Brock Industrial Services, LLC v. Laborers' International Union , 920 F.3d 513 ( 2019 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 17-2597 & 17-2688
BROCK INDUSTRIAL SERVICES, LLC,
Plaintiff-Appellant/
Cross-Appellee,
v.
LABORERS’ INTERNATIONAL UNION
OF NORTH AMERICA CONSTRUCTION
& GENERAL LABORERS LOCAL 100,
Defendant-Appellee/
Cross-Appellant.
____________________
Appeals from the United States District Court
for the Southern District of Illinois.
No. 16-CV-780-NJR-DGW — Nancy J. Rosenstengel, Judge.
____________________
ARGUED APRIL 11, 2018 — DECIDED APRIL 8, 2019
____________________
Before BAUER, SYKES, and BARRETT, Circuit Judges.
SYKES, Circuit Judge. Brock Industrial Services, LLC, is an
Illinois-based provider of industrial services, including
scaffolding, painting, insulation, and shoring. In January
2 Nos. 17-2597 & 17-2688
2016 it entered into a labor agreement with Local 100 of the
Laborers’ International Union 1 (“the Laborers Union” or
“the Laborers”). The agreement requires arbitration of
grievances and establishes a bipartite arbitration procedure
for resolving most disputes. But work-jurisdiction dis-
putes—disputes over whether the Laborers or another union
is entitled to perform work—are instead subject to a tripar-
tite arbitration procedure involving the company and the
contending unions.
Sometime prior to signing the agreement, Brock hired the
Laborers to perform scaffolding work at a chemical plant.
On the day after the agreement became effective, Brock
informed the Laborers Union that it was reassigning the
work to the International Brotherhood of Carpenters (“the
Carpenters Union” or “the Carpenters”). Invoking the
bipartite arbitration procedure, the Laborers Union filed a
grievance with the Grievance Review Subcommittee of the
National Maintenance Agreement Policy Committee (“the
Subcommittee”). Brock responded that the grievance in-
volved a work-jurisdiction dispute subject to tripartite
arbitration and therefore the Subcommittee lacked authority
to arbitrate the matter. The Subcommittee disagreed and
sustained the grievance.
Brock filed suit under section 301 of the Labor Manage-
ment Relations Act, 29 U.S.C. § 185, seeking to vacate the
Subcommittee’s decision. The Laborers Union responded
with a request to enforce the decision. After a flurry of
motions on both sides, the district judge determined that the
1 Formally, the Laborers’ International Union of North America
Construction & General Laborers Local 100.
Nos. 17-2597 & 17-2688 3
Subcommittee had authority to resolve the dispute and
issued an order enforcing its decision. Brock appealed.
Under the mistaken impression that the judge had denied
the motion to enforce, the Laborers Union also appealed.
We reverse. At bottom, this grievance concerns which of
two unions was entitled to perform the scaffolding work at
the chemical plant. That’s a jurisdictional dispute, and the
labor agreement calls for tripartite arbitration of jurisdiction-
al disputes. Accordingly, the Subcommittee had no authority
over the matter and its decision must be vacated.
I. Background
Brock and the Laborers Union entered into a labor
agreement effective January 7, 2016. The agreement pro-
vides: “Except for jurisdictional disputes and those involv-
ing general wage rates, all disputes and grievances arising
out of work performed under this [a]greement … shall be
resolved” through the procedures outlined in Article VI.
Article VI requires Brock and the Laborers to submit unre-
solved grievances to the Subcommittee for arbitration. We
refer to this grievance process as bipartite arbitration.
Article I of the agreement provides a separate procedure
for resolving work-jurisdiction disputes. A work-jurisdiction
dispute is “a dispute between two or more groups of em-
ployees over which is entitled to do certain work for an
employer.” Hutter Constr. Co. v. Int’l Union of Operating
Eng’rs, Local 139, 862 F.2d 641, 644 (7th Cir. 1988) (quotation
marks omitted). Under Article I of the labor contract, unre-
solved work-jurisdiction disputes must be submitted to a
Permanent Umpire. Because this process typically involves
4 Nos. 17-2597 & 17-2688
three parties—the employer plus the two competing un-
ions—we refer to it as tripartite arbitration.
