Plumbing and Mechanical Contractors Association of Milwaukee and Southeastern Wisconsin Inc v. Steamfitters and Refrigeration Service Fitters Local 601, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the Unit

Filing 13

ORDER signed by Judge J P Stadtmueller on 12/17/12 granting 5 Defendant's Motion to Dismiss and DISMISSING this action. (cc: all counsel) (nm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
PLUMBING AND MECHANICAL
CONTRACTORS ASSOCIATION OF
MILWAUKEE AND SOUTHEASTERN
WISCONSIN, INC.,

Case No. 12-CV-630-JPS

Plaintiff,
v.
STEAMFITTERS AND REFRIGERATION
SERVICE FITTERS LOCAL 601, UNITED
ASSOCIATION OF JOURNEYMEN AND
APPRENTICES OF THE PLUMBING AND
PIPEFITTING INDUSTRY OF THE
UNITED STATES AND CANADA,

ORDER

Defendant.

On June 19, 2012, plaintiff, Plumbing and Mechanical Contractors
Association of Milwaukee and Southeastern Wisconsin, Inc. (“the
Association”), filed a complaint against defendant, Steamfitters and
Refrigeration Service Fitters Local 601, United Association of Journeymen
and Apprentices of the Plumbing and Pipefitting Industry of the United
States and Canada (“Steamfitters”). Complaint (Docket #1) at 1. Briefly
stated, the Association and Steamfitters were parties to a Collective
Bargaining Agreement (“CBA”); this lawsuit arises out of Steamfitters’ notice
of termination of that CBA. In its complaint, the Association seeks: (1) a
declaratory judgment that the CBA was not adequately or timely terminated;
(2) a declaratory judgment that the question of whether the CBA was
terminated is for judicial determination and does not fall under the CBA’s
arbitration clause; and (3) a permanent injunction to prevent the Steamfitters

from initiating proceedings based upon a claim that the CBA is not in effect
for the 2012-2013 time period. Complaint at 6-8.
Presently before the court is Steamfitters’ Motion to Dismiss (Docket
#5). In its motion, Steamfitters argues that the parties’ dispute must be
resolved by arbitration, pursuant to the CBA’s arbitration clause. Motion
Brief (Docket #6) at 3, 9. In response, the Association argues that the
arbitration clause in the CBA does not cover the termination of the CBA.
Response (Docket #10) at 2, 3. As explained below, the court concludes that
the dispute regarding Steamfitters’ notice to terminate the CBA is to be
resolved via arbitration. The court, therefore, grants Steamfitters’ motion to
dismiss.
1.

Legal Standard
Steamfitters brings this motion to dismiss under Federal Civil Rule of

Procedure 12(b)(6). A motion to dismiss under Rule 12(b)(6) challenges the
sufficiency of the plaintiff’s complaint by asserting that the claimant failed to
state a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6).
To survive a motion to dismiss under Rule 12(b)(6), claimant’s complaint
must allege facts sufficient to “state a claim for relief that is plausible on its
face.” Justice v. Town of Cicero, 557 F.3d 768, 771 (7th Cir. 2009) (quoting
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)). The court construes the
complaint in the light most favorable to the claimant, accepts as true all wellpleaded facts alleged, and draws all possible inferences in the claimant’s
favor. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008). Yet, the court
need not accept as true “legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 680
(2009). Indeed, “[a] ruling concerning the legal sufficiency of the complaint
is an appropriate determination to make in response to a motion to dismiss.”
Sanner v. Board of Trade of City of Chicago, 62 F.3d 918, 924 (7th Cir. 1995)
Page 2 of 8

(citing Gomez v. Illinois State Board of Education, 811 F.2d 1030, 1039 (7th Cir.
1987)).
2.

Facts
In its complaint, the Association relays the following pertinent facts,

which the court accepts as true for purposes of this motion. Tamayo, 526 F.3d
at 1081. The two parties agreed to a CBA, for a term of one year, from June 1,
2011, to May 31, 2012. Complaint at 3. Section 30.1 of the CBA contains a
“duration clause” which states:
This Agreement shall be binding upon the parties, their
successors and assigns, and shall become effective as June 1,
2011 and continue in full force and effect until May 31, 2012,
and from year to year thereafter, unless terminated by written
notice given by either party to the other not less than sixty (60)
days prior to said expiration date, or any anniversary thereof.
Such notice shall contain a written statement of the changes
desired by the party giving such notice.
Complaint Exhibit 1 at 24, Section 30.1. The CBA also includes an “arbitration
clause,” which states:
In the event a grievance, controversy, or dispute arising under
this Agreement cannot be resolved by [Steamfitters] and the
Association within five (5) working days, it shall automatically
be referred to the Joint Grievance Board for the purpose of
settlement and adjustment.
...
In the event a matter cannot be satisfactorily settled or adjusted
by the Joint Grievance Board, an impartial arbitrator shall be
selected by the Board and the matter shall expeditiously be
submitted to the arbitrator for decision. The decision of the
impartial arbitrator shall be binding upon both parties.
Complaint Exhibit 1 at 17, Sections 18.2 and 18.5(a).

