Baltimore/Washington Construction v. Whiting-Turner Contracting Co.

Filing 12

MEMORANDUM. Signed by Judge James K. Bredar on 3/23/2017. (dass, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Baltimore/Washington Construction and
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Public Employee Laborer’s District Council,
Petitioner
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v.

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Whiting-Turner Contracting Co.,

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Respondent
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CIVIL NO. JKB-16-3722

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MEMORANDUM

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Petitioner filed a petition in this Court to compel arbitration of its claim against
Respondent pursuant to the Federal Arbitration Act and the Labor-Management Relations Act.
(Petition, ECF No. 1.) Now pending before the Court are Respondent’s motion to dismiss the
petition (ECF No. 4) and Petitioner’s motion to compel arbitration (ECF No. 5). Both motions
are fully briefed. (ECF Nos. 4-1, 5-1, 7, 8). No hearing is necessary. See Local Rule 105.6
(D. Md. 2016.) For the reasons stated below, Respondent’s motion will be denied in part and
denied in part as moot, and Petitioner’s motion will be granted in part and denied in part as moot.
I.

STANDARD TO COMPEL ARBITRATION UNDER THE LMRA
The Labor-Management Relations Act provides a labor union with federal standing to

“sue or be sued on behalf of the employees whom it represents.” 29 U.S.C. § 185(b). A union
may thus petition the court to enforce a valid labor contract’s arbitration clause, and federal
courts have the authority to compel arbitration under such circumstances. Kop-Flex Emerson
Power Transmission Corp. v. Int’l Ass’n of Machinists Local Lodge No. 1784, 840
F. Supp. 2d 885, 890 (D. Md. 2012). In ruling on a motion to compel arbitration, a court must
limit its inquiry to determining the question of arbitrability, that is, “the gateway dispute about

whether the parties are bound by a given arbitration clause.” Id. (quoting Howsam v. Dean
Witter Reynolds, Inc., 537 U.S. 79, 84 (2002)).
II.

FACTUAL BACKGROUND
The instant dispute arises within the context of Respondent’s oversight of construction of

the MGM Resort Casino at National Harbor in Prince George’s County, Maryland (“the
Project”). (Petition.) To promote an efficient and cooperative relationship between management
and labor working on the Project, Respondent entered into a Project Labor Agreement (the
“PLA”) with various trade unions, including Petitioner, on September 15, 2014. (PLA § 1.4,
ECF No. 1-1.)
The PLA grants preference to contractors or subcontractors who themselves sign the PLA
and have signed collective bargaining agreements with appropriate unions. (See PLA § 12.5.)
However, it contemplates the participation of other contractors as well. (See id.) According to
the PLA, any contractor or subcontractor working on the Project—whether or not it is a party to
the PLA—must pay its employees according to the region’s prevailing wage, at a minimum.
(Id.) The PLA also sets out a three-step process for resolving any dispute that should arise
between labor and management within the course of the Project. (PLA § 6.3.) This procedure is
the exclusive means of resolving conflicts between a laborer or union and a contractor or the
Respondent when both parties involved are signatories to the PLA. (Id.) It requires that, if a
union has a grievance against an employer, the two must first attempt to resolve the issue
through a conference among their representatives. (Id. at § 6.3.3(b).)1 If the parties are unable to
agree on a solution, then the appropriate international union must send a representative to
attempt to resolve the issue with the employer. (Id. at § 6.3.2.) Finally, if no resolution is
1

The numbering of the PLA’s subsections within § 6.3 contains an apparently erroneous duplication. The
subsection containing “Step 1,” which is numbered § 6.3.3, was presumably intended to be numbered § 6.3.1, in
which case the subsection containing “Step 3” is correctly numbered § 6.3.3.

