J. M. Haley Corp. v. Sheet Metal Workers International Association, Local 28 et al

Filing 33

MEMORANDUM & ORDER granting in part and denying in part 18 Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 24 Motion to Dismiss. For the foregoing reasons, Defendants' motions to dismiss (Docket Entri es 18, 24) are GRANTED IN PART and DENIED IN PART. Specifically, Plaintiff's tortious interference claim, claim for injunctive relief, and claims against the Individual Defendants are DISMISSED WITH PREJUDICE. However, Defendants' motions are otherwise DENIED. So Ordered by Judge Joanna Seybert on 3/7/2016. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-----------------------------------X
J.M. HALEY CORP.,
Plaintiff,
-against-

MEMORANDUM & ORDER
15-CV-1227(JS)(AYS)

SHEET METAL WORKERS
INTERNATIONAL ASSOCIATION,
LOCAL 28, KEVIN CONNOR
in his capacity as President
of Local 28, BOB DIORIO in his
capacity as President/
International Trustee of Local 28,
JAMES CUIFFO in his capacity
as Secretary/Treasurer of
Local 28, ROBERT SOTO in his
capacity as Secretary/
Treasurer of Local 28, and
JOHN DOES 1-10,
Defendants.
-----------------------------------X
APPEARANCES
For Plaintiff:
Ira D. Wincott, Esq.
Emanuel Kataev, Esq.
Joseph M. Labuda, Esq.
Milman Labuda Law Group, PLLC
3000 Marcus Avenue, Suite 3W8
Lake Success, NY 11042
For Defendants:
Sheet Metal Workers
International
Association, Local 28,
Kevin Connor, James
Cuiffo, Robert Soto,
and John Does 1-10

Bob Diorio

Denis A. Engel, Esq.
Colleran, O’Hara & Mills LLP
100 Crossways Park Drive West, Suite 200
Woodbury, NY 11797
Amy F. Shulman, Esq.
Broach & Stulberg, LLP

One Penn Plaza, Suite 2016
New York, NY 10119
SEYBERT, District Judge:
This case concerns alleged unlawful labor practices
committed by a construction union.

Plaintiff J.M. Haley Corp.

(“Plaintiff”) commenced this action against Defendants Sheet Metal
Workers’ International Association, Local 28 (“Local 28”), Bob
Diorio, James Cuiffo, Robert Soto, and ten John Doe Defendants
(collectively, “Defendants”), seeking relief pursuant to Section
303 of the Labor Management Relations Act of 1947 (the “LMRA”), as
amended, 29 U.S.C. § 187,
U.S.C.

§ 158(b)(4)

“NLRA”).

of

the

based on Defendants’ violations of 29
National

Labor

Relations

Act

(the

Both Diorio and the remaining Defendants have filed

motions to dismiss the Complaint.

(Docket Entries 18, 24.)

For

the foregoing reasons, Defendants’ motions are GRANTED IN PART and
DENIED IN PART.
BACKGROUND1
Plaintiff is a company in the business of installing
sheet-metal ductwork in the tri-state area, and Local 28 is a labor
organization that represents workers in the construction industry.
(Compl. ¶¶ 12, 19.)

Connors, Diorio, Cuiffo, and Soto (the

“Individual Defendants”) are all officers of Local 28, and the

The following facts are drawn from Plaintiff’s Complaint and
are presumed to be true for the purposes of this Memorandum and
Order.
1

2

John Doe defendants are alleged to be unknown agents and members
of Local 28 who participated in the conduct at issue. (Compl.
¶¶ 14-18.)

Plaintiff’s employees are represented by Local 355 of

the International Union of Journeymen and Allied Trades (“Local
355”), and not by Local 28.

(Compl. ¶ 2.)

In 2008, Local 28 embarked on a campaign of “picketing
and boycott activity” in an effort to force construction companies
to stop doing business with Plaintiff.
alleges

that

Local

28

aimed

to

(Compl. ¶ 2.)

ensure

that

Plaintiff

work

Plaintiff

contracted to perform was ultimately completed by Local 28 members.
(Compl. ¶ 2.)

More specifically, Plaintiff claims that Defendants

engaged in concerted action on six different construction jobs in
an effort to capture work for Local 28 members at Plaintiff’s
expense.

