Intern. Broth. v. Hope Elec. Corp.

Decision Date26 August 2004
Docket NumberNo. 01-3984.,01-3984.
Citation380 F.3d 1084
CourtU.S. Court of Appeals — Eighth Circuit
PartiesINTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION NO. 545, Plaintiff — Appellee, v. HOPE ELECTRICAL CORPORATION, Defendant — Appellant. International Brotherhood of Electrical Workers, Local Union No. 545, Plaintiff — Appellee, v. Lloyd W. Hope; Hope Electrical Corporation; Hope-Giefer Corporation; Hope Leasing, Inc.; L.W.H. Consulting, Inc., Defendants — Appellants.

Appeal from the United States District Court for the Western District of Missouri, Scott O. Wright, J.

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Martin M. Bauman, argued, St. Joseph, Missouri (Randall A. Bauman, St. Joseph, Missouri, on the brief), for appellants.

Charles R. Schwartz, argued, Kansas City, Kansas, for appellee.

Before RILEY, BOWMAN, and MELLOY, Circuit Judges.

MELLOY, Circuit Judge.

In Case No. 01-3984, Defendant-Appellant Hope Electrical Corporation ("Hope Electrical") appeals the district court's1 enforcement of a February 2001 arbitration award. In Case No. 02-3635, an action to hold Hope Electrical, Lloyd W. Hope, and several related corporations jointly and severally liable for the February 2001 arbitration award, Hope Electrical, Lloyd W. Hope, and three related companies appeal from the district court's entry of default judgment as a sanction for their failure to comply with a discovery order. We affirm.

I. Background-Early History and Prior Appeal2

In 1996, Plaintiff-Appellee the International Brotherhood of Electrical Workers, Local Union No. 545 ("Local 545"), targeted Hope Electrical with an organizational campaign. After members of Local 545 applied for, and failed to secure, employment with Hope Electrical, Local 545 filed an unfair labor practices claim before the National Labor Relations Board (the "Board"). To settle this claim, Hope Electrical agreed to recognize Local 545 as its employees' representative and a regional electrical contractors' association as its own representative. Ultimately, Hope Electrical became a party to a collective bargaining agreement, the First Inside Agreement, that the contractors' association negotiated with Local 545. The term of the First Inside Agreement extended through May 1999.

Hope Electrical became bound under the First Inside Agreement without its workers first having had an opportunity to elect or reject Local 545 as their bargaining unit representative. As such, the First Inside Agreement was a "pre-hire, construction industry agreement" sanctioned by section 8(f) of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 158(f). Section 8(f) agreements and the interest arbitration clauses contained therein generally are enforceable against employers notwithstanding the failure of the signatory union to obtain majority approval among eligible workers. Local Union 257, Int'l Bhd. of Elec. Workers v. Sebastian Elec., 121 F.3d 1180, 1185 (8th Cir.1997).

The First Inside Agreement required Hope Electrical to pay wages according to a defined scale, hire new workers exclusively through Local 545's hiring hall, and categorize workers and their respective duties according to an apprenticeship and work distribution regime. The First Inside Agreement contained an interest arbitration clause. "An interest arbitration clause is one in which the parties agree to arbitrate disputes over the terms of a new collective bargaining agreement in the event of a deadlock." Sheet Metal Workers' Int'l Ass'n, Local 14 v. Aldrich Air Conditioning, Inc., 717 F.2d 456, 456 (8th Cir.1983).3

Soon after Hope Electrical entered the First Inside Agreement, its workers sought a Board-monitored election regarding Local 545 representation, purportedly to decertify Local 545. Because Hope Electrical failed to pay its workers union wages in accordance with the First Inside Agreement and failed to hire exclusively through Local 545's hiring hall, Local 545 instituted an unfair labor practices charge against Hope Electrical before the Board. Under the Board's blocking charge policy, the Board suspended Board-monitored elections pending resolution of the outstanding unfair labor claims. See, e.g., Briggs Plumbingware, Inc. v. NLRB, 877 F.2d 1282, 1289-90 (6th Cir.1989); Bishop v. NLRB, 502 F.2d 1024, 1029 (5th Cir.1974).

