EASTERN DIST. COUNCIL, ETC. v. BLAKE CONST. CO.

• Decision Date: 21 September 1978
• Docket Number: Civ. No. 77-291-N,77-534-N.
• Citation: 457 F. Supp. 825
• Parties: EASTERN DISTRICT COUNCIL OF the UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA and Guy Anderson, et al., Plaintiffs, v. BLAKE CONSTRUCTION CO., INC., Defendant. James C. HOVIS et al., Trustees of the Eastern District Council of Carpenters Pension Fund and Health and Welfare Funds, Plaintiffs, v. BLAKE CONSTRUCTION CO., INC., Defendant.
• Court: U.S. District Court — Eastern District of Virginia

457 F. Supp. 825

EASTERN DISTRICT COUNCIL OF the UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA and Guy Anderson, et al., Plaintiffs, v. BLAKE CONSTRUCTION CO., INC., Defendant.

James C. HOVIS et al., Trustees of the Eastern District Council of Carpenters Pension Fund and Health and Welfare Funds, Plaintiffs, v. BLAKE CONSTRUCTION CO., INC., Defendant.

Civ. Nos. 77-291-N, 77-534-N.

United States District Court, E. D. Virginia, Norfolk Division.

September 21, 1978.

Louis B. Fine and Howard James Marx, Norfolk, Va. (Fine, Fine, Legum & Fine, Norfolk, Va., on briefs), for plaintiffs in Civ. No. 77-291-N.

Collister Johnson, Jr., Washington, D. C. (Peabody, Rivlin, Lambert & Meyers, Washington, D. C., on briefs), for defendant in both cases.

Monroe Kelly, III, Norfolk, Va. (Wolcott, Spencer & Rivers, Norfolk, Va., on briefs), for plaintiffs in Civ. No. 77-534-N.

OPINION

WALTER E. HOFFMAN, District Judge.

These are consolidated actions filed by the Eastern District Council of the United Brotherhood of Carpenters and Joiners of America on behalf of its members and representatives, and Hovis, et al, Trustees of the Eastern District Council of Carpenters Pension and Health and Welfare Funds, against the Blake Construction Company for damages resulting from the breach of an international agreement, sometimes referred to as a national agreement. Civil Action No. 77-291-N was filed in this court by plaintiff labor union on the basis of diversity jurisdiction. Civil Action No. 77-534-N is before the court on removal from the Circuit Court of the City of Norfolk, pursuant to Title 28, U.S.C. § 1441. Additional grounds for jurisdiction are authorized by 29 U.S.C. § 185, as this suit involves a contract between an employer and a labor organization.¹ The actions were consolidated by order of this court.

On November 29, 1968, Morton Bender, President of Blake Construction Company, signed a contract which is commonly known in the construction industry as an international agreement. Such an agreement is for the benefit of construction companies who do work outside of the geographic location in which they are located and in which they may have collective bargaining agreements covering wages, fringe benefits and working conditions. By signing an international agreement with the United Brotherhood of Carpenters and Joiners, a contractor obtains the benefits of local agreements negotiated between contractors' associations and district councils. In this particular agreement Blake agreed to recognize the jurisdictional claims of the United Brotherhood, and

To work the hours, pay the wages and fringe benefits and observe the lawful working conditions . . . established or agreed upon by the United Brotherhood of Carpenters and Joiners of America and the recognized agency of the locality in which any work of the Company is being done, with respect to journeymen carpenters employed by the Company. . . . No change is to be made in the hours, wages and other conditions established or agreed upon in any locality.

In return the United Brotherhood agreed to furnish competent journeymen for reference to jobs upon a non-discriminatory basis by means of district council or local union hiring halls. The United Brotherhood also agreed that there would be no strike pending any dispute being investigated. The agreement contained no provision as to duration or termination of the contract and it clearly appears that it was a contract terminable at will.

Previously, in 1957 and 1958, Blake had executed similar agreements with the United Brotherhood, and had completed at least two construction projects in Norfolk in the early 1960's, presumably operating under the 1958 agreement. In 1968 two signed copies of the new agreement were sent to Blake, informing the company that the 1958 agreement was being terminated and that, if it wished, it could sign the new agreement. Differences between the two documents were slight. Bender executed the new agreement and returned it to national headquarters, but had apparently forgotten the 1968 agreement by the time of the events referred to herein.

