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Weis Builders, Inc. v. International Union of Operating Engineers

United States District Court, N.D. Illinois, Eastern Division

February 7, 2017

WEIS BUILDERS, INC., Plaintiff,
v.
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL UNION NO. 150, Defendant.,

          MEMORANDUM OPINION AND ORDER

          HON. JORGE ALONSO, United States District Judge

         Plaintiff Weis Builders, Inc. (“Weis”), seeks a declaration that it need not pay a grievance award to defendant International Union of Operating Engineers, Local Union No. 150 (“Local 150”), because it terminated its collective bargaining agreement with Local 150 several years ago. Local 150 has counterclaimed, seeking to enforce the grievance award. The parties have filed cross-motions for summary judgment. For the reasons set forth below, Weis's motion is granted, and Local 150's motion is denied.

         BACKGROUND

         Weis is a construction management firm and general contractor that performs construction work throughout the country, including in Illinois. Local 150 represents heavy equipment operators, mechanics, and similar employees in the construction industry throughout northern Illinois, eastern Iowa and northwestern Indiana.

         Local 150 negotiates a master agreement known as the Heavy Highway and Underground Agreement (“HHUA”) with the Mid-America Regional Bargaining Association (“MARBA”), a multi-employer association that bargains with labor organizations on behalf of commercial construction contractors. On August 14, 2000, Weis executed a Memorandum of Agreement (“MOA”) with Local 150, by which Weis became a signatory to the HHUA.

         When it signed the MOA in August 2000, Weis employed only one member of Local 150, who remained employed only until the following month, and Weis did not replace him. In subsequent years, Weis increasingly relied on subcontractors to supply the labor required to complete its projects in the Chicagoland area.

         Beginning in March 2007, Weis participated in the construction of a Wal-Mart in Zion, Illinois. Superintendent Vernon Gibson and Assistant Superintendent Andrew Haney, both Weis employees, were based at the Zion job site. Gibson and Haney are not members of Local 150.[1] Weis rented equipment that it and its subcontractors would need at various stages of the project. The rented equipment included a generator, a number of heaters, and an all-terrain forklift known by its brand name, “Lull, ” which served a number of purposes, including unloading trucks at job sites.

         In the early stages of the project, during the thirty to sixty days that the generator was required, Gibson and Haney would turn the generator on when they arrived in the morning and turn it off when they left the site for the evening. They did not perform service or maintenance work on the generator, nor did Weis employ any operator to “man” the generator, or continuously monitor it and provide service or maintenance as necessary.

         From October 29, 2007 to December 10, 2007, the heaters ran twenty-four hours a day, seven days a week. Haney and Gibson did not operate, service or maintain the heaters, nor did Weis employ any operator to man the heaters.

         Weis rented the Lull at the Zion job site from June to December 2007. Haney testified at his deposition that, when Weis needed an operating engineer to operate the Lull, its typical practice was to ask one of its subcontractors to direct a Local 150 operator who was employed onsite to perform work for Weis for the day, and the subcontractor would later bill Weis for the wages it paid the operator that day. Weis sought an operator from one of its subcontractors about fifteen to twenty times during the course of the Zion project. On some occasions, when Weis received small, off-schedule deliveries and no operating engineer was readily available, Haney and Gibson would use the Lull to remove a pallet or two of material from a delivery truck. Haney operated the Lull four to five times, and Gibson operated the Lull ten to fifteen times at the Zion project. A Local 150 business agent told Gibson and Haney that only a Local 150 member was permitted to operate the Lull, and after that point Haney “stayed off” the Lull, although he testified that he saw Gibson use it “every now and then.” (Local 150 LR 56.1(a) Stmt., Tab 3, Haney Dep., 81:3-4, ECF No. 29-4.)

         On November 3, 2007, Local 150 business agent Vince Zajec brought a grievance against Weis for hiring non-HHUA-signatory subcontractors at the Springbrook project in Naperville, Illinois. The parties settled the grievance in January 2008.

         In February 2008, Zajec filed another grievance against Weis for running unmanned generators and heaters at the Springbrook project. At Springbrook, as at the Zion project, Weis rented generators and heaters from a vendor, but it did not direct any employee or subcontractor to maintain or service them The vendor installed the machines, turned them on, and left them running at the job site indefinitely. According to Zajec's grievance, Weis was required to hire an operating engineer to man the machines. The union ultimately did not pursue the grievance against Weis, and no binding decision or settlement was ever made.

