177 F.3d 648 (7th Cir. 1999), 98-2102, R.L. Coolsaet Const. Co. v. Local 150, Intern. Union of Operating Engineers

Docket Nº:98-2102, 98-2526.
Citation:177 F.3d 648
Party Name:R.L. COOLSAET CONSTRUCTION CO., Plaintiff-Appellee, Cross-Appellant, v. LOCAL 150, INTERNATIONAL UNION OF OPERATING ENGINEERS, Defendant-Appellant, Cross-Appellee.
Case Date:May 07, 1999
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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177 F.3d 648 (7th Cir. 1999)

R.L. COOLSAET CONSTRUCTION CO., Plaintiff-Appellee, Cross-Appellant,



Defendant-Appellant, Cross-Appellee.

Nos. 98-2102, 98-2526.

United States Court of Appeals, Seventh Circuit

May 7, 1999

Argued Jan. 19, 1999.

Rehearing and Suggestion for Rehearing

En Banc Denied June 14, 1999.

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Lawrence D. Levien (argued), Joseph A. Turzi, Akin, Gump, Strauss, Hauer & Feld, Washington, DC, Christopher Meyer, Dukes, Martin, Helm & Ryan, Danville, IL, for Plaintiff-Appellee, Cross-Appellant.

Dale D. Pierson (argued), Pasquale A. Fioretto, Baum, Sigman, Auerbach, Pierson & Neuman, Chicago, IL, David Stuckel, Harvey & Stuckel, Peoria, IL, for Defendant-Appellant.

Before FLAUM, RIPPLE, and DIANE P. WOOD, Circuit Judges.

FLAUM, Circuit Judge.

This is an appeal from judgment in favor of a contractor claiming that a union engaged in improper secondary picketing in violation of federal law and breached the "no-strike" clause in the parties' collective bargaining agreement. The union claims that its activity was aimed only at a non-union contractor on the same project, and to the extent it affected the secondary contractor, it was protected as a sympathy strike implicitly allowed by the terms of their bargaining agreement. The union also challenges the district court's damages award and the contractor cross appeals, claiming the court failed to include certain items in its calculation of prejudgment interest. We now affirm the district court's decisions regarding each of the union's claims, and reverse the court's calculation of damages.

Background 1

This dispute stems from a picket line set up by Local 150 ("Local 150") of the International Union of Operating Engineers ("IUOE") in June 1992, at the National Gas Pipeline Company's ("NGPL's") gas storage facility in Herscher, Illinois. In 1991, NGPL hired R.L. Coolsaet Company ("Coolsaet"), a union contractor, to repair a pipeline running into NGPL's gas compressor at the Herscher facility. As a member of the Pipe Line Contractors Association

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("PLCA"), a national trade group, Coolsaet was at all relevant times a signatory to a national collective bargaining agreement ("National Agreement") between the PLCA and the IUOE. Pursuant to this agreement, Coolsaet hired workers represented by Local 150, as well as workers represented by other craft unions, to perform the work at Herscher. Coolsaet worked in and around an 80-acre fenced-in area within the Herscher facility referred to as Station 201. In 1992, NGPL hired Haley Brothers, a local nonunion contractor, to perform water pipe installation work in the fields surrounding Section 201. At no time prior to the strike, however, did Coolsaet and Haley employees work in close proximity to each other.

On the morning of June 23, 1992, Local 150's steward, Roger Seale, and one of its business agents, Gary Benefield, met at Station 201 and drove three miles to an area called Saffer 3, where Haley was then working. There, Benefield told one of Haley's owners that its work should be performed by union labor and asked Haley to join Local 150. The owner refused. Soon after, John Filiatrault of NGPL arrived at Saffer 3 and told Benefield that Haley's work was a "separate job, separate contract, separate system," and that NGPL had the right to hire non-union contractors. Benefield responded that Haley's presence at Herscher could result in union picketing. That afternoon, Roger Seale repeated Benefield's warning to Coolsaet's office manager.

The same day, in an effort to avert a strike, NGPL scheduled a meeting with union representatives but called it off after concluding that the dispute was between Coolsaet and its unions, not between the union and NGPL. After the meeting was canceled, Benefield called other craft unions representing Coolsaet employees to inform them that Local 150 would likely begin picketing the following day, June 24, in front of Station 201.

Station 201 had three gates: the Main Gate, which was used by anyone with business at the site, Gate 2, which was locked during this period, and Gate 3, which was used exclusively by Coolsaet employees. On the morning of June 24, Benefield set up pickets in the area where Haley had been working the day before, and in front of the Main Gate, which Haley occasionally used to retrieve supplies stored inside Station 201. Benefield also set up pickets in front of Gate 3, despite the union's knowledge that only Coolsaet employees used that gate. The picket line included some Coolsaet employees.

