2d 529, 534 (9th Cir. Cir. 1978);
Automobile Mechanics Local 701, Internat’l Association of Machinists & Aerospace
Workers, AFL–CIO, v. Joe Mitchell Buick, Inc., 930 F.2d 576, 578 (7th Cir. 1991).
Because the Court is unable to determine what ratio was violated, and in what manner it
7
The Union correctly asserts that the Court lacks the authority to construe the CBA. But it can construe the holding
of the LMC, and if it finds the award ambiguous, the Court may remand the matter for further proceedings. San
Francisco Elect. Contractors Assoc., Inc., 577 F.2d 529, 534 (9th Cir. 1978).
MEMORANDUM DECISION AND ORDER - 17
was violated, the Court in its discretion will remand the matter to the LMC for
clarification.
The Court declines to find, as Alloway suggests, that the LMC award was
procured by undue means. The Court may review an erroneous arbitration decision and
decline to declare it final if representation has been “dishonest, in bad faith, or
discriminatory.” Hines, 424 U.S. at 571. The bargaining representative must have fairly
represented the employer in connection with the arbitration proceedings for the Court to
enforce the finality provision when faced with an erroneous arbitration decision. Hines,
424 U.S. at 571. But Alloway has not presented evidence of dishonesty, bad faith, or
discrimination. Although the Union could have done a better job in informing Alloway of
the proceedings and their aftermath, Alloway was apprised of the process, and knew
about the LMC award shortly after the December 10, 2012, meeting. Even considering
Alloway’s claims of procedural irregularity, 8 they do not rise to the level of dishonesty or
bad faith that would necessitate vacating the award. See Sheet Metal Workers, 756 F.2d at
746 (mere appearance of impropriety, standing alone, is insufficient to overturn an
award).The Court declines to so find.
4.
Enforcement of the Arbitration Award by the Pension Fund
The Pension Fund argues it is entitled to enforce the terms of the CBA as
interpreted via the arbitration award, because it is a third party beneficiary of the CBA.
The Pension Fund relies upon 29 U.S.C. § 1145, which states:
8
The Court notes that Alloway was given only three days to comply with the award, an award which the Court finds
ambiguous as explained above.
MEMORANDUM DECISION AND ORDER - 18
Every employer who is obligated to make contributions to a multiemployer
plan under the terms of the plan or under the terms of a collectively
bargained agreement shall, to the extent not inconsistent with law, make
such contributions in accordance with the terms and conditions of such plan
or such agreement.
The Fund is a third party beneficiary of the CBA, and has an independent statutory
right under ERISA, 29 U.S.C. § 1145, to enforce contribution obligations imposed on
Alloway under the CBA. Cent. States v. Sara Lee Bakery Group, Inc., 660 F.Supp.2d
900, 909 (N.D. Ill. 2009). See also So. Cal. Retail Clerks Union and Food Emp’rs Joint
Pension Trust Fund v. Bjorklund, 728 F.2d 1262, 1265 (9th Cir. 1984) (trust funds
occupied position as third party beneficiaries of the collective bargaining agreements).
In Joe Mitchell Buick, the appellate court held that the pension fund was entitled to
enforce an arbitrator’s award for “loss of earnings and benefits” for contributions due to
the pension fund under the terms of the CBA. Joe Mitchell Buick, 930 F.2d at 578.
Similar to this matter, the arbitrator’s award in Joe Mitchell did not set forth the amounts
due under the terms of the award. Rather, the arbitrator indicated the two employees were
entitled to “be made whole by the Company for loss of earnings and benefits which
resulted from their termination.” Id. The arbitrator, however, permitted the Company and
the Union thirty days to negotiate the basis for computing the award, and a mechanism to
calculate the award if the negotiations failed. Id. Upon impasse, the pension fund made
the required calculations, and brought suit to enforce the award according to its
calculations. The court held that the arbitrator’s award was not ambiguous, and the award
entitled the employees to benefits including contributions to the pension fund provided in
the CBA. Id.
MEMORANDUM DECISION AND ORDER - 19
Here, in contrast, the LMC provided no mechanism for calculating the award, nor
any mechanism for Alloway to participate in providing evidence upon which the award
could be calculated. The LMC does not designate the Pension Fund as the sole interpreter
of how the award should be calculated, nor does the LMC designate Gus Sand as the
appropriate individual to make the calculations. Finally, as Alloway argues, the CBA
designates ratios in Section 5.12 by job site, and the employer’s shop is considered to be
a separate job site. The award makes no mention of how the ratio imbalance should be
calculated so as to trigger the award.
The Court is further unsure of what Gus Sand relied upon---both in terms of the
evidence he had of Alloway’s employees, and the provisions of the Trust Agreement--that permitted him to calculate when Alloway was out of ratio; interest; liquidated
damages; and audit fees. The LMC award makes no mention of interest, liquidated
damages, and audit fees. Rather, all the award indicates is that Construction Electricians
“must be paid the full wage and benefit package of an Inside Wireman.” Other courts
interpreting arbitration awards with a “make whole” provision or an award of wages and
benefits have not interpreted such awards to include interest, liquidated damages, and
audit fees, which may only be calculated under ERISA and the terms of the Trust
Agreements. See Joe Mitchell Buick, 930 F.2d at 578 (construing award of “benefits” to
comprise contributions to the Local 701 Pension Fund, but making no reference to
liquidated damages, interest, or audit fees); Central States, Southeast and Southwest
Areas Pension Fund v. Sara Lee Bakery Group, Inc., 660 F.supp.2d 900, 909-10 (N.D.
