International Broth. of Elec. Workers, Local 613 v. Fowler Industries, Inc., 88-8644

• Decision Date: 25 September 1989
• Docket Number: No. 88-8644,88-8644
• Citation: 884 F.2d 551
• Parties: 132 L.R.R.M. (BNA) 2529, 58 USLW 2259, 113 Lab.Cas. P 11,523 INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 613, Plaintiff-Appellant, v. FOWLER INDUSTRIES, INC., Fowler Electric Co., Inc., Steve Fowler Electrical Contractors, Inc., Clark Electrical Contractors, Inc., Samuel Lewis Fowler, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 551

884 F.2d 551

132 L.R.R.M. (BNA) 2529, 58 USLW 2259,

113 Lab.Cas. P 11,523

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 613 Plaintiff-Appellant, v. FOWLER INDUSTRIES, INC., Fowler Electric Co., Inc., Steve Fowler Electrical Contractors, Inc., Clark Electrical Contractors, Inc., Samuel Lewis Fowler, Defendants-Appellees.

No. 88-8644.

United States Court of Appeals Eleventh Circuit.

Sept. 25, 1989.

Rehearing and Rehearing In Banc Denied Nov. 14, 1989.

Frank B. Shuster, Blackburn, Shuster, King and King, Atlanta, Ga., for plaintiff-appellant.

Ira J. Smotherman, Jr., Stokes, Shapiro, Fussell & Wedge, Atlanta, Ga., for defendants-appellees.

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

Before KRAVITCH and CLARK, Circuit Judges, and HENDERSON, Senior Circuit Judge.

KRAVITCH, Circuit Judge:

Plaintiff-Appellant International Brotherhood of Electrical Workers, Local Union 613 (the Union) brought this action against Samuel Lewis Fowler (Fowler), Fowler Industries, Inc. (FI), Fowler Electric Co., Inc. (FEC), Steve Fowler Electrical Contractors, Inc. (SFEC), and Clark Electrical Contractors, Inc. (CEC) under Section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. Sec. 185(a) (1982), alleging that defendants had breached a prehire agreement executed in 1962 between the Union and FEC and that Fowler, FI, SFEC, and CEC had tortiously interfered with the contract and with the Union's business. The district court granted defendants' motion to dismiss the action for lack of subject matter jurisdiction. We reverse.

I. BACKGROUND

For many years, Fowler owned and operated FEC as a union shop performing electrical subcontracting services in the Atlanta area. ¹ In April of 1983, Fowler created two new corporations, FI and SFE. Like FEC, SFE is an electrical subcontracting company. FI, a holding company to which FEC transferred all its tools and equipment, now owns 100% of the stock of both FEC and SFE as well as 49% of the stock of CEC, another electrical subcontracting business. ²

Of the three subcontracting firms, only FEC operates as a union shop. The Union's complaint alleges that the failure of SFE and CEC to pay union scale and to provide other benefits prescribed by the prehire agreement constitutes a breach of that agreement, because SFE and CEC, although not signatories to the agreement, are bound to its terms as subentities of a "single employer" or as "alter egos" of FEC. ³ In support of its claim for breach of the agreement, the Union alleges that twenty-three former employees of FEC were transferred to FI or SFE, that at least some of FEC's customers have become customers of SFE, that all appellees occupy building space FEC occupied alone prior to April of 1983, that FI now rents to both the union (FEC) and non-union (SFE & CEC) shops the tools and equipment formerly owned by FEC, that FI provides FEC, SFE and CEC with identical bookkeeping, accounting, data processing, payroll, and billing services as well as insurance advice, that FEC, SFE and FI file consolidated tax returns, that money is advanced between the corporations on an as-needed basis, that loans among the companies are not memorialized by formal agreements, that Fowler, as the lone stockholder of FI, is solely responsible for naming the boards of directors of FI, FEC and SFE, and that Fowler effectively controls CEC, as its majority shareholder, Leonard Clark, can neither issue checks on the CEC account without the countersignature of a Fowler family member nor bid on projects in excess of $25,000.00 without Fowler's approval. The Union also complains that Fowler, FI, SFE and CEC have tortiously interfered with its business and with its contract with FEC.

Appellees moved to dismiss the complaint or, alternatively, for summary judgment, asserting that, even if the Union's "single employer" and "alter ego" claims are meritorious, enforcement of the prehire agreement against SFE and CEC is proper only after a determination by the NLRB that the combined work forces of FEC, SFE and CEC constitute the appropriate unit for collective bargaining under the LMRA. Appellees also argued that the state law, tortious-interference claims were preempted by section 301 and, alternatively, that, as pendent state-law claims, they should be dismissed along with the federal-question "single employer" and "alter ego" claims. The district court granted the motion to dismiss, concluding that the determination of the appropriate bargaining unit under the LMRA was an essential element of the Union's "single employer" and "alter ego" claims, that such a determination was within the exclusive jurisdiction of the NLRB, and that the court would have subject matter jurisdiction of the Union's claims only after a determination of the appropriate bargaining unit by the NLRB.

