Saraurer et al v. International Association of Machinists and Aerospace Workers, District No. 10 et al
DECISION AND ORDER signed by Magistrate Judge David E Jones on 9/30/19 DENYING 29 Plaintiffs' Motion for Summary Judgment; GRANTING 33 Defendants' Motion for Summary Judgment. Plaintiffs' complaint (ECF No. 1 -1) is dismissed with prejudice. (cc: all counsel) (kah)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
DONALD ZAGAR, and
Case No. 16-CV-361
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE WORKERS,
DISTRICT NO. 10,
INTERNATIONAL ASSOCIATION OF
MACHINISTS AND AEROSPACE WORKERS,
ROCK RIVER LODGE 2053, and
MAYSTEEL INDUSTRIES LLC (ALLENTON FACILITY),
DECISION AND ORDER DENYING PLAINTIFFS’ MOTION FOR
SUMMARY JUDGMENT AND GRANTING DEFENDANTS’ MOTION FOR
The issue in this case is whether the date of either contract ratification or
contract execution constitutes the date when a collective bargaining agreement is
renewed, extended or modified for purposes of applying the Wisconsin right to work
law. For the reasons discussed below, the Court holds that the date of contract
ratification, demonstrating that a meeting of the minds has occurred, is the
operative date, not contract execution. Accordingly, defendants’ motion for summary
judgment will be granted and plaintiffs’ motion for summary judgment will be
Factual and Procedural Background
The factual recitation that follows is derived from Plaintiffs’ Response to
Defendants’ Findings of Fact (“PRDPFP”), ECF No. 40. It may read a little choppy,
but the Court has tried to set out only facts that plaintiffs do not dispute.
Negotiation of the 2015 CBA
For many years, Maysteel Industries (“Maysteel” or “Company”) and
International Association of Machinists, District 10 and Rock River Lodge 2053
(collectively “Union”) have been parties to collective bargaining agreements (CBAs)
covering workers at the Allenton, Wisconsin facility. The prior CBA had effective
dates from March 4, 2012, to March 4, 2015 (hereafter “2012 agreement”), and the
new agreement has effective dates from March 2, 2015 to March 4, 2018 (hereafter
“2015 agreement”). PRDPFP ¶ 1, ECF No. 40.
The Union sent a timely letter to Maysteel to negotiate a successor to the
2012 agreement. Negotiations over the 2015 agreement began in January 2015. A
committee of bargaining unit employees, with the assistance of Business
Representative Scott Parr bargained for the Union. Dave Dembinski, Kevin Matkin,
Darci Boettcher and Mark Mertzig bargained for Maysteel. Dembinski was the
Company’s lead spokesman. Id. ¶ 2.
The Maysteel bargaining unit had a history of voting down contracts. When
Parr began bargaining, he informed both the members and the Company that he
intended to obtain ratification on the first vote no later than March 4th, the
expiration date of the prior agreement. Id. ¶ 3.
The parties kept a “living document” (or “summary document”) of tentatively
agreed-upon proposals which were typically initialed or signed by Parr and
Dembinski. Once all proposals were tentatively agreed upon, they were combined
into a “tentative agreement.” Negotiation regarding all items save the specifics of
the break times were completed by February 27, 2015. Id. ¶ 4
During negotiations, the parties agreed to change from two breaks to one,
and from a 20-minute lunch to a 30-minute unpaid lunch. There was never a
contractual provision or proposal on when such breaks were provided. Id. Similarly,
the 2012 CBA did not specify when breaks were to occur. Id. ¶¶ 6 & 8.
The company did not want to specify break times in the agreement but
proposed that the Union poll employees, then the Union and company would agree
from there. The tentative agreement stated that “the specific time of the rest period
will be established by the company and the committee by April 1st of 2015.” Id. ¶¶ 2
Negotiations focused on changes to the existing CBA as had been the parties’
tradition. They did not bargain from scratch. If no changes to the 2012 language
were proposed, the existing language would be included in the next agreement. Id. ¶
All collective bargaining agreements negotiated by the Union are subject to
ratification. After negotiations concluded, but prior to ratification, the tentative
agreement was sent by Boettcher to Parr by e-mail. The Company also provided
enough copies of the tentative agreement so that it could be distributed to the
Union’s membership at the ratification meeting. Id. ¶ 14.
The tentative agreement was submitted to the Union’s membership on
Saturday, February 28, 2015. Parr believed the Union had gotten everything that
they could out of the Company and recommended that the membership ratify the
agreement. Id. ¶ 17.
