DiPonio Const. Co., Inc. v. Int'l Union of Bricklayers and Allied Craftworkers, Local 9

Decision Date23 December 2010
Docket NumberCivil No. 10-10607
Citation739 F.Supp.2d 986
PartiesDiPONIO CONSTRUCTION CO., INC., Plaintiff, v. INTERNATIONAL UNION OF BRICKLAYERS AND ALLIED CRAFTWORKERS, LOCAL 9, Defendant, and National Labor Relations Board, Intervening Party.
CourtU.S. District Court — Eastern District of Michigan

Kelly M. Kammer, Steven A. Wright, Steven A. Wright, P.C., Shelby Township, MI, for Plaintiff.

John G. Adam, Martens, Ice, Royal Oak, MI, for Defendant.

Nancy E. Kessler Platt, National Labor Relations Board, Special Litigation Branch, Washington, DC, for Intervening Party.

OPINION AND ORDER ADOPTING MAGISTRATE JUDGE MAJZOUB'S REPORT AND RECOMMENDATION GRANTING DEFENDANT AND INTERVENOR'S MOTIONS TO DISMISS [31] AND REJECTING IN PART MAGISTRATE JUDGE'S ORDER DENYING DEFENDANT'S MOTION FOR SANCTIONS [32]

ARTHUR J. TARNOW, Senior District Judge.

The underlying dispute in this case is whether an employer has any obligations under the National Labor Relations Act ("NLRA") to bargain with a union for a new collective bargaining agreement ("CBA") following the termination of a prior CBA. Plaintiff DiPonio Construction Company, Inc. ("DiPonio") asserts that because the now-terminated CBA between itself and Defendant International Union of Bricklayers and Allied Craftworkers, Local 9 ("Union") was entered into pursuant to section 8(f) of the NLRA, 29 U.S.C. § 158(f), it had no obligation under the NLRA to bargain with the Union for a new CBA. The Union, on the other hand, contends that the CBA is instead governed by section 9(a) of the NLRA, 29 U.S.C. § 159(a), and DiPonio was thus required to bargain for a new CBA.

Although Plaintiff urges the Court to resolve this issue, as a threshold matter the Court must determine whether it hassubject matter jurisdiction to do so. Presently before the Court is Plaintiff's Objection (Dkt. 33) to Magistrate Judge Majzoub's Report and Recommendation ("Report") (Dkt. 31) in which she recommends GRANTING Defendant Union and Intervenor National Labor Relations Board's ("NLRB") Motions to Dismiss (Dkts. 6, 22) for lack of subject matter jurisdiction and DENYING Plaintiff's Motion for Summary Judgment (Dkt. 4) as MOOT. Also before the Court is Defendant Union's Appeal From the Magistrate Judge's Order Denying Defendant Union's Motion for Sanctions ("Sanctions Order"). (Dkt. 34.) The matter has been fully briefed and the Court concludes that a hearing on these pending motions is unnecessary. See E.D.Mich. LR 7.1(f)(2).

For the reasons set forth below, the Court ADOPTS the Magistrate Judge's Report as to there being no subject matter jurisdiction and REJECTS IN PART the Magistrate Judge's Sanctions Order.

I. BACKGROUND
A. Facts and Procedural History

On or about July 31, 2009, the CBA between Plaintiff and the Union was terminated.1 Plaintiff allegedly refused to bargain for a new CBA which prompted the Union to file an unfair labor practice ("ULP") Charge with the NLRB on July 31, 2009. (Dkt. 8 ¶ 11.) The Charge asserts that Plaintiff failed to bargain with the Union as required by sections 9(a) and 8(a)(5) of the NLRA. (Dkt. 33, Ex. 2.) After investigating the Union's Charge, the NLRB filed an ULP Complaint against Plaintiff on February 16, 2010. (Dkt. 6, Ex. 3.) The NLRB's Complaint avers that DiPonio "has been failing and refusing to bargain collectively and in good faith with [the Union] as the exclusive collective bargaining representative of [certain] employees of [DiPonio], in violation of Section 8(a)(1) and (5) of the [NLRA]." (Dkt. 33, Ex. 3 at 5.)

On February 11, 2010, DiPonio filed the instant action. The one-count Complaint sought a declaration that Plaintiff properly terminated the CBA between itself and the Union. Therefore, there was no existing CBA between the parties. (Dkt. 1.) Less than two weeks after the Complaint was filed, Plaintiff moved for summary judgment on its declaratory judgment claim. (Dkt. 4.) In response, Defendant Union filed a Motion to Dismiss asserting that this Court lacks subject matter jurisdiction over that claim. (Dkt. 6.) Only after the Union filed its motion, did Plaintiff amend its Complaint to include a second count: a breach of contract claim. ( See Dkt. 8.) The Amended Complaint asserts that this Court has subject matter jurisdiction over the breach of contract claim under section 301(a) of the Labor-Management Relations Act. ( Id. ¶ 4.)