(See

Compl.

¶¶ 21-79.)

Plaintiff’s

allegations

concerning each job are summarized below.
I.

The Novotel Contract
On December 10, 2012, Plaintiff contracted with Fleet

Mechanical Systems (“Fleet”) to provide services in connection
with the construction of a Novotel hotel, located at 226 West 52nd
Street

in

New

York

City.

(Compl.

¶ 21.)

InterServ

(“InterServ”) was the general contractor for the job.

LP

(Compl.

¶ 22.)
Plaintiff alleges that agents of Local 28 repeatedly
called InterServ and told them not to use Plaintiff’s services
3

because Local 28 was claiming the Novotel work, and Plaintiff was
not a signatory to a collective bargaining agreement with Local
28.

(Compl. ¶ 24.)

On February 12, 2013, Local 28 engaged in a

“general Picket in the lobby of the Novotel job demanding that
Novotel and [InterServ] stop using [Plaintiff] and reassign the
work to a Local 28 contractor.”

(Compl. ¶ 25.)

The picketers

stopped people from entering and exiting the building, and Daniel
Fox, Jr., a business agent for Local 28, stated that Local 28 would
“pick off” Plaintiff and other contractors that did not use labor
belonging to the Building Trades Council, an organization that
Local 28 belongs to.

(Compl. ¶ 23-26.)

Agents of Local 28 continued to threaten labor unrest
unless Plaintiff was terminated from the job.

(Compl. ¶ 27.)

On

February 14, 2013, Local 28 engaged in another general picket of
the Novotel job and inflated a fifteen-foot rat balloon near the
entrance to the project.

(Compl. ¶ 28.)

Threats to picket and

inflate the rat balloon continued, and on February 21, 2013,
Plaintiff was notified by Fleet, Novotel, and InterServ that
Plaintiff’s contract was terminated due to “Local 28’s unlawful
threats and coercion.”
II.

(Compl. ¶¶ 13-33.)

The Metadata Solutions Contract
On June 3, 2013, Plaintiff secured a contract to provide

its services to Marlin, Inc. (“Marlin”) for work on Medidata
Solutions’ office space, located at 350 Hudson Street in New York
4

City.

(Compl. ¶ 35.)

JRM Construction (“JRM”) was the general

contractor on the job and Marlin was the mechanical contractor.
(Compl. ¶ 35.)
In August 2013, representatives of Local 28 and two other
unions “claimed the Medidata sheet metal work for Local 28” and
threatened to picket unless Plaintiff was terminated and the sheetmetal work was reassigned to a Local 28 contractor. (Compl. ¶ 36.)
On August 7, 2013 Local 28 again inflated a rat balloon
near the entrance to the job site and picketed around the rat.
(Compl. ¶ 38.)

The very next day, a Local 28 agent texted

Plaintiff that Local 28 was setting up a meeting to recruit
Plaintiff’s employees.

(Compl. ¶ 39.)

III. The New York Presbyterian Hospital Contracts
In April 2012, Plaintiff secured a contract to provide
services to Interstate Mechanical Services (“Interstate”) on two
construction projects for New York Presbyterian Hospital (the
“Hospital

jobs”).

(Compl.

¶¶ 42-43.)

Cauldwell

Wingate

(“Cauldwell”) served as the general contractor for the Hospital
jobs and Interstate served as the mechanical contractor.

(Compl.

¶¶ 44-45.)
In late May or early June 2012, Local 28 “claimed the
Hospital job[s] for itself” and threatened both Cauldwell and
Interstate with “picketing, job shutdowns, and the inflation of a
balloon rat” in an effort to have Plaintiff’s contract terminated.
5

(Compl. ¶ 46.)

Local 28 subsequently “cause[d] several of its

members to patrol near the entrance of the hospital [,] impeding
ingress and egress,” and distributed a flyer which falsely stated
that Plaintiff was an “unsafe contractor.”

(Compl. ¶¶ 47-48.)

Because of Local 28’s actions, Cauldwell and Interstate terminated
Plaintiff’s contract on the Hospital jobs.
IV.

(Compl. ¶ 52.)

