Metropolitan Detroit Bricklayers Dist. Council, Intern. Union of Bricklayers and Allied Craftsmen, AFL-CIO v. J.E. Hoetger & Co.

• Decision Date: 16 March 1982
• Docket Number: No. 80-1321,AFL-CIO,80-1321
• Citation: 672 F.2d 580
• Parties: 109 L.R.R.M. (BNA) 3073, 94 Lab.Cas. P 13,571 METROPOLITAN DETROIT BRICKLAYERS DISTRICT COUNCIL, INTERNATIONAL UNION OF BRICKLAYERS AND ALLIED CRAFTSMEN,, and Bricklayers' Fringe Benefit Funds-Metropolitan Area, Plaintiffs-Appellees, v. J. E. HOETGER & COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 580

672 F.2d 580

109 L.R.R.M. (BNA) 3073, 94 Lab.Cas. P 13,571

METROPOLITAN DETROIT BRICKLAYERS DISTRICT COUNCIL,

INTERNATIONAL UNION OF BRICKLAYERS AND ALLIED

CRAFTSMEN, AFL-CIO, and Bricklayers'

Fringe Benefit

Funds-Metropolitan

Area, Plaintiffs-Appellees, v. J. E. HOETGER & COMPANY, Defendant-Appellant.

No. 80-1321.

United States Court of Appeals, Sixth Circuit.

Argued Dec. 15, 1981.

Decided March 16, 1982.

Donald J. Gasiorik, Schlussel, Lifton, Simon, Rands, Kaufman, Lesinski & Jackier, James C. Foresman, Southfield, Mich., for defendant-appellant.

Ann E. Neydon, Marston, Sachs, Nunn, Kates, Kadushin & O'Hare, Rolland R. O'Hare, Detroit, Mich., for plaintiffs-appellees.

Before KEITH, BROWN and KENNEDY, Circuit Judges.

BAILEY BROWN, Circuit Judge.

The question presented by this appeal is whether appellant J. E. Hoetger and Company ("Hoetger") is liable under § 301(a) of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a) (1976), for fringe benefits owed to the appellees, Metropolitan Detroit Bricklayers District Council, International Union of Bricklayers and Allied Craftsmen ("Union") and its Fringe Benefit Funds, pursuant to the Union's collective bargaining agreement with Hawkins Masonry, Inc. ("Hawkins"). The district court held that, although Hoetger was not a party to the collective bargaining agreement between Hawkins and the Union, Hoetger's relationship with Hawkins was such that it was "fair and equitable" to require Hoetger to pay the fringe benefits. ¹ We reverse since we determine that the decision of the district court is not supported by the facts or the law.

I.

In 1974, Hoetger entered into a contract with the city of Pontiac, Michigan, to act as general contractor for the construction of a community center. Masonry work for the center was subcontracted to Hawkins. The subcontract between Hoetger and Hawkins required that Hawkins employ only workers affiliated with the appellee Union. The subcontract further provided that Hawkins assumed exclusive liability for paying all Union benefits, although Hoetger reserved "the right to escrow any funds available to insure that these payments are made and deduct same from this contract."

Pursuant to the terms of this contract, Hawkins employed Union members under a collective bargaining agreement between the Union and a multi-employer bargaining unit of which Hawkins was a member, but of which Hoetger was not a member. This agreement provided, inter alia, for the payment of fringe benefits by Hawkins to the Union's fringe benefit fund.

In February of 1975, after Hawkins had completed 80% of its work on the center, the Union struck Hawkins for its failure to pay the fringe benefits. At that time, Hawkins ceased its operations at the site having been paid $64,800 of its $91,000 contract. Hoetger held $7200 retainage against Hawkins, which was used in completing the masonry work through subcontracts with other firms. ² Hawkins went out of business on March 5, 1975.

The Union informed Hoetger that it viewed Hoetger, as general contractor, responsible for the fringe benefits that Hawkins had not paid. On May 1, 1975, four pickets appeared on the site carrying signs reading "Bricklayers on strike against Hawkins Masonry for nonpayment of fringes to bricklayers." Other workers on the site honored the picket lines, and no work was done for three days.

In response to the picketing, Hoetger filed an unfair labor practice charge against the Union. After a hearing, the Administrative Law Judge ruled that the Union had not violated § 8(b)(4)(i) and (ii)(B) of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158(b)(4)(i) and (ii)(B) (1976), as alleged. 221 N.L.R.B. 1337 (1976). The ALJ ruled that the independent contractor status of Hawkins had been compromised by certain of the subcontract terms between Hawkins and Hoetger, such as the requirement that Hawkins employ only Union members. The ALJ therefore concluded that Hoetger and Hawkins were joint employers under the rule of Local 363, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Roslyn Americana Corp.), 214 N.L.R.B. No. 129 (1974). ³ The N.L.R.B. adopted the ALJ's order. 221 N.L.R.B. 1337 (1976).

