Sheet Metal Workers Local Union No. 20 v. Baylor Heating and Air Conditioning, Inc.

• Citation: 877 F.2d 547
• Decision Date: 13 June 1989
• Docket Number: No. 88-2300,88-2300
• Parties: 131 L.R.R.M. (BNA) 2838, 58 USLW 2020, 112 Lab.Cas. P 11,275 SHEET METAL WORKERS LOCAL UNION NO. 20, Plaintiff-Appellee, v. BAYLOR HEATING AND AIR CONDITIONING, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 547

877 F.2d 547

131 L.R.R.M. (BNA) 2838, 58 USLW 2020,

112 Lab.Cas. P 11,275

SHEET METAL WORKERS LOCAL UNION NO. 20, Plaintiff-Appellee, v. BAYLOR HEATING AND AIR CONDITIONING, INC., Defendant-Appellant.

No. 88-2300.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 18, 1989.

Decided June 13, 1989.

Wm. Michael Schiff, Kahn Dees Donovan & Kahn, Evansville, Ind., for defendant-appellant.

William R. Groth, Fillenwarth Dennerline Groth & Baird, Indianapolis, Ind., for plaintiff-appellee.

Diane Rosse, N.L.R.B., Washington, D.C., for intervenor.

Before WOOD, Jr. and RIPPLE, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

HARLINGTON WOOD, Jr., Circuit Judge.

The parties to this labor dispute ask us to determine the validity of an interest arbitration clause in a prehire collective bargaining agreement. Involved are (1) the unilateral repudiation of a collective bargaining agreement, (2) unfair labor charges against the company, (3) arbitration, (4) an arbitration award against the company, (5) a federal suit to enforce the arbitration award, (6) unfair labor charges against the union, (7) an appeal by the company, (8) intervention on appeal by the National Labor Relations Board (NLRB or Board), and (9) a requested stay of this appeal. See 29 U.S.C. Secs. 157-159, 185 (National Labor Relations Act (NLRA); Labor Management Relations Act of 1947 (LMRA)). ¹ The union invoked the district court's jurisdiction under Sec. 301 of the LMRA. The district court enforced the collective bargaining agreement in favor of the union, 688 F.Supp. 462 (M.D.Pa.1988), and the company appeals. We previously granted the Board's motion to intervene. In order to resolve this dispute without further delay, we deny the Board's motion for a stay and decide the contractual issues raised by the parties.

I. FACTUAL BACKGROUND

Baylor Heating and Air Conditioning, Inc. (Company), defendant-appellant, and Sheet Metal Workers Local Union No. 20 (Union), plaintiff-appellee, signed a prehire collective bargaining agreement authorized by section 8(f) of the NLRA. See 29 U.S.C. Sec. 158(f). The Union and the Sheet Metal Contractors' Association of Evansville, Inc. negotiated the agreement and, although not a member of this association, the Company voluntarily agreed to be bound by its terms. The agreement went into effect on May 1, 1984, was signed by the Company on August 21, 1984, and was scheduled to expire on April 30, 1987.

The Company and the Union performed under this agreement without apparent incident until near the end of the agreement's three-year term. In January 1987 the Union anticipated renewal of the agreement and advised the Company that it wished to amend the agreement. The Company had other ideas. On February 26, 1987 the Company advised the Union that it did not intend to sign a new agreement. Thereafter, the Company refused to negotiate with the Union.

The Union responded on March 6, 1987 by filing unfair labor charges with the NLRB. The Union charged that the Company refused to bargain in violation of section 8(a)(5) of the NLRA. See 29 U.S.C. Sec. 158(a)(5). On April 14, 1987 the Acting Regional Director of the NLRB found no violation by the Company and refused to issue a complaint for unfair labor practices against the Company. The Union did not appeal this decision to the full Board.

Stymied by the Acting Regional Director, the Union in May 1987 invoked the collective bargaining agreement's interest arbitration clause even though the agreement arguably had been terminated. ² The Union submitted the dispute to the Adjustment Board (Arbitrator) for resolution. The Company, relying on the NLRB's determination that it had committed no unfair labor practice when it repudiated the agreement, chose not to participate in proceedings before the Arbitrator. Not surprisingly, on June 24, 1987 the Arbitrator decided in favor of the Union. Without mentioning the Acting Regional Director's action, the Arbitrator enforced the interest arbitration clause and ordered the Company to execute a new agreement with the Union beginning June 1, 1987 and ending June 30, 1991. The terms of agreement ordered by the Arbitrator were similar to the terms of the 1984 agreement. The Company did not file suit to vacate the Arbitrator's decision or file unfair labor charges with the NLRB.