The 101 Avenue of the Americas Contracts
On August 29, 2012, Plaintiff entered into two contracts

to provide services to Henick-Lane, Inc. (“Henick”) at 101 Avenue
of the Americas in New York City.

(Compl. ¶¶ 55-56.)

Sciame

Construction (“Sciame”) was the general contractor and Henick was
the mechanical contractor.

(Compl. ¶¶ 57-58.)

On December 12, 2012, Local 28 once again inflated a rat
balloon near the entrance to the building and “engaged in a general
picket on the sidewalk.”

(Compl. ¶¶ 60-61.)

The same day,

representatives of Local 28 threatened Sciame and demanded that
Plaintiff be replaced with a Local 28 contractor.
Sciame

and

project.
V.

Henick

subsequently

terminated

(Compl. ¶ 62.)

Plaintiff

from

the

(Compl. ¶¶ 64-65.)

The Verizon Contract
Plaintiff entered into a contract with GDO Contracting

Corp. (“GDO”) to provide services at Verizon, located on the
seventh floor of 360 Bridge Street in Brooklyn, New York.
¶ 68.)

(Compl.

On-Trac Construction Associates (“On-Trac”) served as the
6

general contractor on the project, and GDO was the mechanical
contractor.

(Compl. ¶¶ 71-72.)

Local 28 representatives demanded that Plaintiff hire
its members to work on the Verizon job and stated their intention
to threaten Verizon, On-Trac, and GDO if Plaintiff did not agree
to do so.

(Compl. ¶ 73.)

As a result, Plaintiff hired four

members of Local 28 to work on the Verizon job, which resulted in
a “substantial increase in labor costs.”

(Compl. ¶¶ 75, 77.)

Plaintiff claims that Defendants’ conduct on the various
jobs referenced above constituted “unlawful secondary activity”
prohibited by LMRA, and that Defendants tortuously interfered with
their contracts on each job.
to dismiss the Complaint.

(Compl. at 14-19.)

Defendants move

Diorio principally argues (1) that he

cannot be held liable as a union officer under Section 303 for
actions taken by Local 28 and (2) that Plaintiff’s tortious
interference claim is preempted by Section 303.
Docket Entry 19, at 4-14.)

(Diorio Br.,

The remaining Defendants reiterate

Diorio’s arguments regarding individual liability and tortious
interference, and add that the Complaint fails to state a claim
upon which relief can be granted.

(Defs.’ Br., Docket Entry 24,

at 12-115.)
DISCUSSION
The Court will first address the legal standard before
turning to Defendants’ motions.
7

I.

Standard of Review
In deciding Rule 12(b)(6) motions to dismiss, the Court

applies a “plausibility standard,” which is guided by “[t]wo
working principles.”

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.

Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009); accord Harris v. Mills,
572 F.3d 66, 71-72 (2d Cir. 2009) (citing Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007).
First, although the Court must accept all allegations as true,
this

“tenet”

is

“inapplicable

to

legal

conclusions;”

thus,

“[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.”

Iqbal,

556 U.S. at 678, 129 S. Ct. at 1949; accord Harris, 572 F.3d at
72.

Second, only complaints that state a “plausible claim for

relief” can survive a Rule 12(b)(6) motion to dismiss.
U.S. at 679, 129 S. Ct. at 1950.

Iqbal, 556

Determining whether a complaint

does so is “a context-specific task that requires the reviewing
court to draw on its judicial experience and common sense.”

Id.;

accord Harris, 572 F.3d at 72.
In deciding a motion to dismiss, the Court is confined
to “the allegations contained within the four corners of [the]
complaint.”

Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67,

71 (2d Cir. 1998).

This has been interpreted broadly to include

any document attached to the Complaint, any statements or documents
incorporated in the Complaint by reference, any document on which
8

the Complaint heavily relies, and anything of which judicial notice
may be taken.

See Chambers v. Time Warner, Inc., 282 F.3d 147,

152-53 (2d Cir. 2002) (citations omitted); Kramer v. Time Warner
Inc., 937 F.2d 767, 773 (2d Cir. 1991).
II.