In June of 1979, the Union brought this action against Hoetger and Hawkins pursuant to § 301(a) of the LMRA, 29 U.S.C. § 185(a), alleging that they had violated the collective bargaining agreement. The Union alleged that Hoetger and Hawkins comprised a single employer which was required to pay the fringe benefits under the collective bargaining agreement.

Since Hawkins had been out of business since 1975, it did not answer or otherwise defend in this action. A default judgment against Hawkins was entered on October 24, 1979.

On cross-motions for summary judgment, the district court, relying on "a basic general principle," ruled that in certain circumstances, "it is appropriate and equitable to ignore the separate, fictional identities employed by corporations and other business entities." 480 F.Supp. at 300. Since Hoetger had "inserted itself" into the relationship between Hawkins and the Union by requiring Union employment, by retaining the option to escrow funds to insure that fringe benefits were paid, and by using the retainage to finish the project instead of paying the fringe benefits, the court ruled that Hawkins and Hoetger had "a relationship substantially similar to that shared by ... 'joint employers' ...." Id. The district court, however, did not rely on the N.L.R.B.'s determination that Hoetger and Hawkins were "joint employers" but felt that that determination "buttressed" its own conclusion. Id. ⁴

Judgment was entered against Hoetger in the amount of $6,073.45 on March 16, 1980. This appeal followed.

II.

As a preliminary matter, Hoetger contends that, since it was not a party to the collective bargaining agreement that forms the basis for this suit, the district court lacked jurisdiction to decide the Union's claim against it. Section 301(a) of the LMRA, which confers federal jurisdiction in cases of this type, provides in relevant part:

Suits for violations of contracts between an employer and a labor organization representing employees ... may be brought in any district court in the United States.

29 U.S.C. § 185(a) (1976).

We recognize that courts have generally held that this section creates federal jurisdiction only over parties to the contract being sued upon. Teamsters Local Union No. 30 v. Helms Express, Inc., 591 F.2d 211 (3rd Cir.), cert. denied, 444 U.S. 837, 100 S.Ct. 74, 62 L.Ed.2d 48 (1979); Aacon Contracting Co. v. Ass'n of Catholic Trade Unionists, 178 F.Supp. 129 (E.D.N.Y.1959), aff'd, 276 F.2d 958 (2nd Cir. 1960). However, since the primary issue in this case was whether Hoetger was a "joint employer" such that it could be bound by the collective bargaining agreement, we conclude that the district court had jurisdiction under § 301(a) to decide this claim. Baker v. Fleet Maintenance, Inc., 409 F.2d 551, 553-54 (7th Cir. 1969); see Russom v. Sears, Roebuck and Co., 558 F.2d 439, 443 n.7 (8th Cir.), cert. denied, 434 U.S. 955, 98 S.Ct. 481, 54 L.Ed.2d 313 (1977).

III.

On the merits, Hoetger argues that there is no legal basis for the district court's decision that it was liable for the fringe benefits which Hawkins obligated itself to pay under the terms of the collective bargaining agreement. The Union responds that there are a number of legal theories to support the district court's decision.

First, the Union contends that Hoetger and Hawkins were joint employers and that Hoetger was therefore liable under § 301(a) for Hawkins's violation of the collective bargaining agreement. Although the district court did not explicitly find that Hoetger and Hawkins were joint employers, the Union urges this court to make such a finding, either by giving collateral estoppel effect to the prior N.L.R.B. determination or by independently applying the N.L.R.B.'s "joint employer" standards to the facts of this case. ⁵

It is well settled that collateral estoppel effect can be given to findings of an administrative agency acting in a judicial capacity. United States v. Utah Construction & Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642 (1966). This circuit has held, however, that collateral estoppel effect need not be given to such findings when they were made in adjudicating legal issues that are significantly different from the issue before the court. Tipler v. E. I. duPont deNemours and Co., 443 F.2d 125 (6th Cir. 1971). The reason for this rule is that the "purposes, requirements, perspective, and configuration of different statutes ordinarily vary." Id. at 129; accord, Connecticut Light & Power Co. v. Federal Power Commission, 557 F.2d 349, 353 (2nd Cir. 1977) ("The conclusive effect of an administrative determination is limited to the purpose for which it was made.").

The N.L.R.B.'s decision that Hoetger and Hawkins were joint employers arose in the context of deciding whether the Union's picketing of Hoetger was an unfair labor practice under § 8(b)(4)(i) and (ii)(B) of the NLRA. The issue before this court, by contrast, is whether Hoetger was the Union's "employer" and therefore liable under the collective bargaining contract pursuant to § 301(a) of the LMRA.

An additional reason for denying collateral estoppel effect to the N.L.R.B.'s finding is that § 301(a) gives the federal courts exclusive jurisdiction over cases arising from the breach of collective bargaining agreements. Since the N.L.R.B. has no authority to decide whether Hoetger is liable under the collective bargaining agreement, its finding that Hoetger was a joint employer with Hawkins should not be given preclusive effect in a § 301(a) proceeding. La Mirada Trucking, Inc. v. Teamsters Local 166, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, 538 F.2d 286, 288 (9th Cir. 1976...