Queen City Const., Inc. v. City of Rochester

• Decision Date: 28 December 1999
• Docket Number: No. CX-99-889.,CX-99-889.
• Citation: 604 N.W.2d 368
• Parties: QUEEN CITY CONSTRUCTION, INC., Appellant, v. CITY OF ROCHESTER, et al., Respondents, Southeast Minnesota Building and Construction Trades Council, Respondent.
• Court: Minnesota Court of Appeals

604 N.W.2d 368

QUEEN CITY CONSTRUCTION, INC., Appellant, v. CITY OF ROCHESTER, et al., Respondents, Southeast Minnesota Building and Construction Trades Council, Respondent.

No. CX-99-889.

Court of Appeals of Minnesota.

December 28, 1999.

Review Denied March 14, 2000.

Gregg J. Cavanagh, Maple Grove, MN (for appellant).

Terry L. Adkins, Rochester City Attorney, Rochester, MN (for respondents City of Rochester and Common Council of Rochester).

Richard A. Miller, Brendan D. Cummins, Miller O'Brien Bloom, Minneapolis, MN (for respondent Southeast Minnesota Building and Construction Trades Council).

Considered and decided by CRIPPEN, Presiding Judge, SCHUMACHER, Judge, and DAVIES, Judge.

OPINION

SCHUMACHER, Judge.

Queen City Construction, Inc. appeals the district court's denial of a temporary injunction preventing respondent City of Rochester from requiring successful bidders on a public construction project to sign a project labor agreement (PLA). We affirm.

FACTS

Rochester intends to make extensive improvements to the Mayo Civic Center, which it owns and operates. It plans to build a new 25,200-square-foot exhibit hall, as well as expand and renovate other parts of the center.

On January 14, 1999, Jim Ibister, the Executive Director of the Mayo Civic Center, wrote the Rochester mayor and respondent Common Council of Rochester suggesting that the city enter into a PLA for the civic center construction project. A PLA is an agreement between the owner of a construction project and a labor organization in which the owner of the project agrees to designate that organization as the exclusive bargaining agent for all employees working on the project and employ only contractors and subcontractors who agree, for the purposes of work on that project, to abide by the terms of collective bargaining agreements that organization has in place. In return, typically, the labor organization agrees that there will be no strikes, slowdowns, picketing, sympathy actions, or any other kind of work stoppage or disruptive action for the life of the project, even if one or more of the collective bargaining agreements should expire during the course of the project.

Ibister told the mayor and Common Council that "a unique set of circumstances exist which makes [it] critical that this project be completed on time and within budget," including (1) the space that was to be constructed was already booked, so failure to complete the project on time would cause both a loss of revenue and a loss of credibility with the civic center's customers; (2) a limited budget left little room for increased costs caused by delay; (3) close coordination among all workforces would be necessary to avoid disrupting the civic center's ongoing operations during construction; (4) a near-record level of construction in the Rochester area during the project made for a very tight labor market, and made it more important to take steps to ensure an ample, uninterrupted supply of skilled labor; and (5) space and safety considerations would make it very difficult to establish separate gates for union and non-union personnel. Furthermore, Ibister told the mayor and Common Council that the civic center had in the past lost business because of labor problems on construction projects.

On February 17, 1999, the Common Council passed a short resolution approving without explanation the use of a PLA on the civic center project. But a "Request for Council Action" prepared for the February 17 meeting attached the Ibister letter in explanation for its request that the council "[r]equest a motion adopting the prepared resolution adopting the reasons for the project labor agreement."

On or about March 24, 1999, Queen City brought this action for declaratory and injunctive relief, seeking to prevent Rochester from imposing the bid specification that low bidders on the civic center project must agree to sign the PLA in order to receive the contract. In its complaint, Queen City alleged that the bid specification was illegal and would make it impossible for Queen City to bid successfully on the contract.

On April 5, 1999, the Common Council passed a second resolution concerning the adoption of a PLA for the civic center project, in which it found that PLAs facilitated the timely and efficient completion of substantial construction projects by

(a) making available a ready and adequate supply of highly trained and skilled craft workers;

(b) permitting public owners and contractors to accurately determine project labor costs at the outset and to establish uniform working conditions for all construction crafts for the duration of the project;

(c) allowing for the negotiation of specialized terms and conditions which because of the particular circumstances relating to a particular project, may be required for the effective construction of the project;

(d) providing a negotiated commitment which is a legally enforceable means of assuring labor stability and labor peace over the life of the project;

(e) avoiding work stoppage following expiration of a collective bargaining agreement; and

(f) facilitating equal employment opportunities on the project.