Blake was the successful bidder on the Leigh Memorial Hospital and Eastern Virginia Medical Building projects which were begun in Norfolk during 1975. Early that year (in April) a Blake representative visited Local No. 331 of the United Brotherhood and requested that Edwin Gentry, the union business representative, send two carpenters to the site of the Leigh Memorial Project.² Gentry testified that the Blake person said Blake had an international agreement. He checked his files and verified that Blake was listed as a signator to the international agreement. The carpenters reported to the jobsite and helped construct the necessary temporary office and sheds for a job of that nature.

Sometime in May the two carpenters were laid off temporarily because of lack of materials. Later in May, Gentry visited the jobsite and discovered that work had resumed, but was informed that the job would be worked "open shop." Gentry reported his findings to James C. Hovis, financial secretary of Local No. 331 and secretary-treasurer of the Eastern District Council, a plaintiff in this action, who then reported the situation to officials of the United Brotherhood at its headquarters in Washington. Following further investigation Patrick J. Campbell, second general vice president of the United Brotherhood, met with Bender in July. Bender stated that he did not remember having an international agreement and that he had bid the two projects "open shop" and did not intend to pay union scale. Campbell mailed to Bender a copy of the agreement with his signature on it and arranged for a second meeting in August. At that meeting Bender positively again stated that he was not going to pay union scale and that the job was going to be worked "open shop." Apparently the meeting adjourned with the two men agreeing that they had a problem and that they would try to work something out.

A third and final meeting occurred in November, 1975. William Sidell, general president of the United Brotherhood, and Leo Nazdin, an official of the International Laborer's Union, were present in addition to Bender and Campbell. Bender again stated that he could not pay union scale on the jobs. He did make several offers, including an offer to work one job open shop and the other job union,³ or to negotiate a rate for both jobs but below union scale. Bender stated in a pretrial deposition that at that time he did not know whether his company and the union had a valid agreement, but that he was willing to compromise in order to work out a solution. There were no further negotiations between the parties.

There is in evidence a letter purportedly sent by Bender to Campbell, dated December 15, 1975, whereby Bender stated that he had found it necessary to void the international agreement. Campbell and Sidell deny ever having received such a letter. The letter was not discovered until after responsive pleadings and answers to interrogatories had been filed. There are many differences in the style of the letter as compared to other letters typed by Bender's secretary at that time, whose initials appear on the copy. Despite this fact, no attempt was made to produce this secretary at trial.⁴ This Court has serious doubts that this letter was ever mailed; however, the determination reached in this case renders moot any effect the letter might have had on the outcome.

Civil Action No. 77-534-N is an action brought by the Trustees of the Eastern District Council of Carpenters Pension Fund and Health and Welfare Funds for certain fringe benefits which accrued after 1968 but prior to the legal termination of the 1968 agreement. To the extent ascertained by this opinion, the Court is of the opinion that the defendant is liable to the plaintiffs under a third-party beneficiary theory.

I

Plaintiffs allege that the 1968 international agreement obligates the defendant to pay the wage scale and abide by the terms negotiated between the Virginia Association of Contractors and the Eastern District Council of Carpenters. These terms are contained in a 1972 trust agreement and a 1974 memorandum of understanding. It is argued that they are incorporated by reference into the international agreement. Blake was not a signator to the Eastern District Council agreements, nor is the company a member of the Virginia Association of Carpenters. Defendant argues that these agreements were not in existence in 1968, and therefore could not be incorporated by reference into an earlier agreement. Defendant further argues that the 1968 agreement purportedly binds Blake to conditions established or agreed upon by the United Brotherhood of Carpenters and Joiners, and does not obligate Blake to observe those negotiated by local or regional unions affiliated with the International. The International did not participate in or ratify the local agreements. Finally, defendant contends that any ambiguity in the 1968 agreement must be construed against the plaintiffs, as their national union drafted the agreement.

A discussion of the nature and purpose of the international agreement may be helpful. As noted above, the purpose of such an agreement is to make it unnecessary for a contractor who works on an international, national or regional level to negotiate with the local union or district council of the United Brotherhood each time that a contractor enters a geographical area in which he is not a party to the local collective bargaining agreements. The agreement is in the nature of a prehire agreement, a special kind of labor contract peculiar to the construction industry, in that it would represent an unfair labor practice in other industries. Congress specifically recognized the need for such agreements by enacting § 8(f) of the National Labor Relations Act, the purpose of which was discussed thoroughly in N. L. R. B. v. Irvin, 475 F.2d...