Camping Const. Co. v. District Council of Iron Workers

Decision Date02 October 1990
Docket NumberNos. 87-2767,88-15169,No. 378,378,s. 87-2767
Citation915 F.2d 1333
Parties135 L.R.R.M. (BNA) 2645, 116 Lab.Cas. P 10,344 CAMPING CONSTRUCTION COMPANY, Plaintiff-Appellee, v. DISTRICT COUNCIL OF IRON WORKERS; Iron Workers Local Union 378, Defendants-Appellants. CAMPING CONSTRUCTION COMPANY, Plaintiff-Appellee- Cross-Appellant, v. DISTRICT COUNCIL OF IRON WORKERS OF the STATE OF CALIFORNIA AND VICINITY, an unincorporated association, and Iron Workers Local Union, an unincorporated association, Defendants-Appellants-Cross-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Mark R. Thierman and Robert Fried, Thierman, Cook, Brown & Prager, San Francisco, Cal., for plaintiff-appellee-cross-appellant.

Victor J. Van Bourg and Sandra Rae Benson, Van Bourg, Weinberg, Roger & Rosenfeld, San Francisco, Cal., for defendants-appellants-cross-appellees.

Appeal from the United States District Court for the Northern District of California.

Before GOODWIN, Chief Judge, and PREGERSON and REINHARDT, Circuit Judges.

REINHARDT, Circuit Judge:

These consolidated appeals require us to address once again--for the last time, in all likelihood--the arbitrability of a labor dispute under a "prehire" collective-bargaining agreement when one of the parties claims to have repudiated that agreement. We must also decide the extent to which the Norris-LaGuardia Act, 47 Stat. 70, 29 U.S.C. Secs. 101-115, constrains a district court's power to stay a labor arbitration while the issue of arbitrability is properly before that court. The court below granted the employer's request for a preliminary injunction staying the arbitration sought by the unions, in spite of the unions' claim that such an injunction was prohibited by the Norris-LaGuardia Act. However, the court later granted summary judgment for the unions on the ground that, under the broad arbitration clause at issue, questions relating to termination and repudiation of the agreement were to be decided by an arbitrator rather than the court; it then stayed the arbitration pending our decision. We conclude that the district court's order granting the preliminary injunction was in error, and that the order granting summary judgment for the unions was only partially correct. We therefore affirm in part, reverse in part, and remand for further proceedings.

I STATEMENT OF THE CASE

Camping Construction Company ("Camping") is a California corporation engaged in the business of constructing mini-storage facilities. The District Council of Iron Workers of the State of California and Vicinity (the "District Council") is a voluntary, unincorporated association comprising affiliated local labor unions, including Iron Workers Local Union 378 ("Local 378"). Both the District Council and Local 378 are "labor organization[s]" as that term is defined by the Labor Management Relations Act, 29 U.S.C. Sec. 152(5).

On October 1, 1978, Camping and the District Council entered into a "prehire" collective-bargaining agreement 1 known as the Iron Workers Independent Agreement. In signing this agreement, Camping agreed to abide by the terms and conditions of employment set forth in the District Council's 1977-1980 Master Agreement, and "to comply with ... any amendments, modifications, changes, extensions or renewals of or to said Master Agreement which may be negotiated by the parties thereto." Camping employed union laborers in compliance with the agreements for a short time; however, this practice ceased sometime in 1979, and on February 1, 1980, the administrator of the California Field Iron Workers Trust Funds notified Camping that it was being placed on the "inactive list" because it had not reported the employment of any Iron Workers for the preceding six months.

On February 21, 1980, the District Council informed Camping by mail of its "desire to open the collective bargaining agreement of July 1, 1980 to negotiate changes, modifications, extensions and renewals." The contractor did not respond to the District Council's notice, and it is undisputed that after receiving this notice Camping never engaged in any collective bargaining or executed any further agreements. However, neither did Camping take any formal action to repudiate the agreement or to prevent its automatic renewal.