Page 3 of 8

The Steamfitters mailed a letter dated March 29, 2012, to the
Association, purporting to give notice of termination; that letter did not
include a written statement of the contract changes desired by the
Steamfitters. Complaint at 4. The Association received this letter on April 2,
2012. Complaint at 4.
3.

Analysis
In its motion, Steamfitters argues that the court must dismiss the

Association’s case because the arbitration clause in the CBA requires the
parties to submit “dispute[s] arising under [the] Agreement” to arbitration.
Motion Brief at 3. Steamfitters contends that the question of whether its
notice was timely and effective falls under the arbitration clause of the CBA
because it is a dispute “arising under” the CBA, or, more specifically, the
termination provision of the CBA. Motion Brief at 5. In response, the
Association argues that the question of whether a CBA has been terminated
is for judicial, rather than arbitral determination. Response at 3. The
Association responds that in the Seventh Circuit, “a district court, not an
arbitrator, has to determine the question whether or not a labor contract was
properly terminated.” Response at 1. The Association relies primarily on
Stevens Construction Corp. v. Chicago Regional Council of Carpenters, 464 F.3d
682 (7th Cir. 2006). Response at 1.
The court concludes that the Association’s reading of Stevens is much
too broad, and that Stevens is materially distinguishable from the case at
hand. The facts in Stevens are as follows. Stevens Construction was a member
of the Associated General Contractors of Greater Milwaukee, Inc. (“AGC”),
an employers’ association that entered into a CBA with the Chicago Regional
Council of Carpenters (“the Carpenters”). 464 F.3d at 683. AGC had two
separate CBA with the Carpenters: one was in effect for the years 1999 to
Page 4 of 8

2004 (“1999 CBA”), and one for the years 2004 to 2008 (“2004 CBA”). Id. The
1999 CBA had a rollover provision, stating that a party who fails to meet for
purposes of collective bargaining is deemed to have conceded to some of the
changes desired by the party present for bargaining. Id. In 2003, prior to the
expiration of the 1999 CBA, Stevens withdrew from the AGC. Id. The
Carpenters requested that Stevens assent to being covered by the 2004 CBA,
but Stevens refused. Id. The Carpenters later filed a grievance against
Stevens, alleging that Stevens was violating the 2004 CBA; Stevens filed suit
in federal court, seeking a declaratory judgment that it was not covered by
the 2004 CBA and seeking an injunction prohibiting the Carpenters from
pursuing its grievance. Id. at 683-84. The Carpenters filed two counterclaims,
seeking to compel arbitration of whether Stevens’ termination was proper,
or a judgment that Stevens was bound by the 2004 CBA because it failed to
properly terminate the 1999 CBA. Id. at 684. The district court granted
judgment for Stevens, concluding that Stevens had properly terminated the
1999 CBA and was not bound by the 2004 CBA. Id. The Seventh Circuit
affirmed explaining:
One difficulty with the Carpenters’ argument is that the
“underlying claim” in the union’s grievance against Stevens
was not that the company failed to terminate the 1999 CBA, but
that the company was not complying with the substance of the
2004 agreement. … Although the Carpenters’ counterclaims
sought to compel Stevens to arbitrate the termination issue
under the 1999 CBA, there is no mention in the record of any
grievance based on the 1999 CBA that Stevens could have been
ordered to arbitrate. For the same reason, the Carpenters’
attempt to recharacterize their claim as a “post-expiration
grievance”-that is, a “dispute [that], although governed by the
contract, arises after its termination,” Nolde Bros., Inc. v. Local
No. 358, Bakery & Confectionery Workers Union, AFL-CIO, 430
U.S. 243, 244, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977)-is unavailing.
Page 5 of 8

