Mautz & Oren, Inc. v. Teamsters, Chauffeurs, and Helpers Union, Local No. 279

• Decision Date: 11 August 1989
• Docket Number: No. 88-2903,88-2903
• Parties: 131 L.R.R.M. (BNA) 3244, 112 Lab.Cas. P 11,407 MAUTZ & OREN, INC., Plaintiff-Appellee, v. TEAMSTERS, CHAUFFEURS, AND HELPERS UNION, LOCAL NO. 279, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1117

882 F.2d 1117

131 L.R.R.M. (BNA) 3244, 112 Lab.Cas. P 11,407

MAUTZ & OREN, INC., Plaintiff-Appellee, v. TEAMSTERS, CHAUFFEURS, AND HELPERS UNION, LOCAL NO. 279,

affiliated with International Brotherhood of

Teamsters, Chauffeurs, Warehousemen and

Helpers of America, Defendant-Appellant.

No. 88-2903.

United States Court of Appeals, Seventh Circuit.

Argued April 14, 1989.

Decided July 31, 1989.

As Amended Aug. 11, 1989.

Michael J. Bobroff, Husch, Eppenberger, Donohue, Cornfeld & Jenkins, St. Louis, Mo., for Mautz & Oren, Inc.

John M. Hosteny, Cavanagh, Hosteny & O'Hara, Springfield, Ill., for Teamsters, Chauffeurs, and Helpers Union, Local No. 279.

Before CUDAHY, POSNER and RIPPLE, Circuit Judges.

CUDAHY, Circuit Judge.

This case arises out of picketing conducted by the defendant, Teamsters Local 279 (the "Union"), at a construction site supervised by the plaintiff, Mautz & Oren, Inc. At the time of the picketing the Union was involved in a labor dispute with a non-union subcontractor working at the site, J & B Waste Applicators ("J & B"). Mautz & Oren contends that the Union's picketing was not directed solely at J & B, but was intended to bring economic pressure to bear on "neutral," secondary employers to cease doing business with J & B. Mautz & Oren therefore argues that the Union's picketing had an unlawful secondary objective, in violation of section 8(b)(4) of the National Labor Relations Act (the "NLRA"), 29 U.S.C. section 158(b)(4). Mautz & Oren also alleges that the Union's picketing violated the no-strike clause contained in the collective bargaining agreement between the parties. The district court ruled in Mautz & Oren's favor on both the secondary picketing and breach of contract claims. The Union appeals; we reverse and remand for a new trial.

I.

Mautz & Oren, a general contractor engaged in construction work, is signatory to a collective bargaining agreement with the Union. This agreement apparently requires the company to hire only unionized subcontractors. In early 1985 Mautz & Oren was awarded a contract to modify and enlarge a sewage treatment plant in Shelbyville, Illinois. Mautz & Oren engaged J & B to remove sludge from a lagoon at the Shelbyville plant. J & B began work on the site on September 17, 1985. Beryle Redding, president of the Union, visited the job site on September 20. Redding approached Jim Wolfe, owner of J & B, and asked Wolfe whether he would sign a contract with the Union. When Wolfe refused Redding ordered a picket to patrol the entrance to the site.

Tom Arnold, chief executive officer of Mautz & Oren, attempted to resolve the dispute between the Union and J & B. After his conciliation efforts failed Arnold informed Redding that Mautz & Oren would institute a reserved gate system at the site. Mautz & Oren and other "neutral" employers (i.e., those employers not directly involved in the Union's dispute with J & B) would use the plant's main gate; J & B and its suppliers were to use a separate gate exclusively.

The Union initially respected the reserved gate system, and picketed only the J & B gate. However, two days after the reserved gate system was implemented, Redding determined that the gate system had been "tainted." Redding based this conclusion on two facts: (1) Arnold had repeatedly driven through the gate reserved for J & B; and (2) a fuel truck which serviced J & B equipment had entered the site through the purportedly "neutral" gate. Based on the alleged "taint" resulting from these incidents the Union began picketing both entrances to the site. In response Mautz & Oren filed unfair labor practice charges with the National Labor Relations Board (the "NLRB" or "Board"). An NLRB investigator visited the site and, after being apprised of the facts related above, told the Union that it should remove its pickets or the Board would seek an injunction barring it from picketing. The Union removed the pickets from both gates on October 10.

Mautz & Oren filed the present lawsuit on March 31, 1986. The company sought $100,000 in damages under two alternative theories: (1) the Union's picketing was unlawful "secondary activity," because the Union intended to coerce Mautz & Oren, a neutral secondary employer, to cease doing business with J & B and thereby bring indirect economic pressure to bear on J & B; and (2) the Union had breached the no-strike obligation contained in its contract with Mautz & Oren. The Union's answer alleged, as an affirmative defense to the breach of contract claim, that Mautz & Oren had failed to submit this claim to arbitration as required by the collective bargaining agreement.

