LOCAL 705, INTERN. BROTH. v. Willett, Inc.

Decision Date19 July 1985
Docket NumberNo. 85 C 3421.,85 C 3421.
CourtU.S. District Court — Northern District of Illinois
PartiesLOCAL 705, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN & HELPERS OF AMERICA, Plaintiff, v. WILLETT, INC., et al., Defendants.

Sherman Carmell, Carmell, Charone Widmer & Mathews, Ltd., Chicago, Ill., for plaintiff.

Harry Sangerman, McDermott, Will & Emery, Richard J. Cochran, Tenney & Bentley, Chicago, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Local 705, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America ("Local 705") charges The Willett Company ("Company"), Willett, Inc. ("Willett"), Willett Interstate System, Inc. ("Interstate") and Railhead Cartage, Inc. ("Railhead") violated the collective bargaining agreement ("CBA") between Local 705 and Company by subcontracting cartage work out to persons not represented by Local 705. Willett, Interstate and Railhead (collectively "Movants") now seek to be dismissed under Fed.R.Civ.P. "Rule" 12(b)(1) and 12(b)(6). For the reasons stated in this memorandum opinion and order, their motion is denied.

Facts1

Willett is the sole owner of the other defendants. All defendants are affiliated enterprises with common ownership and management, centralized control of labor relations and sharing of equipment, employees and other assets. Company and Local 705 are signatories to a CBA covering local cartage drivers, under which cartage work performed by or assigned to Company employees cannot be subcontracted out or assigned to any other drivers. None of the Movants is a CBA signatory.

In November 1984 Movants did subcontract out cartage work that belonged to Company's employees. Some or all that work (the Complaint is unclear) was contracted out to Railhead, whose stock Willett had purchased "to circumvent or evade" the CBA.

Local 705 asserts this Court has jurisdiction under Section 301(a) of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a). Complaint Count I's prayer for relief:

requests the court to declare defendants a single employer or joint employer for purposes of this action and to grant such relief as is appropriate, including damages.

Count II's prayer:

requests the court to declare Railhead an alter ego of The Willett Company for purposes of this action and to grant such relief as is appropriate, including damages.
Movants respond:
1. This Court has no jurisdiction over them under Section 301 because they are not signatories to the CBA.
2. All issues raised by Local 705's Complaint are within the exclusive jurisdiction of the National Labor Relations Board ("NLRB" or simply the "Board").

Those contentions will be dealt with in turn.

Section 301 Jurisdiction over Non-Signatories

Section 301(a) provides:

Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties without respect to the amount in controversy or without regard to the citizenship of the parties.

Movants' contention of a lack of Section 301 jurisdiction because they are not signatories or parties to the CBA really begs the question. Plainly the gravamen of the Complaint is that Movants are to be treated as parties to the CBA by virtue of their identity with Company.

Courts considering whether defendants are a "single employer"2 have regularly exercised jurisdiction over all the defendants to resolve that issue. Carpenters Local No. 1846 of the United Brotherhood of Carpenters and Joiners of America, AFL-CIO v. Pratt-Farnsworth, Inc., 690 F.2d 489 (5th Cir.1982), cert. denied, 461 U.S. 942, 103 S.Ct. 2118, 77 L.Ed.2d 1299 (1983); Brotherhood of Teamsters, Local No. 70 v. California Consolidators, Inc., 693 F.2d 81 (9th Cir.1982) (per curiam), cert. denied, ___ U.S. ___, 105 S.Ct. 263, 83 L.Ed.2d 199 (1984). That applies to the alter ego count too. Penntech Papers, Inc. v. NLRB, 706 F.2d 18, 23-24 (1st Cir. 1983). Movants have failed to cite even one single employer or alter ego case holding the contrary.3

Section 301 Jurisdiction over Representational Issues

But scotching that spurious jurisdictional issue shifts attention to a real one — that stemming from the nature of the issues raised by the Complaint:

1. Movants claim the relief sought by Local 705 requires a decision as to representational issues within NLRB's exclusive jurisdiction.
2. Local 705 counters this Court need dispose of only the narrow single employer issue for the time being, leaving consideration of the representational issues for another day.

Evaluation of those arguments must take account of the dual nature of the prayer for relief — as already indicated, Count I asks (a) a declaratory judgment on the single employer question and (b) appropriate relief, including damages.4

Conventional wisdom teaches that the Declaratory Judgment Act, 28 U.S.C. § 2201 et seq., is not itself a source of jurisdiction. But once jurisdiction has otherwise been conferred (in this case by Section 301(a)), the Declaratory Judgment Act clearly empowers this Court to adjudicate the single employer issue by a declaration on that score.

