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Pepper Construction Co. v. International Union of Operating Engineers

December 12, 1984


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 82 C 2586, J. Sam Perry, Judge.

Author: Pell

Before PELL and ESCHBACH, Circuit Judges, and WYATT, Senior District Judge.*fn*

PELL, Circuit Judge. Appellant, Pepper Construction Company (Pepper), plaintiff-counterdefendant below, appeals from a district court order denying its motion for summary judgment and granting summary judgment to appellee, International Union of Operating Engineers, Local 150 (Local 150). The primary issue on appeal is whether a disclaimer made by a union at a section 10(k) hearing before the National Labor Relations Board (the Board) precludes that union from enforcing, up to the time of the disclaimer, a back pay award previously entered by a joint grievance committee.


A. The Collective Bargaining Agreement.

Pepper was a prime contractor for a renovation project at Marshall Field & Company (Field's) State Street store in Chicago, Illinois. Pepper also has been a member of a builders' association that entered a collective bargaining agreement in 1981 with Local 150 concerning working conditions. The builders' association and Local 150 had negotiated similar agreements since 1966. The 1981 contract contained several provisions relevant to the present controversy. The scope-of-work section provided that the contract applied, inter alia, to "construction, erection, modification, addition to or improvement of a building structure or structures." The branches-of-work provision in the agreement stated that "the operation of all engines and boilers on building and construction work operated by . . . any . . . motive power, including, but not limited to . . . all elevators used for building construction or for alteration work, shall be the work of the operating engineers." Furthermore, the agreement provided that, with certain exceptions not applicable here, "elevators, of all types shall require an engineer." The agreement also contained a union shop provision, which stated: "When an employer performs work covered by this Agreement, . . . the employer will obtain all employees used in the performance of such work through the referral offices of the local union. . . ."

The dispute-resolution provisions of the agreement apply to "any claim or dispute involving an interpretation or application of the Agreement." Step three of the grievance procedure requires submission of an unresolved dispute to a Joint Grievance Committee (the Committee) composed of an equal number of representatives from both Local 150 and Pepper. The contract empowered the Committee "to resolve all grievances before it," and, if the Committee resolved the dispute, "no appeal may be taken and such resolution shall be final and binding on all parties and individuals bound by this Agreement."

B. The Grievance.

Pepper started doing maintenance work for Field's in 1937. Since then, Pepper has done all routine maintenance and construction work for Field's. In early October of 1981, Pepper began work as prime contractor on a major renovation project. The contract between Pepper and Field's provided that Field's employees would perform all elevator services. Field's, in turn, had a collective bargaining agreement with Local 372 of the Service Employees International Union (Local 372), which required the assignment to Local 372 members of all elevator work on Field's premises. Field's has never had a collective bargaining agreement with Local 150, nor has Pepper has an agreement with Local 372.

There are ten freight elevators at various locations in Field's State Street store. A number of factors account for the fact that, with insignificant exceptions, Field's has never ceded control of any elevators to construction projects. First, the elevators are of different shapes and sizes and do not all stop at every floor. Consequently, depending upon the dimensions and destination of a given load, any of the elevators might be needed for regular store work. Second, Field's contract with Local 372 required Field's to assign all elevator operations to members of Local 372. Third, because the primary function of the store is to sell merchandise, the movement of inventory has priority over all other uses of the elevators. Finally, the frequent breakdown of the elevators requires constant adjustment of internal freight-movement schedules. As a result, Field's has found it impossible to set aside any particular elevator for a single-purpose use.

Between 1966, when Pepper and Local 150 first entered into a collective bargaining agreement, and 1981, Local 150 never complained about the failure of Pepper to assign members of Local 150 to elevator operations at any renovation sites, including Field's. In late October 1981, however, Local 150 complained to Pepper and demanded that Pepper assign the operation of elevators at the Field's construction site to Local 150 members. A meeting ensued between representatives of Pepper, Field's, and Local 150. Field's noted that it had a collective bargaining agreement that granted to Local 372 the exclusive operation of all freight elevators. Similarly, Pepper claimed that, because it had no control over the operations of Field's elevators, it could not comply with Local 150's demand. Shortly thereafter, however, Pepper requested Field's approval to use a Local 150 member on the elevators or to build a new hoist on the outside of the building for construction purposes. Field's refused both requests, the first due to its contract with Local 372 and the second due to the cost of building a new hoist, the safety hazard and impediment to pedestrian traffic that such a hoist would present, and the negative aesthetic effect of an exterior hoist.

On November 11, 1981, Local 150 notified Pepper that it had filed a formal grievance due to Pepper's failure to assign a Local 150 member to the operation of the elevators, which, Local 150 claimed, constituted bargaining unit work under the collective bargaining agreement. Neither Field's nor Local 372 was involved in the grievance proceeding. On January 26, 1982, the Joint Grievance Committee ruled in favor of Local 150 and ordered Pepper to assign the work to a Local 150 member and make a back pay award from the time when Local 150 first complained about the work assignment. On January 29, Pepper wrote to Field's seeking to gain compliance with the Committee's award. Field's then wrote to Local 372 to see if it could comply with Pepper's request, but Local 372 refused and stated: "It if should come to pass, we would immediately implement any and all of those remedies available to us under the contract, and the National Labor Relations Act which may include picketing and other forms of job action." Field's thereupon denied Pepper's request for January 29.

On March 2, 1982, Pepper filed an unfair labor practice charge against Local 372. The charge, brought under section 8(b)(4)(D) of the National Labor Relations Act (the Act), 29 U.S.C. § 158(b)(4)(D), alleged the Local 372 had threatened Field's with the purpose of forcing Pepper and Field's to assign the disputed work to Local 372 rather than Local 150. At the culmination of the hearing held before the Board Hearing Officer on March 30 and April 2, counsel appearing in the proceeding on behalf of Local 150 stated: "Local 150 would now disclaim any claim to the working dispute." In its brief to the Board following the hearing, Local 150 asserted that the disclaimer terminated any work dispute between itself and Local 372 and, consequently, deprived the Board of further jurisdiction under section 10(k) of the Act, 29 U.S.C. § 160(k), as interpreted by the Supreme Court. Pepper's brief urged the Board to retain jurisdiction, in part because the disclaimer did not include an express withdrawal of Local 150's grievance of abandonment of the back pay award entered by the Committee. Pepper also claimed that Local 150 was manipulating the section 10(k) proceedings to avoid an authoritative determination of the merits of Pepper's claim.

On April 26, 1982, after the hearing but before a Board decision, Pepper filed a section 301 complaint, 29 U.S.C. § 185(a), in federal court to vacate the Committee's award to Local 150. Local 150 counterclaimed for enforcement of the award. Neither party informed the Board of the pendency of the district court case. The Board issued its opinion on the section 10(k) proceeding on July 12, 1982, quashing the notice of hearing. The Board relied upon prior Board rulings that had held that a jurisdictional dispute ceases to exist when one of the competing unions effectively renounces its claim to the disputed work. Despite Pepper's concern with the fact that Local 150 had not expressly abandoned the back pay award, the Board explicitly found that Local 150's disclaimer was unequivocal. The Board also found that Local ...

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