Roughneck Concrete Drilling & Sawing Co. v. Fund

• Decision Date: 07 April 2011
• Docket Number: 09–3685.,Nos. 09–3670,s. 09–3670
• Citation: 640 F.3d 761,51 Employee Benefits Cas. 1401,190 L.R.R.M. (BNA) 2705
• Parties: ROUGHNECK CONCRETE DRILLING & SAWING COMPANY, Plaintiff–Appellant,v.PLUMBERS' PENSION FUND, LOCAL 130, UA [UNITED ASSOCIATION], et al., Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

640 F.3d 761

190 L.R.R.M. (BNA) 2705

51 Employee Benefits Cas. 1401

ROUGHNECK CONCRETE DRILLING & SAWING COMPANY, Plaintiff–Appellant,

v.PLUMBERS' PENSION FUND, LOCAL 130, UA [UNITED ASSOCIATION], et al., Defendants–Appellees.

Nos. 09–3670

09–3685.

United States Court of Appeals, Seventh Circuit.

Argued Feb. 11, 2011.Decided April 7, 2011.

Todd L. Sarver (argued), Attorney, McDonald Hopkins, LLC, Columbus, OH, for Plaintiff–Appellant.Daniel F. Gallagher, Attorney, Christopher Keleher (argued), Attorney, Querrey & Harrow, Julian D. Schreiber (argued), Attorney, Borovsky & Ehrlich, Newton C. Marshall, Attorney, Karbal, Cohen, Economou, Silk & Dunne, Chicago, IL, for Defendants–Appellees in Docket No. 09–3670.John William Loseman (argued), Attorney, Lewis, Overbeck & Furman, Chicago, IL, for Defendants–Appellees in Docket No. 09–3685.J. Peter Dowd, Attorney, Dowd, Bloch & Bennett, Robert P. Casey, Attorney, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Chicago, IL, for Amici Curiae in Docket Nos. 09–3670, 09–3685.Before BAUER, POSNER, and WILLIAMS, Circuit Judges.POSNER, Circuit Judge.

A case can be complex without being difficult and difficult without being complex—and it can also be both complex and difficult, yet difficult for reasons unrelated to its complexity. This case is complex because of multiple parties, four separate proceedings (a mixture of arbitrations and adjudications), a multitude of complex written instruments, and sprawling submissions—the parties and amici curiae have filed a total of seven briefs, running to hundreds of pages. But these complexities—many of which we'll ignore—have little to do with whether to affirm or reverse.

Roughneck, the appellant, is a Chicago construction company engaged in cutting and drilling concrete. Some of this cutting and drilling is for a building's plumbing, some for its electrical system, some for other parts of the building. It employs plumbers for concrete work related to the building's plumbing, electricians for concrete work related to its electrical system, and laborers for the rest, and has collective bargaining agreements with the three local unions representing plumbers, electricians, and laborers respectively.

Its agreement with the plumbers ordained the creation of several pension and benefits funds, but for simplicity we'll pretend there was only one fund. An audit conducted by the fund determined that Roughneck had not employed plumbers to do work that the collective bargaining agreement entitled them to do, and therefore that Roughneck owed the fund the contributions that it would have had to make had it given the work to plumbers—some $2.2 million.

The collective bargaining agreement established a Joint Arbitration Board to resolve disputes arising out of it. The fund kicked off the arbitration process by filing a grievance with the Board. Roughneck filed its own grievance, arguing that the work that the fund contended had been plumbers' work had actually been within the jurisdiction of the electricians' and laborers' unions. (We don't know why Roughneck filed its own grievance rather than just opposing the fund's.) The laborers' union supported Roughneck, which had made contributions to that union's benefits funds for the work that the plumbers' fund contends should have been given to plumbers. Maybe the laborers' union worried that its benefits funds might be ordered to return the money that Roughneck should have given the plumbers' fund.

A hearing before the Joint Arbitration Board on the warring grievances was scheduled for the morning of July 22, 2008. Six days earlier, Roughneck had written the administrator of the Plan for the Settlement of Jurisdictional Disputes in the Construction Industry—the “National Plan,” as it is called—charging that the grievances that Roughneck and the plumbers' fund had submitted to the Joint Arbitration Board were “impediments to job progress.” The National Plan is an agreement between construction companies and the international unions that are the parents of local unions such as the plumbers' and electricians' and laborers' local unions in this case. The National Plan is admitted to bind the plumbers' local union and Roughneck, but the plumbers' fund is not a party, which may be significant (though we think not). The National Plan defines “impediment to job progress” to include “filing a grievance under a collective bargaining agreement” if the issue presented by the grievance “involv[es] a jurisdictional dispute.” Roughneck's letter pointed out that both Roughneck and the plumbers' local are subject to another local arbitral entity (besides the Joint Arbitration Board), called the Joint Conference Board, which was created to resolve jurisdictional disputes, and that the issue between the parties was which craft of workers had “jurisdiction” over the work that the plumbers' fund believed should have been done by plumbers.

