International Broth. of Elec. Workers, Local Union Nos. 12, 111, 113, 969 v. Professional Hole Drilling, Inc.

• Decision Date: 25 May 1978
• Docket Number: No. 76-1594,76-1594
• Parties: 98 L.R.R.M. (BNA) 2407, 83 Lab.Cas. P 10,529 INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION NOS. 12, 111, 113, 969, Unincorporated Associations, Plaintiffs-Appellees, v. PROFESSIONAL HOLE DRILLING, INC., a Colorado Corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 497

574 F.2d 497

98 L.R.R.M. (BNA) 2407, 83 Lab.Cas. P 10,529

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION NOS. 12, 111, 113, 969, Unincorporated Associations, Plaintiffs-Appellees, v. PROFESSIONAL HOLE DRILLING, INC., a Colorado Corporation Defendant-Appellant.

No. 76-1594.

United States Court of Appeals Tenth Circuit.

Argued Sept. 30, 1977.

Decided April 14, 1978.

Rehearing Denied May 25, 1978.

Milnor H. Senior of Milnor H. Senior, P. C., Denver, Colo., for plaintiffs-appellees.

Martin D. Buckley of Hornbein, MacDonald & Fattor, Denver, Colo., for defendant-appellant.

Before LEWIS, Chief Judge, SETH, Circuit Judge, and BRIMMER, Chief Judge. ^*

BRIMMER, District Judge.

Appellant-Defendant, Professional Hole Drilling, Inc. (PHD), seeks review of an adverse judgment in a dispute with the Appellee-Plaintiff, International Brotherhood of Electrical Workers (Union) over the meaning and effect of a collective bargaining agreement.

In March of 1974 PHD became a signatory to a collective bargaining agreement by executing a Letter of Assent thereto. The agreement was initially entered into by the Union and the Western Line Contractors of the National Electrical Contractors Association (N.E.C.A.). Subsequent to signing the Letter of Assent, PHD began work in the construction of a project in the Colorado Springs, Colorado area and PHD complied with the collective bargaining agreement on that project.

On February 9, 1976, PHD obtained a sub-contract from Erickson Air Crane Co. regarding construction work for the Bureau of Reclamation. Because of apparent problems with the bonding of the job, PHD was unable to fulfill the contract. Shortly before the cancellation of that contract, PHD entered into a joint-venture agreement with Caissons, Inc. During early March of 1976 the joint venture was able to obtain the same sub-contract from Erickson that had been initially awarded to PHD. This sub-contract also had an effective date of February 9, 1976.

From October of 1975 through March of 1976 PHD and the Union carried on discussions concerning the application of the collective bargaining agreement to the Erickson project. Specifically, PHD wanted the Union to agree to a lower hourly wage as well as waive the travel pay requirements. The parties were unable to agree as to the issues and the Union, pursuant to the contract, submitted the matter to the Joint Conference Committee for arbitration.

At the arbitration hearing, PHD asserted that for the purposes of the Erickson project it was part of a joint venture which was not a signatory to the contract, and that therefore the committee was without jurisdiction. The arbitration committee concluded, that it did have jurisdiction, that the agreement was fully applicable to their project, that PHD was in violation of the agreement, and ordered PHD to fully comply with the contract. When PHD did not comply with the committee's order, the Union commenced this action under Section 301(a) of the Labor Management Relations Act, 29 U.S.C. Section 185(a) (1947), and Section 9 of the United States Arbitration Act, 9 U.S.C. Section 9.

The District Court at trial without a jury upheld the arbitration order, finding that PHD was a party to the line agreement made by the Union and N.E.C.A., found that the dispute was arbitrable and that the committee had jurisdiction over the matter. The Court entered its order requiring specific performance of the arbitration award. On appeal PHD contends that (1) it is not now a signatory to the line agreement; (2) PHD was not obligated to arbitrate this dispute; and (3) the arbitration award is not enforceable.

I.

PHD asserts that its Letter of Assent to the collective bargaining agreement was executed for only one project and that therefore PHD was not a signatory to the agreement for the purposes of any work other than the initial Colorado Springs project. This assertion was supported by the testimony of Marvin Krumholt, the President of PHD, who testified that the Letter of Assent was to be effective for "one job, one job only." His testimony was contradicted, however, by that of George Waterhouse, a Union official, who stated that at no time did the PHD president request a fixed duration Letter of Assent. The Letter of Assent itself provided that it would remain in effect until terminated by PHD, and Krumholt testified that it had never been terminated.