Prior to signing the agreement, Brock assigned several
Laborers to construct scaffolding at the Afton Chemical
Plant. On January 8, 2016—the day after the operative labor
agreement became effective—Brock notified the Laborers
Union that its services were no longer required because the
project was assigned to the Carpenters Union. On January 11
the Laborers Union sent a letter to the National Maintenance
Agreement Policy Committee claiming that Brock violated
the agreement when it reassigned the work to the Carpen-
ters. On January 21 the Laborers notified the Carpenters
Union of a work-jurisdiction dispute between the unions
over the project.
Invoking the bipartite arbitration procedure specified in
Article VI, the Laborers filed a grievance with the Subcom-
mittee complaining that Brock violated the agreement by
terminating the Laborers and assigning work to the Carpen-
ters. The grievance requested reinstatement and backpay as
a remedy. Brock responded that the Subcommittee had no
arbitral authority over the grievance because it constituted a
work-jurisdiction dispute and requested that the grievance
be dismissed or denied.
The Subcommittee denied Brock’s request and sustained
the grievance, finding that Brock violated Article I, Section 5
of the labor contract. That provisions states: “During the
existence of the [a]greement, there shall be no strikes, lock-
outs, work stoppages, or picketing arising out of any juris-
dictional dispute. Work will continue as originally assigned,
pending resolution of the dispute.” The Subcommittee
Nos. 17-2597 & 17-2688 5
determined that Brock violated this section by making “a
change of assignment.”
Brock brought this suit under section 301 seeking to va-
cate the arbitral award as void because the grievance consti-
tuted a jurisdictional dispute and thus was outside the
Subcommittee’s arbitral authority. A bevy of motions fol-
lowed. The Laborers moved to dismiss under Rule 12(b)(6)
of the Federal Rules of Civil Procedure; Brock moved to
vacate the award; the Laborers moved to “dismiss” the
motion to vacate on timeliness grounds; and the Laborers
moved to enforce the award.
The judge denied all four motions. She acknowledged
that the Subcommittee lacked arbitral authority if the griev-
ance concerned a jurisdictional dispute. She concluded,
however, that if the grievance concerned both a jurisdictional
dispute and a wrongful-termination claim, then the Sub-
committee could properly adjudicate the latter dispute. But a
material issue of fact—namely, whether the Laborers were
ever assigned the project to begin with—prevented the judge
from resolving the case at that time.
Brock sought reconsideration, and the Laborers moved
for summary judgment. The judge denied reconsideration
and entered summary judgment for the Laborers Union,
ruling that Brock had indeed assigned the scaffolding work
to the Laborers and the Subcommittee’s decision is enforcea-
ble. Both sides appealed.
II. Discussion
We review a summary judgment de novo. Hooper v. Proc-
tor Health Care Inc., 804 F.3d 846, 849 (7th Cir. 2015). We
begin by addressing the Laborers’ cross-appeal, which seeks
6 Nos. 17-2597 & 17-2688
review of the judge’s initial order denying the motion to
enforce the arbitral award. The cross-appeal rests on the
mistaken assumption that the judge never issued an order
enforcing the award. But the summary-judgment order
clearly states that the “award is enforceable as a matter of
law.” Because the Laborers prevailed, we dismiss the cross-
appeal.
With that out of the way, we turn to the main event:
Brock’s argument that the Subcommittee lacked the authori-
ty to arbitrate the grievance because it raised a work-
jurisdiction dispute. “[A]rbitration is a matter of contract[,]
and a party cannot be required to submit to arbitration any
dispute which he has not agreed so to submit.” AT&T Techs.,
Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 648 (1986)
(quotation marks omitted). “[T]he question of arbitrability—
whether a collective-bargaining agreement creates a duty for
the parties to arbitrate the particular grievance—is undenia-
bly an issue for judicial determination.” Id. at 649.