At the ratification meeting, Parr explained that the members were voting on
the existing CBA as modified by the changes reflected in the tentative agreement.
Before voting started, Parr explained all the changes included in the tentative
agreement. He observed that no modifications had been made to the union security
provisions during the negotiations and that the membership was ratifying the
continuation of provisions of the prior agreement, which would include the union
security provisions. Maysteel and the Union agreed that the new CBA would
include all existing provisions of the 2012 agreement plus all changes to the
language tentatively agreed upon during negotiations. After this explanation, the
members ratified the contract on February 28, 2015. Id. ¶¶ 18 & 19.
Plaintiff Brace, at that time a Union member, attended the ratification
meeting; the remaining plaintiffs, not being members of the Union, did not attend.
Id. ¶¶ 13 & 20.
Either on February 28th or the next day, Dembinski asked Parr if they could
make the new wage rates effective March 2nd. Dembinski indicated that the
contract would have taken effect March 5th, but he agreed to pay the new wages for
the entire week. March 2 was a Monday and the first day of the Company’s payroll
period. This early implementation allowed the Company to avoid calculating pay
based upon two different rates for each employee in the same week. Id. ¶¶ 23 & 24.
On March 2nd, Parr also sent a letter to Maysteel indicating that the
agreement had been ratified and attaching the agreement. Upon this notification,
Boettcher put the wages into effect for Monday March 2, 2015. Boettcher believed
that “you can’t put anything in place until the contract’s ratified.” She used the
agreed language changes document to adjust the rates. She also notified payroll to
adjust short-term disability amounts and benefit percentages. Id. ¶¶ 25 & 26.
Following ratification, Darci Boettcher was responsible for doing the work
necessary to put the ratified provisions into booklet form and for making sure that
the final booklet reflected all the things that were negotiated. She took the existing
contract and changed the language to reflect the changes negotiated by the parties.
The changes were then proofread by Dembinski, Mertzig, Parr and the bargaining
committee. Id. ¶ 27.
Between the date of ratification and the signing of the 2015 contract, Sarauer
and Zastrow requested copies of the contract. Boettcher told plaintiff Sarauer that
the Union and Company still had some things to “hash out.” By this term, Boettcher
meant that the parties would need to meet to ensure that all changes in the
tentative agreement were reflected in the final booklets. Other than setting specific
break times, nothing else need to be “hashed out” by the parties. Id. ¶ 28.
The draft contract was completed on March 9, and the parties executed the
agreement on March 18, 2015. Id. ¶¶ 29-30.
The specific break times were established on or around April 6, 2015. Id. ¶¶ 4
Plaintiffs Sarauer, Bartsch, Brace, Captain, Engeleiter, Kubatzki, Leitzke,
Stinemates, Zagar, and Zastrow are members of the bargaining unit represented by
the Union. Prior to the 2015 negotiations, all of them except Brace resigned from
the Union. As non-members of the Union, they were not entitled to attend Union
meetings, contract proposal meetings, or to vote upon contract ratification. Id. ¶ 9.
As non-members, Plaintiffs annually received statements concerning
calculations of fees they were obligated to pay pursuant to the union security clause.
The annual statements reflected that they were paying fees to the Union through
check-off. Prior to 2015, the Plaintiffs raised no objection about fees being deducted
pursuant to check-off authorizations. The amount of Union dues deducted plaintiffs’
pay correlated with their financial obligation to the Union. Id. ¶ 10.
On March 11, 2015, 2015 Wisconsin Act 1 was enacted into law. This statute,
also known as the Wisconsin right to work law, made it unlawful for, among other
things, companies to deduct union fees from the paychecks of non-union members.
Wis. Stat. § 111.04(3)(a). It also amended Wis. Stat. § 111.06 to make it illegal for
an employer to contribute on behalf of its employees’ financial support to a labor
union or to encourage membership in a labor Union as a condition of employment.
Wis. Stat. §§ 111.06(1)(b), (1)(c), and (3).
Once Plaintiffs Bartsch, Sarauer, and Leitzke learned that the 2015 collective
bargaining agreement had been signed after the effective date of Wisconsin’s right
to work law, they began to seek ways to revoke their dues checkoff authorizations.
In an e-mail message dated March 12, 2015, Bartsch wrote, on behalf of himself,
Sarauer, and Zastrow, to the local Union’s president requesting a copy of “our
payroll deduction authorization cards.” PRDPFP ¶ 31, ECF No. 40.