A post-expiration grievance must be a grievance based on an
agreement that has expired; the Carpenters filed no such
grievance here.
Id. at 686. The Seventh Circuit’s analysis thus turned on the fact that the
Carpenters’ grievance found footing in the 2004 CBA, to which, of course,
Stevens was not a party. The circuit court distinguished this fact pattern from
the usual “post-expiration grievance” because the dispute was not based
upon an agreement that had expired.
The Association’s urging notwithstanding, this court does not read
Stevens as “holding that a district court, not an arbitrator, has to determine
the question of whether or not a labor contract was properly terminated.”
Response at 1. In the case currently before the court, the facts critical to the
analysis in Stevens are absent. First, there is no dispute that the parties had
a valid CBA from June 1, 2011, to May 31, 2012. Second, there is no dispute
that the allegedly noncompliant actions provoking the complaint occurred
during the time period when the CBA was in place to govern the parties’
relationship. Third, as the parties’ briefing on the matter shows, resolution
of the complaint requires interpretation of the termination clause of the CBA
to determine whether the notice was timely (even though the Association
actually received it after May 31, 2011) and whether the notice was adequate
(even though Steamfitters did not include a written statement of contract

Page 6 of 8

changes desired). Fourth and finally, the CBA includes a broad1 arbitration

1

The Association also argues that the arbitration clause in this case is
“narrow” and that termination is a matter of “substantive arbitrability for judicial
determinations.” Response at 3. For support, the Association offers a string cite of
six cases. Response at 3-4. The court concludes that the cited authorities are not
persuasive, and, in some instances, are directly contrary to the Association’s
argument.
In R.J. Corman Derailment Services, LLC v. International Union of Operating
Engineers, Local Union 150, AFL-CIO, the only Seventh Circuit case cited, the factual
background is so unique as to render the case sui generis, and, in any event, the
Seventh Circuit did not hold that a court must determine the termination question,
but rather remanded for more analysis regarding whether the question is
arbitrable. 335 F.3d 643, 649-50 (7th Cir. 2003).
Then, in New England Cleaning Services, Inc. v. Services Employees International
Union, Local 254, AFL-CIO; New York News, Inc. v. Newspaper Guild of New York; and
Trinidad Corp. v. National Maritime Union of America, Dist. No. 4, Marine Engineers
Beneficial Ass’n, the First, Second, and Eighth Circuits, respectively, held that the
arbitration clauses at issue did not apply to the question of termination because the
arbitration clauses covered only employee grievances, not grievances brought by
the entire union. New England Cleaning Services, Inc. v. Services Employees
International Union, Local 254, AFL-CIO, 199 F.3d 537, 541-42 (1st Cir. 1999); New York
News, Inc. v. Newspaper Guild of New York, 927 F.2d 82, 83-84 (2nd Cir. 1991); Trinidad
Corp. v. National Maritime Union of America, Dist. No. 4, Marine Engineers Beneficial
Ass’n, 81 F.3d 769, 772 (8th Cir. 1996). The CBA at issue in today’s case contains no
such restriction and is, in fact, found in Article 18 of the CBA, entitled “Contract
Administration Procedures,” which contains procedures not limited to employee
grievances. Complaint Exhibit 1 at 17.
Finally, the Ninth Circuit, in Northern California Newspaper Guild Local 52 v.
Sacramento Union, reiterated the usual rule that “[w]hen the collective bargaining
agreement contains a broad arbitration clause, the question of whether a particular
act or failure to act effectively serves to terminate the agreement is to be resolved
by an arbitrator,” but found the arbitration clause in that CBA to be limited to
disputes arising from the “application of” the CBA, a qualification the facts of that
case did not satisfy. 856 F.2d 1381, 1383 (9th Cir. 1988) (square brackets in original,
citation omitted). Further, in Brotherhood of Teamsters and Auto Truck Drivers Local
No. 70 v. Interstate Distributor Co., the Ninth Circuit concluded that the arbitration
clause “clearly includes disagreements over whether the collective bargaining
agreement has been renewed or has been terminated,” and therefore directed the
District Court to compel arbitration. 832 F.2d 507, 512 (9th Cir. 1987).
On these authorities, the court simply cannot agree with the Association’s
position.

Page 7 of 8

clause that states agreement to arbitrate any “grievance, controversy, or
dispute arising under this Agreement.” The Seventh Circuit has instructed
that “a court should compel arbitration unless it may be said with positive
assurance that the arbitration clause is not susceptible of an interpretation
that covers the asserted dispute.” Welborn Clinic v. MedQuist, Inc., 301 F.3d
634, 639 (7th Cir. 2002) (citations, internal quotation marks omitted). This
arbitration clause may certainly be interpreted as governing the parties’
dispute as to termination. The parties must, therefore, resolve this dispute in
arbitration.
Accordingly,
IT IS ORDERED that Steamfitters’ motion to dismiss (Docket #5) be
and the same is hereby GRANTED; this case be and the same is hereby
DISMISSED.
The Clerk is directed to enter judgment accordingly.
Dated at Milwaukee, Wisconsin, this 17th day of December, 2012.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

Page 8 of 8