Either the plumbers' local union or Roughneck could have filed a grievance with the Joint Conference Board, but hadn't done so. They seem to have thought that that board could hear only jurisdictional disputes arising out of current employment, and not ones over completed work, as in this case, although the distinction is not found in the agreement between the employers and the local unions that had created the Board; the agreement doesn't define “jurisdictional dispute.”

The administrator of the National Plan notified the international plumbers' union of Roughneck's letter and scheduled a hearing before an arbitrator named Paul Greenberg for the afternoon of July 21, 2008, the day before the scheduled hearing of the Joint Arbitration Board. Shortly before Greenberg's hearing, the fund's attorney wrote the international union's president saying that the Joint Arbitration Board was the appropriate forum to resolve the dispute.

The hearing before Greenberg was conducted as scheduled on July 21; present were representatives of Roughneck and of the three parent international unions. That evening Greenberg ruled that the effort of the plumbers' fund to obtain benefits based on hours worked by employees represented by other local unions was beyond the authority of the Joint Arbitration Board, and he ordered that the upcoming hearing before the Board be cancelled and that the Board dismiss the grievances. He explained that “this effort to collect fringe benefit payments is patently jurisdictional in nature, and thus prohibited. If UA Local 130 [the plumbers' local union] believes it has a legitimate jurisdictional claim to work being performed by other crafts employed by Roughneck, the collective bargaining agreement has a clear mechanism available for UA Local 130 to vindicate its jurisdictional rights and the rights of the workers it represents. But the claim now scheduled for hearing on July 22 is not the appropriate mechanism, but instead is barred” (emphasis in original). The authority of the National Plan's arbitrator to make a binding interpretation of the collective bargaining agreement is not questioned.

Neither the plumbers' fund nor anyone else notified the Joint Arbitration Board of Greenberg's order, so the Board went ahead with its hearing the next morning. Roughneck did not attend. The Board ruled that the plumbers' fund was authorized to invoke the Board's jurisdiction, and, on the merits, that Roughneck had violated its collective bargaining agreement with the plumbers' union by having employees not represented by that union do plumbing work. The Board ordered Roughneck to pay the fund more than $3.3 million in delinquent contributions, plus interest and penalties.

Which brings us at last to the litigation out of which the appeals (functionally one appeal) that we are asked to decide arise. Roughneck filed two suits in the district court, which we've consolidated in this court: one to vacate the Board's order and the other to enforce Greenberg's order. Both suits were brought under section 301(a) of the Labor Management Relations Act (Taft–Hartley), 29 U.S.C. § 185(a), because they charge the defendants with violating a labor contract—the National Plan as interpreted by arbitrator Greenberg. And both seek the same relief—invalidation of the Joint Arbitration Board's $3.3 million award to the plumbers' fund.

Roughneck lost both cases, and appeals both judgments. The district court ruled that by submitting its grievance to the Joint Arbitration Board, and later by failing to appear at the hearing before the Board, Roughneck had waived any objection to the Board's jurisdiction and was therefore bound by the Board's order and could not avail itself of arbitrator Greenberg's order in its favor.

The applicable limitations period for a suit to set aside Greenberg's order was 90 days, as that is the deadline in Illinois law for a challenge to an arbitration award. 710 ILCS 5/12(b). For want of a statute of limitations in the Labor Management Relations Act, courts look to local law for a limitations period, see United Auto. Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 704–06, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966); Sullivan v. Gilchrist, 87 F.3d 867, 870 (7th Cir.1996); Sullivan v. Lemoncello, 36 F.3d 676, 681 (7th Cir.1994), and the applicable local law in this case, all agree, is that of Illinois. The fund did not file a suit within 90 days; we pause to consider whether that was a fatal mistake, or whether the fund protected itself by opposing Roughneck's suit to enforce Greenberg's order.

Roughneck had filed its suit to set aside the award by the Joint Arbitration Board within the 90–day deadline for challenging an arbitration award. In defending against that suit, the fund challenged the validity of Greenberg's order, on which Roughneck relied for its argument that the Joint Arbitration Board's award had exceeded the Board's authority. Roughneck's suit to enforce Greenberg's order came a month later, but was timely because Illinois law provides a...