Christian Labor Ass'n v. City of Duluth
| Docket Number | CIVIL 21-227 (DWF/LIB) |
| Decision Date | 14 June 2023 |
| Parties | Christian Labor Association, Kaski, Inc., Nordic Group Inc., Roen Salvage Co., Luke Krhin, and Dylan Smith, Plaintiffs, v. City of Duluth, City of Cloquet, City of Two Harbors, Western Lake Superior Sanitary District, and Duluth Building and Construction Trades Council, Defendants. |
| Court | U.S. District Court — District of Minnesota |
This matter is before the Court on cross-motions for summary judgment brought by Plaintiffs Christian Labor Association Kaski, Inc., Nordic Group Inc., Roen Salvage Co., and Luke Krhin (Doc. No. 118) and by Defendants City of Duluth, City of Cloquet, City of Two Harbors, Western Lake Superior Sanitary District, and Duluth Building and Construction Trades Council (Doc. No. 98). For the reasons set forth below, the Court denies Plaintiffs' motion and grants Defendants' motion.
This action involves a challenge to the Project Labor Agreements (“PLAs”)[1] of four public entities: the cities of Duluth, Cloquet, and Two Harbors, and the Western Lake Superior Sanitary District (the “Sanitary District”) (collectively, the “Public Entities”). Plaintiffs are Christian Labor Association (“CLA”), Kaski, Inc., Nordic Group Inc., Roen Salvage Co., and Luke Krhin (collectively “Plaintiffs”). The one remaining claim is a constitutional claim, in which Plaintiffs assert that the PLAs violate the First and Fourteenth Amendments of the United States Constitution.
The PLAs at issue were entered into by the Public Entities and the Duluth Building and Construction Trades Council (the “Building Trades”). (See Doc. No. 121 Exs. 1-4 () & Exs. 5-8 (amended PLAs)).[2] The Building Trades is an unincorporated labor organization that advocates on behalf of seventeen affiliated craft unions in Duluth, Minnesota and surrounding areas. (Doc. No. 105 (“Campeau Decl.”) ¶ 2.) The Building Trades enters into PLAs on its own behalf and, additionally, as the representative of its affiliates. (Id.) Only contractors and subcontractors who agree to the terms of the PLAs are eligible to work on certain public-works projects governed by the PLAs.[3] At the time the lawsuit was filed, each PLA required contractors and subcontractors to: (1) recognize a union that belongs to the Building Trades as the sole and exclusive bargaining representative of their employees working on PLA projects; and (2) hire their employees through the unions' job referral systems (“hiring halls”). Some of the PLAs contained a “union security clause” that required employees hired to work on PLA projects to “become” and “remain members” of a Building Trades affiliated union while working on the PLA project. (See generally PLAs, Art. III.) In addition, the PLAs required contractors and subcontractors to abide by the wage rates, rules of employment, and fringe benefit contributions negotiated by a council-affiliated union. (See PLAs, Art. II, § 9.)
In March 2021, the cities of Duluth, Cloquet, and Two Harbors amended their PLAs to remove the union security clause.[4] (Campeau Decl. ¶ 14.) Each PLA now affirmatively states that no employee may be required to join or pay a union as a condition of working on a covered project. (Id.) The amended PLAs continue to require contractors and subcontractors to recognize a council-affiliated union as the “sole and exclusive bargaining representatives of all craft employees within their respective jurisdictions working on the Project” (Amended PLAs, Art. III, § 1), to hire employees through the council-affiliated unions' job-referral system (id., Art. IV), and to abide by the wage and contract rates, rules of employment, and fringe benefit contributions as set forth in the applicable Local Area Agreement (id., Art. II, § 9).
CLA is an independent labor union representing workers throughout the United States. (Doc. No. 121-9 (“Tulenchik Decl.”) ¶ 4; Doc. No. 117 (“Aubrey Decl.”) ¶ 7, Ex. 5 (“Tulenchik Dep.”) at 10-11.) CLA's local union affiliates operate independently from the national CLA, and the national CLA has no members. (Tulenchik Dep. at 14-23, 75-76.) No member of a CLA-affiliated local union has worked or sought to work on a project covered by the Public Entities' PLAs. (Id. at 36-38.) No member of a CLA-affiliated local union has been required to pay dues to any union other than the CLA to work on a construction project. (Id. at 39.)
Nordic Group is a general contractor engaged in marine, civil, and building construction in Minnesota and Wisconsin. (Aubrey Decl. ¶ 4, Ex. 2 (“Jouppi Dep.”) at 11-12, 14, 16, 25.) Nordic Group has performed some work for Duluth, but it has not worked under the Duluth PLA. (Id. at 48-51.) Nordic Group has not done work for Cloquet, Two Harbors, or the Sanitary District. (Id. at 51.) When asked why Nordic Group chose not to bid on work covered by PLAs, it explained that it believed that the PLA required that labor performed on the project be performed by people affiliated with the unions. (Id. at 55.)
