Taylor Sheet Metal, Inc. v. International Association of Sheet Metal, Air, Rail and Transportation Workers Union, Local No. 16

Filing 31

ORDER: The Court ADOPTS Magistrate Judge Beckerman's Findings and Recommendation (# 27 ). Accordingly, the Court GRANTS the Motion (# 11 ) for Summary Judgment filed by Plaintiff Taylor Sheet Metal, Inc., and DENIES the Motion (# 20 ) f or Judgment on the Pleadings filed by Defendant International Association of Sheet Metal, Air, and Transportation Workers Union, Local No. 16. The Court, therefore, VACATES the arbitration award issued April 24, 2017. The Court DIRECTS the parties to confer and to submit no later than December 15, 2017, a form of Judgment for entry by this Court. IT IS SO ORDERED. Signed on 12/7/2017 by Judge Anna J. Brown. (gw)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

TAYLOR SHEET METAL, INC.,
Plaintiff,

3:17-CV-00753-SB
ORDER

v.
INTERNATIONAL ASSOCIATION OF
SHEET METAL, AIR, AND
TRANSPORTATION WORKERS UNION,
LOCAL NO. 16,
Defendant.

BROWN, Judge.
Magistrate Judge Stacie F. Beckerman issued Findings and
Recommendation (#27) on October 2, 2017, in which she recommends
the Court grant the Motion (#11) for Summary Judgment filed by
Plaintiff Taylor Sheet Metal, Inc., and deny the Motion (#20) for
Judgment on the Pleadings filed by Defendant International
Association of Sheet Metal, Air, and Transportation Workers
Union, Local No. 16.

Defendant filed timely Objections to the

Findings and Recommendation.

The matter is now before this Court

pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil

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Procedure 72(b).
When any party objects to any portion of the Magistrate
Judge's Findings and Recommendation, the district court must make
a de novo determination of that portion of the Magistrate Judge's
report.

28 U.S.C. § 636(b)(1).

See also Dawson v. Marshall, 561

F.3d 930, 932 (9th Cir. 2009); United States v. Reyna-Tapia, 328
F.3d 1114, 1121 (9th Cir. 2003)(en banc).

BACKGROUND
The following facts are taken from the Magistrate Judge’s
Findings and Recommendation and accepted as undisputed unless
otherwise indicated.
On January 7, 2014, Plaintiff executed a Collective
Bargaining Agreement with Defendant pursuant to 29 U.S.C.
§ 158(f)(referred to as a “prehire” agreement).

The Agreement

expired on June 30, 2016, but renewed automatically each year.
Either party could renegotiate the Agreement’s terms by providing
written notice up to 90 days before the Agreement expired.

If

negotiations became deadlocked, the parties agreed to submit the
matter to binding arbitration before the National Joint
Adjustment Board (NJAB).
On March 9, 2016, Defendant notified Plaintiff that it was
reopening the Agreement for negotiation.
On January 12, 2017, Defendant declared the negotiations
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were at an impasse, which triggered the Agreement’s arbitration
provision.

Plaintiff objected to the arbitration proceeding.

An

arbitration panel was appointed over Plaintiff’s objection.
On January 23, 2017, Plaintiff informed Defendant by letter
that it intended to withdraw from the Union.
On March 10, 2017, Plaintiff raised objections to the NJAB’s
jurisdiction to arbitrate the matter, including an objection that
the Agreement entered into pursuant to 29 U.S.C. § 158(f) was
subject to repudiation and that Plaintiff, in fact, repudiated
the Agreement.

Plaintiff also filed a grievance with the

National Labor Relations Board (NLRB) alleging Defendant failed
to bargain in good faith in violation of 19 U.S.C. § 158(b)(3).
On April 12, 2017, the NLRB dismissed Plaintiff’s grievance
on the ground that the parties did not have a statutory duty to
bargain because Plaintiff employed too few employees.
On April 18, 2017, the arbitration panel convened.

Although

someone appeared on behalf of Plaintiff, the record does not
reflect Plaintiff actually participated in the arbitration
hearing.
On April 24, 2017, the arbitration panel issued a written
decision.

The panel stated Plaintiff raised several objections

to the proceeding in writing to the NJAB and “[t]hose objections
were considered, but it was determined that all procedural and
jurisdictional requirements had been met.”

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The arbitration panel

directed the parties to execute a four-year agreement with
specified terms.
On May 12, 2017, Plaintiff filed a Petition (#1) to Vacate
Arbitration Award in this Court.

