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International Union of Operating Engineers v. National Labor Relations Board


January 29, 1985


Cummings, Chief Judge and Bauer and Wood, Circuit Judges.

Author: Cummings

CUMMINGS, Chief Judge.

This appeal asks us to review an order by the National Labor Relations Board (the "NLRB" or the "Board") against the International Union of Operating Engineers, Local 150 ("Local 150") reported at 268 N.L.R.B. No. 200. We enforce the order.


D.J. Johnson Company (the "Company") is a Delaware corporation engaged in the business of brick masonry as a construction subcontractor in DuPage County, Illinois. On August 1, 1981, the Company began masonry work on an apartment building for the elderly in Mount Prospect in adjacent Cook County, Illinois. One of the unions working on the jobsite was Construction and General Laborers' Local 118 ("Local 118") to whom the Company assigned its only forklift operation.

William Ruckers, Business Representative of Operating Engineers' Local 150, complained to the Company about this assignment sometime in August 1981. On August 27, members of Local 150 began to picket the jobsite. Local 118 retaliated by threatening to picket the jobsite if the Company replaced the laborer on the forklift with an operating engineer. Thus the Company was presented with a classical work jurisdiction dispute.

Understanding the issue in dispute requires understanding the various sources of the obligations of the several parties vis-a-vis jurisdictional disputes. The Company had no collective bargaining agreement with Local 118, though it is bound by an agreement with two other Laborers' locals in DuPage County. Since 1963 the Company has been party to an international agreement (the "International Agreement")*fn1 negotiated between Local 118's international, Laborers' International Union of North America, and the Mason Contractors Association of America (the "MCAA") with which the Company is affiliated through its membership in the Mason Contractors Association of DuPage County. Article V, paragraph 1, of that Agreement regulated the Company's relations with Local 118 as follows:

When the Employer [here D.J. Johnson Company] enters into an area where wages, hours and working conditions have been agreed upon through bona fide collective bargaining, the Employer will be presented such evidence by the Union and the Employer will conform his operations accordingly except that all jurisdictional issues and/or disputes shall be resolved under the provisions of Article III, paragraph 3 "Jurisdiction" of this International Agreement. (Emphasis supplied.)

Article III, paragraph 3 provides that "any dispute over work jurisdiction will be referred to the International Union and the Employer Association [the MCAA] for decision which decision shall be final and binding on all parties." The Agreement provides further in Article X, paragraphs 1 and 3:

It is expressly understood and agreed by both parties to this understanding that any agreement or intention expressed in a local union collective bargaining agreement which provides any method for settling jurisdictional disputes that differs from or conflicts with Article III, paragraph 3, "Jurisdiction" of this International Agreement is held to be null and void and of no force and effect.

It being expressly understood between the parties hereto that the procedure for adjustment (set out in ARTICLE X) is exclusive and supersedes any other plan, method or procedure outlined in any agreements between a member or members of the Association and any Local Union.

The Company had signed a Memorandum of Agreement with Local 150 in 1965 that bound the parties to the terms of any collective bargaining agreements negotiated between Local 150 and the Builders Association of Chicago. The Builders Association of Chicago is affiliated with the Construction Employers' Association.*fn2 That Association entered into an agreement with the Chicago and Cook County Building and Construction Trades Council (the "Council") in 1913. That agreement is known as the Standard Agreement. The Standard Agreement established the Joint Conference Board (the "JCB") for resolving jurisdictional disputes. The JCB is a body of twenty-four members divided equally between union and management representatives. Its jurisdiction is restricted to disputes arising in Cook County, Illinois. The agreement between Local 150 and the Builders Association of Chicago requires jurisdictional disputes arising in Cook County to be resolved pursuant to the Standard Agreement, thus requiring the Company and Local 150 to submit jurisdictional disputes to the JCB.

Local 150 is a member of the Council. Local 118 is a member of the Construction and General Laborers' District Council, which is a member of the Council. Both unions' affiliation with the Council binds them to the Standard Agreement negotiated between the Council and the Construction Employers' Association. Thus both locals are bound to submit jurisdictional disputes to the JCB. Their obligation to abide by the Standard Agreement is an independent duty and need not be set forth in any particular collective bargaining agreement.