By signing the agreement, Brock agreed to submit some
disputes—but not all—to arbitration by the Subcommittee.
Article VI of the agreement creates a bipartite arbitration
procedure and vests the Subcommittee with arbitral authori-
ty. Subject to two exceptions, the bilateral procedure applies
to “all disputes and grievances arising out of work per-
formed under [the] [a]greement involving the meaning or
interpretation of any provision in [the] [a]greement.” Juris-
dictional disputes are one of the exceptions. Article I creates
a separate, tripartite arbitration procedure to resolve work-
jurisdiction disputes and vests arbitral authority in the
Permanent Umpire rather than the Subcommittee. Accord-
Nos. 17-2597 & 17-2688 7
ingly, the Subcommittee exceeded its authority if the griev-
ance raised a work-jurisdiction dispute.
The gravamen of the grievance is work jurisdiction. The
grievance and its supporting documents all complain that
Brock improperly assigned work to the Carpenters instead
of the Laborers. The Grievance Form Fact Sheet demanded
that Brock “make proper assignment of work to the Labor-
ers’ Union,” “reinstate the Laborers,” and compensate
workers for “lost wages and benefits.” Indeed, the Subcom-
mittee sustained the grievance because Brock “made a
change of assignment.” In other words, the Laborers com-
plained (and the Subcommittee found) that Brock assigned
work to the wrong union. That’s the definition of a jurisdic-
tional dispute. The Subcommittee therefore had no authority
to arbitrate the grievance. The contract required tripartite
arbitration in which the competing unions and the employer
could be heard.
Our previous decisions amply support this conclusion. In
Local 416, Sheet Metal Workers International Ass’n v. Helgesteel
Corp., 507 F.2d 1053 (7th Cir. 1974), Helgesteel Corporation
(a contractor) and the Sheet Metal Workers were parties to a
labor contract that provided for tripartite arbitration of
jurisdictional disputes in Article XI and bipartite arbitration
for almost all others in Article X. Id. at 1054–56. A dispute
arose when Helgesteel reassigned work to an Ironworkers’
union. The Sheet Metal Workers filed a grievance under
Article X complaining about this reassignment; the arbitrator
sustained the grievance and awarded damages. When
Helgesteel refused to pay, the Sheet Metal Workers filed suit
in federal court to enforce the award. Helgesteel told the
Ironworkers it would likely need to give the work back to
8 Nos. 17-2597 & 17-2688
the Sheet Metal Workers, so the Ironworkers filed their own
grievance, which the arbitrator sustained. Id. The Ironwork-
ers then filed suit in federal court seeking to compel the
Sheet Metal Workers and Helgesteel to submit the entire
controversy to tripartite arbitration. Id. at 1055.
We held that the entire controversy constituted a jurisdic-
tional dispute requiring tripartite arbitration. Id. at 1057. The
Sheet Metal Workers insisted that the agreement permitted
them to seek damages under the bipartite process of
Article X even if tripartite arbitration was also required
under Article XI. Id. at 1058. We rejected that argument,
explaining that such an interpretation of the contract “would
allow inconsistent final arbitration awards; the national joint
board may say that the work should be assigned to the
ironworkers while the local joint board has awarded damag-
es to the sheet metal workers.” Id.
Likewise, in William Charles Construction Co. v Teamsters
Local Union 627, 827 F.3d 672 (7th Cir. 2016), we confronted a
similar agreement featuring bifurcated arbitration proce-
dures. The William Charles Construction Company per-
formed work on a highway expansion for the State of
Illinois. Id. at 674. During construction, a dispute broke out
between the Teamsters and the International Union of
Operating Engineers Local 649 over who was entitled to
operate the trucks required for the excavation work. The
Teamsters initiated tripartite arbitration, arguing that the
work had been improperly assigned to the engineers. The
arbitrator ruled in the Teamsters’ favor but awarded no
backpay or damages. Id. The Teamsters then filed a second
grievance under bipartite arbitration, complaining again of
the improper assignment but this time seeking damages. Id.
