International Union of Operating Engineers, Local 150, AFL-CIO v. R.W. Dunteman, Inc.
MEMORANDUM Opinion and Order Signed by the Honorable Matthew F. Kennelly on 7/13/2017.(gcy, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
International Union of Operating
Engineers, Local 150, AFL-CIO,
R.W. Dunteman, Inc.,
Case No. 17 C 76
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
Local 150 of the International Union of Operating Engineers, seeks to vacate an
arbitration award issued by arbitrator Brian Clauss on October 6, 2016, denying Local
150's grievance against R.W. Dunteman, Inc. (RWD). The parties have filed cross
motions for summary judgment.
The Court takes the following facts from the arbitrator's award, as well as from
Local 150's exhibits filed in connection with its motion for summary judgment.
As of at least June 1, 1987, Local 150 and the Mid-America Regional Bargaining
Association (MARBA) entered into a "heavy and highway and underground
construction" agreement (HHUA). Pl.'s Statement of Uncontested Material Facts, Tab
(Pl.'s Tab) 2 (HHUA). The HHUA makes clear that the "terms and conditions of [the
HHUA] relating to the employment of employees have been arrived at by means of
collective bargaining and the Agreement shall be deemed to be the Agreement of each
of the MARBA Members and shall be binding on all parties hereto and their respective
members." HHUA, § INTENT.
On June 1, 1987, Local 150 and RWD signed a memorandum of agreement
(MOA) in which RWD agreed to be bound by the terms in the HHUA. The MOA states:
This agreement shall continue in effect from year to year thereafter and
specifically adopt any master agreement entered into between [Local 150]
and [MARBA] subsequent to the expiration date of the Master Agreement
[the HHUA] herein adopted unless notice of termination or amendment is
given in the manner provided herein.
Pl.'s Tab. 3 (MOA) at 1. To date, neither Local 150 nor RWD have terminated the
Unlike the MOA between Local 150 and RWD, there have evidently been several
renditions of the HHUA. The version relevant to this case was signed on June 1, 2010.
Pl.'s Tab 1 (Arb. Hrg. Transcript) at 45:13-46:11. The HHUA contains certain
safeguards for union employees. Specifically, an employer bound by the HHUA agrees
to hire only union subcontractors for projects involving construction work. The
The Employer agrees that he will not contract or subcontract any
work covered by the Scope of Work of this Agreement and/or work coming
under the occupational jurisdiction of the Union to be done at the site of
construction, alteration, painting, or repair of a building, structure, or other
work, except to a person, firm or corporation, party to the applicable
current labor agreement with the Union.
HHUA, Art. I § 4.
The HHUA does not expressly define Local 150's "occupational jurisdiction." It
defines "scope of work" as follows:
SECTION 7 – SCOPE OF WORK
This Agreement shall apply to work classifications and operations
incidental thereto as are herein generally and specifically described:
excavating of all types, paving of all types, bridges, culverts, roads,
streets, airport runways, ramps, grading, resurfacing, grade separations,
overpasses, underpasses, curbs, gutters, sidewalks, parking, areas,
skyways, caissons, and all other highway construction work, underground
and utility work of all types, sewers, subways, tunnels, water mains,
piping, pipe jacking, headwalls, outfall structures, junction chambers,
concrete construction, conduits, drainage, sheeting, dewatering, pile
driving and all other underground utility work, heavy construction work of
all types, dams, cofferdams, dock walls, shore protection and all landbased operations involving lakes, harbors, and river improvements; snow
removal, flood controls, civil defense, fire and catastrophe operations of all
types, landscaping, black dirt and black dirt fields, and wrecking of all
types, dismantling or demolition of any building structure, railroad spurs
from main line to building line, all farm and land improvements and all
assembly and disassembly of all equipment on the job site coming under
the jurisdiction of the operating engineers.
HHUA, Art. I § 7.
The HHUA also outlines the procedure for resolving claims that arise out of the
agreement. The HHUA states:
For the purpose of this Agreement, the term "grievance" is any claim or
dispute involving an interpretation or application of the Agreement by an
employee, or an Employer, or the Union, or the Association that one of the
other of the aforesaid persons or organization is violating or has violated
HHUA, Art. XIII §1. The HHUA provides for resolution of grievances by an arbitrator or
a joint grievance committee. It states:
The Joint Grievance Committee shall have the power to resolve all
grievances before it and shall have the right to examine all records of the
Employers and employees as is reasonably necessary to resolve the
grievance. The Joint Grievance Committee shall have the authority to
determine and assess remedies for violations of this Agreement, including,
but not limited to an award of back pay and equivalent benefits to the
Local 150 Assistance Fund.
Id. In resolving a grievance, "[n]either the Joint Grievance Committee nor an arbitrator
shall have any authority to add to, detract from, or in any way alter the provisions of this
Agreement or make a new Agreement." Id.
