International Union of Operating Engineers, Local 103 v. Indiana Const. Corp.

Citation910 F.2d 450
Decision Date17 September 1990
Docket NumberNo. 89-1634,89-1634
Parties135 L.R.R.M. (BNA) 2281, 116 Lab.Cas. P 10,256 INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 103, Plaintiff-Appellant, v. INDIANA CONSTRUCTION CORPORATION, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

William R. Groth, Fillenwarth, Dennerline, Groth & Baird, Indianapolis, Ind., Stephen J. Lerch, Levine & Lerch, Fort Wayne, Ind., for plaintiff-appellant.

M. Scott Hall, William T. Hopkins, Gallucci, Hopkins & Theisen, Fort Wayne, Ind., for defendant-appellee.

Before RIPPLE and MANION, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.

RIPPLE, Circuit Judge.

On June 21, 1988, the International Union of Operating Engineers filed a complaint under 29 U.S.C. Sec. 185 requesting the district court to compel arbitration of its dispute with Indiana Construction Corporation. On February 14, 1989, the district court granted Indiana Construction's motion for summary judgment. We now reverse and remand for further proceedings.

I BACKGROUND
A. Facts

Indiana Construction (IC) was the general contractor on a building project in Fort Wayne, Indiana. During the relevant time period, IC was a party to a collective bargaining agreement (also referred to as the Building Construction Agreement) with the International Union of Operating Engineers (Operating Engineers). The agreement contains a prohibition against subcontracting that reads as follows:

The Employer agrees not to sub-contract or sublet any on-site work covered by this Agreement to any person, firm or corporation which does not pay at least the minimum rates of pay and abides by all apprenticeship standards as set forth in this Agreement together with fringes established herein.

R.2 Ex.A at 11 (Article 15). The agreement also provides for arbitration of disputes involving the agreement, with an exception for disputes involving territorial or craft jurisdiction:

Should any dispute arise between the Union, or any employee covered by this Agreement, and the Employer concerning the interpretation or application of the terms of this contract the same shall be submitted to a joint arbitration board.... Provided, however, that the arbitration provisions of this contract shall not apply in any way to any dispute arising between the Union, or Unions, involving territorial or craft jurisdiction.

Id. at 4-5 (Article 6).

In April 1988, IC subcontracted certain masonry work on the Fort Wayne project to L. Byerly Masonry. Byerly had a collective bargaining agreement with the Laborers Union, but no agreement with the Operating Engineers. Thus, the individual hired by Byerly to run a forklift on the job site as part of the subcontract was a member of the Laborers Union.

Operating Engineer's Business Manager, Dan Smart, sent IC a letter in May 1988, asserting that the forklift operator was paid less than the amount paid to Operating Engineers' workers. Accordingly, Mr. Smart demanded arbitration of the alleged violation of the subcontracting provision of the collective bargaining agreement. In this same letter, Mr. Smart also made the following demand:

Local Union No. 103 believes Indiana Construction Corp. is responsible for the payments to Local Union No. 103 Fringe Benefit Funds for all hours worked or paid for, the hours the fork lift has been or will be operated in the future, and the difference in the pay rate in accordance with [the agreement].

Id. Ex.B. IC refused arbitration, claiming in a letter to Mr. Smart that the dispute was jurisdictional and therefore not subject to arbitration. Operating Engineers then brought this suit to compel arbitration.

B. District Court Opinion

The district court focused on whether the dispute was jurisdictional. If it was, then the claim for arbitration must fail because the arbitration clause exempted disputes involving territorial or craft jurisdiction. The court concluded that, because the Operators Engineers requested payment into its fringe benefit fund, it was claiming the job for its own (i.e. that the dispute was jurisdictional):

Although there is a factual dispute as to whether the Operators Union claimed the forklift work for its members, there is no dispute about the fact that the union is claiming financial compensation for the International Union of Operating Eng'rs, Local 103 v. Indiana Constr. Corp., 706 F.Supp. 667, 673 (N.D.Ind.1989). Accordingly, the district court granted IC's motion for summary judgment.

forklift work assigned to the Laborers Union members.... [B]y seeking financial compensation based on work performed by the Laborers Union, the Operators Union is claiming that same work as its own, thus creating a jurisdictional dispute.

