Sysco Minnesota, Inc. v. International Brotherhood of Teamsters, Teamsters Local 120 et al
Filing
62
ORDER granting 37 Plaintiff's Motion for Summary Judgment; denying 39 Defendant's Motion for Summary Judgment; Plaintiff is entitled to judgment, LET JUDGMENT BE ENTERED ACCORDINGLY.(Written Opinion) Signed by Judge Paul A. Magnuson on 10/26/2018. (JEP)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Sysco Minnesota, Inc.,
Civ. No. 17-5162 (PAM/BRT)
Plaintiff,
v.
MEMORANDUM AND ORDER
Teamsters Local 120,
Defendant.
This matter is before the Court on the parties’ cross-Motions for Summary
Judgment. For the following reasons, Plaintiff’s Motion is granted and Defendant’s
Motion is denied.
BACKGROUND
In the late afternoon of Thursday, November 16, 2017, International Brotherhood
of Teamsters Local 41 began a one-day picket at Plaintiff’s Sysco Minnesota, Inc.’s food
distribution center in Mounds View, Minnesota. But Local 41 does not represent Sysco
Minnesota’s employees and had no grievance with Sysco Minnesota. Rather, Local 41
represents employees at a different Sysco facility in Kansas City, Missouri, owned by
Sysco Minnesota’s sister company, Sysco Kansas City, Inc. Both Sysco Minnesota and
Sysco Kansas City are subsidiaries of Sysco, Inc., but are separately owned and operated.
Nearly all of the members of Defendant Teamsters Local 120, representing
production, warehouse, and maintenance employees at the Mounds View facility, refused
to cross Local 41’s picket line, which was timed to interfere with both the Thursday evening
and Friday morning shifts. As a result, Sysco was unable to make its food deliveries to
commercial customers preparing for the upcoming Thanksgiving holiday. Sysco claims to
have suffered more than $1.2 million in lost profits and lost customers as a result of the
strike. Local 120 did not have any labor grievance with Sysco, and indeed had signed a
new four-year collective bargaining agreement (“CBA”) several months before the
incident.
Sysco brought this suit claiming that Local 120’s participation in the strike breached
the parties’ collective bargaining agreement. The parties’ CBA contains two relevant
provisions. Article 23 provides that “there shall be no lockout, strike or any other
interference with the operation of the business during the life of this Agreement.” (Am.
Compl. Ex. 1 (“CBA”) (Docket No. 14-1) at 17.) Article 24 also provides that “no
employee shall be requested to go through a primary picket line where a union is on primary
strike.” (Id.)
The parties have now cross-moved for summary judgment. Sysco contends that
there are no genuine issues of fact that Local 120 violated Article 23 and is therefore liable
for Sysco’s unrebutted damages. Local 120 argues that Sysco has failed to exhaust its
arbitral remedies under the CBA and asks the Court to stay the matter pending arbitration.
Article 22 of the CBA establishes a grievance procedure, including arbitration with the
Federal Mediation and Conciliation Service, for “any controversy, complaint or dispute
arising as to the interpretation or application or of the compliance with any provisions of”
the CBA. (Id. at 16.) In the alternative, Local 120 contends that the undisputed evidence
establishes that this was a “sympathy strike” that is authorized under Article 24.
2
DISCUSSION
Summary judgment is proper if there are no disputed issues of material fact and the
moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The Court
must view the evidence and inferences that “may be reasonably drawn from the evidence
in the light most favorable to the nonmoving party.” Enter. Bank v. Magna Bank of Mo.,
92 F.3d 743, 747 (8th Cir. 1996). The moving party bears the burden of showing that there
is no genuine issue of material fact and that it is entitled to judgment as a matter of law.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A party opposing a properly supported
motion for summary judgment may not rest on mere allegations or denials, but must set
forth specific facts in the record showing that there is a genuine issue for trial. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).
A.
Arbitration
Local 120 contends that the case should be dismissed for Sysco’s failure to exhaust
its administrative remedies under the CBA. Sysco argues that Local 120 has waived its
right to arbitration by litigating this matter for eight months, including through extensive
discovery, before raising the arbitration issue.
There is no dispute that a party may waive its right to arbitration if it acts
inconsistently with that right and the other party suffers prejudice as a result. Lewallen v.
Green Tree Servicing, L.L.C., 487 F.3d 1085, 1090 (8th Cir. 2007). “A party acts
inconsistently with its right to arbitrate if the party [s]ubstantially invoke[s] the litigation
machinery before asserting its arbitration right.” Id. (quotation omitted). Examples of a
party substantially invoking litigation machinery include engaging in extensive discovery
3
or failing “to move to compel arbitration and stay litigation in a timely manner.” Id. “To
safeguard its right to arbitration, a party must ‘do all it could reasonably have been expected
to do to make the earliest feasible determination of whether to proceed judicially or by
arbitration.’” Id. at 1091 (quoting Cabinetree of Wis., Inc. v. Kraftmaid Cabinetry, Inc.,
50 F.3d 388, 391 (7th Cir. 1995)).
Any doubts about waiver must be resolved in favor of arbitration. Phillips v. Merrill
Lynch, Pierce, Fenner & Smith, 795 F.2d 1393, 1396 n.9 (8th Cir. 1986). Further, delay
in and of itself is not sufficient to establish prejudice. Stifel, Nicolaus & Co. v. Freeman,
924 F.2d 157, 159 (8th Cir. 1991).
Local 120 has waived its right to pursue arbitration. Although it raised arbitration
as a defense in its Rule 26(f) report early in this case, Local 120 has not attempted to compel
Sysco to arbitrate this dispute. Indeed, Local 120’s response to Sysco’s Motion argues the
merits before offering arbitration as a second alternative. This does not constitute doing
all it reasonably could have been expected to do to secure its arbitration rights. Local 120’s
Motion on this point is denied.