A "Request for Council Action" prepared for the April 5 meeting explained that "due to a miscommunication between the City Attorney's Office and the City Administrator's Office, a resolution adopting the reasons for a project labor agreement was not prepared" in connection with the February 17, 1999 resolution. The "Request for Council Action" observed, however, that the January 14, 1999, Ibister letter had documented the need for a PLA.

Under the PLA approved by the Common Council, both union and non-union contractors may bid for contracts, but all successful bidders must agree to abide by the terms of the PLA during the project. That means that successful bidders will have to follow union work rules, contribute to union benefit plans, and use union hiring halls during the project. (Federal law requires union hiring halls to be nondiscriminatory, that is, to refer both union and non-union personnel for jobs without discriminating on the basis of union membership. 29 U.S.C. § 158(a)(3), (b)(1)(A), (b)(2).) The obligation to comply with the PLA (and its incorporated collective bargaining agreements) extends only to the civic center project and only during that project.

Queen City moved for a temporary injunction to prevent the imposition of the PLA bid specification. The district court heard argument and denied the motion from the bench, later issuing a written ruling.

ISSUE

Did the district court abuse its discretion in refusing to grant Queen City a temporary injunction preventing Rochester from requiring successful bidders on the civic center project to sign the PLA?

ANALYSIS

Absent a clear abuse of discretion, we will not reverse the district court's decision whether to grant a temporary injunction. Carl Bolander & Sons Co. v. City of Minneapolis, 502 N.W.2d 203, 209 (Minn.1993). We view the facts alleged in the pleadings and affidavits in the light most favorable to the prevailing party. Pacific Equip. & Irrigation v. Toro Co., 519 N.W.2d 911, 914 (Minn.App.1994), review denied (Minn. Sept. 16, 1994).

A temporary injunction is an "extraordinary equitable remedy" that serves to maintain "the status quo pending a trial on the merits." Ecolab, Inc. v. Gartland, 537 N.W.2d 291, 294 (Minn.App.1995). To be entitled to an injunction, Queen City must show that it faces irreparable harm and has no adequate remedy at law. Cherne Indus. v. Grounds & Assoc., 278 N.W.2d 81, 92 (Minn.1979). It alleges that the PLA bid specification in essence makes it impossible for it to submit a successful bid on the civic center project. Once the contract is let, even if Queen City successfully challenges the contract, its remedies are limited to recovery of the amount it spent in preparing its bid. Minn.Stat. § 471.345, subd. 14 (1998). As Queen City points out, those costs are relatively small, and pale in comparison to the profit a successful bidder might hope to earn on the project. Assuming for argument's sake that the PLA requirement does prevent Queen City from effectively competing for a contract on the civic center project, once the project is bid out with the PLA requirement in place, Queen City's opportunity to earn any profit on the project is gone forever. As a result, Queen City at least arguably faces irreparable harm without adequate legal remedy.

But in order to merit injunctive relief, Queen City must also demonstrate its entitlement under the five factors set forth in Dahlberg Bros. v. Ford Motor Co., 272 Minn. 264, 274-75, 137 N.W.2d 314, 321-22 (1965):(1) the relationship between the parties; (2) the relative hardship; (3) the likelihood of success; (4) the public interest; and (5) any administrative burdens.

The first Dahlberg factor, preserving the "status quo ante" relationship of the parties, Dahlberg, 272 Minn. at 276, 137 N.W.2d at 322, echoes the above discussion of irreparable harm and adequacy of legal remedy. If the civic center project is allowed to be bid out with the PLA requirement (again assuming for argument's sake Queen City's version of the effect on it), Queen City would lose forever the chance to win a profitable contract on the project. This factor weighs in Queen City's favor.

The second Dahlberg factor requires weighing the relative hardship to the parties if their positions on injunctive relief do not prevail. Queen City argues that Glenwood Bridge, Inc. v. City of Minneapolis, 940 F.2d 367 (8th Cir.1991), supports its argument that the loss of the meaningful opportunity to bid on the contract is sufficient hardship to justify an injunction. In Glenwood Bridge, the city of Minneapolis had received and opened bids on a bridge project when its director of public works recommended that the bids be rejected and the project rebid with the inclusion of a PLA. Glenwood Bridge, Inc., the low bidder,...