II. DISCUSSION

Section 8(f) of the NLRA, 29 U.S.C. Sec. 158(f) (1982), "allows construction industry employers and unions to enter into agreements setting the terms and conditions of employment for the workers hired by the signatory employer without the union's majority status first having been established" under section 9 of the NLRA. Jim McNeff, Inc. v. Todd, 461 U.S. 260, 266, 103 S.Ct. 1753, 1756, 75 L.Ed.2d 830 (1983); see also Plumbers and Pipefitters Local Union 72 v. John Payne Co., 850 F.2d 1535, 1539 (11th Cir.1988). Although execution of a section 8(f) prehire agreement gives a union signatory neither the right to picket in order to compel a construction industry employer to negotiate, NLRB v. Local Union No. 103, Int'l Ass'n of Bridge, Structural and Ornamental Iron Workers, 434 U.S. 335, 98 S.Ct. 651, 54 L.Ed.2d 586 (1978), nor the right to maintain an action for recognition as the exclusive bargaining representative for a group of employees, Local No. 3-193, Int'l Woodworkers of America v. Ketchikan Pulp Co., 611 F.2d 1295 (9th Cir.1980); NLRB v. Don Burgess Const. Corp., 596 F.2d 378 (9th Cir.), cert. denied, 444 U.S. 940, 100 S.Ct. 293, 62 L.Ed.2d 306 (1979); Local 627, Int'l Union of Operating Engineers v. NLRB, 518 F.2d 1040 (D.C.Cir.1975) rev'd on other grounds sub nom., South Prairie Const. Co. v. Local 627, Int'l Union of Operating Engineers, 425 U.S. 800, 96 S.Ct. 1842, 48 L.Ed.2d 382 (1976), until the union achieves majority status in an appropriate collective-bargaining unit, a union signatory may enforce the economic terms of a voluntarily executed prehire agreement in an action under section 301(a), regardless of the union's majority status. Jim McNeff, 461 U.S. at 269, 103 S.Ct. at 1758. Accordingly, we have held that an NLRB determination of the appropriate collective-bargaining unit is not a prerequisite to a signatory union's section 301 action to enforce the economic terms of a prehire agreement. John Payne, 850 F.2d at 1537 (disposition of union's suit to enforce monetary obligations incurred by construction industry employer under prehire agreement "would not require the district court to decide any representational issues, or other LMRA questions, that fall within the primary jurisdiction of the NLRB").

Against this background, the Union makes two arguments. First, citing Jim McNeff, the Union contends that the district court erred by concluding that a determination of the appropriate collective bargaining unit is a prerequisite to this action. Alternatively, the Union argues that, even if determination of the appropriate collective bargaining unit is necessary, the district court erred by holding that it has no jurisdiction to make that determination. For this proposition, the Union cites Carpenters Local Union No. 1846 v. Pratt-Farnsworth, Inc., 690 F.2d 489, 521 (5th Cir.1982) ("[W]here [a unit determination] is essential to the disposition of contractual rights in a section 301 action ..., a district court has the power to decide it, at least in the absence of a previous or pending determination by the [NLRB]."), cert. denied, 464 U.S. 932, 104 S.Ct. 335, 78 L.Ed.2d 305 (1983). Because we agree with the Union's first contention, we need not address the second.

In Jim McNeff, a construction subcontractor signatory to a union's master labor agreement failed to make contractually required contributions to the union's fringe benefit trust funds. The trustees sued under section 301, and the subcontractor argued that the contract was not enforceable unless and until the union demonstrated majority status in an appropriate bargaining unit. A demonstration of majority status, of course, would have necessitated a determination of the appropriate bargaining unit.

Rejecting the subcontractor's argument, the Supreme Court noted a "critical distinction" between section 301 actions to enforce prehire agreements and those seeking recognition of the union as the exclusive bargaining representative of a group of employees. 461 U.S. at 267, 103 S.Ct. at 1757. Unlike attempts to compel negotiations, an action to enforce a voluntarily executed prehire agreement, the Court observed, does not impinge upon the representational interests of the defendant's employees:

Union enforcement, by way of a Sec. 301(a) suit, of monetary obligations incurred by an employer under a prehire contract prior to its repudiation does not impair the right of employees to select their own bargaining agent.... [E]nforcement of accrued obligations in a Sec. 301 suit does not mean that the union represents a majority of the employer's employees. In a Sec. 301 suit, the District Court merely enforces a contract entered into by the employer--a contract that Congress has legitimated to meet a special situation even though employees themselves have no part in its negotiation or execution. Such enforcement does not grant the plaintiff union a right otherwise enjoyed only by a majority union except in the very narrow sense, expressly intended by Congress, that employers and minority unions in the construction industry do not violate the Act...