         At about the same time, Haney left the Zion project and went to work for Weis at another Wal-Mart construction project in Gurnee, Illinois. Haney testified at his deposition that Weis ran a few unmanned heaters twenty-four hours a day at the Gurnee project, as at Springbrook.

         On December 4, 2008, Leonard L. Burridge, General Counsel for Weis, sent a letter informing Local 150 that Weis was terminating the MOA, and therefore would not be bound by the HHUA, because Weis had “not directly employed operating engineers since signing the [MOA] and [did] not intend to hire any operating engineers to perform work within the scope of work of the [HHUA] in the future.” (See Weis LR 56.1(a) Stmt. App., Ex. U, ECF No. 27-22.) Dale D. Pierson, General Counsel for Local 150, responded in a letter that the “relevant inquiry” is not whether Weis employs Local 150 members but “whether any [Weis] employees perform work covered by” the HHUA, and “[s]hould [Weis] perform any work within the scope of work of the [HHUA], Local 150 will utilize all legal remedies available to it to ensure [Weis's] compliance with the terms of the [HHUA].” (Id., Ex. V, ECF No. 27-23.) Burridge sent a second letter to reiterate Weis's position that Weis “has not, does not, and has no intention of utilizing any [Weis employees to] perform any work within the scope of work” of the HHUA. (Id., Ex. W, ECF No. 27-24.) Pierson, in turn, replied that Local 150's position was that “the Agreement between Weis Builders and Local 150 [would] remain in effect” because the terms of the agreement gave Weis “no option to terminate” at that time. (Id., Ex. X, ECF No. 27-25.)

         In November 2014, Local 150 brought another grievance against Weis, alleging that Weis violated the HHUA by hiring non-signatory subcontractors at a project in Lombard, Illinois. Weis sent Local 150 a letter explaining its position that it had terminated its agreement with Local 150 in 2008 and it was no longer a signatory to the HHUA. The Joint Grievance Committee (“JGC”), a body composed equally of Local 150 and MARBA-member employer representatives that hears and decides union grievances, set a date to hear Local 150's grievance against Weis. Weis sent another letter to inform Local 150 and the employer representatives on the JGC of Weis's position that it was not bound to any agreement with Local 150. Weis did not appear at the hearing, and the JGC sustained the grievance, directing Weis to pay $10, 908.92 to the Local 150 Assistance Fund. After Local 150 sought to collect the award, Weis filed this action.

         ANALYSIS

         The parties have filed cross-motions for summary judgment. “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In considering such a motion, the Court construes the evidence and all inferences that reasonably can be drawn therefrom in the light most favorable to the nonmoving party. See Kvapil v. Chippewa Cty., Wis., 752 F.3d 708, 712 (7th Cir. 2014). “Summary judgment should be denied if the dispute is ‘genuine': ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Talanda v. KFC Nat'l Mgmt. Co., 140 F.3d 1090, 1095 (7th Cir. 1998) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)); see Bunn v. Khoury Enters., Inc., 753 F.3d 676, 681-82 (7th Cir. 2014). The court will enter summary judgment against a party who does not “come forward with evidence that would reasonably permit the finder of fact to find in [its] favor on a material question.” Modrowski v. Pigatto, 712 F.3d 1166, 1167 (7th Cir. 2013).

         Weis's position is that it properly repudiated the MOA and the HHUA in 2008 under the “one-man unit rule.” Under Section 8(f) of the National Labor Relations Act, an employer in the construction industry may enter into “prehire agreements” with labor unions even before the employer hires any workers, rather than wait for a majority of employees to elect a union to represent them. See 29 U.S.C. § 158(f). Prehire agreements are generally illegal, but Congress enacted section 8(f) to permit them in the construction industry because the transient, short-term nature of construction work meant that employers often had no stable workforce “employed by management in a continuing work relationship” that was “capable of designating a union representative or participating in a certification election.” See Int'l Ass'n of Bridge, Structural & Ornamental Iron Workers, Local 3 v. NLRB, 843 F.2d 770, 772-73 (3d Cir. 1988). By sanctioning prehire agreements in the ...


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