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availing after the previous two steps, then either party may submit the dispute to arbitration. (Id.
at § 6.3.3(a).)
DGS Construction, d/b/a Schuster Concrete Construction (“Schuster”), which does not
have a collective bargaining agreement with its employees and is not a signatory to the PLA,
contracted with Respondent to perform certain services on the Project. (Petition ¶ 11.) On
March 17, 2016, Petitioner met with Respondent in an attempt to address Petitioner’s objection
that Schuster allegedly failed to pay its employees in conformity with § 12.5 of the PLA.
(Allison Letter dated March 25, ECF No. 1-2.) In correspondence on April 20 and May 2, 2016,
Respondent asserted its position that Petitioner had not alleged Respondent to have violated the
PLA and that Schuster (a non-signatory to the PLA) was not bound by the PLA’s prevailing
wage requirement. (Taylor Letters dated April 20 and May 2, ECF Nos. 4-2, 4-3.) Interpreting
Respondent’s communications as denials under Steps One and Two of the PLA’s grievance
procedure, Petitioner proceeded at some point between May 2 and May 9, 2016, to submit the
dispute for arbitration.2 (Martire Letter dated March 25, ECF No. 4-4.) In correspondence on
May 10, and 20, 2016, Respondent refused to participate in arbitration, reasserting its position
that Petitioner had failed to allege Respondent to have committed any breach of the PLA and that
accordingly, there was no basis for arbitration. (Taylor Letters dated May 10 and 20, ECF
Nos. 4-5, 1-3). On May 23, 2016, Petitioner averred (1) that the PLA obliged Respondent to
ensure that all non-union subcontractors it retained paid their employees in conformity with
§ 12.5 of the PLA; (2) that by failing to do so in the case of Schuster, Respondent was in breach
of the PLA; and (3) that Petitioner’s objection to this breach was an arbitrable grievance.
(Petruska Letter dated May 23, ECF No. 1-4.) On June 4, 2016, Respondent again denied that

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The letter evidencing this determination appears to be incorrectly dated March 25, 2016, as the letter
contains a reference to other correspondence dated May 2, 2016. (See ECF Nos. 4-4, 4-5.)

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Petitioner’s claim constituted an arbitrable grievance under the PLA. (Taylor Letter dated
June 4, ECF No. 1-5.) The instant action followed on November 16, 2016. (Petition.)
III. ANALYSIS
Petitioner filed its action pursuant to two federal statutes: the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 4 (2015), and the Labor-Management Relations Act (“LMRA”), 29 U.S.C.
§ 185 (2015). (Petition ¶¶ 18–25.) As discussed below, the Court finds (A) the action is timely
under the LMRA, (B) the substance of Petitioner’s grievance is contemplated under the
arbitration provision contained in the PLA’s grievance procedure, and (C) questions of
Petitioner’s compliance with the grievance procedure are appropriate for resolution in arbitration.
Accordingly, Petitioner’s motion to compel arbitration will be granted and Respondent’s motion
to dismiss will be denied under the LMRA. Both parties’ motions with respect to the FAA will
therefore be denied as moot.
A.

Timeliness under the LMRA

Congress has adopted a broad federal policy “favoring arbitration of labor disputes.”
Peabody Holding Co., LLC v. United Mine Workers of Am., Int’l Union, Unincorporated Ass’n,
815 F.3d 154, 162 (4th Cir. 2016). It passed the LMRA in 1947 in order to define the rights of
employees and employers (with respect to each other and to organized labor unions) and to
ensure protection of such rights and those of the public in connection with labor disputes
affecting commerce. 29 U.S.C. § 141 (2015).
The Fourth Circuit has not definitively stated the applicable statute of limitations in
actions to compel labor arbitration. See United Steel, Paper & Forestry, Rubber, Mfg., Energy,
Allied-Indus. & Serv. Workers Int’l Union Local No. 850L v. Cont’l Tire N. Am., Inc.,
568 F.3d 158, 162 (4th Cir. 2009) (declining to address the issue). Respondent appeals to the

