Healy v. Metro. Pier & Exposition Auth.

• Citation: 804 F.3d 836
• Decision Date: 23 October 2015
• Docket Number: No. 15–1241.,15–1241.
• Parties: Joseph HEALY, et al., Plaintiffs–Appellants, v. METROPOLITAN PIER and EXPOSITION AUTHORITY, Defendant–Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

804 F.3d 836

Joseph HEALY, et al., Plaintiffs–Appellants

v.METROPOLITAN PIER and EXPOSITION AUTHORITY, Defendant–Appellee.

No. 15–1241.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 18, 2015.

Decided Oct. 23, 2015.

Sean Morales–Doyle, Attorney, Despres, Schwartz & Geoghegan, Chicago, IL, for Plaintiffs–Appellants.

Michael A. Warner, Jr., Attorney, Franczek Radelet P.C., Chicago, IL, for Defendant–Appellee.

Before BAUER, KANNE, and ROVNER, Circuit Judges.

Opinion

BAUER, Circuit Judge.

Plaintiffs-appellants, Joseph Healy, Tom O'Driscoll, Alan Porter, James Howland, Karl Diede, Jim Timothy, and John Ryan (collectively “Plaintiffs”), are electrical workers. They claim that their respective employers, Freeman Electrical, Inc. (“Freeman”) and Global Experience Specialists, Inc. (“GES”) wrongfully terminated them, in violation of the relevant collective bargaining agreement (the “CBA”) and applicable federal labor law. Specifically, Plaintiffs claim that collusion between Freeman, GES, and defendant-appellee Metropolitan Pier and Exposition Authority (“MPEA”) spurred Plaintiffs' terminations. Plaintiffs also claim that their union, International Brotherhood of Electrical Workers, Local Union No. 134 (the “Union”), failed to adequately represent them in Plaintiffs' CBA-mandated grievance process. Plaintiffs, on behalf of themselves and a putative class of similarly-situated electrical workers, brought a six-count lawsuit against Free-man, GES, MPEA, and the Union (collectively “Defendants”), seeking damages and declaratory judgments.

All Defendants moved to dismiss the counts particular to them. The district court denied the motions to dismiss four of the counts, but dismissed a declaratory judgment motion against MPEA, Freeman, and GES, and the claim of state law tortious interference with contracts against MPEA. In granting MPEA's motion to dismiss the tortious interference claim, the district court held that Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185 (“ § 301”) preempts Plaintiffs' state law tort claim. Plaintiffs have appealed only the dismissal of the tortious interference claim against MPEA. For the reasons stated below, we affirm the district court's ruling.

I. BACKGROUND

Plaintiffs allege that defendants illegally circumvented the hiring process detailed in the CBA. At the motion to dismiss stage, we accept the allegations within Plaintiffs' complaint as true and draw all permissible inferences in Plaintiffs' favor. E.g., Fortres Grand Corp. v. Warner Bros. Entm't Inc., 763 F.3d 696, 700 (7th Cir.2014).

A. The CBA Referral Process

The Union has a longstanding CBA with the Electrical Contractors' Association of Chicago. Freeman and GES are members of the Electrical Contractors' Association of Chicago; MPEA is also a party to the CBA. Article IV of the CBA—entitled “Referral Procedure”—describes a regimented process for hiring Union electrical workers. Specifically, Article IV states that the Union “shall be the sole and exclusive source of referral of applicants for employment.” To do this, the Union maintains a “pool” of workers from which a given employer will be sent workers for a particular job. Within the overall pool, the Union stratifies workers into four priority groups based on their experience, certifications, and skills. The Union then selects workers within each priority group based on when the workers registered for employment. An employer may only deviate from this “pool hiring” process in two situations: to meet age quotas that the CBA mandates or when the employer “states bona fide requirements for special skills and abilities in his request for applicants.” If an employer lays off workers, it must do so in reverse order of that established by the priority group; that is, the employer must terminate workers who are lower on the priority list first.

B. The McCormick Place Call List

Normally, the Union uses two separate “call lists” for referring workers to potential employers, the “short call” and the “long call.” The short call is for jobs demanding less than ten days' labor, while the long call is for jobs requiring at least ten days' labor. However, in referring workers to the McCormick Place convention center, the Union uses a third call list—the “McCormick Call.” All workers sent to McCormick Place begin as short-term workers; that is, for less than ten days' work. MPEA, which operates McCormick Place, may later convert any selected workers from short-term to long-term work. MPEA has not defined the process for converting workers or established standards for how workers qualify for conversion. Instead, Plaintiffs claim that conversion occurs “informally and without transparency.”