Because none of its union employees would cross the picket line, Coolsaet's operation was completely shut down from June 24 until July 7. On June 25, Michael Quigley, the Local 150 business agent in charge of the picketing activity, requested a meeting with NGPL and representatives from other unions to discuss his concern about Haley working at Herscher. NGPL's manager, David Nightengale, informed Quigley that Haley had removed all of its supplies from Station 201 that day and asked why Local 150 continued to picket at that location instead of where Haley was actually working. Quigley responded that the union had the right to picket wherever it would be most effective.

The pickets remained in place in front of Station 201 from approximately 7:00 a.m. to 4:00 p.m. each day even though Haley no longer used either gate and Local 150 business agents did not know whether Haley was working on the site during those hours. During this period, Quigley told Coolsaet's manager, Ryan Colonello, that as long as Haley was still on the job, the picketing would continue.

The National Agreement between the PLCA and IUOE contained a broad no-strike provision (Article IX(A)) which prohibited the union from engaging in any "strike slowdown, stoppage of work or any interference ... with the progress of the work" and prevented the employer from ordering any lockout of union workers. On July 25, 1992, Hailey Roberts, the director

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of the PLCA, faxed a letter to Frank Hanley, president of the IUOE, informing him that Local 150 had set up a picket line at Herscher in violation of the no-strike clause in the National Agreement. On July 30, Howard Evans of the IUOE faxed Roberts' letter to Bill Dugan, president of Local 150, along with a cover note stating: "I am sure you are aware that Article [IX] of the National Pipeline Agreement contains a no strike clause." On July 2, Local 150 treasurer Joe Ward told Evans that "the picket line would be down on Monday [July 6]." When the strike continued on July 6, Evans faxed another letter ordering the removal of the picket line, which came down on July 7, 1992.

In September 1992, Coolsaet sued Local 150 for damages resulting from what it alleged was an illegal secondary picket in violation of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158(b)(4), and the Labor Management Relations Act ("LMRA"), 29 U.S.C. §§ 185 and 187. Coolsaet also claimed that Local 150 breached the no-strike clause of the National Agreement.

Following a four day bench trial, the court determined that because Local 150 had intended to exert pressure on Coolsaet and NGPL, neutral or secondary employers, in an effort to remove Haley from the Herscher site, the union violated Section 8(b)(4) of the NLRA. Additionally, the court held that Local 150 breached the no-strike clause of the National Agreement. Based on the delay and increased cost Coolsaet incurred as a result of the strike, the court initially awarded the contractor $329,467 in damages. After additional briefing by the parties, the court awarded Coolsaet $105,221 in compounded prejudgment interest based on all of the contractor's damages except those associated with equipment expenses on machines owned by Coolsaet.

Local 150 now appeals, claiming that it did not engage in any illegal secondary activity nor did it violate the National Agreement. The union also challenges the court's damages and interest calculations. Coolsaet cross-appeals, claiming that the interest award improperly excluded equipment expenses and should have been higher.


In reviewing the trial court's decision, we examine any legal conclusions de novo, Orix Credit Alliance v. Taylor Mach. Works, Inc., 125 F.3d 468, 474 (7th Cir.1997), but adopt its factual findings unless clearly erroneous. Air Line Pilots Ass'n, Int'l v. United Air Lines, Inc., 802 F.2d 886, 891 (7th Cir.1986); Fed.R.Civ.P. 52(a). A finding of fact is clearly erroneous only when "the reviewing court is left with the definite and firm conviction that a mistake has been committed." Anderson v. City of Bessemer City, North Carolina, 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985). The court's award of damages or prejudgment interest is reviewed for abuse of discretion. Treat Bros. Co. v. Fidelity and Deposit Co., 986 F.2d 1110, 1121 (7th Cir.1993). An abuse of discretion exists where the district court has made a manifest error of law, but this court does not second-guess the exercise of discretion that falls within the range of reasonable options. See American Nat'l Bank & Trust Co. v. Regional Transp. Auth., 125 F.3d 420, 431 (7th Cir.1997). With these standards in mind, we examine each of the claims raised on appeal.

Unlawful Secondary Boycott

Section 303 of the LMRA provides a private cause of action for a party injured by union conduct defined as an unfair labor practice under Section 8 of the NLRA. 29 U.S.C. § 187. Section 8(b)(4), in turn, defines picketing as an unfair labor practice if "any object of that activity is to exert...

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