To summarize, the Company's agreement with Local 150 requires it to submit jurisdictional disputes involving Local 150 to the JCB. That agreement also binds Local 150; in addition Local 150's membership in the Council requires it to submit jurisdictional disputes to the JCB. Local 118 is similarly bound through its affiliation with the Council.

As noted, the Company has no collective bargaining agreement with Local 118. Nonetheless, its adoption of the International Agreement requires it to abide by whatever collective bargaining agreement may be in effect in Cook County, except that all jurisdictional disputes must be submitted to the International Union and the MCAA. This exception contradicts the provision in the Company's collective bargaining agreement with Local 150 requiring it to submit work jurisdiction disputes to the JCB.

On September 2, 1981, the Company filed unfair labor practice charges against both unions. The Company alleged that they had violated Section 8(b)(4)(D) of the National Labor Relations Act (the "NLRA"), 29 U.S.C. § 158(b)(4)(D), which prohibits strikes or coercive activity undertaken with a jurisdictional object. A hearing officer of the NLRB conducted a hearing on October 1 and 9, 1981, pursuant to Section 10(k) of the NLRA, 29 U.S.C. § 160(k).*fn3 The Company justified its submission of the dispute of the NLRB by asserting that its acceptance of the International Agreement precluded the NLRB's recognition of any contrary agreement to submit the dispute to the JCB. Local 150 maintained in those proceedings that the Board's Notice of 10(k) Hearing should be quashed since an agreed-upon method, that is, submission of the dispute to the JCB, allegedly existed for resolving the jurisdictional dispute.

The Board rejected this contention in a Section 10(k) proceeding with Member Fanning dissenting, and on July 22, 1982, decided the case against Local 150. 262 N.L.R.B. 1147 . Member Fanning believed that a binding agreed-upon method of settlement existed because all the parties were bound by one of the two dispute settlement procedures at issue, viz., the JCB procedure. In particular, he believed that a failure by both the Company and Local 118 to give formal notice to withdraw from and terminate their respective commitments to honor the decision of the JCB required them to submit to the authority of the JCB which had ruled in favor of Local 150. The Board majority found, however, that it had jurisdiction under Section 10(k) because no "determinative, agreed-upon method of dispute resolution" existed because of the equally binding, conflicting work dispute provisions in the applicable agreements (App. 24).

In the meantime, on September 14, 1981, Local 150 requested a hearing before the JCB. The JCB invited the Company to appear but it declined to do so, asserting that it was not bound to any JCB decisions. Both unions appeared and the JCB thereafter awarded the work to Local 150 before the NLRB's October 1981 hearing of this jurisdictional dispute was closed.

Local 150 declined to comply with the order the Board entered against it. This refusal resulted in an unfair labor practice proceeding against Local 150 upon a complaint filed by a Regional Director of the Board. That proceeding resulted in a unanimous order against Local 150 issued on February 29, 1984 (App. 1-12), with the Board holding that Local 150 could not relitigate the prior Section 10(k) decision. Its decision and order are reported at 268 N.L.R.B. No. 200. Local 150 has asked us to review and set aside the Board's 1984 order, while the Board has requested enforcement. Local 150 contends that the availability of the JCB deprived the Board of jurisdiction. Local 150 does not attack the Board's determination on the merits that Local 150's picketing violated Section 8(b)(4)(i) and (ii)(D) of the Act. The parties have stipulated to the Section 10(k) administrative record (App. 3). We uphold the Board's jurisdiction.


Judicial review of agency action is quite limited. Factual findings supported by substantial evidence in the record as a whole are conclusive. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S. Ct. 456, 464, 95 L. Ed. 456 (1951). Substantial evidence exists if the record contains "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S. Ct. 206, 217, 83 L. Ed. 126 (1938). A preponderance of the evidence is necessary, as long as "there is a rational connection between the facts found and the choice made." Bloomer Shippers Association v. ICC, 679 F.2d 668, 672 (7th Cir.1982). Similarly, the Board's interpretation of the NLRA will be upheld as long as it has "a reasonable basis in law." Allied Chemical and Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 166, 92 S. Ct. 383, 390, 30 L. Ed. 2d 341 (1971) (quoting NLRB v. Hearst Publications, 322 U.S. 111, 131, 64 S. Ct. 851, 860, 88 L. Ed. 1170 (1944)).

