W.C. James, Inc. v. Oil, Chemical and Atomic Workers Intern. Union, 4-449

• Decision Date: 27 April 1981
• Docket Number: A,No. 4-449,No. 234,No. 80-1519,4-449,234,80-1519
• Citation: W.C. James, Inc. v. Oil, Chemical and Atomic Workers Intern. Union, 646 F.2d 1292 (8th Cir. 1981)
• Parties: 107 L.R.R.M. (BNA) 2226, 91 Lab.Cas. P 12,724 W. C. JAMES, INC., Appellant, v. OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION; Oil, Chemical and Atomic Workers International Union, Local; J. C. Turner and Russell T. Conlon, Representatives of the Members of International Union of Operating Engineers; and Clarence D. La Chance and Donald Morgan as Representatives of the Members of International Union of Operating Engineers, Localppellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1292

646 F.2d 1292

107 L.R.R.M. (BNA) 2226, 91 Lab.Cas. P 12,724

W. C. JAMES, INC., Appellant, v. OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION; Oil Chemical and Atomic Workers International Union, Local No 4-449; J. C. Turner and Russell T. Conlon, Representatives of the Members of International Union of Operating Engineers; and Clarence D. La Chance and Donald Morgan as Representatives of the Members of International Union of Operating Engineers, Local No. 234, Appellees.

No. 80-1519.

United States Court of Appeals Eighth Circuit.

Submitted March 10, 1981.

Decided April 27, 1981.

P. L. Nymann, argued, Jacobs, Gaul, Nymann & Green, Sioux City, Iowa, for W. C. James, Inc.

Barbara J. Hillman, argued, and Arnold S. Rosenberg, Cornfield & Feldman, Chicago, Ill. (John R. Tadlock, Denver, Colo., of counsel), for defendants-appellees.

Barry J. Levine, Gruenberg, Souders, & Levine, St. Louis, Mo., for Operating Engineers Local 234.

MacDonald Smith, Sioux City, Iowa, for defendants-appellees J. C. Turner and Russell T. Conlon, Representatives of the members of International Union of Operating Engineers.

Before BRIGHT, Circuit Judge, GIBSON, Senior Circuit Judge, and ROSS, Circuit Judge.

ROSS, Circuit Judge.

Plaintiff, W. C. James, Inc., appeals from an order of the district court ¹ granting summary judgment in an action for alleged breach of a prehire agreement by defendant unions. Count I of the complaint sought damages for breach of contract from Dome Pipeline Company and Williams Brothers Engineering Company. ² Count II sought damages against the Oil, Chemical and Atomic Workers International Union (OCAW) and its Local No. 4-449 (Local 4-449) for breach of the prehire agreement. Count III sought damages against the International Union of Operating Engineers (IUOE) and its Local No. 234 (Local 234) alleging inducement to breach and tortious interference with the contracts described in Counts I and II. Jurisdiction of the court over Count II was grounded on § 301 of the National Labor Relations Act, 29 U.S.C. § 185. Jurisdiction over Counts I and III was grounded on diversity of citizenship (Counts I, III) and on pendent jurisdiction (Count III).

Summary judgment was denied as to that portion of Count III alleging tortious interference by IUOE. On May 12, 1980, the parties stipulated that this case was to be dismissed without prejudice whereupon the district court entered an order dismissing the action subject to the parties' stipulations. ³

The district court based its grant of summary judgment on three alternative grounds: (1) that any agreement was unenforceable because OCAW lacked majority status; (2) that any agreement was illegal because procured by unlawful union assistance by James; and (3) that any agreement was nonexistent because withdrawn by OCAW prior to its execution by James. The court concluded further that since the underlying prehire agreement was void, illegal, nonexistent or otherwise unenforceable, there can be no recovery for inducement of its breach by IUOE. We affirm.