That however is only part of the story, for it is equally clear no other relief can flow simply from a determination that Movants and Company are a single employer. Before Movants can be held bound to the CBA, Local 705 must establish both the existence of that single-employer group and the propriety of a single bargaining unit comprising the employees of the same group (Movants and Company). South Prairie Construction Co. v. Local No. 627, International Union of Operating Engineers, AFL-CIO, 425 U.S. 800, 805, 96 S.Ct. 1842, 1844, 48 L.Ed.2d 382 (1976) (per curiam); Pratt-Farnsworth, 690 F.2d at 505, 507; California Consolidators, 693 F.2d at 82-84; NLRB v. Don Burgess Construction Corp., 596 F.2d 378, 386 (9th Cir.1979); Local 17, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America v. Coast Cartage Co., 103 LRRM 3053, 3054 (D.Colo.1980). Pratt-Farnsworth, 690 F.2d at 507 explained the reason for that two-stage inquiry:

It is clear that the primary motivation of the Board in making an independent unit determination in a single employer case is to protect the rights under section 7 of the NLRA, 29 U.S.C. § 157, of the employees of each of the subentities constituting the single employer to bargain collectively with representatives of their own choosing.
* * * * * *
Further, as will be shown in Part II.C.8 of this opinion, even the fact that the union employer and the union have stipulated in the agreement as to the appropriate unit will not preclude an inquiry by the Board into the appropriateness of the unit comprising the employees of both the union and nonunion employers.

What is really at issue here is only one of those two inquiries: the single employer question. And every reported case that has squarely addressed that subject has held a district court may resolve that question in a Section 301 suit. See, e.g., Northwest Administrators, Inc. v. Con Iverson Trucking, Inc., 749 F.2d 1338, 1340 (9th Cir.1984) and cases there cited. Where the Courts of Appeal are split is at the second level of inquiry: whether a district court has jurisdiction under Section 301 to resolve bargaining unit issues. See California Consolidators, 105 S.Ct. at 263-64 (White and O'Connor, JJ. dissenting from denial of certiorari). Our own Court of Appeals has not addressed that question.

That second-level split stems from the potentially conflicting jurisdictional allocations of the LMRA and the predecessor National Labor Relations Act ("NLRA" or simply the "Act"). NLRA §§ 7 and 8, 29 U.S.C. §§ 157 and 158 (as amended by LMRA), grant employees the right to organize and prohibit unfair labor practices. It has long been established the NLRB has exclusive original jurisdiction over cases arising under those sections. San Diego Building Trades Council v. Garmon, 359 U.S. 236, 245, 79 S.Ct. 773, 779, 3 L.Ed.2d 775 (1959). On the other hand, Section 301 conferred federal court jurisdiction for the enforcement of collective bargaining agreements.

But unfair-labor-practice cases and breach-of-collective-bargaining-agreement cases are heavily overlapping sets: Many if not most activities that constitute breaches of bargaining agreements are also unfair labor practices. Thus district courts adjudicating Section 301 claims frequently face issues normally decided by the NLRB in the NLRA §§ 7 or 8 context. Of course that fact alone does not deprive a federal court of jurisdiction. Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 562, 96 S.Ct. 1048, 1055, 47 L.Ed.2d 231 (1976). Nonetheless courts have typically declined to exercise jurisdiction (which they possess under the literal language of Section 301) as to those representational issues that most require exercise of the NLRB's special expertise and discretion. Though such declined cases may speak in terms of want of "jurisdiction," it is unimportant whether that characterization is conceptually accurate. What matters is that courts simply will not take and decide such cases. Northwest Administrators, 749 F.2d at 1339; Local Union 204 of the International Brotherhood of Electrical Workers, Affiliated with the AFL-CIO v. Iowa Electric Light and Power Co., 668 F.2d 413, 419 (8th Cir.1982).

Determination of appropriate bargaining units is the paradigmatic instance of such nonexercise of judicial jurisdiction. NLRA § 9(b), 29 U.S.C. § 159, delegated that issue entirely to the discretion of the Board:

The Board shall decide in each case whether, in order to assure to employees the fullest freedom in exercising the rights guaranteed by this Act, the unit appropriate for the purposes of collective bargaining shall be the
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