After conducting a two-day bench trial the district court ruled in Mautz & Oren's favor on both counts of its complaint. The court stated the basis for its decision as follows:

Looking at the evidence as a whole, it is apparent that the union did attempt at least in part to comply with the [governing legal] standards. However, two key facts tend to rebut the presumption that the pickets were wholly primary in nature. First, on Friday, October 4, pickets remained up at Gate 2 [the neutral gate] despite the fact that J & B Waste did not work that day.... It seems difficult for the union to argue that it was engaged in a wholly primary picket against J & B Waste when pickets remained standing in the absence of the primary employer's presence.

Second, once the pickets were removed from Gate # 2, the union ceased to picket J & B Waste at Gate # 1. We agree with Plaintiff that the fact that after the NLRB halted picketing at the Mautz & Oren gate, the union did not continue to picket the J & B Waste gate, is clear evidence of the primary object of the union's picketing and is even stronger evidence that the real dispute was with Mautz & Oren from the very beginning. Hence, we conclude that the picket did have an illegal secondary objective.

This in turn answers the breach of contract question. If the union's picket had secondary objectives, they were engaging in a picket in violation of the no strike clause of the collective bargaining agreement.

(emphasis added). The court also found that the company had exhausted the contractual grievance procedures in connection with its breach of contract claim. For the Union had filed a grievance alleging that Mautz & Oren had breached the collective agreement by subcontracting work to J & B, and this grievance had been processed through all available phases of the grievance machinery.

The Union subsequently filed a motion to amend the court's findings and judgment or for a new trial. In its memorandum in opposition to the motion, Mautz & Oren conceded that J & B had worked at the site on October 4, thus admitting that one of the "two key facts" relied upon by the district court was in error. Despite this concession the district court denied the Union's motion without explanation. The Union appeals.

II.

A.

The first count of Mautz & Oren's complaint states a cause of action under section 303 of the Labor Management Relations Act, 29 U.S.C. section 187, which creates a private right of action for money damages for any person who is injured by union conduct which violates section 8(b)(4) of the NLRA. Section 8(b)(4), in turn, makes unlawful various forms of secondary boycotting or picketing activity. "The gravamen of a secondary boycott is that its sanctions bear, not upon the employer who alone is a party to the dispute, but upon some third party who has no concern in it. Its aim is to compel him to stop business with the employer in the hope that this will induce the employer to give in to his employees' demands." International Bhd. of Elec. Workers v. NLRB, 181 F.2d 34, 37 (2d Cir.1950) (L. Hand, C.J.), aff'd, 341 U.S. 694, 71 S.Ct. 954, 95 L.Ed. 1299 (1951); see also NLRB v. Local 825, Int'l Union of Operating Eng'rs, 400 U.S. 297, 302-05, 91 S.Ct. 402, 406-07, 27 L.Ed.2d 398 (1971); Landgrebe Motor Transp., Inc. v. District 72, Int'l Ass'n of Machinists, 763 F.2d 241 244 (7th Cir.1985). Where a union has a grievance with the terms and conditions of employment of a certain employer, (the "primary" employer), it must focus its picketing activity on that employer. The union may not exert pressure on an unrelated, "secondary" employer in order to coerce the secondary employer to cease dealing with the primary employer, thereby advancing the union's goals indirectly. If the union acts with "mixed motives," partially primary and partially secondary, its conduct is unlawful under section 8(b)(4); "[i]t is not necessary to find that the sole object of the strike was secondary so long as one of the union's objectives was to influence" the secondary employer to bring pressure to bear on the primary. NLRB v. Enterprise Ass'n of Steam Pipefitters, Local 638, 429 U.S. 507, 530 n. 17, 97 S.Ct. 891, 904 n. 17, 51 L.Ed.2d 1 (1977) (first emphasis original); see also George E. Hoffman & Sons, Inc. v. International Bhd. of Teamsters, Local 627, 617 F.2d 1234, 1241 (7th Cir.), cert denied, 449 U.S. 937, 101 S.Ct. 335, 66 L.Ed.2d 160 (1980).

While section 8(b)(4)'s prohibition of "secondary" activity seems straightforward in principle, application of that principle becomes complicated where the primary and secondary employers occupy a common work site. In such "common situs" situations, the union has every right to picket the primary employer at the work site, even though this picketing might incidentally, but foreseeably, have a substantial effect on secondary employers. Section 8(b)(4) proscribes only union activity whose "object" or purpose is to coerce secondary employers. And there is an important distinction between intending to enmesh secondary employers in a dispute not their own, and acting with knowledge that secondary employers will inevitably be affected by the union's actions. Even if the union's picketing has substantial (and foreseeable ) secondary effects, that conduct does not violate section 8(b)(4)...