Facts

Plaintiff, W. C. James, Inc., is a pipeline construction contractor and on July 15, 1977, was awarded the Iowa portion (Spread 6) of a multistate pipeline project by the project's general contractors, Dome Pipeline Corporation and Williams Brothers Engineering Company. Members of IUOE were employed by James and worked on the Spread 6 project. Subsequent to July 15, 1977, a representative of the IUOE or its Local No. 234 made contact with Williams Brothers, James, and OCAW.

By letter dated July 26, 1977, James contacted OCAW concerning terms of a prehire agreement with OCAW that would be applicable to employees working on Spread 6. Following a series of conferences by phone and in person, a document entitled "Pipeline Agreement as Amended" was sent by OCAW to James by mail on August 18, 1977. The agreement had been signed by an OCAW representative and contained a union security clause.

On August 19, 1977, OCAW sent James a telegram stating: "This is to inform you that OCAW Local 4-449 cannot enter into an agreement with your company due to Article XX of the AFL-CIO Constitution. We have been informed by the OCAW President that (that) contract would be in violation of (the) AFL-CIO Constitution." This telegram was received by James before it received the agreement by mail. As a result of failing to secure a prehire agreement, a condition of its contract with Dome-Williams, James was pulled off the Spread 6 project and was not permitted to return.

No employees working for James on Spread 6 were ever paid on the basis of the wage rate set forth in the agreement nor were any union dues or initiation fees ever forwarded by James to OCAW.

At the hearing on motions for summary judgment, James conceded it could not prove through authorization cards or otherwise that OCAW ever represented a majority of the employees on the project, either at the time of negotiation or thereafter.

Discussion

Section 8(f) of the National Labor Relations Act permits an employer engaged in the building and construction industry to enter into a prehire agreement with a labor organization before the majority status of that organization has been established in accordance with the recognitional provisions of the Act. In pertinent part, 29 U.S.C. § 158(f) provides:

(f) It shall not be an unfair labor practice under subsections (a) and (b) of this section for an employer engaged primarily in the building and construction industry to make an agreement covering employees engaged (or who, upon their employment, will be engaged) in the building and construction industry with a labor organization of which building and construction employees are members (not established, maintained, or assisted by any action defined in subsection (a) of this section as an unfair labor practice) because (1) the majority status of such labor organization has not been established under the provisions of section 159 of this title prior to the making of such agreement, * * * Provided further, That any agreement which would be invalid, but for clause (1) of this subsection, shall not be a bar to a petition filed pursuant to section 159(c) or 159(e) of this title.

In NLRB v. Irvin, 475 F.2d 1265 (1973) the Third Circuit explained the rationale for allowing such agreements:

(8(f)) was adopted to meet specific problems which had arisen in the construction industry under the prior law because of the transitory nature of the employer-employee relationship in that industry. * * * In summary, prehire agreements which would otherwise be invalid were authorized in the construction industry because of the dual necessities (1) that construction bidders know in advance of bid what their labor costs would be, and (2) that construction employers have access to an available pool of skilled craftsmen for quick reference.

Id. at 1267.

We agree with the district court's interpretation of § 158(f) as expressed in its order of May 8, 1980:

It should be noted, however, that Section 158(f) does not state that pre-hire agreements are automatically enforceable in court; it merely states that entering into such agreements will not constitute an unfair labor practice under specified conditions.

The enforceability of such agreements was considered by the Supreme Court in NLRB v. Local No. 103, Iron Workers, 434 U.S. 335, 98 S.Ct. 651, 54 L.Ed.2d 586 (1978). There, a union having a prehire agreement with a construction employer, but lacking a majority status among the employees at the time, picketed the employer at several project sites in an effort to enforce the prehire agreement. The NLRB determined that it is an unfair labor practice within the meaning of § 8(b)(7)(C) (recognitional picketing) for an uncertified union, not representing a majority of the employees, to engage in such picketing. In upholding the Board's determination, the Court stated:

(A) prehire agreement does not entitle a minority union to be treated as the majority representative of the...