Construction Industry Employers turn the tables,
Sue the Unions after Arbitration
Bricklayers Counsel Accused of
Wearing two hats, causing conflict
Plumbers Accused of Creating
Jurisdictional Dispute by Audit
that claimed Laborers and IBEW hours
Once an employer that is signatory to a contract with a trade union loses at arbitration, its choices are to satisfy its obligations under the award, attempt to negotiate a less unpleasant outcome with the union, or go to court to vacate the award. As to the third choice, two recent suits filed in the federal court here in Chicago show widely diverse grounds to set aside the umpire’s determination.
Generally such litigation commences when the union, having won, goes to court to seek to enforce the award.
In J.P. Phillips, Inc v. International Union of Bricklayers, __FSupp2d__, 08 C 5428 (N.D. Ill. September 23, 2008), a former employee filed a grievance over pay. The grievance eventually came to a joint arbitration board for hearing. The board’s rules require the presence of a mediator. Also, a member of the board was a competitor of Phillips that employed the grievant at the time of the hearing.
Counsel for the Bricklayers Union, Barry Bennett, introduced himself as mediator then proceeded to “act as an advocate for the Union and grievant,” and according to the complaint he refused to allow Phillips to introduce evidence – and presented evidence himself as a witness for the union. On July 15 the board sustained the grievance, erroneously (Phillips claims) ignoring the International union’s provisions as to pay, that allegedly override the local union’s contract on this point.
Phillips wants Judge Zagel to throw out the award.
This first case was relatively uncomplicated. Roughneck v Plumbing Contractors’ Association of Chicago and Cook County, __FSupp2d__, 08 C 5990 (N.D. Ill. October 20, 2008) is more involved.
Signatory to the Plumbers Local 130 area agreement, the employer, a concrete cutting and drilling contractor, was confronted with a joint arbitration board hearing after Roughneck experienced one of Local 130’s typical heavy-handed audits. A typical Local 130 audit differs from most audits conducted by other trades’ funds in the industry. Legal counsel is aggressively involved early and remains involved to the end of the process. Arbitration before a panel of union and competing plumbing companies is mandatory, whereas audits in other trades that don’t settle wind up in court. Legal counsel for the Local 130 funds almost always participates in joint arbitration board hearings and, in the opinion of many, takes an unusually aggressive approach to the hearing – some believe to the point of running it. Local 130’s zealous approach to audits and enforcement of obligations believed by the funds to flow therefrom have sometimes met with a cold reception from the courts, see, e.g., William Randolph v. Local 130 Funds, ___F3rd___ (7th Cir. 2003)(appeals court found that Local 130 had determined liability for unpaid contributions despite clear evidence that the employer involved was under no legal obligation to pay contributions; hefty attorney’s fees awarded to employer).
In Roughneck, the funds auditor erroneously determined an obligation of unpaid contributions in excess of $2 million. It took six months for the auditing firm to get the audit report to Roughneck; most auditors in this business get the audit report to the employer as soon as it is printed and approved by the funds. According to the complaint the funds immediately demanded the $2 million plus and invoked arbitration during the months that passed between the notification of findings and demand, and the actual submission of the findings to Roughneck. Furthermore, after requesting detailed evidence of payments made for employees to the Electrical Workers and Laborers funds, the funds kept all these hours in the audit anyway. According to Roughneck, all of the hours in the audit were attributable to employees not doing plumber’s work.
Roughneck filed a grievance to arbitrate what it believed was the improper assertion of jurisdiction by Local 130 over work that was outside the covered work provisions of the collective bargaining agreement (“CBA”), i.e. work performed by employees covered by other labor contracts. Roughneck went outside the collective bargaining relationship and also served a written notice of “impediment to job progress,” on Richard Resnick, Administrator for the Plan for the Settlement of Jurisdictional Disputes in the Construction Industry. Under the provisions of the Plan a signatory employer or trade union can claim that a union is obstructing the orderly and reasonable flow of work by claiming work covered by another union’s CBA.
Unlike the NLRB machinery to resolve jurisdictional disputes invoked pursuant to §8(B)(4)(D), the Plan’s regulations represent the construction trades’ self-policing. The Plan is an impartial body created and maintained by the entire unionized construction industry.
Shortly thereafter the Laborers Union filed a similar notice with the administrator, and Resnick set the matter for arbitration one day before the Plumbers’ funds joint arbitration board hearing on July 22, 2008. Arbitrator Greenberg heard evidence on July 21 and a few hours after the hearing ordered that the Local 130 funds’ JAB hearing be dismissed. “This effort to collect fringe benefit payments is patently jurisdictional in nature, and thus prohibited,” he wrote. “If UA Local 130 believes it has a legitimate jurisdictional claim to work being performed by other crafts employed by Roughneck, the [CBA] has a clear mechanism available for UA Local 130 to vindicate [sic] it’s jurisdictional rights and the rights of the workers it represents…”
Roughneck accordingly declined to attend the JAB hearing set for the next day but the funds proceeded unilaterally. With the imposition of additional fines (“for CBA violations”) the board assessed fines against Roughneck, and awarded the funds, $3,315,194.13.
The claim before Judge Moran is based on the jurisdictional disputes provision of the Plumbers CBA: decisions rendered by arbitrator “…shall become effective immediately and complied with by all parties.”
For any area agreement that includes similar jurisdictional disputes provisions, the implications of this suit are substantial. If Judge Moran were to find that the funds were not subject to the July 21, 2008 decision from Arbitrator Greenberg, the case will become difficult for Roughneck. But if he decides that the funds – given their intimate and functional relationship with Local 130 – improperly proceeded with the July 22 JAB hearing, this audit, and others like it, will be subject to significant modifications.
As many readers know, union trust fund auditors “pick up” hours reported to other unions but generally take them out of the audit when provided proof of reporting to the other trade’s funds. Local 130 is notorious for going after everybody and ignoring proof that the hours should be removed from the audit.