Nos. 17-2597 & 17-2688 9
at 676. The second arbitrator also sided with the Teamsters
and awarded lost wages and benefits. Id. at 677. The compa-
ny filed suit seeking a declaratory judgment that the second
award was void. Id. We agreed that the second grievance
was not arbitrable because it was jurisdictional in nature and
therefore not subject to bipartite arbitration. Id.
So too here. The Laborers Union complains that Brock
improperly reassigned the project to another union, so the
grievance must be resolved in tripartite arbitration. Allow-
ing the Laborers to seek damages through bipartite arbitra-
tion could produce “inconsistent final arbitration awards,”
Helgesteel, 507 F.2d at 1058, so the Subcommittee lacked
authority and its award must be vacated.
This conclusion accords with the reasoning of cases in
which we declined to find a jurisdictional dispute reserved
for tripartite arbitration. For instance, in Hutter v. Local 139,
862 F.2d 641, Hutter (a general contractor) had a labor
agreement with the International Union of Operating Engi-
neers (“the Operators” or “the Operators Union”). Id. at 642.
The agreement gave the Operators exclusive jurisdiction
over most forklift jobs in Wisconsin; it also provided that
work could be subcontracted only to signatories to the
agreement. When Hutter was awarded work on a prison
contract in Oshkosh, it subcontracted the masonry work to
BDI, which was not a signatory to the agreement. BDI
thereafter assigned forklift duties to the Wisconsin Laborers
District Council and Laborers Local Union No. 1086 rather
than the Operators. The Operators Union submitted a griev-
ance to bipartite arbitration, complaining that Hutter had
improperly subcontracted the work to a nonsignatory. Id.
10 Nos. 17-2597 & 17-2688
The arbitrator agreed and ordered backpay, and the Opera-
tors filed suit in federal court to enforce the award. Id. at 643.
Hutter argued that the Operators’ grievance was really a
“disguised jurisdictional dispute” subject to tripartite arbi-
tration and that the bipartite arbitration award should be
vacated. Id. We disagreed, concluding that the subcontracting
grievance “was a distinct non-jurisdictional claim” because it
did not turn on who was ultimately assigned the work. Id. at
644. For example, BDI could have assigned the work to the
Operators, and in that case there would have been no juris-
dictional dispute even though Hutter violated the subcon-
tracting provision. Id. Because the subcontracting dispute
was nonjurisdictional, the arbitrator had the authority to
resolve the grievance under the bipartite procedure. Id. at
645.
Although Hutter held that the dispute in question was
nonjurisdictional, its reasoning supports the opposite con-
clusion here. We emphasized in Hutter that the subcontract-
ing grievance “arose independently” of the work
assignment; its validity was “not dependent upon the identi-
ty of the party that ultimately performed the forklift work.”
Id. at 644. In contrast, here the Laborers’ grievance is entirely
dependent on the work assignment. Under the reasoning in
Hutter, the Laborers’ grievance is really just a “disguised
jurisdictional dispute.” Id. at 643.
Our conclusion finds additional support in Miron Con-
struction Co. v. International Union of Operating Engineers,
Local 139, 44 F.3d 558 (7th Cir. 1995). The facts there are
strikingly similar to those in Hutter. Miron (a general con-
tractor) signed a labor agreement granting the Operators
Union exclusive jurisdiction over forklift jobs in Wisconsin
Nos. 17-2597 & 17-2688 11
and stipulated that work could be subcontracted only to
signatories to the agreement. Id. A dispute arose when
Miron twice subcontracted work to nonsignatories, each of
which assigned forklifting work to the Wisconsin Laborers
District Council. Id. at 561. The Operators filed grievances
under the bipartite procedure complaining that Miron had
violated the subcontracting provision. The Laborers District
Council filed its own grievances to resolve the proper work
assignment and threatened to strike. This threat got the
NLRB involved, which held a § 10(k) hearing to resolve the
jurisdictional dispute. The Board eventually awarded the
first project to the Laborers District Council. Id.