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federal policy in favor of speedy resolution of labor disputes as a basis for applying the National
Labor Relations Act’s (“NLRA’s”) six-month statute of limitations (measured from the date on
which a party first refuses to participate in arbitration) in the instant case3 and argues this statute
of limitations has been applied by several courts in analogous situations to the instant case.4
(Resp’t’s Reply in Supp. 10–11, ECF No. 7.) Petitioner, by contrast, argues that the cases relied
on by Respondent do not represent the current state of the law5 and that it is more appropriate to
apply the general three-year statute of limitations governing civil actions in Maryland.6 (Pet’r’s
Reply in Supp. 5–7, ECF No. 8.) However, in the instant matter, the Court need not determine
the correct statute of limitations because it finds Petitioner to have complied with even the more
stringent standard promoted by Respondent.
Petitioner first complained to Respondent about Schuster’s noncompliance with the PLA
on March 17, 2016. (Allison Letter dated March 25.) As early as April 20, 2016, Respondent
denied Petitioner’s complaint was subject to the grievance procedure (including arbitration).
(Taylor Letter dated April 20.) Respondent would have the Court conclude that its April 20
correspondence represents a refusal to arbitrate the instant dispute. (Resp’t’s Mem. in Supp. 6-7,
ECF No. 4-1.) According to that position, the latest date Petitioner could have filed a timely
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See, e.g., Zemonick v. Consolidation Coal Co., 762 F.2d 381, 387 (4th Cir. 1985) (indicating that the
quick resolution of labor disputes is “one of the underlying policies of the United States”).
4
For the proposition that the six-month statute of limitations applies to actions to compel arbitration of
collective bargaining agreements, Respondent relies on cases decided by several district courts in the Fourth Circuit
as well as decisions of a number of circuit courts. See, e.g., United Steel, Paper & Forestry, Rubber, Mfg., Energy,
Allied-Indus. & Serv. Workers Int’l Union Local No. 850L v. Cont’l Tire N. Am., Inc., 562 F. Supp. 2d 677, 683
(W.D.N.C. 2008), aff’d on other grounds, 568 F.3d 158 (4th Cir. 2009); Aluminum, Brick, & Glassworkers Int’l
Union Local 674 v. A.P. Green Refractories, Inc., 895 F.2d 1053, 1055 (5th Cir. 1990).
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Petitioner relies on Reed v. United Transp. Union, in which the Supreme Court applied to labor cases the
general principle that when a federal statute does not specify a limitations period, courts should generally turn to the
most closely analogous state law to supply one and should only look to another federal statute when it provides a
closer analog and is more appropriate to the circumstances at hand. 488 U.S. 319, 323 (1989); see also United
Paperworkers Int’l Local 395 v. ITT Rayonier Inc., 931 F.2d 832, 836–38 (11th Cir. 1991) (applying Reed to
conclude that a state statute of limitations should govern a motion to compel arbitration in the labor context).
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Petitioner infers from Int’l Longshoreman’s Ass’n v. Cataneo, Inc., that Fourth Circuit precedent would
favor application of a state-law limitations period to a motion to compel labor arbitration. 990 F. 2d 794, 799–800
(4th Cir. 1993) (applying a state limitations period in a motion to vacate an arbitration award).

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action under the NLRA’s limitations period would have been October 20, 2016, thus rendering
untimely the instant action, filed on November 16, 2016.7 Opposite that position, Petitioner
argues its complaint was not fully articulated until May 23, 2016, when it averred that
Respondent was in breach of contract because it did not enforce Schuster’s compliance with
§ 12.5 of the PLA. (Petruska Letter dated May 23.) Respondent’s next refusal to arbitrate came
on June 4, 2016 (Taylor Letter dated June 4), and based on that date, the six-month statute of
limitations would not expire until December 4, 2016, making the instant action timely.
These facts do not lend themselves to a clear determination as to when Petitioner
articulated its current claim and when Respondent refused to arbitrate it.

In favor of

Respondent’s position is the notion that the underlying conduct complained of by Petitioner on
March 17 (i.e., that Schuster did not pay its employees according to the prevailing wage
requirement) is the same conduct that it seeks to remedy in arbitration. In Petitioner’s favor is
the fact that even Respondent characterizes Petitioner’s May 23 articulation of its complaint
(including the allegation that Respondent had a duty to ensure Schuster’s compliance) as a new
and distinct claim from those that came before. (Resp’t’s Mem. in Supp. 4 n.5 (“[T]he allegation
by the Union in its May 23, 2016 correspondence that [Respondent] breached the PLA is. . . an
entirely new claim against [Respondent].”).) If either interpretation were clearly correct, the
Court would honor it;8 however, given the ambiguities involved, the Court will resolve the
matter in Petitioner’s favor. In reaching this conclusion, the Court relies on the overarching

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Limitations periods calculated from Respondent’s subsequent refusals to arbitrate on May 2 and 10, 2016,
would likewise render the instant Petition untimely, with periods expiring November 2 and 10, 2016, respectively.
However, those refusals, responding to the same argument as Respondent’s letter of April 20, require no separate
analysis.
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If the Court adopted Respondent’s interpretation, it would then be required to decide whether the sixmonth statute of limitations applies. If pressed, the Court would adopt the view of the Eleventh Circuit in ITT
Rayonier Inc., and apply the state law limitations period. See 931 F.2d at 836–38. Under Maryland law, the
limitations period would be three years, and the Petition would be considered timely. See Md. Code Cts. & Jud.
Proc. § 5-101 (Lexis 2013).

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federal policy favoring arbitration of labor disputes, see Peabody Holding Co., 815 F.3d at 162,
and on the fact that the parties have agreed to resolve at least some of their disputes through
arbitration. The motion to dismiss will be denied as to Respondent’s argument that the Petition
is untimely under the LMRA.
B.