Local 150 challenges the Board's decision if four respects: (1) it disputes the Board's determination that the various parties' commitments to use the JCB did not constitute an agreed-upon method of jurisdictional dispute resolution; (2) it contests the Board's factual finding that the International Agreement abrogated the Company's obligation to use the JCB; (3) it alleges that the Board's decision constitutes an unexplained, unwarranted departure from precedent; (4) it contends that the Board's decision undermines the policies of Section 10(k) in particular and the federal labor laws in general favoring private resolution of labor disputes, herein the JCB.

The central issue is whether or not the International Agreement vitiated the Company's otherwise binding agreement to carry all jurisdictional disputes involving Local 150 to the JCB for resolution. Consequently, the validity of Local 150's objections depends upon the proper construction of the International Agreement. This determination depends on whether the International Agreement extends to a jurisdictional dispute between two local unions in Cook County if one of the local unions involved happens to be a Laborers' affiliate. A second necessary determination is whether, even if the dispute at issue is within the scope of the International Agreement, the various other agreements separately binding each party to use the JCB constitute an agreed-upon method of jurisdictional dispute resolution so that the NLRB would be without jurisdiction under Section 10(k) of the NLRA (quoted in note 3 supra ).

Contrary to the allegations of Local 150, the Company did have an agreement with Local 118. The agreement was not a formal one negotiated between the two parties directly. Rather the International Agreement constituted the contract governing relations between the two organizations. The International Agreement provided for wages, hours and working conditions by stipulating that the terms of any local agreement resulting from "bona fide collective bargaining" (Article V, P1) would control. The only exception is work jurisdiction disputes, which must be resolved according to the mechanisms established in the International Agreement.*fn4 The Company was conducting its relations with Local 118 in accordance with the International Agreement and certainly considered it to be the controlling document. Local 118 provided the Company evidence of the relevant local agreement (Board Tr. 90-92) as Article V of the International Agreement mandates, so that Local 118 also regarded the International Agreement as controlling.*fn5

Local 150 might argue that even if the International Agreement were the controlling document, it cannot suspend the work jurisdiction requirements of Local 150's agreement with the Company because it was signed subsequently to the Company's acceptance of the International Agreement. The NLRB has on occasion allowed a subsequent agreement between an employer and the International of a union to abrogate a previously entered into agreement between the International's local and the employer.

See Carpenters Local 1906 (Modern Erection Service), 249 N.L.R.B. 234, 235 (1980); Laborers' District Council of Washington, D.C. (Western Caissons, Inc.), 240 N.L.R.B. 1161, 1163 (1979). These decisions do not suggest, however, that the only way to rescind an international agreement is through a subsequent agreement between a local and an employer. The language of this International Agreement does not restrict itself to affecting agreements already in existence, as was true of the international agreement in Western Caissons, 240 N.L.R.B. at 1163 . Prohibiting employer associations and national or international organizations from agreeing to one method of dispute resolution despite conflicting provisions that their affiliates may accept in future local agreements in unnecessarily restrictive of their freedom to contract. They could still circumvent a contrary local agreement easily by renewing their Article X-type of restriction each year. The ease with which the parties could do so suggests the inappropriateness of formulating case law in such a manner.

A stronger reason for interpreting the International Agreement as applicable is its relatively minimal impact on the Company's collective bargaining agreement with Local 150. The International Agreement intended to require the Company to submit to the procedures that agreement had established for those work jurisdiction disputes involving Local 118. Thus, it contradicts the Company's collective bargaining agreement with Local 150 only to the extent that Local 118, as opposed to any other union that might have been involved, happens to be the other party. The Company still must use the JCB to resolve other work jurisdiction disputes involving Local 150. Local 150's assertion that the International Agreement intends to abrogate all of the Company's work jurisdiction agreements, regardless of whether the Laborers are involved, is simply without merit.*fn6

