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Hutter Construction Co. v. International Union of Operating Engineers

decided: November 16, 1988.

HUTTER CONSTRUCTION CO., PETITIONER-APPELLANT, AND WISCONSIN LABORERS DISTRICT COUNCIL AND LABORERS LOCAL UNION NO. 1086, INTERVENORS-PETITIONERS-APPELLANTS,
v.
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 139, AFL-CIO, RESPONDENT-APPELLEE



Appeal from the United States District Court for the Eastern District of Wisconsin. No. 85 C 1508--John W. Reynolds, Judge.

Wood, Jr., Flaum and Kanne, Circuit Judges.

Author: Flaum

FLAUM, Circuit Judge.

Petitioners Hutter Construction Company ("Hutter") and Wisconsin Laborers District Council and Laborers Local Union No. 1086 ("Laborers") appeal from the district court's grant of summary judgment in favor of respondent, the International Union of Operating Engineers Local 139 ("Operators"). The district court affirmed an arbitrator's decision awarding the Operators damages for Hutter's breach of a subcontracting provision in a collective bargaining agreement.*fn1 We affirm.

I.

In July 1984, the state of Wisconsin awarded Hutter, a general construction contractor, the contract to build a medium security prison in Oshkosh, Wisconsin. At the time, Hutter, through its membership in the Associated General Contractors of America, was a party to a collective bargaining agreement ("Area II Agreement") with the Operators, a union representing mason-tending forklift workers.*fn2 The Area II Agreement granted the Operators the exclusive right to operate forklift trucks on construction projects throughout most of Wisconsin.*fn3 In addition, the Area II Agreement stipulated that bargaining unit work could only be subcontracted to a signatory to the Agreement.*fn4 The Agreement generally provided for bi-partite arbitration of disputes arising under the contract and gave arbitrators wide discretion in fashioning remedies for violations.*fn5 The Agreement, however, mandated tri-partite arbitration of "jurisdictional disputes."*fn6

Shortly after receiving the Oshkosh prison contract, Hutter subcontracted the masonry work on the project to Bill Dentinger Inc. ("BDI"). BDI was not a signatory to the Area II agreement but was a party to a collective bargaining agreement with the Laborers, a union that also represented mason-tending forklift workers.*fn7 Acting pursuant to this contract and in conformity with its longstanding practice, BDI assigned the forklift work on the project to the Laborers.

The Operators, however, refused to accept this result. In August 1984, David Waite, the Operators' business representative, entered into negotiations with both Hutter and BDI in an effort to have the Laborers removed from the project. After these negotiations proved unsuccessful, the Operators filed a grievance with Hutter, alleging that Hutter had violated the Area II Agreement by subcontracting the masonry work to BDI.

The Operators' grievance was eventually submitted to bi-partite arbitration. In July 1985, the arbitrator, after finding that the dispute between Hutter and the Operators was not jurisdictional, ruled in favor of the Operators and ordered Hutter to provide backpay to individual members of the Operators who were prevented from working on the project by Hutter's subcontract to BDI. The arbitrator stipulated that this award would continue until the forklift work ceased or was assigned to members of the Operators. In October 1985, the Operators filed suit in the district court to enforce the award.

Hutter responded to the adverse arbitration award by asking BDI to replace members of the Laborers with members of the Operators. The Laborers, faced with the possibility of being replaced on the prison project, informed BDI that it would take legal and economic action against the subcontractor to protect its status. This threat prompted BDI to file a § 8(b)(4)(D) unfair labor practice charge against the Laborers with the NLRB.*fn8

In November 1985, the Laborers staged a one day work stoppage at the construction site. This action prompted Hutter to file its own § 8(b)(4)(D) unfair labor practice charge against the union. BDI, however, continued to use members of the Laborers on the project until its completion in June 1986.

The NLRB consolidated the two charges against the Laborers into a single § 10k proceeding*fn9 and issued its decision in January 1987. After analyzing various factors including employer preference, contractual obligations and efficiency of performance, the Board ruled that the Laborers had the superior claim to the forklift work. Accordingly, the Board dismissed the unfair labor practice charges against the Laborers. In June 1987, the district judge granted summary judgment in favor of the Operators on its claim to enforce the arbitrator's award and denied petitioners' motion to vacate the judgment.

II.

Petitioners' principal argument on appeal is that the district court erred in affirming the arbitrator's decision that the Operators' subcontracting grievance was not a jurisdictional dispute. Petitioners claim that the subcontracting grievance was a disguised jurisdictional dispute and make alternative arguments based on this premise. First, petitioners contend that the NLRB resolved the jurisdictional dispute at the § 10k hearing by awarding the forklift work on the project to the Laborers. Alternatively, petitioners contend that the subcontracting grievance was a jurisdictional dispute within the meaning of the Area II Agreement; that the arbitrator lacked authority under the Agreement ...


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