The final section of the HHUA states, "[t]his represents the entire Agreement of
the parties, it being understood that there is no other agreement or understanding,
either oral or written." HHUA, Art. XXIII. It also states that the agreement is effective
until May 31, 2017, and continues thereafter on a yearly basis unless a party gives
notice of termination at least 60 days before the annual expiration date. Id.
Sometime in 2015, the City of Chicago awarded RWD a seventeen million dollar
contract for a road construction project. See Pl.'s Tab 4; Pl.'s Tab 6 at 1. RWD and the
City signed a project labor agreement (PLA) to which Local 150 was also a signatory.
Arb. Hrg. Transcript at 89:19-90:5. At a pre-job conference with RWD, Local 150
discovered that RWD had hired a non-union subcontractor—C3 Corporation—to
perform the site layout survey work on the project. Id. at 94:3-95:23; Pl.'s Tab 29 (Arb.
Award) at 3. Local 150 notified RWD that survey work fell within its occupational
jurisdiction and informed RWD that it was required to hire a union subcontractor to
perform the survey work on the project. Arb. Hrg. Transcript at 94-95; Pl.'s Tab 6 at 7.
RWD disagreed and continued to work with C3. Id.
On July 27, 2015, Local 150 filed an administrative complaint with the City of
Chicago regarding RWD's use of non-union survey workers, alleging that RWD violated
the PLA. Pl.'s Tab 9 at 1. Local 150 asked the City to instruct RWD to remove C3 from
the project. Id. at 2. On October 15, 2015, the City notified RWD that it violated its
contract with the City when it hired non-union survey workers. See Pl.'s Tab. 5. The
City wrote, "it is the position of the City that the performance of certain survey work
during actual construction constitutes 'construction' work under the terms of the PLA,
and therefore, in accordance with your contract with the City, must be performed by
union contractors." Id. On October 23, 2015, RWD responded to the City, saying,
"[RWD is] not in violation of the PLA. The project will continue with C3  unless their
removal is ordered, in writing to our office, by the Chicago Department of
Transportation." Pl.'s Tab 13. The City did not take any further action. See Arb. Award
On September 14, 2015, Local 150 filed a grievance pursuant to the procedure
outlined in the HHUA. See Pl.'s Tab 10. On November 20, 2015, Local 150 made a
demand for arbitration. Pl.'s Tab 11. On June 8, 2016, RWD and Local 150 attended
an arbitration hearing, presided over by arbitrator Clauss. The parties stipulated that
the issue to be determined by the arbitrator was, "[d]id [RWD] violate Article I, Section 4
of its [HHUA] with Local 150 when it subcontracted surveyor work performed at the site
of construction to a non-union surveying company?" Arb. Award at 7. Local 150 argued
that survey work fell within its occupational jurisdiction and that, pursuant to the HHUA,
RWD was required to hire Local 150 for work falling within its jurisdiction. Id. at 8-12.
Local 150 cited to, among other things, its constitution, which included survey work
under its jurisdiction. Id. at 10-11. RWD argued that survey work did not fall within
Local 150's occupational jurisdiction because survey work does not include heavy
machinery. Id. at 12. In support, RWD noted that Local 150 and similar unions had not
objected to RWD's use of non-union survey workers in the past. Id. RWD asserted that
because the HHUA does not define Local 150's occupational jurisdiction, Local 150 was
required to negotiate with RWD to expand its jurisdiction to include survey work. Id. at
On October 6, 2016, the arbitrator denied Local 150’s grievance. Id. at 15. He
recognized that RWD agreed to be bound by the HHUA. Id. at 4, 8, 15. The arbitrator
noted that the HHUA does not define Local 150's occupational jurisdiction but that
article one, section seven of the HHUA provides a "non-exhaustive list" of the work
falling within Local 150's "scope of work." Id. at 16. The arbitrator determined that,
because the HHUA was silent on the inclusion of survey work, Local 150 had to present
evidence of its and RWD's mutual intent to include survey work within Local 150's scope
of work. Id. The arbitrator wrote:
The [HHUA] does not mention survey workers as being covered by the
agreement. However, Article I, Section 7 does not state that it is an
exhaustive list of covered workers. Instead, it states that the "Agreement
shall apply to work classifications and operations incidental thereto as are
here in general and specifically described . . ." Thus, when [Local 150]
asserts a non-specified work classification and/or operation, there must be
a determination as to whether that classification or operation was intended
by the parties to be include[d].