On April 21, 2010, the NLRB filed a Motion to Intervene in the instant action "solely for the purpose of filing a motion to dismiss and apprising this Court of the significance of the Board's related proceedings." ( See Dkt. 23 at 5.) Contemporaneously, the NLRB filed a Motion to Dismiss asserting that this Court lacks subject matter jurisdiction because Plaintiff's claims are representational in nature and therefore are within either the exclusive or primary jurisdiction of the NLRB. ( See Dkt. 23 at 9-20.)

On April 23, 2010, Plaintiff asked the administrative law judge to stay the NLRB proceeding pending resolution of this suit. In that motion, Plaintiff argued, "If the NLRB proceedings are not stayed, it is possible that the District Court will reach one result and the NLRB will reach another. To avoid such inconsistent results, [the NLRB] proceeding should be stayed pending the decision of the District Court." (Dkt. 26, Ex. A.) The administrative law judge denied Plaintiff's motion to stay the NLRB proceeding on May 10, 2010, 2010 WL 2331043. (Dkt. 26, Ex. C.)

On June 10, 2010, the Magistrate Judge issued an Order Granting NLRB's Motion to Intervene, and noted that the "issues in this action overlap with and may conflict with the issues raised in the NLRB Complaint." (Dkt. 30 at 3.) No objections to that Order were filed.

On June 23, 2010, 2010 WL 2553773, the Magistrate Judge issued her Report regarding the pending Motions to Dismiss and for Summary Judgment. (Dkt. 31.) Plaintiff has filed its Objections to the Magistrate Judge's Report (Dkt. 33), Defendant Union and Intervenor NLRB have responded (Dkts. 36, 37), and Plaintiff has replied to those responses (Dkts. 38, 39).

Additionally, on March 29, 2010, Defendant Union filed a Motion for Sanctions asserting that "by any objective measurement [Plaintiff's] pleadings are frivolous." (Dkt. 14 at 1.) Plaintiff responded (Dkt. 20), and, on June 23, 2010, the Magistrate Judge issued an order denying the motion, (Dkt. 32). On July 7, 2010, Defendant appealed that order (Dkt. 34), and Plaintiff has filed a timely response (Dkt. 35).

B. The Underlying Representational Dispute

Under section 9(a) of the NLRA, employers are required to bargain with a union that has been "designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes." 29 U.S.C. § 159(a). The NLRA, however, creates an exception for construction industry employers. Specifically, section 8(f) of the NLRA allows an employer in the construction industry to enter into a CBA with less than a majority of employees authorizing the union's representation. Strand Theatre of Shreveport Corp. v. NLRB, 493 F.3d 515, 518 (5th Cir.2007) (citing 29 U.S.C. § 158(f); Nova Plumbing, Inc. v. NLRB, 330 F.3d 531, 534 (D.C.Cir.2003)). Further, and most relevant to the instant case, if the employer enters into a section 8(f) CBA, once the agreement expires, the parties have no duty to bargain with one another. Id. (citing Nova, 330 F.3d at 534). In contrast, under a section 9(a) CBA, "the employer must continue bargaining with a union ... because the union is entitled to a continuing presumption of majority status." Id. (citing Nova, 330 F.3d at 534). In fact, section 8(a)(5) of the NLRA makes it an ULP for an employer to refuse to bargain with a section 9(a) employer. 29 U.S.C. § 158(a)(5); see also Nova, 330 F.3d at 533-34. The parties disagree as to whether the now-terminated CBA between DiPonio and the Union was a section 8(f) or 9(a) agreement, and thus, they dispute whether DiPonio has committed an ULP under section 8(a)(5) by refusingto bargain for a new contract after the termination of the previous CBA.

C. The Present Jurisdictional Dispute

The threshold issue before the Court is whether the NLRB has exclusive, or at least primary, jurisdiction to decide if DiPonio has a duty to bargain under section 8(a)(5) of the NLRA. In San Diego Building Trades Council v. Garmon, 359 U.S. 236, 245, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), the Supreme Court explained that where the conduct alleged is even "arguably" subject to section 7 or 8 of the NLRA, "the States as well as the federal courts must defer to the exclusive competence of the National Labor Relations Board' and deem the claim preempted." See also id. at 244-45, 79 S.Ct. 773 (holding that "courts are not primary tribunals to adjudicate [representational] issues. It is essential to the administration of the [NLRA] that these determinations be left in the first instance to the [NLRB]").

Section 301(a) of the Labor-Management Relations Act ("LMRA") carves out an exception to the Garmon preemption doctrine. It provides that the federal district courts have jurisdiction, without regard to citizenship or amount in controversy, over "[s]uits for violation of contracts between an employer and a labor organization representing employees." 29 U.S.C. § 185(a).

Plaintiff's Amended Complaint includes two Counts. Count I is framed as a declaratory action wherein Plaintiff asks this Court to declare that it properly terminated the CBA between it and Defendant, and that no CBA between the parties now exists. (Dkt. 8 ¶¶ 7-15.) Count II is couched as a breach of contract claim wherein Plaintiff asserts that Defendant breached the CBA by "fail[ing] to honor DiPonio's termination of the CBA, and instead attempted to force DiPonio to bargain for a new contract and to provide information." ( Id. ¶¶ 19-20.)

The Union and NLRB argue that this Court lacks subject matter jurisdiction...

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