Laborers' Local 118 (Ronald Huber d/b/a Huber Masonry), 260 N.L.R.B. 1417 (1982), does not undermine this conclusion. That case involved the same unions that are parties to this dispute, Local 150 and Local 118. Again Local 150 argued that all parties had agreed to submit the dispute to the JCB. The employer, like the employer here, was based outside of Cook County. It argued that because it was not a member of the Construction Employers' Association, it was not subject to the JCB's jurisdiction. The NLRB rejected this superficial excuse, just as it rejected that employer's allegation that it could not initiate disputes before the JCB. Id. at 1419. If these facts were the only ones involved in the instant situation, then Local 150's arguments would have merit. But the existence of the International Agreement, to which the Company is also bound, precludes finding that an agreed-upon forum does exist in the JCB.

The situation is in fact similar to that in Laborers' District Council of Washington, D.C. (Fruin-Colon Corp.), 241 N.L.R.B. 126 (1979). The employer there had signed two independent collective bargaining agreements with two different unions. Both agreements required the employer and the union to arbitrate work jurisdiction disputes. Even though both agreements required the two parties to invite the second union to the arbitration proceeding, nothing required that second union to attent. Id. at 128. Consequently, no single proceeding would necessarily bind all three parties in interest. Furthermore, the two unions could require the employer to arbitrate the grievance in two separate arbitrations on the same subject matter, possibly yielding two contradictory awards. Id. That situation is precisely the one that occurred in the instant situation. The JCB reached one decision. The NLRB (and presumably the MCAA if it had had the opportunity to hear the dispute under the International Agreement*fn7) reached the opposite result.

Local 150 argues vigorously that the existence of one procedure binding all three parties -- the JCB -- distinguishes cases such as Fruin-Colon. In support of this argument, Local 150 cites Sheet Metal Workers Local 359 (E.L.T. Piping), 217 N.L.R.B. 987 (1975). There the employer's collective bargaining agreement with the sheet metal workers local conflicted with its agreement with the local's international. The other union and the employer were separately bound to the dispute mechanism mandated by the sheet metal workers' International. The Board ruled that it lacked jurisdiction under Section 10(k) because an agreed-upon method of settlement existed. Thus E.L.T. Piping illustrates the situation where an international agreement has abrogated the local one, precisely what happened in this case. The case does not represent the situation where all parties may be bound to one forum, but at least one of the parties is also bound to another, conflicting forum.

The International Agreement here does not abrogate the Company's agreement with Local 150.Instead it suspends the contrary provision with Local 118 that appears in the local collective bargaining agreement whose terms the International Agreement incorporates. If no such provision had appeared in the local agreement, then the International Agreement would abrogate Local 118's and the Company's independent obligations to submit to the jurisdiction of the JCB. Insofar as the International Agreement supersedes any local agreement to which Local 118 or the Company may have assented, E.L.T. Piping is in accord with the Board's decision here.

Nor can Local 150 argue that the International Agreement is not equally binding because it does not affect all parties. The logic of this argument is faulty. Local 150 asserts that the dispositive factor in Fruin-Colon is that no dispute bound all the parties but that if one arbitration proceeding would have bound all the parties while the seciond one bound fewer parties, then the NLRB would have had no jurisdiction (Reply Br. 12). But the thrust of the NLRB decision was that no "overall" settlement that would prevail over any other contradictory settlement was possible. Fruin-Colon, 241 N.L.R.B. at 268.*fn8 The NLRB in fact concluded that the "Board has long held that the voluntary adjustment must be binding upon both disputing unions as well as the employer to come within the meaning of voluntary settlement as set out in Section 10(k)." Id.

While Fruin-Colon emphasized the lack of binding agreement upon both union, Western Caissons, supra, emphasized the failure of the employer to commit itself irrevocably to one forum. The two cases read together illustrate the importance of each party's having accepted a single forum without the spectre of conflicting requirements. The International Agreement precludes concluding an agreed-upon method of determination exists because it is just as binding on the Company as is the Company's collective bargaining agreement with Local 150. The Company does not owe a higher obligation to submit the dispute to the JCB merely because the two unions owe separate duties to do so also. In terms of determining the scope of the Company's obligations under the International Agreement, whatever the local unions involved may have accepted is irrelevant.