Since at least June 30, 1980, Camping has subcontracted out all iron workers' work to nonunion companies at various projects throughout northern California. The contractor contends without dispute that since that time it has not used the union hiring hall, submitted fringe benefit contributions, or in any fashion operated under the terms of the agreements. Camping further asserts that its noncompliance with the agreements was well known in the industry, and that several unions (we are not told whether they included the defendants) regarded Camping as a nonunion contractor and picketed some of its projects on that basis. The unions assert, however, that the District Council, through the administrator of the California Field Iron Workers Administrative Trust (the "Administrator"), sent Camping no fewer than eleven notices of changes, amendments, and modifications between July 23, 1980, and June 5, 1987, all of which strongly suggest that the unions involved in this litigation believed Camping was still bound by the Master Agreement.

On February 27, 1987, Local 378 filed a grievance against Camping according to the grievance procedures set forth in the 1986-1989 Master Agreement, which the unions characterize as "an amendment, modification, change and renewal of the previous Master Agreements negotiated between the District Council of Iron Workers and the Employers Association." Section 28 of that agreement provides for the settlement of all grievances, other than jurisdictional disputes, by Boards of Adjustment which "shall have the power to adjust any differences that may arise regarding the meaning and enforcement of this Agreement." Local 378 claimed that Camping, by performing one of its jobs with nonunion labor, was violating two sections of the Master Agreement: section 20-B (governing the hiring of subcontractors) and section 5 (governing the use of the union hiring hall). The Administrator sent a copy of the grievance to Camping on March 9, along with a letter asking Camping to contact the administrator's office to schedule a meeting at which the grievance might be heard. Camping made no immediate response to this letter. On May 13, Camping received notice that a Board of Adjustment would be appointed to hear the grievance June 4. On May 26, Camping responded by requesting a postponement, and the Board notified Camping on June 2 that this request would be considered at the June 4 hearing.

Camping's counsel made a "special appearance" on June 4 in order to argue to the Board of Adjustment that it lacked jurisdiction over Camping because Camping was no longer bound to comply with the Master Agreement. In a letter of the same date, Camping's counsel explained to the Administrator that Camping regarded the District Council's letter of February 21, 1980, as a notice of termination pursuant to section 34 of the Agreement. The Board granted Camping's request for a postponement of the hearing.

On June 18, Local 378 filed another grievance against Camping, this time alleging hiring hall violations with respect to a different construction site. Notice of this second grievance was sent to Camping on June 23, again with a request that Camping contact the Administrator to schedule a grievance proceeding. Camping then filed with the district court a complaint for an injunction staying arbitration and for a declaration that Camping was no longer obligated to comply with the Master Agreement because (a) the District Council's letter of February 21, 1980, constituted a termination notice; and (b) Camping's subsequent conduct had served to repudiate the earlier agreement.

Two months later, Camping's motion for a preliminary injunction staying the arbitration came on before the Hon. Charles A. Legge, sitting in the absence of the Hon. Samuel Conti. Judge Legge noted that where the existence of an agreement to arbitrate is in dispute, that question is properly decided by a court prior to arbitration. He then concluded that Camping had shown a sufficient probability that it would succeed in showing that no such agreement existed. He further concluded that Camping might suffer irreparable harm if the arbitration went forward, for which it might lack an adequate remedy at law; and that the balance of hardships favored the granting of the requested relief. Accordingly, the court granted the preliminary injunction. The union appealed pursuant to 28 U.S.C. Sec. 1292(a)(1).

The parties then filed cross-motions for summary judgment. Camping contended that the agreement had either been terminated by the District Council or repudiated by Camping's conduct; the unions argued that the questions of termination or repudiation, as well as the underlying disputes, were for the arbitration Board rather than the court to decide. On April 22, 1988, Judge Conti granted summary judgment for the unions, holding that both termination under the agreement and repudiation by conduct were arbitrable issues which the court could review only upon a motion to confirm or vacate the arbitration award. Camping's motion for reconsideration was denied on July 18, almost exactly one year after it filed its complaint. However, Judge Conti granted Camping's motion for a stay of its order pending appeal. Noting that the preliminary injunction was on appeal to this court, Judge Conti stated that he would "follow Judge Legge's determination and stay arbitration in this matter pending appeal." Camping timely filed its notice of appeal.

II TERMINATION AND REPUDIATION

The Supreme Court recently reaffirmed as a "first principle" of federal labor law over the last thirty years the rule that " 'arbitration is a matter...

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