Arbitrability of Petitioner’s Grievance According to the PLA

Respondent next claims that it never consented to arbitrate disputes of the type raised by
Petitioner. (Resp’t’s Mem. in Supp 8–10.) The PLA is ambiguous as to whether the alleged
conduct, if true, would constitute a breach of Respondent’s duty and, therefore, whether
Petitioner’s allegation is covered by the arbitration provision. However, the Court does not find
Respondent to have overcome the applicable presumption of arbitrability. Petitioner has also
claimed a protectable interest in Respondent’s compliance with the applicable section of the
PLA. For these reasons, the Court will deny Respondent’s motion to dismiss the petition.
The Supreme Court has recognized that unless the parties have clearly agreed otherwise,
it is a reviewing court’s duty to interpret an arbitration agreement and to determine “whether the
parties intended to arbitrate grievances concerning a particular matter.” Granite Rock Co. v. Int’l
Bhd. of Teamsters, 561 U.S. 287, 301 (2010) (internal quotation marks omitted). In conducting
such an analysis under circumstances where the parties reached a valid and enforceable
arbitration agreement, but in which that agreement is “ambiguous about whether it covers the
dispute at hand,” a reviewing court should apply a presumption of arbitrability and should order
arbitration where the presumption is not rebutted. Id.
The PLA contains a grievance process for settling disputes “arising out of and during the
term of” the PLA, and Step Three of the process is an enforceable arbitration provision. (PLA
§ 6.3.) The parties disagree as to whether Petitioner’s claim “arises out of” the PLA, and is thus
subject to the arbitration agreement. The grievance Petitioner seeks to arbitrate stems from its
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interpretation of the PLA’s prevailing wage clause contained in § 12.5, which states that for all
contractors working on the Project, even those that are otherwise exempt from the PLA
payment of the prevailing wages and fringe benefit rates of the project as
indicated on [sic] the Maryland Department of Labor, Licensing, and Regulation
Informational Wage Rate for Prince George’s County determined at the
commencement of the Project, which [Respondent] has voluntarily adopted for
the Project, shall be a minimum requirement.
(PLA § 12.5.)

The parties disagree over whether the PLA places an affirmative duty on

Respondent to enforce adherence to this prevailing wage clause against contractors who are not
unionized and not signatories to the PLA. (Resp’t’s Mem. in Supp. 9–10; Pet’r’s Mem. in
Opp’n 15–16, 18–19, ECF No. 5-1.)
Section 12.5 does not expressly state that it is Respondent’s duty to ensure contractors’
compliance with the prevailing wage clause. On the other hand, it does state that Respondent
adopted the prevailing wage requirement, and the agreement imposes that requirement on all
contractors working on the Project, even those who do not sign the PLA themselves. If the
parties did not contemplate Respondent demanding non-signatory contractors to abide by the
wage requirement, then this provision would be effectively meaningless. Thus, if Petitioner’s
interpretation of the PLA is not correct, § 12.5 is at least ambiguous on Respondent’s duties and
on whether Petitioner’s complaint alleges conduct “arising under the PLA,” subject to the
parties’ arbitration agreement. Accordingly, the Court will apply a presumption of arbitrability.
See Granite Rock Co., 561 U.S. at 301. Particularly in light of the common law principle to
prefer an interpretation that makes the contract effective rather than one rendering it illusory and
unenforceable, see Questar Builders, Inc. v. CB Flooring, LLC, 978 A.2d 651, 670 (Md. 2009),
Respondent fails to defeat the presumption of arbitrability. The Court finds that the parties’
disagreement over the responsibilities Respondent assumed in § 12.5 of the PLA is subject to the

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arbitration agreement in § 6.3 and therefore, that Respondent agreed to arbitrate claims like the
one raised by Petitioner.9
The parties also disagree over whether Petitioner claims to have been injured by the
alleged breach and thus has standing to bring its grievance. (Resp’t’s Reply in Supp. 13–14;
Pet’r’s Reply Mem. 7–8.) Union-standards clauses like the one in § 12.5 of the PLA are not an
uncommon feature in labor agreements and have been found proper and enforceable by the
courts and by the National Labor Relations Board. See Eisenmann Corp. v. Sheet Metal Workers
Int’l Ass’n Local No. 24, 323 F.3d 375, 383–84 (6th Cir. 2003) (citing sources). Such clauses
serve the legitimate purpose of protecting unionized laborers against lower-paid potential
competitors. Id. (quoting Gen. Teamsters Local 386, 198 NLRB 1038 (1972)). Petitioner thus
alleges it was injured when Respondent allegedly permitted Schuster to compensate its
employees for less than the prevailing wage standards agreed upon in § 12.5 of the PLA.
Consequently, the Court concludes Petitioner has standing to bring its grievance.
Respondent’s motion to dismiss will be denied as to its argument that Petitioner failed to
present a grievance that falls within the parties’ arbitration agreement.
C.