Miron filed a complaint in federal court seeking tripartite
arbitration. Id. at 561–62. We affirmed the district court’s
denial of that relief. While the Laborers’ grievance concerned
work jurisdiction, the Operators’ grievance alleged only a
subcontracting violation. And under Hutter a subcontracting
dispute is distinct and independent of a jurisdictional dis-
pute. Id. In a subcontracting grievance, “[t]he identity of the
employees who ultimately perform the work is irrelevant.”
Id. at 566 (citing Hutter, 862 F.2d at 644). A subcontracting
grievance does not conflict with a work-jurisdiction award
so long as there is no “demand that the subcontractor reas-
sign the work … . Since the subcontractor has complete
control over which union actually performs the work,
maintenance of an action against the general contractor
cannot be viewed as a veiled attempt to force a reassignment
of the work.” Id.
Miron too is factually distinguishable from this case,
though like Hutter its reasoning supports our conclusion. In
Miron we focused on whether the bipartite proceeding could
12 Nos. 17-2597 & 17-2688
generate an award that conflicts with the resolution of a
jurisdictional dispute. A bipartite arbitration award is valid
so long as the grievance “cannot be viewed as a veiled
attempt to force a reassignment of the work.” Id. Here the
Laborers explicitly attempted to force reassignment—the
union demanded that Brock “make [a] proper assignment of
work [back] to the Laborers’ Union.”
One case cuts in the opposite direction. In Alberici–Eby v.
Local 520, International Union of Operating Engineers, 992 F.2d
727 (7th Cir. 1993), we affirmed awards entered in bipartite
arbitration for improper work assignment. Alberici–Eby (a
general contractor) hired six unions to construct a lock on
the Mississippi River in Illinois. Id. at 728. The unions made
competing claims to each part of the work, and Alberici–Eby
did its best to divide the work fairly. Id. at 729. After the
project was completed, two unions—the Engineers and the
Laborers—filed separate grievances under their respective
collective-bargaining agreements alleging that Alberici–Eby
had improperly assigned their work to other unions.
Alberici–Eby responded that the grievances raised jurisdic-
tional disputes, so the arbitrators had no authority to hear
them. Id. One arbitrator heard the Engineers’ grievance and
decided in their favor, and a second arbitrator heard the
Laborers’ grievance and refused to stay the proceeding.
Alberici–Eby then filed suit in federal court asking that the
judge set aside the first arbitrator’s award, stay the proceed-
ing before the second arbitrator, and require any unions
seeking relief to submit to multiparty arbitration to settle the
jurisdictional dispute. Id.
We denied Alberici–Eby’s request. We first noted that
Alberici–Eby failed to timely invoke the multiparty arbitra-
Nos. 17-2597 & 17-2688 13
tion mechanism even though it “was on notice that it faced
the strong possibility of conflicting arbitral awards.” Id. at
730. We then determined that the first arbitrator had authori-
ty to resolve the Engineers’ grievance. Id. at 733. The relevant
labor agreement created a separate arbitration process for
jurisdictional disputes, but we noted that the agreement
“[did] not tell us whether the subject of the grievance … was
or was not a jurisdictional dispute.” Id. However, the agree-
ment provided that “any difference or dispute arising out of
the interpretation or application of any of the provisions
contained in th[e] [a]greement” was to be decided by an
arbitrator. Id. The agreement further provided that the
Engineers had exclusive jurisdiction over the relevant work,
so we concluded that the dispute “ar[ose] out of the interpre-
tation or application of the [agreement].” Id. We also refused
to stay the proceedings before the second arbitrator, again
emphasizing that Alberici–Eby failed to timely invoke
multiparty arbitration, so it “would be manifestly unjust to
deny the Laborers an opportunity to be heard by way of
bipartite arbitration.” Id. at 734.