MEMORANDUM DECISION AND ORDER - 20
Ill. 2009) (interpreting “make whole” award to include wages, benefits, and retirement
contributions to the Fund on behalf of the employees).
The Pension Fund has not explained how, based upon the language of the LMC
award, it is entitled to interest, liquidated damages, and audit fees. The award, by
specifying only wages and benefits, is ambiguous in that regard, and does not appear to
allow for the Pension Fund to enforce collection of those amounts under ERISA and the
terms of the Trust Agreement, which the award does not incorporate. Again, remand is
appropriate for clarification of this ambiguity.
5.
Breach of Contract Claim and Defenses
The Union alternatively brings its claim under a state law breach of contract
theory, alleging Alloway breached the CBA by its failure to maintain the required ratio.
In turn, Alloway contends that the Union prevented its performance under the CBA
because union electricians were walking off of jobs.
The Union may not bring a state law breach of contract claim based upon
violations of the CBA. Wichita, 2005 WL 466206 at *6. When resolution of a state-law
claim is substantially dependent upon analysis of the terms of an agreement made
between the parties in a labor contract, the claim must be addressed under Section 301 of
the Labor Management Relations Act. Allis-Chalmers Corp. v. Lueck, 417 U.S. 202, 220
(1985). In other words, state causes of action whose existence depends upon an
examination of the CBA to ascertain the duties of each of the parties and their scope are
preempted by federal law. Wichita, 2005 WL 466206 at *6 (citing Lingle v. Norge Div. of
Magic Chef, Inc., 486 U.S. 399, 406 n.4 (1988)).
MEMORANDUM DECISION AND ORDER - 21
In this case, the Union sets forth the elements of a claim under state law, with
reference to the provisions of the CBA. But whether Alloway breached the terms of the
CBA by its failure to maintain required ratios of Journeymen to apprentices, CWs, or
CEs, requires an examination of the specific provisions set forth in the CBA and any
applicable addendum. Accordingly, federal law preempts Idaho law on the Union’s
breach of contract claim. The CBA’s grievance procedure is the exclusive and final
remedy for disputes arising under the CBA. Wichita, 2005 WL 455206 at *6. 9
Similarly, Alloway may not raise an affirmative defense that it was prevented
from performance and could not comply with the ratio requirement because union
employees walked off the job. 10 Alloway was required to raise its defenses during the
grievance procedure set forth in the CBA. Wichita, 2005 WL 455206 at *6. Further,
Alloway was required to raise any challenges to the arbitrator’s award within the ninety
day period following the arbitrator’s decision. It failed to do so. The Court therefore may
not consider Alloway’s affirmative defenses based upon breach of contract theories. See
Bhd. of Teamsters and Auto Truck Drivers Local No. 70, 708 F.2d at 491 n.4 (party who
failed to move to vacate an unfavorable award may not raise affirmative defenses in a
later confirmation proceeding if those defenses could have been raised in a timely
petition to vacate).
9
Defendants explained at the hearing that they asserted a breach of contract claim “under ERISA.” However, such a
theory is improper. To bring a breach of contract claim, Defendants must assert that the CBA and the Trust
Agreement provide an independent basis for Alloway’s contribution obligation. See Sara Lee, 660 F.Supp.2d at 91314 (finding the Fund asserted an independent claim for breach of contract based upon the CBA). Here, in contrast,
the Fund is relying solely upon the LMC award as a basis for its breach of contract claim. Under those
circumstances, the breach of contract claim does not arise independent of the LMC award, and is preempted.
10
The Court notes that, by raising this defense, Alloway implicitly admits it did not comply with the CBA’s ratio
requirement.
MEMORANDUM DECISION AND ORDER - 22
CONCLUSION
Although the Court finds the award enforceable, it cannot be enforced in its
current form. The award is ambiguous, both in terms of what provision of Section 5.12 it
relies upon for its conclusion that Alloway was noncompliant with the ratio provision,
and in terms of how to calculate the award. Further, the LMC decision provided no
mechanism for Alloway to participate in further proceedings to ensure a fair and accurate
award calculation. The Court will remand this matter to the LMC for further proceedings
consistent with this opinion.
MEMORANDUM DECISION AND ORDER - 23
ORDER
NOW THEREFORE IT IS HEREBY ORDERED:
1) Plaintiffs’ Motion for Summary Judgment (Dkt. 14) is GRANTED IN
PART AND DENIED IN PART.
2) Defendant’s Motion for Summary Judgment (Dkt. 16) is GRANTED IN
PART AND DENIED IN PART.
3)
This matter is hereby REMANDED to the Labor Management
Committee of the International Brotherhood of Electrical Workers, Local 291, for
further proceedings consistent with the Court’s opinion.
4)
The Clerk is directed to close this case.
July 22, 2014
MEMORANDUM DECISION AND ORDER - 24
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