Petitioner’s Compliance with the PLA’s Procedural Requirements

Respondent points out that even if it is responsible for ensuring its subcontractors pay
their employees in conformity with the prevailing wage, Petitioner did not articulate this
allegation until after it had referred its grievance to arbitration. (Resp’t’s Reply in Supp. 4.)
Because arbitration is only Step Three in the PLA’s grievance procedure, and because that
procedure does not include a provision allowing a party to amend its grievance after the
procedure has begun, Respondent denies ever having agreed to arbitrate a claim like that brought
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Because it decides the issue before it by applying a presumption of arbitrability, the Court does not
identify Respondent’s affirmative duties under § 12.5 of the PLA. That determination, which goes to the merits of
the dispute, is one to be resolved by the arbitrator.

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by Petitioner.10 (Id.) However, whether Petitioner sufficiently complied with the arbitration
agreement’s grievance procedure is a matter for the arbitrator and not the Court to decide.
As discussed above, the question of whether the parties have submitted a particular
dispute to arbitration (i.e., whether the parties are bound by a given arbitration agreement or
whether a concededly binding agreement covers a particular controversy) is a matter for judicial
determination. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83–84 (2002). However,
the Supreme Court has cautioned that not all “potentially dispositive gateway question[s]” are
questions of arbitrability. Id. at 84. Rather, “procedural questions which grow out of the dispute
and bear on its final disposition are presumptively not for the judge, but for an arbitrator, to
decide.” Id.
In assessing whether a procedural question in an arbitration agreement is suitable for
judicial determination, John Wiley & Sons, Inc. v. Livingston is informative. 376 U.S. 543
(1964). Much like the instant case, Livingston involved an employer that challenged whether
unionized employees had satisfied the first two steps of a grievance process before attempting to
enforce the third step—referral to arbitration. Under those facts, the Supreme Court observed
that such disputes are not easily divided into their ‘substantive’ and ‘procedural’ aspects because
procedural questions are inextricably intertwined with the substantive facts of the parties’
dispute. Id. at 556–57. The Court concluded that
[d]oubt whether grievance procedures or some part of them apply to a particular
dispute, whether such procedures have been followed or excused, or whether the
unexcused failure to follow them avoids the duty to arbitrate cannot ordinarily be
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Whether Petitioner’s ultimate grievance was the same or different from its original one affects the
parties’ respective interests oppositely on the issue of conformity with the PLA’s grievance process as compared to
the statute of limitations issue. On the statute of limitations issue, it is in Petitioner’s interest for its final version of
its grievance (specifically alleging a breach of duty by Respondent) to be distinct from its earlier version (alleging
only that Schuster was not in conformity with the PLA) because the limitations period would effectively be reset
with the new articulation. On the issue of conformity with the grievance procedures, interpreting Petitioner’s
allegations as a new grievance cuts in Respondent’s favor because it indicates that Petitioner skipped over Steps One
and Two of the procedure when it brought its “new” complaint.

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answered without consideration of the merits of the dispute which is presented for
arbitration.
Id. at 557.
The record includes sufficient evidence to understand the Union’s allegations in Step One
and Step Two of the grievance process (that Schuster had not paid its employees a prevailing
wage) to have been distinguishable from those advanced in Step Three (adding that Respondent
was responsible for ensuring Schuster’s conformity). See supra, Part III. A. However, whether
this difference represents an unexcused failure to follow the PLA’s grievance process, and
whether such a failure relieves Respondent from its duty to arbitrate, cannot be answered without
consideration of the merits of the dispute. Accordingly, these are questions to be resolved in
arbitration.
The Court will not dismiss based on Petitioner’s potential noncompliance with the PLA’s
grievance process. Respondent’s motion to dismiss under the LMRA will, therefore, be denied
and Petitioner’s motion to compel arbitration under the LMRA will be granted.
D.

Petitioner’s Motion to Compel Arbitration under the FAA

The Court interprets the Petition as arguing in the alternative for relief under the LMRA
or the FAA. (See Petition ¶¶ 18–25.) Because the Court will grant Petitioner’s motion under the
LMRA, it will deny as moot Petitioner’s motion to compel arbitration under the FAA and
Respondent’s motion to dismiss on that basis.
IV. CONCLUSION
For the foregoing reasons, with respect to Petitioner’s claim under the LMRA,
Respondent’s motion to dismiss the Petition will be denied and Petitioner’s motion to compel
arbitration will be granted. With respect to Petitioner’s claim under the FAA, both parties’
motions will be denied as moot. A separate order will issue.
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DATED this 23rd day of March, 2017.
BY THE COURT:

/s/
James K. Bredar
United States District Judge

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