Hope Electrical now argues that Local 545 abused the blocking charge policy as a "union tactic" to delay a Board-monitored decertification vote. Local 545 argues that the blocking charge policy worked as intended to prevent a decertification vote from occurring at a time when Hope Electrical had "stacked the deck" against a successful union vote through its refusal to hire exclusively from Local 545.4 Although Hope Electrical, like Local 545, raised other unfair labor charges before the Board, it is undisputed that Local 545's original unfair labor charge alone was sufficient to invoke the blocking charge policy and prevent Hope Electrical's workers from obtaining a Board-monitored vote at all times relevant to these cases. It appears undisputed that the workers actually employed by Hope Electrical did not desire representation by Local 545. The workers were not hired from the Local 545 hiring hall.

On February 11, 1999, Hope Electrical provided Local 545 with timely notice of an intent not to enter a successor collective bargaining agreement upon termination of the First Inside Agreement. Hope Electrical also provided notice of its withdrawal from representation by the regional electrical contractors' association.5 Local 545 subsequently and unilaterally instituted interest arbitration, first before a Joint Labor Management Committee and later before the Council on Industrial Relations (the "CIR"), as authorized by the First Inside Agreement. Hope Electrical refused to participate in either arbitration proceeding. On May 18, 1999, while the First Inside Agreement was still in effect, the CIR issued a ruling and directed Local 545 and Hope Electrical to sign and implement a successor agreement, the Second Inside Agreement. A copy of the Second Inside Agreement, imposed upon Hope Electrical by the CIR at Local 545's request, was attached to the CIR's arbitration ruling. The CIR's order specifically stated, "The parties are directed to sign and implement immediately the [Second] Inside Agreement which is attached hereto and hereby made a part of this decision. Sufficient copies of this agreement are to be promptly submitted for approval in accordance with the usual procedure."

Hope Electrical subsequently refused to sign or abide by the terms of the Second Inside Agreement. Eventually, Local 545 brought an action in the district court under section 301 of the LMRA, 29 U.S.C. § 185, to enforce the arbitration award. On May 30, 2000, the district court entered an order to enforce the arbitration award. In its order, the district court specifically stated:

that the May 18, 1999 CIR award is confirmed and that defendant is to comply with said award in all respects. It is further [o]rdered that defendant submit to an audit of its business records for the purpose of ascertaining defendant's liability arising from defendant's non-compliance with the [Second] Inside Agreement that defendant was ordered to implement in the CIR award.

In accordance with our prior decision in Aldrich Air Conditioning, 717 F.2d at 458-59, the Second Inside Agreement did not include a unilateral interest arbitration provision. Rather, regarding issues of contract termination or modification, Article I, Section 2(e) of the Second Inside Agreement provided, "By mutual agreement only" the parties "may jointly" submit conflicts for arbitration before the CIR. As such, under the Second Inside Agreement, Local 545 could not force Hope Electrical to enter a third generation inside agreement through unilateral arbitration. Accordingly, the current dispute involves only the First and Second Inside Agreements. The Second Inside Agreement expired on May 31, 2002.

Regarding the arbitration of issues other than contract termination or modification, however, Article I, Section 8 of the Second Inside Agreement provided for the unilateral submission of grievances. Article 1, Section 8 specifically provided, "Should the Labor-Management Committee fail to agree or to adjust any matter, such shall then be referred to the Council on Industrial Relations for the Electrical Contracting Industry for adjudication. The Council's decisions shall be final and binding."

Hope Electrical failed to appeal, or comply with, the district court's May 30, 2000 order that imposed the Second Inside Agreement. Local 545 sought and obtained enforcement orders from the district court on July 7 and 14, 2000, to force Hope Electrical to comply with the May 30, 2000 order. Finally, on August 29, 2000, under threat of contempt sanctions, Hope Electrical signed the Second Inside Agreement and consented to an audit. Hope Electrical subsequently failed to comply in all respects with the Second Inside Agreement or with the May 30, 2000 order. According to Local 545, Hope Electrical continued to hire non-union workers and failed to pay wages as required by the Second Inside Agreement.

Due to Hope Electrical's continued non-compliance, Local 545 filed a series of motions to hold Hope Electrical in contempt. In the third such motion, Local 545 attached a copy of November 14, 2000 charges that Hope Electrical filed with the Board. In these November 14, 2000 charges — filed nearly six months after entry of the May 30, 2000 order (from which Hope Electrical never appealed) and nearly eighteen months after the spring 1999 arbitration rulings — Hope Electrical refuted the validity of the arbitrators' and district court's actions.6 On November 22, 2000, in response to Local 545's third request to hold Hope Electrical in...

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