On July 11, 2017, Plaintiff

filed a Motion (#11) for Summary Judgment.

On August 4, 2017,

Defendant filed a Motion (#20) for Judgment on the Pleadings.
As noted, on October 2, 2017, the Magistrate Judge filed
Findings and Recommendations (#27).

On October 16, 2017,

Defendant filed timely Objections (#29).

On October 20, 2017,

Plaintiff filed its Response (#30) to Defendant’s Objections.

DISCUSSION
Defendant objects to the Magistrate Judge’s findings on the
grounds that “Plaintiff lawfully repudiated the Agreement
pursuant to the one employee rule”; the repudiation deprived the
arbitration panel of jurisdiction; and the arbitration panel’s
decision, therefore, was invalid on the ground that it was
outside of the panel’s authority.

Defendant also contends the

validity of Plaintiff’s repudiation of the Agreement should have
been resolved by the arbitration panel rather than the Court.
In response Plaintiff contends whether Plaintiff repudiated
the Agreement is an issue for the Court to determine, and the
Magistrate Judge properly found Plaintiff had repudiated the
Agreement.

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I.

The Court properly determined the issue of repudiation of
the Agreement.
As noted, Plaintiff made a “prehire” agreement with

Defendant.

A prehire agreement is a contract between a union and

an employer that is usually signed in advance of hiring employees
and, therefore, in advance of any showing of Union majority
support.

American Metal Prod., Inc. v. Sheet Metal Int’l.

Assoc., Local Union No. 104, 794 F.2d 1452, 1455 (9th Cir. 1986).
A prehire agreement is voidable by either party until the union
establishes it represents a majority of the employees and an
appropriate unit.

Id. at 1456.

When an employer has only one

employee who qualifies for union representation, a majority vote
cannot be taken, and, therefore, the employer may repudiate the
agreement at any time.

29 U.S.C. §§ 152(2), 157, and 159.

See

also Laborers Health & Welfare Trust Fund v. Westlak Dev., 57
F.3d 979, 983 (9th Cir. 1995).

“[A] construction industry

employer who employs a single employee pursuant to a Section 8(f)
pre-hire agreement is entitled to repudiate the agreement by
conduct sufficient to put the union and the employee on notice
that the agreement has been terminated.”

Operating Eng’rs

Pension Trust v. Beck Eng’g & Surveying Co., 746 F.2d 557, 566
(9th Cir. 1984).
In Ion Construction Co. v. District Counsel of Painters
No. 16 the Ninth Circuit held:

“[A]s between the court and an

arbitrator, it is the former that should determine the
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effectiveness of an employer’s alleged repudiation of a prehire
agreement.”

803 F.2d 1050, 1051 (9th Cir. 1986).

When granting

the employer's petition to vacate an arbitration, the court
stated:
We believe Griffith Construction v. United Brotherhood
of Carpenters & Joiners, 785 F.2d 706 (9th Cir. 1986),
is controlling precedent in this case. In Griffith
Construction our court expressly adopted the rule of
decision applied by the district court in the instant
case, 593 F. Supp. at 236, that, as between the court
and an arbitrator, it is the former that should
determine the effectiveness of an employer’s alleged
repudiation of a prehire agreement.
803 F.2d at 1051 (citations omitted).
Based on Ion Construction, this Court concludes it was
proper for the Magistrate Judge to make a recommended finding as
to whether Plaintiff repudiated the Agreement and for this Court
to review that issue.
Accordingly, this Court has done so and has also carefully
considered Defendant’s Objections.

The Court concludes

Defendant's Objections do not provide a basis to modify the
Findings and Recommendation.

The Court also has reviewed the

pertinent portions of the record de novo and does not find any
error in the Magistrate Judge's Findings and Recommendation.

CONCLUSION
The Court ADOPTS Magistrate Judge Beckerman’s Findings and
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Recommendation (#27).

Accordingly, the Court GRANTS the Motion

(#11) for Summary Judgment filed by Plaintiff Taylor Sheet Metal,
Inc., and DENIES the Motion (#20) for Judgment on the Pleadings
filed by Defendant International Association of Sheet Metal, Air,
and Transportation Workers Union, Local No. 16.

The Court,

therefore, VACATES the arbitration award issued April 24, 2017.
The Court DIRECTS the parties to confer and to submit no
later than December 15, 2017, a form of Judgment for entry by
this Court.
IT IS SO ORDERED.
DATED this 7th day of December, 2017.

/s/ Anna J. Brown
ANNA J. BROWN
United States Senior District Judge

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