That the International Agreement expressly provides that its provisions for work dispute resolutions override those of whatever agreement the Company may have either with a Laborer local with whom it has negotiated a collective bargaining agreement, or with a Laborer local with which it is operating under the terms of a local collective bargaining agreement not actually negotiated between the two parties, emphasizes the extent to which it binds the Company. The International Agreement governs all areas of concern between Local 118 and the Company and is tantamount to an agreement negotiated between them. It governs their relationship, including the appropriate manner in which to resolve work jurisdiction disputes. Because that manner of disposition conflicts with the mode prescribed between the company and Local 150, even though Local 118 would also be bound to submit to the JCB in a work jurisdiction dispute with a company not bound by the International Agreement, no agreed-upon method of dispute resolution exists in this situation and the Board accordingly has jurisdiction to decide the case.*fn9

This result is fully in accord with the policies underlying the federal labor laws and Section 10(k). Local 150 correctly states that national labor policy strongly favors private arbitration of labor disputes. But Local 150 impermissibly minimizes that the federal labor laws favor the voluntary private arbitration of disputes. See, e.g., Laborers' Local 309 v. W.W. Bennett Construction Co., 686 F.2d 1267, 1277 (7th Cir.1982) ("federal labor law favors only voluntary arbitration of disputes" (emphasis in original)). When a party to a dispute has conflicting agreements with the two unions involved, then no voluntary agreement binding all parties, without the risk of conflicting judgments, exists. Section 10(k) especially "contemplates only a voluntary agreement as a bar to a Board decision." NLRB v. Plasterers' Local 79, 404 U.S. 116, 133, 92 S. Ct. 360, 371, 30 L. Ed. 2d 312 . Congress designed Section 10(k) not only to support the enforcement of private, voluntary agreements but also "to protect employers and the public from the detrimental economic impact" of jurisdictional strikes or picketing. See id. at 130, 92 S. Ct. at 369 . The Board does so by making work awards to resolve the dispute permanently when no private agreement will do so. In the instant case, the NLRB's not resolving the dispute would subject the Company to conflicting awards -- one by the MCAA/Laborers' International favoring Local 118 (see note 7 supra ) and one by the JCB favoring Local 150. The NLRB's acceptance of jurisdiction is necessary to avoid this result.

W.R. Grace and Co. v. Local Union 759, 461 U.S. 757, 103 S. Ct. 2177, 76 L. Ed. 2d 298, is not dispositive of this case. There the Supreme Court enforced an award of back pay given for the employer's violation of its collective bargaining agreement whose terms governing employee lay-offs conflicted with an Equal Employment Opportunity Commission ("EEOC") conciliation agreement. The Court refused to require the collective bargaining agreement to defer to the terms of the EEOC agreement, leading Local 150 to argue here that similarly we should not allow the terms of the Company's agreement with Local 150 to give way to its agreement with the Laborers' International. The short answer is that neither is giving way to the other; the work jurisdiction provisions of neither agreement are being enforced in favor of NLRB determination pursuant to Section 10(k). Furthermore, W.R. Grace and Co. involved a proceeding under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185.*fn10 Had Local 150 proceeded under Section 301, it may have been able to have its agreement to submit disputes to the JCB enforced. But its election to picket unlawfully and the subsequent NLRB determination here may undermine its ability to rely on Section 301. See Teamsters Local 50 v. McCartin-McAuliffe Mechanical Contractor, Inc., 708 F.2d 313 (7th Cir.1983). Section 301 is directed solely at the particular collective bargaining agreement placed before it and does not consider potential conflicting agreements that one of the parties may have signed. That consideration is the province of Section 10(k), so that Local 150's reliance on cases decided under Section 301 is misplaced.

Substantial evidence in the record justifies the NLRB's determination of the scope and impact of the International Agreement on the Company's conflicting obligations under its collective bargaining agreement with Local 150. Both agreements purported to provide exclusive fora, and neither can be said to override the other. Therefore, the NLRB's assumption of jurisdiction was well within the reach of Section 10(k). The Board's order will be enforced.

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