New Frontier Electrical Inc. et al v. Trustees of Neca et al

Filing 49

ORDER ON DEFENDANT'S MOTION TO DISMISS, signed by the Honorable Matthew F. Kennelly on 7/15/2021: For the reasons stated in this order, the Court denies defendant's motion to dismiss for lack of subject matter jurisdiction but grants its m otion to dismiss for failure to state a claim [dkt. no. 21]. Unless plaintiff files, by August 6, 2021, a motion for leave to amend attaching a proposed amended complaint that states a viable claim over which the Court has jurisdiction, the Court wi ll enter judgment against plaintiff. The status hearing and ruling set for July 16, 2021 is vacated. The case is set for a telephonic status hearing on August 13, 2021 at 9:10 a.m., using call-in number 888-684-8852, access code 746-1053. Counsel should wait for the case to be called before announcing themselves. (mk)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
NEW FRONTIER ELECTRICAL,
INC. and JAMES FOSTER,
Plaintiffs,
vs.
IBEW LOCAL 176,
Defendant.

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Case No. 20 C 3254

ORDER ON DEFENDANT'S MOTION TO DISMISS
MATTHEW F. KENNELLY, District Judge:
New Frontier Electrical Inc. has filed a complaint against International
Brotherhood of Electrical Workers Local 176. The complaint, which was filed by the
non-lawyer principal of New Frontier and later adopted by counsel, states the following.
New Frontier is a minority union electrical contracting firm and "has been signatory as a
contractor with IBEW Local 176 for about 11 years." In February 2020, Local 176 gave
written notice of termination of the agreement, as best as the Court can tell, pursuant to
something called the "one man unit rule." The union's notice said that the termination
would be effective "upon the expiration of the current agreement on May 31, 2020,
pursuant to Section 1.01 of the IBEW 176—NECA Inside Agreement." New Frontier
alleges that it had no prior notice of the termination or its claimed basis, and it also
alleges (among other things) that it "currently has union electricians working" for it on
various projects. New Frontier contends that the termination of the agreement with
Local 176 would be catastrophic for its business—presumably it would not be able to
get job where union contractors are required. It asks the Court to enjoin the termination,

which it appears to contend is improper, though the complaint does not explain why.
Local 176 has moved to dismiss for lack of subject matter jurisdiction and for
failure to state a claim. On the first point, Local 176 argues that the Court lacks
jurisdiction to adjudicate a matter of this type. Instead, the union contends in its motion,
"exclusive primary jurisdiction" lies with the National Labor Relations Board. Mot. to
Dismiss (dkt. no. 21) at 1. On the question of jurisdiction, in J.W. Peters, Inc. v. Bridge,
Structural and Reinforcing Iron Workers, Local Union 1, AFL-CIO, 398 F.3d 967 (7th
Cir. 2005), the Seventh Circuit considered, on appeal from a decision by a district court,
a case presenting more or less a mirror image of the situation in this case: an employer
repudiated an agreement with a union and sued seeking a declaration that it had acted
properly. The dispute involved the same "one-man unit" rule apparently involved in the
present case. The court ruled that a district court had jurisdiction to determine the
validity of the contractual repudiation. Id. at 972-73. The court drew this from section
301 of the Labor Management Relations Act, 29 U.S.C. § 185(a), concluding that the
dispute was a claim for breach of contract within the meaning of that section.
In Copps Food Center, Inc. v. United Food & Commercial Workers Union, Local
73-A, 940 F.2d 665 (7th Cir. 1991) (unpublished), the court considered a primary
jurisdiction argument similar to the one made by the union in this case. A federal court,
it said, has jurisdiction under section 301 to adjudicate a contract dispute, limited only
by "the policy of reserving to the NLRB jurisdiction over issues involving representation."
Id. at *3. That policy was brought into play in Copps Food Center, in which the dispute
brought before the court was also part of a pending NLRB proceeding involving an issue
of union representation of certain persons. But the present case does not appear to

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involve an issue of representation—at least Local 176 does not contend that it does.
For these reasons, the Court denies Local 176's motion to dismiss for lack of
subject matter jurisdiction.
New Frontier's complaint founders, however, on the merits. As Local 176 points
out, it is not alleged to have repudiated the contract mid-term. Rather the union is
alleged to have terminated the agreement as of the date it expired by its own terms. It
is hard to see how that could be a breach, at least without a properly-supported
allegation that New Frontier had a contractual or other right of renewal. Indeed, New
Frontier's complaint makes no effort to explain what, if anything, the union did wrong.
Rather, it simply alleges that the termination would cause it hardship. That is no doubt
so, but a claim for breach of contract requires an allegation of breach, which is lacking.
Conclusion
For the reasons stated in this order, the Court denies defendant's motion to
dismiss for lack of subject matter jurisdiction but grants its motion to dismiss for failure
to state a claim [dkt. no. 21]. Unless plaintiff files, by August 6, 2021, a motion for leave
to amend attaching a proposed amended complaint that states a viable claim over
which the Court has jurisdiction, the Court will enter judgment against plaintiff. The
status hearing and ruling set for July 16, 2021 is vacated. The case is set for a
telephonic status hearing on August 13, 2021 at 9:10 a.m., using call-in number 888684-8852, access code 746-1053. Counsel should wait for the case to be called before
announcing themselves.
Date: July 15, 2021

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MATTHEW F. KENNELLY
United States District Judge
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