Alberici–Eby is hard to reconcile with Helgesteel, Hutter,
Miron, and William Charles. The grievances concerned work-
assignment disputes, but we permitted bipartite arbitration
to proceed. We based our decision in part on the language in
the agreement between Alberici–Eby and the Engineers, but
that language cannot be meaningfully distinguished from
virtually identical language in Helgesteel. Compare Alberici–
Eby, 992 F.2d at 733 (providing for bipartite arbitration over
“any difference or dispute arising out of the interpretation or
application of any of the provisions contained in th[e]
[a]greement”) with Helgesteel, 507 F.2d at 1055 (providing for
bipartite arbitration over any “[g]rievance of the [e]mployer
14 Nos. 17-2597 & 17-2688
or the [u]nion[] arising out of interpretation or enforcement
of th[e] [a]greement”).
Because Alberici–Eby is an obvious outlier, we limit the
case to its peculiar facts. We emphasized there that the
contractor waited too long to request multiparty arbitration.
That defeated the purpose of the multiparty arbitration
process, “which was carefully designed to produce a speedy
resolution of jurisdictional disputes in order to permit work
to be properly allocated before that work is performed.”
Alberici–Eby, 992 F.2d at 731. The mistake was inexcusable in
light of “the strong possibility of conflicting arbitral awards”
when the unions filed their separate grievances. Id. at 730.
Moreover, the project had already been completed. As a
consequence the multiparty arbitration would have done
little good: “[T]he work ha[d] already been performed,” and
the multiparty procedure had “no authority to award dam-
ages for misassigned work.” Id. at 730 n.2. We specifically
highlighted these facts when we refused to stay arbitration
of the Laborers’ grievance. Id. at 734 (“In … light of Alberici–
Eby’s failure to move in a timely fashion to achieve multi-
party arbitration (assuming that such was available), it
would be manifestly unjust to deny the Laborers an oppor-
tunity to be heard by way of bipartite arbitration.”). None of
these circumstances are present here. The Laborers Union
notified the Carpenters of the work-jurisdiction dispute ten
days after it filed its bipartite grievance. And Brock chal-
lenged the propriety of bipartite arbitration at the earliest
opportunity.
The district judge offered two reasons to affirm the arbi-
tral award but neither holds up under the caselaw we’ve just
surveyed. First, the judge reasoned that because several
Nos. 17-2597 & 17-2688 15
Laborers were already working on the project, removing
those workers from the job gave rise to a wrongful-
termination claim distinct from the jurisdictional dispute.
Not so. The Laborers were terminated because the work was
assigned to the Carpenters; a finding of wrongful termina-
tion necessarily implies that the work was misassigned. That
puts this grievance squarely on the work-jurisdiction side of
the line. As such, it was subject to tripartite arbitration.
Second, the judge held that the grievance arose out of
Article I, Section 5, which provides a separate contractual
basis for bipartite arbitrability. The provision in question
states: “During the existence of the [a]greement, there shall
be no strikes, lockouts, work stoppages, or picketing arising
out of any jurisdictional dispute. Work will continue as
originally assigned, pending resolution of the dispute.”
Grievances arising under this provision are indeed sub-
ject to bipartite arbitration. Like the subcontracting provi-
sions in Hutter and Miron, a dispute under this provision can
be separately arbitrated without interfering with a jurisdic-
tional dispute. Suppose for a moment that the Laborers and
the Carpenters submitted a jurisdictional dispute to tripartite
arbitration, and to pressure Brock into taking its side, the
Laborers Union called a strike, prompting Brock to file a
grievance under Section 5. It would be completely consistent
for one arbitrator to award the work assignment to the
Laborers and another to sanction the Laborers for initiating a
strike. Neither award would call the other into question.
But bipartite arbitration was not appropriate just because
the Laborers labeled the grievance as one arising under
Section 5. We look instead to the substance of the grievance.
And in substance, this grievance is a work-jurisdiction
16 Nos. 17-2597 & 17-2688
dispute. As such, it was subject to tripartite arbitration, and
the Subcommittee lacked arbitral authority.
REVERSED; CROSS-APPEAL DISMISSED.