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Ndk Corp. v. Local 1550

OPINION FILED OCTOBER 18, 1984.

NDK CORPORATION, PLAINTIFF-APPELLANT,

v.

LOCAL 1550 OF THE UNITED FOOD & COMMERCIAL WORKERS INTERNATIONAL UNION ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. Harold Siegan, Judge, presiding.

PRESIDING JUSTICE LINN DELIVERED THE OPINION OF THE COURT:

Plaintiff employer brought an action in State court to rescind a collective bargaining agreement entered into with defendant Union. The complaint alleged that the parties had engaged in lack of good faith bargaining in negotiating the contract, conduct prohibited as an unfair labor practice under the National Labor Relations Act. 29 U.S.C. § 158 (1982).

Defendant filed a motion to dismiss on the ground that the State court lacked jurisdiction over an action that involved unfair labor practices within the exclusive jurisdiction of the National Labor Relations Board. The trial court granted defendant's motion.

We affirm the decision of the trial court.

FACTS

Plaintiff, NDK Corporation (NDK), a supermarket engaged in the selling of food and food products, filed a complaint seeking rescission of a collective bargaining agreement entered into in May 1981 with defendant, Local 1550 of the United Food & Commercial Workers International Union (Union). NDK claims that the contract was procured by fraud arising out of certain oral misrepresentations made by defendant Union. These misrepresentations allegedly arose in the course of what plaintiff plainly describes as "lack of good faith bargaining," in which plaintiff admittedly and defendant allegedly engaged prior to signing the collective bargaining agreement.

NDK asserts that the parties orally agreed, as was their custom, neither to enforce nor adhere to the terms and conditions of the written contract. In the spring of 1982, in apparent contravention of this illicit pact, the Union began seeking strict compliance with the written collective bargaining agreement. Plaintiff, in response, halted compliance with the agreement and in August 1982, moved for an injunction and rescission of the contract in the United States District Court for the Northern District of Illinois, asserting jurisdiction under section 301 of the Labor Management Relations Act (29 U.S.C. § 185 (1982)) and alleging that the contract, induced by the illicit agreement not to comply therewith, was fraudulently procured. The district court, finding that the suit did not arise under section 301 of the Act, dismissed the complaint for lack of subject matter jurisdiction. That decision was affirmed by the Seventh Circuit Court of Appeals on June 17, 1983.

Subsequent to the district court action, the Union filed charges against NDK with the National Labor Relations Board (NLRB). Based thereon, the NLRB issued complaints against plaintiff on October 29 and December 29, 1982, and February 11, 1983, alleging that NDK committed certain unfair labor practices by withdrawing recognition from the Union and repudiating its obligations under the collective bargaining agreement. An order consolidating these complaints issued on February 25, 1983.

In January 1983, after dismissal by the Federal court and while the action before the NLRB was pending, plaintiff filed this complaint in the circuit court of Cook County seeking rescission of the written contract, an injunction and a declaratory judgment. Defendant moved to dismiss the complaint, alleging that the jurisdiction of the State court was preempted by the action then pending before the NLRB, which had exclusive jurisdiction over the regulated conduct. The trial court denied defendant's motion.

On August 22, 1983, defendant filed a petition for reconsideration of its motion to dismiss the complaint. In its motion, defendant alleged that on July 11, 1983, a hearing before an administrative law judge had commenced on the complaints issued against NDK and that in that proceeding, contrary to the representation NDK had made to the trial court, plaintiff had been given full opportunity to litigate its affirmative defense of fraud.

In an order issued November 16, 1983, the trial court granted defendant's motion for reconsideration and dismissed the complaint as to all defendants with prejudice, finding that the National Labor Relations Board had exclusive jurisdiction of the matter. It is from this order that plaintiff now appeals.

OPINION

The sole issue on appeal is whether the circuit court of Cook County has subject matter jurisdiction over a complaint brought by an employer, seeking rescission of a collective bargaining agreement on the basis of fraudulent misrepresentations, wherein the conduct complained of arguably constitutes an unfair labor practice under section 8 (29 U.S.C. § 158 (1982)) of the Labor Management Relations Act (Act). We believe that under these circumstances, the jurisdiction of the circuit court is preempted by the exclusive primary jurisdiction vested in the National Labor Relations Board.

The preemption doctrine and its effect on the jurisdiction of a State court to hear certain suits involving conduct regulated by the NLRB is predicated on the theory that a single national labor policy is desirable and that such policy can best be administered and applied by the National Labor Relations Board. (Alexander v. Standard Oil Co. (1977), 53 Ill. App.3d 690, 368 N.E.2d 1010.) In creating the NLRB, Congress confided primary interpretation and application of its rules to a specific and specially constituted tribunal and prescribed particular procedures for investigation, complaint and notice, and hearing and decision. Congress thereby evinced its intent that the administration of these specially designed procedures be centralized to obtain uniform application of its substantive rules as well as to avoid the conflicts likely to result from multifarious local procedures and attitudes towards ...


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