Sheet Metal Workers International Ass'n Local Union No. 27 v. E.P. Donnelly, Inc.

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
Nos. 10-2201, 10-2202 & 10-2325
____________
SHEET METAL WORKERS INTERNATIONAL
ASSOCIATION LOCAL UNION NO. 27, AFL-CIO,
Appellant in No. 10-2202
v.
E.P. DONNELLY, INC.;
SAMBE CONSTRUCTION CO., INC.
E.P. DONNELLY, INC,
Appellant in No. 10-2201
SAMBE CONSTRUCTION CO., INC,
Appellant in No. 10-2325
___________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 1-07-cv-03023)
District Judge: Honorable Renee M. Bumb
____________
11-4480
____________
SHEET METAL WORKERS INTERNATIONAL
ASSOCIATION LOCAL UNION NO. 27, AFL-CIO,
Petitioner
v.
NATIONAL LABOR RELATIONS BOARD; UNITED
BROTHERHOOD OF CARPENTERS AND JOINERS
OF AMERICA, LOCAL UNION NO. 623; E.P.
DONNELLY,
Respondents
___________
12-1047
___________
NATIONAL LABOR RELATIONS BOARD,
Petitioner
v.
SHEET METAL WORKERS’ INTERNATIONAL
ASSOCIATION, LOCAL UNION NO. 27, AFL-CIO;
UNITED BROTHERHOOD OF CARPENTERS AND
JOINERS OF AMERICA, LOCAL UNION NO. 623,
Respondents
2
___________
On Petition for Review and Cross-Application for
Enforcement of a Decision and Order of the
National Labor Relations Board
(NLRB Docket No. 4-CD-1188)
___________
Argued February 13, 2013
Before: McKEE, Chief Judge, HARDIMAN, AND
VANASKIE, Circuit Judges.
(Filed: December 13, 2013)
Louis Rosner, Esq. (ARGUED)
Suite 2020
123 South Broad Street
Philadelphia, PA 19109
Counsel for E.P. Donnelly Inc.
Mark E. Belland, Esq. (ARGUED)
Steven J. Bushinsky, Esq.
O’Brien, Belland & Bushinsky
1526 Berlin Road
Cherry Hill, NJ 08003
Counsel for Sheet Metal Workers International
Association AFL-CIO Local Union No. 27
Melissa C. Angeline, Esq.
6352 Lancaster Avenue
Philadelphia, PA 19151
3
Marc Furman, Esq.
Jonathan Landesman, Esq. (ARGUED)
Cohen, Seglias, Pallas, Greenhall & Furman
30 South 17th Street
19th Floor
Philadelphia, PA 19103-0000
Counsel for Sambe Construction Co. Inc.
Heather S. Beard, Esq. (ARGUED)
Julie B. Broido, Esq.
Linda Dreeben, Esq.
National Labor Relations Board
1099 14th Street, N.W.
Washington, D.C. 20570
Counsel for the National Labor Relations Board
Raymond G. Heineman, Esq.
Kroll Heineman
99 Wood Avenue South
Metro Corporate Campus I, Suite 307
Iselin, NJ 08830-0000
Counsel for United Brotherhood of Carpenters and
Joiners of America Local Union No. 623
___________
OPINION
___________
VANASKIE, Circuit Judge.
