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Water Pipe Extension v. City of Chicago

December 26, 2000


The opinion of the court was delivered by: Justice Gordon

Appeal from the Circuit Court of Cook County.

Honorable Stephen A. Schiller, Judge Presiding.

Defendant, the City of Chicago (the "City") appeals from the judgment of the circuit court of Cook County in favor of plaintiff Water Pipe Extension, Bureau of Engineering Laborers' Local 1092 (the "Union") which vacated two arbitration awards. Those awards attempted to resolve a dispute between the City and the Union over the construction of certain provisions in a collective bargaining agreement entered into between them. The arbitrators found for the City but both awards were vacated and remanded for re-arbitration by the trial court pursuant to the Union's petition to vacate. On re-arbitration, the arbitrators issued supplemental awards refusing to modify their original decisions. The trial court vacated the supplemental awards and remanded to a new arbitrator for re-arbitration on the issue of damages alone. The City moved to vacate the new award, which the trial court refused to do and entered judgment on the award. It is from this judgment that this appeal is brought. For the reasons discussed below, we reverse.


The following facts are undisputed. In 1992, the City's Department of Water decided to increase the rate at which it was replacing certain water mains. The City began to look for outside sub-contractors to perform water main replacement work in addition to the work being performed by the City's employees. The relationship between the City and the Union is governed by a collective bargaining agreement (the "agreement") between the two parties. The agreement specifically addresses the issue of subcontracting and spells out the rights of the parties when the City wishes to subcontract work.

The agreement (the relevant portions of which are set out below in the analysis section of this decision) provides in article 27 that certain rights, including the right to subcontract, belong exclusively to the City subject to further limitations in the agreement. In article 20, section 20.1 the agreement provides for the establishment of a subcommittee "to examine all subcontracting situations to determine how such work could alternatively be, or continue to be, performed" by the City without subcontractors. Section 20.2 provides that the City will attempt to have City employees perform the work instead of subcontractors where practicable. It requires, among other things, that the City provide the Union with all bid specifications and guidelines provided to potential subcontractors "including a description of the work to be performed, any known impact upon bargaining unit employees, and other relevant data necessary for the Union to submit proposals." It further provides that 10 days after such information is received by the Union, the Union will provide the City with a proposal for the use of City employees instead of subcontractors. Within 10 days after the submission of the proposal, the subcommittee will meet and review the Union's proposal.

On March 12, 1993, the City notified the Union of a bid announcement for the subcontracting of a portion of the work and offered to make bid specifications available to the Union. At the request of the Union the bid specifications and proposed contracts were forwarded to it by the City on April 21, 1993. The parties then met on May 14, 1993. At that meeting the Union argued that it would be more cost- effective for the City not to subcontract the work, however, the City responded that it wished to conduct a three-year study to compare the performance of work done by subcontractors and City employees.

At the further request of the Union, the City, on May 20, 1993, provided additional information including bid sheets submitted by the lowest bidders. Thereafter the Union responded that the information provided by the City was inadequate and asked for detailed "actual cost" information claiming that it was entitled to that information under the "other relevant data" provision of the agreement. On June 30, 1993, the City responded that the information requested by the Union was not available because the City did not maintain records in that format. As a result, the Union refused to submit a proposal of its own pursuant to section 20.2 on the asserted ground that it did not believe that it had sufficient information to draft a proposal. On July 1, 1993, the City gave the Union 30 days notice that its proposed contracts with the subcontractors would be finalized.

The Union subsequently filed a grievance (No. 1993-24) on July 14, 1993, alleging that the City had violated the subcontracting provisions of the agreement when it hired outside contractors to perform some of its water main construction projects. This grievance was submitted to arbitrator Edwin H. Benn ("Benn"). At the arbitration the Union argued that the City did not comply with sections 20.1 and 20.2 of the agreement because the subcommittee did not meet before the decision to subcontract was made as required by section 20.1; because the City did not provide the Union with the "other relevant information" which it requested pursuant to section 20.2; because the City failed to work cooperatively with the Union as required by section 20.2 and because the City did not attempt to keep the work in house where practicable as required by section 20.2. On April 9, 1995, arbitrator Benn issued his decision in that arbitration, finding in favor of the City in that the City had not breached the agreement.

In his award, arbitrator Benn emphasized the City's right to subcontract under article 27 of the collective bargaining agreement. While the Union argued that the meeting of the article 20 subcommittee on subcontracting was a condition precedent to any decision by the City to subcontract, Benn disagreed. Rather, Benn found that the specific requirement of section 20.2 which specifies that the subcommittee is to meet after a proposal is made by the Union prevails over the general language establishing the subcommittee in section 20.1.

Benn also found that the City had not failed to provide the Union with the information required by the contract because the information which the City refused to provide was not relevant. His conclusion was premised on the City's undisputed assertion that it did not use that information in its costing process, a process which the City had the right to determine. Benn further found that the City had not breached its obligation to cooperate with the Union, as the City and the Union "went back and forth" over the Union's information request for 48 days, a request which Benn found to be irrelevant. Benn found that, contrary to the Union's contention, the City had not breached its obligation to attempt to have employees perform the work where practicable.

On October 20, 1993, the Union filed a second grievance (No. 1993- 30) involving the same collective bargaining agreement but relating to subcontracting in the City's Department of Sewers. This dispute was submitted to arbitration before a different arbitrator, Marvin F. Hill ("Hill"). On July 5, 1995, arbitrator Hill issued an award in favor of the City with respect to the second grievance purporting to follow arbitrator Benn's decision pursuant to "principles of res judicata." *fn1 Arbitrator Hill reasoned that if "the issue is the same, the contractual language is the same, the same arguments are being made and the arbitrator cannot find any significant factor that would warrant ignoring the first award, then relitigation of the issue should not be allowed."

On September 15, 1995, the Union filed a petition in the circuit court of Cook County asking that the awards of arbitrators Benn and Hill be vacated. At the hearing on that petition the Union contended that Benn's award eviscerated the provisions of article 20 which require the City to provide the Union with "other relevant data." The Union also argued that Benn effectively eliminated the provision of article 20 requiring the subcommittee to meet before any subcontracting occurred. The Union further contended that Benn negated the provisions of article 20 requiring the City to work cooperatively with the Union and to attempt to perform the work in-house where practicable. *fn2

On August 16, 1996, the able trial judge vacated both awards and remanded the case for re-arbitration. The court indicated that it thought the contract was "not really clear" and that "it could have been written better." The court reasoned that there was "absolutely no evidence at all that the City did anything at all to attempt to keep the work" in-house. The court also stated that although there would have to be a "bid received from the Union" in order to require the subcommittee to meet under 20.2, this does not "save the day for the City because of the lack of compliance with the spirit of 20.1 and the letter of 20.1." The court finally stated that it vacated the award because "there is no basis for [the arbitrators'] finding that the City complied with its responsibility to work cooperatively with ...

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