949 F.2d 1241 (3rd Cir. 1991), 90-3606, Limbach Co. v. Sheet Metal Workers Intern. Ass'n, AFL-CIO

Docket Nº:90-3606.
Citation:949 F.2d 1241
Party Name:LIMBACH COMPANY, v. SHEET METAL WORKERS INTERNATIONAL ASSOCIATION, AFL-CIO and Sheet Metal Workers International Association, Local Union No. 108, Appellants.
Case Date:December 06, 1991
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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949 F.2d 1241 (3rd Cir. 1991)

LIMBACH COMPANY,

v.

SHEET METAL WORKERS INTERNATIONAL ASSOCIATION, AFL-CIO and

Sheet Metal Workers International Association,

Local Union No. 108, Appellants.

No. 90-3606.

United States Court of Appeals, Third Circuit

December 6, 1991

Argued April 9, 1991.

Reargued Oct. 9, 1991.

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Robert A. King (argued), P. Jerome Richey, Buchanan Ingersoll, Professional Corp., Pittsburgh, Pa., for Limbach Co.

Donald W. Fisher, Toledo, Ohio, Judith Rivlin, Washington, D.C., for Sheet Metal Workers Intern. Ass'n, AFL-CIO.

Michael Shelley, Wohlner, Kaplan, Phillips, Vogel, Shelley & Young, Encino, Cal., for Sheet Metal Workers Intern. Ass'n, Local Union No. 108.

Marsha S. Berzon, Laurence Gold (argued), Washington, D.C., of counsel with Sheet Metal Workers Intern. Ass'n and Local Union No. 108.

Argued April 9, 1991.

Before SLOVITER, Chief Judge, and GREENBERG and WISDOM, [*] Circuit Judges.

Reargued October 9, 1991

Before SLOVITER, Chief Judge, and BECKER, STAPLETON, GREENBERG, HUTCHINSON, SCIRICA, COWEN, NYGAARD, ALITO, and ROTH, Circuit Judges.

OPINION

GREENBERG, Circuit Judge.

I.

BACKGROUND

This matter is before the court in banc pursuant to our order of August 21, 1991, granting partial rehearing to Sheet Metal Workers International Association, AFL-CIO and Sheet Workers International Association Local Union No. 108 in No. 90-3606. By our opinion of July 9, 1991, a panel of this court disposed of the appeals of these two labor organizations as well as the appeal of Limbach Company (Limbach) in No. 90-3639, 949 F.2d 1211 (3rd Cir.1991). While our prior opinion was partially in favor of these two labor organizations and was wholly in favor of three other local unions and thus to that extent was against Limbach, it has not cross-petitioned for rehearing. Thus, we are concerned only with the issues raised in the petition filed by the International and Local 108 which we will hereafter in certain contexts sometimes refer to as the unions to the exclusion of the other locals.

While the background on the case is set forth in the panel's opinion, for purposes of completeness we will repeat it. Limbach is a mechanical contracting company with offices in Pittsburgh, Pennsylvania, Woburn, Massachusetts (Boston), Compton, California (Los Angeles), Pontiac, Michigan (Detroit), and Columbus, Ohio. Prior to the events underlying this case, Limbach was a union contractor and was a member of multi-employer bargaining associations in the metropolitan areas where it operated. Through its membership in these bargaining organizations, Limbach had collective bargaining relationships with the sheet metal workers' union--Local No. 12 in Pittsburgh, Local No. 17 in Boston, Local No. 80 in Detroit, Local No. 98 in Columbus, and Local No. 108 in Los Angeles.

In 1982-83, Limbach was reorganized and became a wholly-owned subsidiary of Limbach Constructors, Inc. and, as part of this reorganization, Jovis Constructors, Inc. was formed as a sister-company to Limbach. A purpose of the reorganization and the formation of Jovis was so that the Limbach organization could acquire nonunion operations in new geographic areas. Thus, in July 1983, Jovis purchased Harper Plumbing & Heating Company, Inc. in Florida. Harper had been a nonunion contractor for 30 years and, following its acquisition by Jovis, continued to be nonunion.

When Edward Carlough, the General President of the International Union, learned of this acquisition, he wrote a letter dated August 10, 1983, to Walter Limbach, the president of Limbach until 1983, and the president of Limbach Constructors, Inc. from 1983 to 1988, stating:

I want to congratulate you on your company's takeover of Harper Plumbing and Heating in Orlando, Florida. We have been attempting to organize this contractor for a good number of years, and it was very thoughtful of you to have us

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organize this firm through your purchase of it.

App. at 2737.