Plaintiff States a Claim under Section 303 of the LMRA
Defendants argue that the Complaint does not contain

sufficient facts supporting Plaintiff’s claim that it was subject
to an unfair labor practice.

(Defs.’ Br. at 5-12.)

The Court

disagrees.
Section 303 of the LMRA makes it unlawful for “any labor
organization to engage in any activity or conduct defined as an
unfair

labor

Plaintiff

practice

claims

. . . .”

Defendants

29

engaged

U.S.C.
in

§ 187(a).

unlawful

Here,

secondary

activity, as defined within 29 U.S.C. 158(b)(4) of the NLRA.

A

union engages in primary activity when it “targets an employer
with whom it has a dispute.”

Capitol Awning Co. v. Local 137 Sheet

Metal Workers Int’l Ass’n, 698 F. Supp. 2d 308, 322 (E.D.N.Y.
2010).

A union engages in secondary activity when it targets an

employer or third-party that it does not have a dispute with to
gain leverage over the employer it does have a dispute with.
id.

See

“By placing enough pressure, [the] union might coerce a

secondary employer to change its own business relationship with a
primary employer, in such a way that is detrimental to the primary
employer.”

C&D Restoration, Inc. v. Laborers Local 79, No. 029

CV-9448, 2004 WL 736915, at *3 (S.D.N.Y. Apr. 5, 2004).
158(b)(4)

broadly

prohibits

secondary

activitity,

Section

making

it

illegal for a union to “engag[e] in or induc[e] or encourage[e]
strikes and picketing against an employer with whom it does not
have a dispute, with an object of forcing that secondary employer
to cease doing business with a primary employer.”

See NLRB v.

Local 3 Int’l Bhd. of Elec. Workers, 730 F.2d 870, 875–76 (2d Cir.
1984).

More specifically, the statute makes it an unfair labor

practice to “threaten, coerce, or restrain any person” for the
purpose of: (1) “forcing . . . any employer or self-employed person
to join any labor or employer organization”; (2)

“forcing . . .

any person to cease . . . doing business with any other person”;
(3) “forcing or requiring any employer to recognize or bargain
with a particular labor organization as the representative of his
employees”; or (4) “forcing or requiring any employer to assign
particular work to employees in a particular labor organization
. . . .”

29 U.S.C. § 158(4)(A-D).
To state a claim against a union under Section 303 for

unlawful

secondary

activity,

the

plaintiff

must

plead

facts

demonstrating that: (1) “the union or its agents engaged in,
[threatened],

induced,

or

encouraged

a

refusal

to

perform

services”; (2) the purpose of the union’s conduct was not to
preserve work for the threatened employer’s employees, but rather
“were

tactically

calculated

to
10

satisfy

union

objectives

elsewhere”; and (3) “the unlawful conduct was a proximate cause of
the damage.”

Tru-Art Sign Co. v. Local 137 Sheet Metal Workers

Int’l Ass’n, 573 F. App’x 66, 67 (2d Cir. 2014).

The first element

relates to the nature of the union’s conduct, the second element
concerns its purpose, and the third element addresses causation.
In Tru-Art, for example, the Second Circuit found that evidence
that a union threatened to “shut down” job site, “claim[ed]” work
a contractor was to perform for itself, and told the owner of the
project that there could be a “problem” if it continued to use a
contractor, were sufficient to sustain a jury verdict awarding
damages under Section 303.

Id. at 67-68.

Here, Plaintiff plausibly states a claim for relief.
The Complaint describes how agents of Local 28 picketed at five
different jobs sites where Plaintiff was hired to perform work;
made statements that Local 28 had “claimed the work for itself”;
threatened general contractors, primary contractors, and owners on
each job with labor unrest, unless Plaintiff was terminated-including making threats to “shut down the jobs”; and in fact
succeeded in getting Plaintiff’s contract terminated on three
occasions.

The Complaint therefore plausibly states a claim

against Local 28 for unfair labor practices.

See Jung Sun Laundry

Grp. Corp. v. Laundry, Dry Cleaning, & Allied Workers Joint Bd.,
No. 10-CV-0468, 2010 WL 4457135, at *4 (S.D.N.Y. Nov. 1, 2010)
(allegations that a union picketed in front of a hotel that used
11

the laundry services of the primary employer, and asked the hotel
to cease using the primary employer’s services sufficiently stated
a claim under Section 303).