The arbitrator considered extrinsic evidence to resolve the issue of intent. He
dismissed the bulk of Local 150's evidence, stating that it "does little to shed light on the
parties’ mutual intent." Id. In contrast, the arbitrator found that RWD "presented
competent evidence showing that it has historically used nonunion survey contractors
on its job sites where those workers are not specifically included in the applicable
contract." Id. at 18. For that reason, the arbitrator concluded that there was "insufficient
evidence to establish that [RWD] agreed to include survey workers within [Local 150's]
occupational jurisdiction at the time the [HHUA] was executed." Id. He therefore denied
Local 150's grievance.
On January 5, 2017, Local 150 filed this lawsuit, seeking to vacate the arbitration
award. See Compl. In response, RWD moved for sanctions, arguing that Local 150 did
not have a good faith basis for challenging the arbitration award. Local 150 then moved
for summary judgment, and RWD cross-moved for summary judgment.
Summary judgment is appropriate where a "movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law." Fed. R. Civ. P. 56(a). A genuine issue of material fact exists "if the
evidence is such that a reasonable jury could return a verdict for the nonmoving party."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In making this
determination, all "facts must be viewed in the light most favorable to the nonmoving
party." Scott v. Harris, 550 U.S. 372, 380 (2007).
Local 150 and RWD have both moved for summary judgment. Local 150 asserts
that the arbitrator exceeded the scope of his powers, and it asks the Court to vacate the
arbitration award. RWD, on the other hand, contends that the arbitration award is valid;
it asks the Court to uphold the award and impose sanctions on Local 150 for filing this
Local 150 argues that the arbitrator improperly concluded that RWD did not
violate article one, section four of the HHUA when it subcontracted survey work to C3, a
non-union survey company. Local 150 contends that the arbitrator exceeded the
powers delegated to him. First, Local 150 argues that the arbitration award fails to
acknowledge that the HHUA was negotiated between Local 150 and MARBA, not RWD,
thus making RWD's intent irrelevant. Second, Local 150 argues that the arbitrator
exceeded the scope of the HHUA by finding that an understanding of "occupational
jurisdiction" between Local 150 and RWD required a written modification to the HHUA.
Third, Local 150 argues that the arbitration award failed to properly consider its
evidence that survey work fell within its occupational jurisdiction.
RWD, on the other hand, argues that the arbitration award should stand because
it was drawn from the essence of the HHUA. RWD contends that the arbitrator
identified the parties' stipulated issue, identified the relevant contract provisions,
described the basis of Local 150's grievance, considered Local 150's evidence, and
determined that Local 150 failed to establish that survey work fell within its jurisdiction
as defined by the HHUA. RWD contends that the Court lacks the authority to vacate the
arbitration award because it was based on contract interpretation and factual findings.
An arbitration award may be vacated "where the arbitrators exceeded their
powers, or so imperfectly executed them that a mutual, final, and definite award upon
the subject matter submitted was not made." 9 U.S.C. § 10(a)(4). A court's review of
an arbitration award is "extremely limited." United States Soccer Fed'n, Inc. v. United
States Nat'l Soccer Team Players Ass'n, 838 F.3d 826, 831 (7th Cir. 2016) (internal
quotation marks omitted). Where an arbitration award "draws its essence" from the
collective bargaining agreement at issue, a court must accept the arbitration award as
legitimate. Id. But where an "arbitrator ha[s] exceeded the powers delegated to him by
the parties," a court is authorized to vacate the award. Id. at 832. An arbitrator exceeds
his delegated powers where there is no basis in the contract to support the final
arbitration award. See id.; see, e.g., United Food & Commercial Workers, Local 1546 v.
Ill. Am. Water Co., 569 F.3d 750, 754-55 (7th Cir. 2009) ("The question before a federal
court is not whether the arbitrators erred in interpreting the contract; it is not whether
they clearly erred in interpreting the contract; it is not whether they grossly erred in
interpreting the contract; it is whether they interpreted the contract.") (internal quotation
marks omitted). For example, an arbitrator exceeds his authority when he ignores or
adds language to the contract he seeks to administer. See Int'l Union of Operating
Engineers, Local 139, AFL-CIO v. J.H. Findorff & Son, Inc., 393 F.3d 742, 745 (7th Cir.
2004); United Food & Commercial Workers, Local 1546, 569 F.3d at 755
("Misinterpretation of contractual language, no matter how clear, is within the arbitrator's
powers; only a decision to ignore or supersede language conceded to be binding allows
a court to vacate the award.") (internal quotation marks omitted). A court may also infer
that an arbitrator exceeded the scope of his authority where "there is no possible
interpretive route to the award." United States Soccer Fed'n, Inc., 838 F.3d at 832
(internal quotation marks omitted).
When a court vacates an arbitration award, "the appropriate remedy is to remand
the case for further arbitration proceedings," rather than making its own factual findings
and legal interpretations. Major League Baseball Players Ass'n v. Garvey, 532 U.S.