The letter suggested a meeting between Lonnie Bassett, the International's Director of Organization, or Larry Cassidy, Carlough's assistant, to "consummate a labor agreement with your new shop." Walter Limbach gave this letter to Charles Prey, his successor as President of Limbach, who wrote to Carlough informing him that Limbach had not acquired Harper.

In October 1983, Cassidy and Walter Limbach met at Limbach's Pittsburgh office. Cassidy told Walter Limbach that Carlough expected Limbach to have Harper sign a collective bargaining agreement with a union affiliate and stated that the Harper nonunion operation violated existing collective bargaining agreements between Limbach and Locals 12, 17, 80, 98 and 108.

Walter Limbach disagreed with Cassidy, maintaining that Jovis, not Limbach, had acquired Harper, that Harper was a separate employer from Limbach and that Limbach had no authority over Harper's labor relations matters. Cassidy told Walter Limbach that if Harper did not sign a labor agreement, contract violation grievances would be filed and if they did not result in Harper's unionizing, Limbach would face serious labor problems.

Carlough, Cassidy and Walter Limbach met on November 23, 1983, to discuss the Harper situation. Carlough asserted that Limbach was in violation of its local collective bargaining agreements by virtue of the Harper operation and he told Walter Limbach that the Union would file grievances alleging these violations. Walter Limbach maintained his position that Limbach and Harper were separate and that Limbach had no authority to sign a collective bargaining agreement on behalf of Harper. Carlough told Walter Limbach that if the situation were not resolved, the locals would disclaim interest in representing Limbach employees upon the expiration of their existing collective bargaining agreements.

The local unions filed grievances in the summer of 1984, alleging that Limbach was in violation of its collective bargaining agreements with them by virtue of its sister-relationship with Harper. The grievances of Locals 12, 17 and 108 ultimately came before the National Joint Adjustment Board for the Sheet Metal Industry, the final decision maker under the collective bargaining agreements. This board was composed of an equal number of union and employer representatives.

The unions' grievances alleged that the operation of Harper on a nonunion basis was a breach of the Standard Form of Union Agreement, negotiated by the International Union and the Sheet Metal and Air Conditioning Contractors National Association which represented Limbach. The agreement serves as a model for local collective bargaining agreements. It was the unions' belief that the Standard Form of Union Agreement prohibited "double-breasting," meaning that a company owns both union and nonunion shops. Carlough believed he could force Harper to recognize the union through the grievance process by claiming that Limbach was in violation of its agreements through its affiliation with Harper. On February 8, 1985, the National Joint Adjustment Board issued its decision on the grievances but was deadlocked on whether Limbach had violated any of the provisions of its bargaining agreements. It did, however, find that the agreement between Limbach and Local 17 was not valid and binding and was of no force or effect.

Faced with the failure of the grievances against Limbach, Carlough met with the International Union's General Executive Council to develop an alternate method to combat double-breasting and this led to the development of the so-called "Integrity Clause." 1 The Integrity Clause obligated an employer to notify the union if it became affiliated through common ownership with a nonunion shop and gave local unions the power to rescind their labor agreements

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upon an employer's becoming so affiliated. In a letter dated March 22, 1985, Carlough instructed the local unions to have the Integrity Clause negotiated into their local agreements as soon as possible. Furthermore Carlough met on April 15, 1985, with the Executive Committee of the Sheet Metal and Air Conditioning Contractors National Association in Washington to discuss the Integrity Clause. At the same time, the International attempted to dissuade union members from working for double-breasting contractors, including Limbach, doing this with written appeals promoting union loyalty and changes in withdrawal card rights and pension benefits for members who continued working for companies affiliated with nonunion operations.

In the spring and summer of 1986, Locals 12, 17 and 108 did not renew the collective bargaining agreements as they expired and the locals issued disclaimers terminating their representation of Limbach employees. 2 Local 98 disclaimed the following year when its agreement expired. By June 1988, Limbach's operations were 100% nonunion.

In the summer of 1986, Carlough spoke at the convention of Sheet Metal Workers International Association. He said, in part:

... Take this message back to Limbach. We are not in the business of getting rid of union contractors. We are in the business of organizing contractors.

* * * * * *

Limbach used to be with [the Sheet Metal and Air Conditioning Contractors National Association] years ago. You ought to understand the union thinking in the union man's mind. To me it's never too late. The door in this union is open.

If the man wants to come back and operate the right way I know both our people, both in Los Angeles and in Pittsburgh, and Walsh and the gang in Boston, if the man wants to straighten out the situation, who knows. He is a very smart fellow.

He wants to...

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