B.
Breach of Contract
Local 120 contends that it did not violate the CBA because Article 24 protects Union
workers from repercussions if they refuse to cross “a primary picket line where a union is
on primary strike.” (CBA at 17.) According to Local 120, the Local 41 strike was a
primary strike that was extended from Local 41’s facility in Missouri to the facility in
Minnesota. Sysco argues that the CBA’s use of the term “primary” limits the protection to
strikes by other unions at the unionized workers’ location and does not cover sympathy
4
strikes.
The Labor-Management Relations Act (“LMRA”) makes specific reference to
“primary” strikes and “primary” pickets in 29 U.S.C. § 158(b)(4)(B), which provides that
labor actions against entities for whom a union is not a certified bargaining representative
are unlawful, except primary strikes or primary picketing. Although there is a dearth of
caselaw on the subject, those cases discussing the meaning of “primary” in this section
indicate that “primary” does not apply to strikes such as the one at issue here. See, e.g.,
Nat’l Woodwork Mfrs. Ass’n v. N.L.R.B., 386 U.S. 612, 620 (1967) (holding that union
employees’ refusal to install third-party manufacturer’s product was not prohibited under
§ 158(b)(4)(B), because it was an action “pressuring the [union members’] employer for
agreements regulating relations between [the employer] and his own employees”); Retail
Clerks Int’l Union & Retail Store Emp. Union, Local 655 v. Quick Shop Mkts., Inc., 604
F.2d 581, 589 (8th Cir. 1979) (nothing that strike against franchisers was “the paradigm of
primary activity” because union “sought recognition and bargaining agreements with the
franchisers”). Local 120 does not disagree, describing the work stoppage here as an
“extension” of Local 41’s primary strike rather than as a primary strike.
Local 120 also contends that the action here was a sympathy strike. The National
Labor Relations Act (“NLRA”) protects the right of unionized workers to engage in
sympathy strikes. 29 U.S.C. § 7; see also John Morrell & Co. v. Local Union 304A of
United Food & Commercial Workers, AFL-CIO, 913 F.2d 544, 551 (8th Cir. 1990) (noting
that § 157 “generally grants employees the right to engage in sympathy strikes in support
of a lawful strike by another union”). Local 120 argues that, unless the CBA clearly and
5
unambiguously waives employees’ sympathy-strike rights, the strike here was lawful and
did not violate the CBA. See Amcar Div., ACF Indus. Inc. v. N.L.R.B., 641 F.2d 561, 566
(8th Cir. 1981).
Here, however, the CBA does clearly and unambiguously waive Local 120’s right
to engage in sympathy strikes. The Court must read the CBA as a whole. Article 23
prohibits any “strike or any other interference with the operation of the business.” Article
24 modifies this prohibition to allow Local 120 to honor “primary” strikes. Having
essentially conceded that the strike at issue was a sympathy strike, not a primary strike,
Local 120 cannot escape the CBA’s prohibition on any non-primary-strike work stoppages.
The parties invite the Court to examine their bargaining history, with each party
contending that this history supports their interpretation of Articles 23 and 24. But while
the Court must “look to the language of the contract, the structure of the contract, the
bargaining history, and any other relevant conduct of the parties that shows their
understanding of the contract,” Amcar, 641 F.2d at 567, the parties’ bargaining history here
is, at best, contradictory. And regardless of bargaining history, the language of the CBA
is subject to only one interpretation: any work stoppage that is not a primary strike is
prohibited.
Because Local 120 violated Article 23’s strike prohibition, it is liable for all
damages that flow from that breach. See Williams v. Nat’l Football League, 582 F.3d 863,
873 (8th Cir. 2009) (noting that suit under the LMRA for violation of CBA is a suit for
breach of contract); see also Lesmeister v. Dilly, 330 N.W.2d 95, 103 (Minn. 1983) (a
plaintiff may recover “damages sustained by reason of the breach [of contract] which arose
6
naturally from the breach or could reasonably be supposed to have been contemplated by
the parties when making the contract as the probable result of the breach”).
Sysco submitted extensive evidence regarding lost profits and lost customers.
Sysco’s expert witness calculates Sysco’s total damages as $1,238,315. (Douglas Decl.
Ex. W (Docket No. 49).) Local 120 has not rebutted this evidence or offered an alternative
damages model for the Court to use in calculating Sysco’s damages here. Indeed, Local
120’s only argument in this regard is that it did not violate the CBA so no damages are
owed. The Court disagrees, however. It is Local 120’s burden in opposing a properly
supported summary-judgment motion to set forth specific facts in the record that show a
genuine dispute. Local 120 has failed to do this, and an award of damages in the amount
Sysco requests is appropriate. See, e.g., Satcher v. Univ. of Ark. at Pine Bluff Bd. of Trs.,
558 F.3d 731, 735 (8th Cir. 2009) (“[F]ailure to oppose a basis for summary judgment
constitutes waiver of that argument.”).
CONCLUSION
Accordingly, IT IS HEREBY ORDERED that:
1.
Plaintiff’s Motion for Summary Judgment (Docket No. 37) is GRANTED;
2.
Defendant’s Motion for Summary Judgment (Docket No. 39) is DENIED;
and
3.
Plaintiff is entitled to judgment in the amount of $1,238,315.
LET JUDGMENT BE ENTERED ACCORDINGLY.
7
Dated: October 26, 2018
s/ Paul A. Magnuson
PAUL A. MAGNUSON
United States District Court Judge
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?