II DISCUSSION
A. Procedural Posture

This case comes to us on appeal from the grant of summary judgment. We review the grant of summary judgment de novo; the moving party (here IC) will prevail only if there is no genuine issue of triable fact and it is entitled to judgment as a matter of law. PPG Indus., Inc. v. Russell, 887 F.2d 820, 823 (7th Cir.1989); Oil, Chemical and Atomic Workers Int'l Union v. Amoco Oil Co., 883 F.2d 581, 583-84 (7th Cir.1989); Fed.R.Civ.P. 56(c). Any doubt regarding the existence of a genuine issue for trial is resolved against the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986) ("The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor."); United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962) (per curiam); Amoco Oil Co., 883 F.2d at 584; International Union of Operating Eng'rs v. Associated Gen. Contractors, 845 F.2d 704, 705 (7th Cir.1988).

B. Governing Principles

It is for the court to determine whether a dispute is subject to arbitration. AT & T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 649, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986); Hutter Constr. Co. v. International Union of Operating Eng'rs, Local 139, 862 F.2d 641, 644 (7th Cir.1988). 1 An order to arbitrate a grievance ought not be denied " 'unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.' " AT & T, 475 U.S. at 650, 106 S.Ct. at 1419 (quoting Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1980)); see also Oil, Chemical and Atomic Workers Int'l Union v. Amoco Oil Co., 883 F.2d 581, 584-85 (7th Cir.1989); Associated Gen. Contractors, 845 F.2d at 706; E.M. Diagnostic Sys., Inc. v. Local 169, Int'l Bhd. of Teamsters, 812 F.2d 91, 95 (3d Cir.1987). In making the determination whether a particular suit is subject to arbitration, the district court must focus on the collective bargaining agreement in question and must examine all relevant evidence. AT & T, 475 U.S. at 651-52, 106 S.Ct. at 1419-20; see also Amoco, 883 F.2d at 586-87. As this court determined in a similar summary judgment context, when a collective bargaining agreement contains an arbitration clause, "there is a presumption of arbitrability that may only be overcome by 'forceful evidence' of an intent to exclude the claim." Amoco Oil, 883 F.2d at 587 (quoting Warrior & Gulf, 363 U.S. at 585, 80 S.Ct. at 1354); see also Local 232, Allied Indus. Workers v. Briggs & Stratton Corp., 837 F.2d 782, 784-86 (7th Cir.1988); cf. AT&T, 475 U.S. at 650, 106 S.Ct. at 1419 (discussing presumption of arbitrability); Butchers, Food Handlers and Allied Workers Union v. Hebrew Nat'l Kosher Foods, Inc., 818 F.2d 283, 286 (2d Cir.1987) (if the contract contains an arbitration clause, "the court should resolve any doubt as to whether a particular dispute falls under that clause in favor of ordering arbitration."). 2 Despite this presumption in favor of arbitration, a court can compel arbitration only in accordance with the parties' contract (generally a collective bargaining agreement). Gateway Coal Co. v. United Mine Workers, 414 U.S. 368, 374, 94 S.Ct. 629, 635, 38 L.Ed.2d 583 (1974); Warrior & Gulf, 363 U.S. at 582, 80 S.Ct. at 1352.

C. The Contract in this Case

In the collective bargaining agreement between IC and the Operating Engineers, a dispute regarding subcontracting would be arbitrable, but a dispute about jurisdiction would not.

The classical jurisdictional dispute is "a dispute between two or more groups of employees over which is entitled to do certain work for an employer." NLRB v. Radio and Television Broadcast Eng'rs Union, Local 1212, 364 U.S. 573, 579, 81 S.Ct. 330, 334, 5 L.Ed.2d 302 (1961). One employer has agreements with two or more unions or locals; the employer assigns a particular piece of work to one union or local, and another union or local threatens action unless the employer changes the work assignment. See, e.g. Georgia-Pacific Corp. v. NLRB, 892 F.2d 130, 131-32 (D.C.Cir.1989); J.F. White Contracting Co. v. Local 103 Int'l Bhd. of Elec. Workers, 890 F.2d 528, 528-29 (1st Cir.1989); Hutter Constr. Co. v. International Union of Operating Eng'rs, Local 139, 862 F.2d 641, 644 (7th Cir.1988); C.J. Morris, The Developing Labor Law 1249 (2d ed. 1983). A jurisdictional dispute generally places the employer " 'in a cross-fire between two unions.' " Laborers' Int'l Union v. W.W. Bennett Constr. Co., 686 F.2d 1267, 1272 (7th Cir.1982) (quoting Carey v. Westinghouse Elec. Corp., 375 U.S. 261, 275, 84 S.Ct. 401, 410, 11 L.Ed.2d 320 (1964) (Black, J., dissenting)). In a typical subcontracting dispute, an employer subcontracts a part of the union's work to another employer that does not hire that union's employees. Many subcontracting cases involve a collective bargaining agreement provision that requires the employer to subcontract only to firms that have signed an agreement with the...

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