As of March 2015, Signed checkoffs exist for plaintiffs Bartsch, Captain,
Engeleiter, Stinemeates, and Zagar. The Union has not been able to locate the
checkoff authorizations for Brace, Kubatzki, Sarauer, Leitzke, and Zastrow. Id.
¶¶ 11 & 12.
When Maysteel and the Union did not respond to plaintiffs Bartsch, Sarauer,
Leitzke, and Zastrow’s requests for information about their checkoffs, they filed
unfair labor practice charges against the Union with the NLRB. Among other
things, these plaintiffs alleged, “Despite any evidence that Charging Parties ever
signed or entered into any dues deduction authorization, the Union, without lawful
authorization, continued collecting dues from Charging Parties’ paychecks, and
caused Employer to continue deducting and remitting dues from Charging Parties’
paychecks.” Id. ¶ 35.
During the NLRB proceedings, the Defendants were unable to produce the
dues checkoff authorizations for Sarauer, Bartsch, Leitzke, Kubatzki, Brace and
Zastrow. Each one of them acknowledges that the amount of dues deducted from
their pay was the exact amount owed under the existing union security clause to the
Union. During this lawsuit, the Union found the checkoff authorization for Bartsch.
Id. ¶¶ 39-40.
There was a settlement of the charges negotiated by the NLRB. The
settlement did not require that the union security provision in the collective
bargaining agreement be rescinded or invalidated. Id. ¶ 38.
Summary Judgment Standard
“The court shall grant summary judgment if the movant shows that there is
no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a). “If no reasonable jury could find for the
party opposing the motion, it must be granted.” Hedberg v. Ind. Bell Tel. Co., 47
F.3d 928, 931 (7th Cir. 1995) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986)). With cross summary judgment motions, the Court must “construe all
facts and inferences in favor of the party against whom the motion under
consideration is made.” Orr v. Assurant Emp. Benefits, 786 F.3d 596, 600 (7th Cir.
2015) (citing Hendricks-Robinson v. Excel Corp., 154 F.3d 685, 692 (7th Cir. 1998)).
Thus, “the court assesses whether each movant has satisfied the requirements of
Rule 56.” Koger v. Dart, 114 F. Supp. 3d 572, 576 (N.D. Ill. 2015) (citing Cont’l Cas.
Co. v. Nw. Nat’l Ins. Co., 427 F.3d 1038, 1041 (7th Cir. 2005)).
The effect of the right to work law on the 2015 CBA
Wisconsin’s right to work law “applies to a collective bargaining agreement
containing provisions inconsistent with this act upon the renewal, modification, or
extension of the agreement occurring on or after” March 11, 2015. 2015 Wisconsin
Act 1 § 13. Because the right to work law makes illegal union security clauses and
fee payments for non-Union members, and because plaintiffs contend that the 2015
CBA was not completed before March 11, the unlawful provisions should be
So, the question is whether a “renewal, modification, or extension” of the
2015 CBA occurred before the effective date of the right to work law, March 11,
2015. Plaintiffs argue that, at the earliest, the 2015 CBA was modified on the date
of execution, March 18, 2015. They cite two main line of cases, one dealing with how
courts dealt with the Taft Hartley Act, and the other arising in the context of
possible collusion by a union and employer to frustrate employees’ representational
wishes. For the reasons that follow, neither line is persuasive.1
As this Court previously found in denying remand, the issue here is one of
contract formation. This is so because the effective date provision of the Wisconsin
right to act law uses language redolent of formation: renewed, modified or extended.
1 Neither party presses the argument that the 2015 CBA’s effective date (March 2
or March 5, 2015) should play a role in the analysis, and the Court agrees that it is
And contract formation is a question of “‘federal common law, rather than the law of
the state where the agreement is signed or performed.’” ECF No. 19, at 5, 7 (quoting
Mohr v. Metro East Mfg. Co., 711 F2d 69, 71 (7th Cir. 1983)). Under federal law, a
“collective bargaining agreement need not be reduced to writing when the ‘meeting
of the minds’ occurs.” Chauffeurs, Teamsters, & Helpers Local Union No. 771, 2011
NLRB LEXIS 383, 16-17 (N.L.R.B. July 27, 2011).
