Phoenix Engineering, Inc. v. MK-Ferguson of Oak Ridge Co.
| Decision Date | 27 July 1992 |
| Docket Number | MK-FERGUSON,AFL-CI,91-6358,Nos. 91-5527,U,s. 91-5527 |
| Citation | 966 F.2d 1513 |
| Parties | 140 L.R.R.M. (BNA) 2546, 60 USLW 2803, 122 Lab.Cas. P 10,221, 38 Cont.Cas.Fed. (CCH) P 76,348 PHOENIX ENGINEERING, INC., Tennessee Roofing Corporation, Del-Air Service Company, Inc., Lloyd J. Bunch, J.C. Bible, East Tennessee Chapter Associated Builders and Contractors, Inc., Associated General Contractors of Tennessee, Inc., Knoxville Branch, Plaintiffs-Appellants, v.OF OAK RIDGE COMPANY, Knoxville Building and Construction Trades Council,nited States of America, James D. Watkins, Joseph LaGrone, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
R. Loy Waldrop, Jr. (briefed), David N. Garst, Alan M. Parker, Lewis, King, Krieg & Waldrop, Knoxville, Tenn., Maurice Baskin (argued and briefed), Venable, Baetjer, Howard & Civiletti, Washington, D.C., for plaintiffs-appellants.
E.H. Rayson (briefed), Kramer, Rayson, McVeigh, Leake & Rodgers, Knoxville, Tenn., James Kelley (argued and briefed), Edward C. Uehlein, Morgan, Lewis & Bockius, Richard M. Resnick (briefed), Lawrence Cohen, Sherman, Dunn, Cohen, Leifer & Yellig, Washington, D.C., S. Del Fuston (briefed), Chattanooga, Tenn., Jerry G. Cunningham, U.S. Atty., Office of the U.S. Atty., Knoxville, Tenn., D. Scott Barash (briefed), U.S. Dept. of Justice, Civ. Div., Washington, D.C., for defendants-appellees.
Before: KEITH and RYAN, Circuit Judges; and TIMBERS, Senior Circuit Judge. *
At issue in this case is the legality of a Project Labor Agreement entered into by the defendants MK-Ferguson of Oak Ridge Corporation and the Knoxville Building and Construction Trades Council. Plaintiffs appeal from an order of the district court denying their motion for a preliminary injunction and from a series of orders of the district court dismissing the plaintiffs' complaint against the defendants.
Plaintiffs raise the following issues on appeal: 1) whether the enforcement of the Project Labor Agreement constitutes governmental interference with private collective bargaining in violation of the National Labor Relations Act, 29 U.S.C. § 158; and 2) whether the enforcement of the Project Labor Agreement violates the Competition in Contracting Act, 41 U.S.C. § 253, and the related Federal Acquisition Regulation, 48 C.F.R. § 52.244-5?
We conclude that the Project Labor Agreement violates neither the NLRA nor the Competition in Contracting Act. We thus affirm the district court's dismissal of the case, and consequently do not reach the plaintiffs' challenge to the denial of a preliminary injunction.
The case involves three groups of plaintiffs: the corporate or contractor plaintiffs are Phoenix Engineering, Inc., Tennessee Roofing Corporation, and Del-Air Service Company, Inc.; the individual plaintiffs are Lloyd Bunch and J.C. Bible; and the association plaintiffs are the East Tennessee Chapter Associated Builders and Contractors and the Associated General Contractors of Tennessee, Inc. The defendants are the general contractor MK-Ferguson of Oak Ridge Corporation, the federal defendants, 1 and the Knoxville Building and Construction Trades Council, AFL-CIO.
The Department of Energy (DOE) maintains a nuclear facility at Oak Ridge, Tennessee, known as Oak Ridge Operations (ORO). The DOE retains outside contractors to operate and manage different aspects of the facility. Prior to 1989, construction at ORO was directed by three entities: the DOE itself, the overall facility manager (Martin Marietta), and the construction contractor (Rust Engineering). In 1989, the DOE decided to consolidate the functions of outside contractors and retain one construction contractor for all construction. In April 1990, the DOE chose MK-Ferguson of Oak Ridge Corporation (MK-F) to succeed Rust Engineering. MK-F took over the operation on October 1, 1990, when the Management and Operating (M & O) contract it entered into with the DOE took effect.