504, 511 (2001). And "[a]lthough the general rule is that a reviewing court should either
enforce or vacate an arbitration award, courts have the power to remand to the
arbitrator where appropriate." United Steelworkers of Am., AFL-CIO v. Aurora Equip.
Co., No. 86 C 9211, 1987 WL 10990, at *7 (N.D. Ill. May 12, 1987) (internal quotation
marks omitted) (citing Young Radiator Co. v. International Union, UAW, 734 F.2d 321,
326 (7th Cir. 1984)). For example, "[w]here the arbitrator fails to address fully the
question presented to him, remand is appropriate." Id.
The arbitrator's award did not draw its essence from the language in the HHUA.
Section four of the HHUA states that an employer cannot employ a non-union party for
any work falling under the scope of work section of the HHUA "and/or work coming
under the occupational jurisdiction of the Union." HHUA, Art. I § 4 (emphasis added).
The arbitrator reviewed the scope of work section of the HHUA and determined that it
did not include survey work. Arb. Award at 16. But when considering the other basis
for a subcontracting bar under section 4—work coming under the occupational
jurisdiction of the Union—the arbitrator fashioned and applied a rule not rooted in the
language of the HHUA. Specifically, the arbitrator stated that when Local 150 "asserts a
non-specified work classification and/or operation" other than ones found in the "scope
of work" section, "there must be a determination as to whether that classification or
operation was intended by the parties to be include[d]." Arb. Award at 16. And he then
looked to RWD's intent in making that determination. This analysis was doubly wrong,
and it departed from the language of the HHUA. First of all, there is no basis to say that
"the occupational jurisdiction of the Union" has anything to do with the intent of
employers. Rather, the straightforward meaning of that term appears to involve a
determination made by reference to the union alone, or at least without regard to the
understanding of any particular employer like RWD. Second, even if this were not the
case, the arbitrator ignored the contract, essentially adding a term, when he made
RWD's intent a determinative or even a relevant factor. The HHUA was an agreement
between Local 150 and MARBA, not RWD. Thus if the arbitrator had hewed to the
HHUA, there would have been no basis to consider RWD's intent—RWD simply signed
onto an already-extant agreement, effectively stepping into the shoes of MARBA, the
contracting party. Indeed, the arbitrator's focus on RWD's intent suggests that he relied
on the MOA that RWD signed—the agreement binding RWD to the terms of the
HHUA—rather than on the HHUA, the agreement that governed determination of Local
150's grievance. Reliance on the MOA is inconsistent with the HHUA's provision stating
that the HHUA "represents the entire Agreement of the parties, it being understood that
there is no other agreement or understanding, either oral or written." HHUA, Art. XXII.
RWD argues that it was proper for the arbitrator to consider evidence of RWD's
intent. It relies on a decision from another court in this district, Laborers' International
Union of North America Laborers' Pension Fund v. W.R. Weis Co., Inc., 180 F. Supp. 3d
540 (N.D. Ill. 2016). In that case, the court upheld an arbitration award in which the
arbitrator considered the parties' past dealings to determine the scope of the plaintiff's
"work jurisdiction" under the collective bargaining agreement (CBA) at dispute. Id. at
550. The facts of the case, however, distinguish it from the present one. In Laborers',
the CBA specifically made reference to a separate agreement; it stated that "issues
involving wages  are governed by the locally negotiated collective bargaining
agreement." Id. (internal quotation marks omitted) (emphasis added). The parties had
signed a local CBA whose language conflicted with the master CBA. Id. The arbitrator
thus necessarily and appropriately relied on the parties' past dealings to resolve the
discrepancy between agreements. In this case, by contrast, MARBA and Local 150
agreed that the HHUA represented the parties' entire agreement, see HHUA, Art. XXIII,
and RWD agreed to this when it signed the MOA and thereby agreed to be bound by
the terms of the HHUA.
Besides asking the Court to vacate the arbitration award, Local 150 asks the
Court to make a finding that survey work does fall within Local 150's occupational
jurisdiction. This issue, however, is appropriately resolved, at least in the first instance,
by an arbitrator applying the appropriate standard, not this Court.
For the reasons stated above, the Court vacates the arbitration award and
remands the case for further arbitration proceedings consistent with this decision. The
Court also denies RWD's motion for sanctions, because Local 150's position in this
case was correct and certainly was not unwarranted by the facts or the law, as Rule 11
For the reasons stated above, the Court grants plaintiff's motion for summary
judgment [dkt. # 19] and denies defendant's motions for summary judgment [dkt. # 22]
and sanctions [dkt. # 15]. The Clerk is directed to enter judgment in favor of plaintiff,
vacating the arbitration award, and remanding the case for further arbitration
proceedings consistent with this decision.
MATTHEW F. KENNELLY
United States District Judge
Date: July 13, 2017
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