Ratification, in which the union membership votes on whether to accept a
CBA, is of critical importance in determining when the meeting of the minds takes
place. As the Supreme Court of the United States observed, “the ratification vote . . .
provide[s] overwhelming evidence that the parties reached a meeting of the minds.”
Similarly, the Third Circuit has explained that union “ratification is generally
considered to be the last act necessary . . . to create a meeting of the minds and an
enforceable agreement.” Mack Trucks, Inc. v. Int’l Union, United Auto., 856 F.2d
579, 592 (3rd Cir. 1988). The Seventh Circuit appears to agree, as it has held that a
“signature at the bottom of the collective bargaining agreement itself is
unnecessary.” Bricklayers Local 21 v. Banner Restoration, Inc., 385 F.3d 761, 767
(7th Cir. 2004).
As the NLRB long ago noted, “[o]f course, the contract in this case was ‘oral,’
more exactly ‘parole,’ only in a highly technical sense. Save for the missing
signature, it was a complete written document, duly publicized to all interested
parties at the time of its adoption, and proved by unimpeachable documentary
evidence.” Teamsters Local 294 (Conway's Express), 87 NLRB 972, 976 n. 9 (1949).
Based on this reasoning, the NLRB has said that, once a meeting of the minds has
occurred, the parties to a CBA are “required to execute a written collectivebargaining agreement” embodying the agree-upon terms regardless of intervening
events. Young Women’s Christian Ass'n of W. Massachusetts & Int'l Union, United
Auto., Aerospace & Agric. Workers of Am., Local 2322, AFL-CIO, 349 NLRB 762,
763 (2007) (hereafter “YWCA”). The actual execution of a CBA is so insignificant to
the formation issue that the Supreme Court has distinguished between “the mere
act of signing an employment contract” with “the parties’ express agreement on
different terms.” Livadas v. Bradshaw, 512 U.S. 107, 131 (1994).
Based on this authority, the Court finds that a meeting of the minds occurred
on February 28, 1015, the date the Union ratified the 2015 CBA. Accordingly, the
2015 CBA does not fall within the requirements of the Wisconsin right to work law.
The Court is not persuaded by the two lines of authority put forward by
plaintiffs. As to the Taft-Harley Act cases, which focused on execution dates, no one
argued that an earlier ratification date should be used instead. Moreover, those
cases all involved CBAs that were executed nearly a year or more after the June
1947 effective date of the Taft-Hartley Act, making it likely irrelevant whether the
parties used execution date or ratification date. See Spiegel, 91 NLRB 647, 662
(1950 (CBA executed in December 1948); United Hoisting Co., 92 NLRB 1642 (1951)
(CBA executed in April 1948); Salant & Salant, Inc., 87 NLRB 215, 216, 218 (1949)
(CBA executed in November 1948).
The second line of authority is based on Appalachian Shale Prods. Co., 121
NLRB 1160 (1958), in which a union ratified a contract that was later executed.
Between ratification and execution, workers submitted an election petition, seeking
different representation. The NLRB held that it applies a bright-line rules in such
circumstances, allowing only fully executed CBAs to bar representation petitions,
and allowed the election to proceed. Id. at 1161-62.
But the NLRB has cabined Appalachian Shale to its context. In YWCA, the
parties had reached agreement on a CBA, but before execution, the employer
received notice from a majority of its employees that they no wanted to be
represented by the union. Based on this, the employer refused to execute the CBA
and refused to recognize the union. 349 NLRB at 2. In so holding, the NLRB stated
that the “rule of Appalachian Shale, that only a written agreement will bar the
processing of an election petition, is essentially an effort to avert the danger that
unions and employers may collude to defeat employees' representational wishes on
the basis of illusory or fabricated agreements.” Id. at 4.
The Board also noted that requiring “evidence of an executed, written
agreement is designed to assure that employee rights are protected from such
deception. Because collusion is not an issue when an employer unilaterally reneges
on a final agreement and withdraws recognition, the policy considerations justifying
the Appalachian Shale rule do not arise in this case.” Id. Instead, based on
principals of CBA formation, discussed above, the Board held that the existence of a
ratified, though unexecuted, CBA made the employer’s conduct unlawful. Id. at 763
& n. 8.
In this case, there is no suggestion that the ratified 2015 CBA represented an
“illusory or fabricated” agreement. Of equal importance, the Board made clear that
Appalachian Shale “solely addresses the issue of employee decertification petitions.”
Given the consistent emphasis that courts and the Board has placed on ratification,
versus execution, the Court can see no reason to extend the Appalachian Shale rule
outside of its narrow field.