C. The 2010 Amendment to the Metropolitan Pier and Exposition Authority Act

In 2009, McCormick Place began losing conventions and exhibitions to competitor convention centers. To help McCormick Place remain competitive, the Illinois legislature amended the Metropolitan Pier and Exposition Authority Act in 2010 (the “Amendment”). Central to the legislative action was the finding that, among other costs, the “mark-up” on union labor work had “substantially increased exhibitor and show organizer costs,” and had made McCormick Place a less attractive venue than other convention centers. 70 ILCS 210/5.4(a)(13). To address this problem, the Amendment forbade MPEA from serving “as the exclusive provider of electrical services,” and demanded that MPEA “make every effort to substantially reduce exhibitor's costs.” 70 ILCS 210/5.4(f). The Amendment allowed MPEA two choices: to retain an outside electrical contractor or offer its own electrical services at cost.

In 2011, to comport with the Amendment's demands, MPEA contracted with Freeman and GES to provide electrical services at McCormick Place. Freeman and GES then hired workers for McCormick Place electrical work from the Union's McCormick Call list, pursuant to the CBA. Plaintiffs were among those workers hired.

D. The Side Agreements and Termination of Plaintiffs

On June 29, 2011, the Union entered into “Interpretive Side Letter” agreements with Freeman and GES. These agreements—made without Plaintiffs' knowledge—allowed Freeman and GES to hire electrical workers outside of the established CBA referral process. To continue working at McCormick Place, Freeman and GES had to hire electrical labor provided by MPEA itself, instead of from the established McCormick Call list. After making the “Interpretive Side Letter” agreements with the Union, Freeman and GES entered into agreements with MPEA called the “McCormick Place Utility Services Agreements” (“MPUSAs”) on June 30, 2011. These MPUSAs established their own referral process, separate from the referral process detailed in the CBA.

On August 15, 2011, Freeman and GES terminated Plaintiffs and all other Union employees. Since that time, Freeman and GES have used only in-house McCormick Place electricians that MPEA provides for electrical work at the site. Plaintiffs claim that their termination and Freeman's and GES' respective use of in-house electricians contravenes both the CBA hiring process and the demands of the Amendment. Plaintiffs further claim to have “filed numerous grievances” with the Union against their respective employers, but such grievances were “to no avail.” Further, after filing their grievances, Plaintiffs received copies of the “Interpretive Side Letter” agreements on October 4, 2011. This was the first time that the Plaintiffs became aware of the side agreements between the Union, Freeman, and GES.

E. Procedural History

On November 30, 2011, Plaintiffs filed an internal charge against their local Union officers with the International Brotherhood of Electrical Workers' regional Vice President. Two weeks later, on December 14, 2011, Plaintiffs filed the present lawsuit. The first complaint alleged four counts against the Union, Freeman, and MPEA. Count I, against the Union, alleged breach of duty of fair representation implicit in the Labor–Management Relations Act (“LMRA”), 29 U.S.C. §§ 158(b) and 159(a). Count II, also against the Union, alleged breach of duty of fair representation implicit in § 301. Count III, against Freeman and MPEA, alleged violations of a collective bargaining agreement under § 301. Count IV, against the Union, alleged failure to permit inspection in violation of 29 U.S.C. §§ 414 and 431.

Plaintiffs later amended their complaint, adding GES as a defendant and adding two requests for declaratory judgment. Notably, Plaintiffs also converted their count against MPEA from a § 301 violation of the CBA to a state law tortious interference claim. The amended complaint alleges six causes of actions. Counts I and II, against the Union, still allege breach of duty of fair representation. Count III, against Freeman and GES, alleges violation of a collective bargaining agreement under § 301. Count IV, against MPEA, alleges a state common law claim for intentional interference with contracts. Count V is a request for declaratory judgment: that the district court declare the MPUSAs between MPEA, Freeman, and GES illegal and unenforceable. Count VI is also a request for declaratory judgment, specifically that the district court declare the “Interpretive Side Letter” agreements between the Union, Freeman, and GES illegal and unenforceable.

All Defendants moved to dismiss the respective counts against them. On April 14, 2015, the district court denied dismissal of Counts I, II, III, and VI. However, the district court dismissed Count V for lack of standing. It also dismissed Count IV, the state law tortious interference claim against MPEA, as preempted by § 301. It noted the long-standing precedent that § 301 preempts any state law claim whose resolution requires interpretation of the relevant collective bargaining agreement. E.g., Allis–Chalmers Corp. v. Lueck, 471 U.S. 202, 220, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985) ; Lingle v. Norge Div. of Magic Chef, Inc., 486...