In May 1990, prior to DOE's contract with MK-F taking effect, there was a labor strike at ORO when the existing Rust Labor Agreement expired. MK-F, knowing it would soon assume responsibility for construction at ORO, stepped in and negotiated with the Building Trades Council, an umbrella organization representing sixteen different craft unions. By August, MK-F and the Building Trades Council agreed on a preliminary version of the Project Labor Agreement, a type of labor agreement known as a prehire agreement. One major difference between this new agreement and the Rust Labor Agreement was that under the Rust agreement, nonunion signatory subcontractors were not required to adopt the full agreement, only the work rules. Under the new Project Labor Agreement, nonunion contractors had to adopt the whole agreement, including the employee referral provisions.
In August 1990, several contractors, including the plaintiffs, protested some of the provisions. In September, MK-F and the Building Trades Council modified the provisions relating to the job referral procedures, incorporating a core employee provision. The final version went into effect on October 1. Under the final version, the Project Labor Agreement requires that "[a]ny subcontractor, of whatever tier, performing covered work on this project site, shall become a signatory to this Project Agreement." The Agreement also requires employers to "recognize[ ] the signatory unions as the collective bargaining agents for its employees."
The key provision of the final Agreement was the hiring hall procedure for the referral of employees. Under the Agreement, when the subcontracting construction companies need craft employees, Once tradesmen are referred by the Union, the employer "shall have the right to determine the competency of all employees ... [and also] the right to reject any applicant referred by the Unions." The employer must use the hiring hall for all employees except that "[e]ach employer will be allowed to have designated and referred for employment up to four (4) of their supervisory, regular, essential or key employees (hereinafter known as 'core' employees)." While the referred employees themselves need not be union, the Unions will control the referral through the hiring halls.
In October 1990, MK-F solicited bids from subcontractors pursuant to the new M & O contract. At the time, MK-F utilized the Rust Subcontract Document Package, which explained various details of the relationship between prime contractor and the subcontractor. Both the bid solicitation itself and the document package contained several provisions relating to DOE involvement. In November 1990, MK-F revised its Subcontract Document Package and deleted any references to the DOE.
In December 1990, plaintiffs filed a complaint seeking declaratory and injunctive relief against defendants. The complaint contained five counts: 1) labor law preemption claim and related constitutional claims of contractor plaintiffs; 2) labor law preemption claim and related constitutional claims of individual plaintiffs; 3) Competition in Contracting Act (CICA) and Federal Acquisition Regulation (FAR) claims; 4) antitrust claims; and 5) a specific labor law claim regarding the "hot cargo" prohibition in the NLRA, 29 U.S.C. § 158(e). The complaint sought an injunction to restrain the defendants from enforcing the Project Labor Agreement, a declaration that the Agreement violates federal law, and an award of monetary damages.
In January 1991, plaintiffs moved for a preliminary injunction to prevent enforcement of the Project Labor Agreement and to prevent MK-F from letting any subcontracts pursuant to the Agreement. All defendants opposed the request and the DOE also moved to dismiss, or alternatively, for summary judgment. On March 22, 1991, the district court denied the plaintiffs' motion for a preliminary injunction. Plaintiffs filed a timely notice of appeal in April.
On April 29, the district court granted in part and denied in part the federal defendants' motion to dismiss. The district court dismissed most claims, including the NLRA claim, but refused to dismiss and denied summary judgment as to the CICA-FAR claim.
On April 24, the Building Trades Council moved for summary judgment on all counts. MK-F did the same on May 8. On June 20, the district court granted the Building Trades Council's motion for summary judgment on all claims, including the CICA-FAR claim. The court granted summary judgment to MK-F on all but the CICA-FAR claim.
Immediately prior to oral argument in this court in the appeal from the denial of a preliminary injunction, the district court granted final judgment to the defendants contemporaneous with its entry of an order granting the remainder of the federal defendants' and MK-F's motions to dismiss. In this order, the district court dismissed the remaining claim, that is, the CICA-FAR claim, against the federal defendants and MK-F.
On November 5, this court heard oral argument in the appeal of the denial of the preliminary injunction. At that time, all parties expressed a desire to consolidate the pending appeal with the upcoming appeal from the dismissal of the complaint. On November 6, plaintiffs filed a timely notice of appeal from the orders which granted final judgment to defendants. On November 11, plaintiffs filed a motion to consolidate the appeal from the district court's denial of the preliminary injunction with the appeal from the final judgment, and on December 9, this court granted the plaintiffs' motion to consolidate appeals.
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