Defendants inappropriately focused

upon each of Plaintiff’s allegations in a vacuum, when a broader
view is necessary to shed light on both Defendants’ alleged conduct
and motives.

See C&D Restoration, 2004 WL 736915, at *3.

III. Plaintiff’s Section 303 Claims are Dismissed against the
Individual Defendants
Defendants argue that Plaintiff’s Section 303 claims
must be dismissed against them because union officers cannot be
held liable under Section 303 for the union’s activities.
Br. at 4-5; Defs.’ Br. at 12.)

(Diorio

Plaintiff does not dispute that it

cannot recover damages against the Individual Defendants under
Section 303, but insist that they must remain parties to this
action

because

Plaintiff

seeks

injunctive

relief

against

Individual Defendants in their capacity as union officers.

the
(See

Pl.’s Diorio Opp., Docket Entry 22, at 8.)
While Section 303 explicitly permits parties to bring an
action seeking “damages” for unfair labor practices, it makes no
mention of injunctive relief.

29 U.S.C 187(b).

In addition,

Courts within this Circuit have uniformly held that injunctive
relief is not available when a lawsuit for damages is brought under
Section 303.

See Iodice v. Calabrese, 345 F. Supp. 248, 270

(S.D.N.Y. 1972), rev’d in part on other grounds, 512 F.2d 383 (2d

12

Cir. 1975); Haspel v. Bonnaz, Singer & Hand Embroiderers, Tuckers,
Stitchers & Pleaters Union, Local 66, 112 F. Supp. 944, 946
(S.D.N.Y. 1953) aff’d, 216 F.2d 192 (2d Cir. 1954).

Considering

whether district courts have jurisdiction to grant injunctive
relief under Section 303, the Judge Edward J. Dimockin noted in
Haspel that “Congress has erected an elaborate statutory machinery
to cope with [ ] problems [in the field of labor relations]” and
district courts only have the power to injunctions prohibiting
union collective activity in proscribed circumstances.
112 F. Supp. at 946.

Haspel,

Judge Dimockin thus warned against reading

into the statute a “remedy not expressly provided by Congress.”
Id.

His warning still holds true today.
Since

injunctive

relief

is

not

available

in

this

situation, Plaintiff’s claims against the Individual Defendants
under Section 303 are DISMISSED WITH PREJUDICE.
IV.

Plaintiff’s Tortious Interference Claim is Dismissed
Based upon the very same conduct that forms the basis of

Plaintiff’s Section 303 claims, Plaintiff alleges in the Complaint
that “Defendants actions interfered with Plaintiff’s business
operations and contractual relationships.” (Compl. ¶ 119.) Diorio
argues

that

Plaintiff’s

tortious

interference

claim

must

be

dismissed because it is preempted by Section 303 of the LMRA.
(Diorio Br. at 8.)

The Court agrees.

The Supreme Court held in

Local 20, Teamsters, Chauffeurs & Helpers Union v. Morton, 377
13

U.S. 252, 261, 84 S. Ct. 1253, 1259, 12 L. Ed. 2d 280 (1964) that
“state law has been displaced by § 303 in private damage actions
based on peaceful union secondary activities.”

In addition, the

Second Circuit reaffirmed this principle. Monarch Long Beach Corp.
v. Soft Drink Workers, Local 812, Int’l Bhd. of Teamsters, 762
F.2d 228, 232 (2d Cir. 1985) (holding that a tortious interference
claim was preempted by federal labor law); See also Iodice, 512
F.2d at 390.

Plaintiff’s tortious interference claim is therefore

DISMISSED WITH PREJUDICE.
CONCLUSION
For

the

foregoing

reasons,

Defendants’

motions

to

dismiss (Docket Entries 18, 24) are GRANTED IN PART and DENIED IN
PART.

Specifically, Plaintiff’s tortious interference claim,

claim for injunctive relief, and claims against the Individual
Defendants are DISMISSED WITH PREJUDICE.

However, Defendants’

motions are otherwise DENIED.
SO ORDERED.

/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

March
7 , 2016
Central Islip, New York

14