These consolidated appeals arise out of a construction
trades jurisdictional dispute concerning whether certain work
on a public building should be conducted by sheet metal
4
workers or by carpenters. Sheet Metal Workers’ International
Association, Local 27, AFL-CIO (“Sheet Metal”) petitions
this Court for review of the decision and order of the National
Labor Relations Board (“the Board” or “NLRB”) of
December 8, 2011, finding that Sheet Metal violated the
National Labor Relations Act by maintaining a section 301
suit against E.P. Donnelly, Inc. (“Donnelly”) and Sambe
Construction Company, Inc. (“Sambe”) following the Board’s
decision in a section 10(k) proceeding to assign the disputed
work to the New Jersey Regional Council of Carpenters and
the United States Brotherhood of Carpenters and Joiners of
America, Local 623 (“Carpenters”). The Board cross-
petitions for enforcement of its order. Also before this Court
are three appeals from orders of the District Court entered in
connection with the jurisdictional labor dispute. Donnelly
appeals from an order of the District Court granting summary
judgment in favor of Sheet Metal on its breach of contract
claim and awarding Sheet Metal $365,349.75 in
compensatory damages. Sheet Metal appeals the District
Court’s award of nominal damages of $1.00 against Sambe,
and Sambe cross-appeals against Sheet Metal on the matters
of contract liability and damages. For the reasons that follow,
we will deny Sheet Metal’s petition for review; grant the
Board’s petition for enforcement of its December 8, 2011
decision and order; vacate the judgment of the District Court
in favor of Sheet Metal on the breach of contract claims
against Donnelly and Sambe; and remand the case to the
District Court with directions to enter judgment in favor of
Donnelly and to conduct further proceedings with respect to
Sheet Metal’s contract claim asserted against Sambe.
I. FACTS AND PROCEDURAL HISTORY
5
In 2006, Egg Harbor Township, located in Atlantic
County, New Jersey, authorized the construction of the Egg
Harbor Township Community Center (“the Project”). In
accordance with New Jersey law governing public works
projects, the Township adopted a project labor agreement
(“the PLA” or “Agreement”), which governed the terms and
conditions of the Project’s construction.1 All contractors
working on the Project were required to become signatories to
1
New Jersey law authorizes public entities to adopt
project labor agreements to govern public works projects
if the public entity determines,
taking into consideration the size,
complexity and cost of the public
works project, that, with respect
to that project the project labor
agreement will meet the
requirements of section 5 of this
act, including promoting labor
stability and advancing the
interests of the public entity in
cost, efficiency, skilled labor
force, quality, safety and
timeliness.
N.J.S.A. § 52:38-3 (2002). The statute further provides that
“[a]ny project labor agreement negotiated pursuant to this act
between the public entity or its representative or a
construction manager and one or more labor organizations
shall be binding on all contractors and subcontractors
working on the public works project . . . .” Id. § 52:38-4.
6
the PLA. The PLA also contained a “supremacy provision,”
which provided that the PLA “together with the local
Collective Bargaining Agreements appended hereto as
Schedule A represent[] the complete understanding of all
signatories and supersede[] any national agreement, local
agreement or other collective bargaining agreement of any
type which would otherwise apply to this Project(s), in whole
or in part” (“the Supremacy Clause”). (Board Appeals Joint
Appendix [“B. J.A.”] 100.)
Sambe was selected as the general contractor on the
Project and, as required, became a signatory to the PLA. In
early 2007, Sambe subcontracted the Project roofing work to
Donnelly. In accordance with the PLA’s requirement that
general contractors obtain signed letters of assent from all
subcontractors hired to work on the Project, on March 30,
2007, Donnelly executed a letter of assent in which it
consented to be bound by the terms and conditions of the
PLA, and further agreed that any party it selected to perform
the roofing work would also be required to become a
signatory to the PLA.
A dispute arose when Donnelly selected Carpenters to
perform the roofing work, even though Carpenters was not a
signatory to the PLA. Donnelly apparently hired Carpenters
because the two were parties to a collective bargaining
agreement (“CBA”).2 Sheet Metal, which was a signatory to
2
Both Donnelly and Sambe are signatories to CBAs
with Carpenters. Before the District Court, the parties
disputed whether Donnelly and Sambe assented to Sheet
Metal’s CBA and whether its CBA was appended to the PLA.
The District Court in its March 26, 2010 decision awarding
7
the PLA, protested the work assignment and informed
Donnelly that Carpenters could not complete the Project
because it had not executed the PLA. Carpenters, in turn,
threatened to picket if Donnelly reassigned the roofing work
to Sheet Metal. Although Donnelly created conflicting
contractual obligations by assenting to both the Carpenters’
CBA and the PLA, it refused to reassign the work to Sheet
Metal.