On October 13, 1987 the Union filed suit under section 301 of the LMRA to enforce the arbitration award. See 29 U.S.C. Sec. 185. On November 19, 1987 the Company filed unfair labor charges with the NLRB against the Union. The Company filed these charges after it had answered the complaint but before the district judge had ruled. The Company charged that the Union caused the Company to discriminate against its employees in violation of Sec. 8(b)(2) of the NLRA; coerced the Company's employees in violation of Sec. 8(b)(1)(A); engaged in an unlawful secondary boycott in violation of Sec. 8(b)(4)(ii); and attempted to coerce the Company to agree to a collective bargaining agreement in violation of section 8(e). See 29 U.S.C. Sec. 158(b). The Company then moved the district court to stay its proceedings until the NLRB resolved the unfair labor charges. The district judge denied the stay, found that the Company's contractual duties were more exacting than its statutory duties, and on June 1, 1988 granted summary judgment in favor of the Union enforcing the arbitration award. The Company, having filed timely notice on June 30, 1988, appeals the district court's judgment.

Approximately three and one-half months after the district judge ordered enforcement of the arbitration award, on September 14, 1988 the Regional Director of the NLRB issued a complaint against the Union for unfair labor practices. The complaint was based on the Company's earlier charges. In an unusual move, the Board then moved to intervene in this court while this appeal was pending. On November 15, 1988 we granted the Board's motion to intervene. The Board now asks us to stay our decision until it resolves the unfair labor practice complaint against the Union.

We consider the Board's request together with the issues raised by the Company. The Company argues that (1) the district court erred by not staying its proceedings until the Board resolved the unfair labor practice charges pending against the Union; (2) the Union should have sought a judicial determination of arbitrability before unilaterally submitting the matter for arbitration; and (3) the interest arbitration clause violates federal labor policy and is consequently void and unenforceable.

II. ANALYSIS

A. Request for a Stay

The Board asks us to exercise our discretion and grant a stay. The Board states "that the issue to be decided on appeal will also be decided in, and is central to, the unfair labor practice case." The Board wants to decide whether the Union violated the NLRA and national labor policy by enforcing the interest arbitration clause. We must decide whether the district judge erred when, based on the prehire agreement, he ordered enforcement of the arbitration award. The Board has jurisdiction to resolve unfair labor complaints, see 29 U.S.C. Sec. 160; the district judge has jurisdiction to enforce collective bargaining agreements, see 29 U.S.C. Sec. 185; and we have jurisdiction over both, see 28 U.S.C. Sec. 1291; 29 U.S.C. Secs. 160, 185. ³ We could grant the stay, let the Board decide the unfair labor complaint, and then review the district judge's order. Alternatively, we could deny the stay and resolve the issues now before us.

The Union and the Company have suffered through various proceedings with accompanying delay. The Board wants to decide an unfair labor charge that was filed on November 19, 1987 and provided the basis for a complaint issued on September 14, 1988. Although the Board has had jurisdiction since November 1987, it has not decided the unfair labor charge that underlies this controversy. Further delay runs counter to a basic tenet of our national labor policy--labor disputes should be resolved promptly. See UPS v. Mitchell, 451 U.S. 56, 63, 101 S.Ct. 1559, 1564, 67 L.Ed.2d 732 (1981); NLRB v. C & C Plywood Corp., 385 U.S. 421, 430, 87 S.Ct. 559, 565, 17 L.Ed.2d 486 (1967); cf. International Org. of Masters v. Trinidad Corp., 803 F.2d 69 (2d Cir.1986) (stay granted because Board had issued unfair labor practice charge and scheduled a hearing to be conducted within two months of oral argument before the court of appeals).

This case involves the Company's contractual duty to arbitrate. Congress intended for the federal courts to resolve contractual disputes. See 29 U.S.C. Sec. 185; Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 562, 96 S.Ct. 1048, 1055, 47 L.Ed.2d 231 (1976); Chicago Typographical Union No. 16 v. Chicago Sun-Times, Inc., 860 F.2d 1420, 1426-27 (7th Cir.1988). We agree with the Ninth Circuit that potential for conflict between the Board and the courts does not require a stay. See International Bhd. of Elec. Workers, Local 532 v. Brink Constr. Co., 825 F.2d 207, 213 (9th Cir.1987). Further, we agree that when the underlying controversy is primarily contractual, the Board should defer to the courts. Id.

Therefore, we deny the stay. For the same reasons that we deny a stay of this appeal, we also find that the district judge did not abuse his discretion when he denied the Company's request for a stay of the district court proceedings. See McGough v. First Arlington Nat'l Bank, 519 F.2d 552, 554 (7th Cir.1975). Even though the Board was allowed to intervene and brief the issues, we proceed cautiously because we do so without the benefit of a Board decision in an area where it is an expert.

B. Arbitrability

Before evaluating the consequence of the interest arbitration clause, we must determine whether this dispute was properly arbitrable and whether the Union should have sought a judicial determination of arbitrability before it unilaterally submitted the...