When a case is tried without a jury this Court will not set aside the findings of a trial court unless the finding is clearly erroneous, even though there may be a conflict of evidence. Morris v. Uhl & Lopez Engineers, Inc., 468 F.2d 58 (10th Cir. 1972). Additionally, where the terms of a contract are unambiguous the parties will be bound by that instrument. Local 9, International Union of Operating Engineers AFL-CIO v. Siegrist Construction Company, 458 F.2d 1313 (10th Cir. 1972); Kohler, Stover & Ivey v. City of Tulsa, 214 F.2d 946 (10th Cir. 1954). We therefore conclude, since the trial court's finding is not clearly erroneous, that the trial court did not err in finding that PHD was a signatory to the agreement at the time of the dispute in question.

PHD alternatively suggests that the agreement contained an illegally discriminatory job referral system, relying on the recent case of Local Union No. 68, International Brotherhood of Electrical Workers and Billie N. Burt, Jr., an Individual, and Rocky Mountain Chapter, National Electrical Contractors Association, NLRB No. 27-CB-926. The agreement before us expressly provides that applicants for employment shall be selected and referred "without discrimination against such applicant by reason of membership or nonmembership in the Union and such selection or referral shall not be affected in any way by rules, regulations, bylaws, constitutional provisions or any other obligation of Union membership, policies or requirements." (R., Vol. 3, 64)

Discrimination cannot be inferred from the face of an instrument when that instrument specifically provides there will be no discrimination against applicants. There is no evidence in the record before us which establishes any discrimination on the part of the Union. Absent such a showing of discrimination, we cannot find that the agreement was illegal. Local 357, International Brotherhood of Teamsters v. NLRB, 365 U.S. 667, 81 S.Ct. 835, 6 L.Ed.2d 11 (1961).

In addition, the affirmative defense of illegality is waived if not pleaded. Moreover, it cannot thereafter be raised for the first time on appeal. Radio Corporation of America v. Radio Station KYFM, 424 F.2d 14 (10th Cir. 1970). PHD failed to raise the issue of illegality as required by Rule 8, Federal Rules of Civil Procedure, and therefore that defense is not now properly before us. Finally, allegations of illegality which are raised under Section 8 of the Labor Management Relations Act must be initially adjudicated before the National Labor Relations Board. Oil, Chemical & Atomic Workers International Union v. Arkansas Louisiana Gas Co., 332 F.2d 64 (10th Cir. 1964).

For the foregoing reasons we are of the opinion that PHD's assertion of the defense of illegality is without merit.

II.

PHD next contends that it was not obligated to arbitrate disputes arising over the Erickson project sub-contract, because it was part of a joint venture which was not a signatory to the collective bargaining agreement. The joint conference committee and the court below were, however, of the opinion that PHD was under a duty to arbitrate. We agree.

The district court relied in reaching its decision on the case of John Wiley & Sons v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964) where an employer had "disappeared" by means of a merger and the Supreme Court, nevertheless, required the new entity to go to arbitration because of the substantial identity between the old company and the merged business. The Wiley decision has indeed been limited by a series of successor-employee cases, the most notable of which are NLRB v. Burns Security Services, 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972), and the more recent decision in Howard Johnson Company v. Detroit Local Joint Executive Board, 417 U.S. 249, 94 S.Ct. 2236, 41 L.Ed.2d 46 (1974).

In Howard Johnson, Grissom Corporation sold in part and leased in part its motor lodge and restaurant to Howard Johnson Company. At the time of the sale Grissom was a signatory to a collective bargaining agreement with the Hotel Employees Union. When Howard Johnson began hiring new employees for the lodge and restaurant, the Union filed an action alleging a lockout and requesting an order compelling arbitration. The Supreme Court refused to compel arbitration and in so doing distinguished the Wiley case. The Court enumerated several points of differentiation, the most significant being the continuity of work force before and after the change of business identity. Where the employees were virtually identical after the merger in Wiley, there was no such identity in Howard Johnson.

While the reasoning in Wiley is highly persuasive relative to this case, there does not seem to be the identity of work force which is required in Howard Johnson to make Wiley the sole controlling authority in the case at bar. Nevertheless, this Court will not reverse the decision of a lower court where there are proper grounds to affirm. Pound v. Insurance Company of North America, 439 F.2d 1059 (10th Cir. 1971).

The Court, in Howard Johnson, stressed that the facts of each case were to be given substantial weight in a court's decision . . . The Court in Burns recognized that, its decision 'turned to a great extent on the precise facts involved here.' The same observation could have been made in Wiley, as indeed it could be made in this case. In our development of the Federal common law under Section 301 we must necessarily proceed cautiously, in the traditional case by case approach of the common law. ...