Kaski, Inc. is a Duluth-based general contractor. (Aubrey Decl. ¶ 3, Ex. 1 (“Kaski Dep.”) at 15-16.) Kaski, Inc. has not bid on a construction project covered by a PLA for any of the city Defendants. (Kaski Dep. at 76-79.) In or around 2018, Kaski, Inc. bid on and was awarded a job on a Cloquet Pump Station project for the Sanitary District that was covered by a PLA; however, Kaski, Inc. subcontracted the performance of specific work to subcontractors such that none of Kaski, Inc.'s employees worked on the project. (Id. at 89.) Kaski, Inc. asserts that it has not bid on additional PLA-covered projects, explaining that it already pays into a fringe benefit fund for its employees and that it believes that if its employees worked under a PLA, they would be required to pay into a union's fringe benefit funds also. (Id. at 85.)
Plaintiff Krhin is the only remaining employee-plaintiff. (Doc. Nos. 19 & 76.) He is a member of the CLA and has been employed by Nordic Group since 2015. (Aubrey Decl. ¶ 5, Ex. 3 (“Krhin Dep.”) at 8, 15; Doc. No. 121-13 (“Krhin Decl.”) ¶ 3.) Krhin worked as an equipment operator, cement mason, general laborer, and carpenter. (Krhin Dep. at 9, 17-19.) Krhin has never worked under one of the Public Entities' PLAs and has never been required to use a union referral system. (Id. at 32-33.) There is no evidence that Krhin paid any dues or fees to a union pursuant to any of the relevant PLAs.
Discovery has revealed that in or around 2018, Krhin was promoted to site superintendent. (Id. at 21-22.) In that position, Krhin testified that he manages crews, on-site production and building, and the other trades and subcontractors on site. (Id.) Krhin also testified that he contributes to the preparation of bids for projects (the labor portion), orders materials, and is authorized to purchase materials without additional approval. (Id. at 23-24.) With respect to his supervision of Nordic Group employees, Krhin testified that he assigns work based on experience and that he disciplines and sometimes terminates employees. (Id. at 27-29.) With respect to hiring, Krhin testified that he interviews applicants on his own or with a Nordic Group owner and that he discusses and makes hiring recommendations to Nordic Group's owners. (Id. at 24-31.) Krhin further testified that the Nordic Group owners rely on his judgment when they make final hiring decisions and that they typically accept his hiring recommendations. (Id. at 31.) Krhin stated: “I'm in charge of hiring and the process of who we have working for us.” (Id. at 24.) In his role as “site superintendent,” Krhin spends 60% of his time as superintendent and 40% “with tools on.” (Id. at 22.) Krhin explained that when he is working “with tools on,” he operates more as a “foreman.” (Id.)[5]
Plaintiffs dispute that Krhin has the authority to hire, assign, fire, or discipline employees, or to effectively recommend any such actions. Instead, Plaintiffs argue that Krhin occasionally participates in interviews and recommends personnel actions, but that the action must be approved or independently investigated by his superiors. [6] Plaintiffs also submit that Krhin is listed as a “senior carpenter” in the payroll system, is paid hourly, and is in the same bargaining unit as other “rank-and-file” laborers. (Second Jouppi Decl. ¶¶ 5-6.)
Plaintiffs filed this action on January 28, 2021, asserting a constitutional claim (that the PLA-imposed conditions violated their First and Fourteenth Amendment rights) and an antitrust claim (that the PLAs restrain competition in violation of the Sherman Act). (Doc. No. 1 ¶¶ 37-50.) Defendants moved to dismiss under Rule 12(b)(6) arguing that Plaintiffs lack standing and that their claims were moot, and alternatively that their claims failed to state a claim. The Court found the following: Plaintiffs plausibly alleged particular, concrete harm to both the employee-plaintiffs' and employer-plaintiffs' legally protected interests caused by Defendants' continued use of PLAs, that the prerequisites to associational standing were present, and that the CLA, therefore, has standing to sue. (Doc. No. 44 at 15-17.) In addition, the Court found that Plaintiffs' claims were not moot. Finally, the Court found that Plaintiffs had sufficiently pled their constitutional claim, but that the antitrust claim failed to state a claim and was properly dismissed.
In that Order, the Court's rulings were made in the context of a motion to dismiss (taking the allegations as true) and the Court noted that discovery could change those...
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