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Chicago Regional Council of Carpenters, United Brotherhood of v. Joyce Installation Company

February 10, 2011

CHICAGO REGIONAL COUNCIL OF CARPENTERS, UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, PLAINTIFF,
v.
JOYCE INSTALLATION COMPANY, L.L.C., DEFENDANT.



The opinion of the court was delivered by: Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER

Plaintiff Chicago Regional Council of Carpenters, United Brotherhood of Carpenters and Joiners of America filed a two-count complaint against defendant Joyce Installation Company

L.L.C., alleging breach of a settlement agreement and a state law workers' compensation retaliation claim. Defendant now moves to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6), arguing that § 301 of the Labor Management Relations Act preempts plaintiff's claims and that plaintiff failed to exhaust the grievance and arbitration procedures of the collective bargaining agreement ("CBA") before filing suit. For the following reasons, defendant's motion is granted.

BACKGROUND

The following facts are taken from plaintiff's complaint and are deemed true for the purposes of this motion. Plaintiff and defendant are parties to a CBA, which sets forth the wages and benefits to be paid to union employees as well as the grievance procedure those employees must follow. After signing the CBA, Wayne Bloch, one of plaintiff's members, successfully pursued a workers' compensation claim against defendant. He was awarded a workers' compensation benefit payment, which defendant paid. In January 2009, after making the payment, defendant terminated Wayne Bloch and constructively discharged Ray Bloch, Wayne's brother, and Mathew Bloch, Wayne's son.

On August 14, 2009, plaintiff grieved the discharges and demanded arbitration pursuant to the CBA. An arbitrator set a hearing date for May 28, 2010. On May 27, 2010, the parties agreed to settle the grievance, and plaintiff signed a finalized settlement agreement on June 22, 2010. The terms of the agreement required defendant to make installment payments to all three of the Blochs and rehire Ray and Mathew, the former as a Journeyman Carpenter and the latter as an Apprentice Carpenter. Defendant has failed to comply with these terms.

DISCUSSION

I. Standard of Review

A complaint that fails to state a claim upon which relief can be granted should be dismissed. Fed. R. Civ. P. 12(b)(6). A Rule 12(b)(6) motion tests the sufficiency of the complaint, not the merits of the case. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). The court thus accepts the complaint's well-pleaded factual allegations as true and draws all reasonable inferences in the plaintiff's favor. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007) (citations omitted). To provide the defendant with "fair notice of what the claim is and the grounds upon which it rests," id. at 555, the complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). In addition, its allegations must plausibly suggest that the plaintiff has a right to relief and raise that possibility above the "speculative level." Twombly, 550 U.S. at 555, citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, at 235-36 (3d ed. 2004).

II. Breach of Contract Claim

A. Section 301 Preemption

Federal district courts have original jurisdiction over lawsuits alleging breach of a contract between an employer and a labor organization. 29 U.S.C. § 185(a). Further, § 301 "authorizes federal courts to fashion a body of federal law" to enforce these contracts. Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 403 (1988). To that end, § 301 preempts state law claims that are "substantially dependent upon the analysis of the terms of an agreement made between the parties in a labor contract." Allis-Chambers Corp. v. Lueck, 471 U.S. 202, 220 (1985). Section 301 thus preempts a state law claim when the underlying CBA creates the rights upon which the claim is founded, or when the claim's resolution substantially depends on the meaning or interpretation of the CBA. Lingle, 486 U.S. at 405-06; Caterpillar, Inc. v. Williams, 482 U.S. 386, 394 (1987). But when a state law claim merely requires reference to a CBA, § 301 will not preempt it. Livadas v. Bradshaw, 512 U.S. 107, 124 (1994).

Section 301 applies not only to CBAs, but also to grievance settlement agreements, SEIU, Local 4 v. EMI Enters., Inc., No. 04 C 3598, 2004 U.S. Dist. LEXIS 16063, at *9 (N.D.Ill. Aug. 12, 2004), and other types of agreements between an employer and a labor organization. See, e.g., United Bhd. of Carpenters & Joiners v. Sidell, 552 F.2d 1250, 1254-56 (7th Cir. 1977) (union constitutions); Gen. Teamsters, Auto Truck Drivers & Helpers Local 162 v. Mitchell Bros. Truck Lines, 682 F.2d 763, 765-66 (9th Cir. 1982) (strike settlement agreements).

Defendant argues that plaintiff's breach of contract claim, which is based on a settlement agreement, is preempted by ยง 301. Specifically, he relies on SEIU, Local 4's explanation that a common law claim for breach of a settlement agreement is "meaningless without reference to the collective bargaining agreements . . . because the settlement agreement resolved ...


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