Finally, plaintiffs argue that the 2015 CBA falls within the purview of the
right to work law because it was modified when the parties reached agreement on
specific break times in April of 2015. But plaintiffs are confusing a CBA contract
term with a working condition. Just as happened with the 2012 CBA, specific break
times were not made a part of the 2015 CBA. In each instance, when the specific
times were set, the record does not show that anything was done to amend or
otherwise modify the CBA, or that a new execution ceremony took place, or that a
new ratification vote occurred. If anything, the setting of break times under the
2012 and 2015 CBAs represented the faithful execution of a provision of those
CBAs, not a modification.
Plaintiffs’ checkoff claims are preempted
The last claim is that Maysteel improperly deducted a union fee from
plaintiffs’ wages without authorization in violation of Wis. Stat. Ch. 109. Pursuant
to Wis. Stat. §§ 109.03(1) and (5), “Every employer shall . . . pay to every employee
engaged in the employer’s business . . . all wages earned by the employee” and
“[e]ach employee shall have a right of action against any employer for the full
amount of the employee’s wages due on each regular payday as provided in §
109.11(2), in any court of competent jurisdiction.” See Kenosha Fire fighters, Local
Union No. 414, AFL-CIO v. City of Kenosha, 168 Wis. 2d 658, 665 (Wis. Ct. App.
1992) (indicating that policy goal of Ch. 109 is to ensure prompt payment of full
It is certainly true that Maysteel and the Union have not been able to locate
signed authorizations allowing Maysteel to deduct union fees from some of
plaintiffs’ wages. But plaintiffs have suffered no real harm, as no one disputes that
Maysteel remitted all the money it withheld to the Union as union fees, which nonunion employees were obligated to pay. Unlike the typical case covered by Chapter
109, the employer here did not gain a penny from its allegedly unlawful
Moreover, plaintiffs already filed an unfair labor practice charge with the
NLRB, which was settled without reimbursement of deducted union fees, as
payment of these fees would have, in the end, been the obligation of plaintiffs if they
had not been deducted from their wages by their employer.
In any event, this state law claim is preempted. As far as the Court is aware,
no court has applied Chapter 109 in this context, likely because “[i]t is by now a
commonplace that in passing the NLRA Congress largely displaced state regulation
of industrial relations.” Wis. Dep't of Indus., Labor & Human Rels. v. Gould, Inc.,
475 U.S. 272, 286 (1986). Because of this displacement, states may not regulate
activity that the NLRA protects, prohibits, or arguably protects or prohibits, which
includes subjects of mandatory bargaining such as a dues checkoff. San Diego
Building Trades Council v. Garmon, 359 U.S. 236, 246 (1959).
There can be no question that deducting union dues without authorization is
a matter that falls under federal labor law. See Cushman & Wakefield, Inc., 2014
L.R.R.M. (BNA) ¶ 152867 (NLRB Div. of Judges Mar. 5, 2014). In seeking redress
through NLRB charges for the same conduct alleged in Count III of the complaint,
plaintiffs acknowledged the federal nature of their claim. Plaintiffs’ remedy, if any,
must come through federal labor law, not Chapter 109.
Nor does Wisconsin’s right to work law change this dynamic, as recognized by
our sister court in Madison: “Wisconsin’s law regulating dues checkoff agreements
does not come within the § 14(b) exception to federal preemption, and it is
preempted both because it overlaps with, and is in conflict with, federal regulation
under the LMRA.” Int'l Ass'n of Machinists Dist. 10 v. Allen, No. 16-CV-77-WMC,
2016 WL 7475720, at *5 (W.D. Wis. Dec. 28, 2016), aff'd sub nom. Int'l Ass'n of
Machinists Dist. Ten & Local Lodge 873 v. Allen, 904 F.3d 490 (7th Cir. 2018).
NOW, THEREFORE, IT IS HEREBY ORDERED that defendants’ motion
for summary judgment (ECF No. 33) is granted.
IT IS ALSO ORDERED that plaintiffs’ motion for summary judgment (ECF
No. 29) is denied.
IT IS ALSO ORDERED that plaintiffs’ complaint (ECF No. 1-1) is
dismissed with prejudice.
Dated at Milwaukee, Wisconsin, this 30th day of September, 2019.
BY THE COURT:
s/ David E. Jones
DAVID E. JONES
United States Magistrate Judge
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