In an attempt to settle the work dispute, Sheet Metal
initiated an arbitration proceeding pursuant to Article 10 of
the PLA.3 An arbitration hearing was held before arbitrator
Stanley Aiges. Donnelly, Sambe, and Sheet Metal
participated in the hearing; Carpenters, although made aware
Sheet Metal damages concluded that Sheet Metal’s CBA was
appended to the PLA and was thus binding on Donnelly. See
Sheet Metal Workers Int’l Ass’n Local Union No. 27 v. E.P.
Donnelly, Inc., No. 07-3023, 2010 WL 1257741, at *4
(D.N.J. Mar. 26, 2010) (“Sheet Metal III”). The parties
apparently do not challenge this conclusion on appeal.
3
Article 10 sets forth the procedure for resolving
jurisdictional disputes between unions and contractors. In
summary, a union disputing the assignment of Project-related
work is required to submit its objection in writing to a
designated administrator, in accordance with the procedure
set forth in Article 10. The dispute is then submitted to an
arbitrator, whose award is “final and binding on the disputing
Local Unions and the involved Contractor on this Project
only, and may be enforced in any court of competent
jurisdiction.” (B. J.A. 122.)
8
of the hearing, did not appear at the proceeding.4 On June 15,
2007, Arbitrator Aiges issued a short form arbitration
decision awarding the disputed work to Sheet Metal (“the
Aiges arbitration award”).5
Carpenters nonetheless persisted in its assertion that it
would picket the Project if the work were assigned to Sheet
Metal. Donnelly subsequently filed an unfair labor practice
charge with the Board pursuant to section 10(k) of the
National Labor Relations Act (“NLRA” or “the Act”), 29
U.S.C. § 160(k), alleging that Carpenters violated section
8(b)(4)(ii)(D) of the NLRA, 29 U.S.C. § 158(b)(4)(ii)(D), “by
engaging in proscribed activity [threatening to picket] with an
object of forcing [Donnelly] to continue to assign certain
work to employees it represents rather than to employees
represented by [Sheet Metal].”6 United Bhd. of Carpenters &
4
Carpenters did, however, submit a letter to Aiges
objecting to his jurisdiction to resolve the work dispute and to
the validity of the PLA generally.
5
On July 2, 2007, Aiges issued a long form arbitration
award confirming the short form decision.
6
Section 8(b)(4)(ii) makes it is an unfair labor
practice for a labor organization
to threaten, coerce, or restrain any
person engaged in commerce or in
an industry affecting commerce,
where in either case an object
thereof is –
...
9
Joiners of Am., Local Union No. 623, 351 N.L.R.B. 1417,
1417 (2007) (“Local Union No. 623”). The regional director
for the NLRB ordered a section 10(k) hearing to determine
the work jurisdiction dispute.7
While Donnelly’s unfair labor practice charge against
Carpenters was pending, Sheet Metal filed a grievance against
(D) forcing or requiring any
employer to assign particular
work to employees in a particular
labor organization or in a
particular trade, craft, or class
rather than to employees in
another labor organization or in
another trade, craft, or class . . . .
29 U.S.C. § 158(b)(4)(ii)(D) (2012).
7
Under section 10(k) of the Act,
[w]henever it is charged that any person
has engaged in an unfair labor practice
within the meaning of [section
8(b)(4)(ii)(D)] of this title, the Board is
empowered and directed to hear and
determine the dispute out of which such
unfair labor practice shall have arisen,
[unless the dispute is resolved by the
parties within 10 days].
29 U.S.C. § 160(k) (2012).
10
Sambe and Donnelly with the Local Joint Adjustment Board
(“the LJAB”) pursuant to its own CBA, seeking to confirm
the Aiges arbitration award because Donnelly had not yet
assigned the disputed work to Sheet Metal.8 Donnelly and
Sambe were invited to participate in the LJAB proceeding,
but both declined. Donnelly objected to the LJAB’s
jurisdiction. One month later, on July 25, 2007, the LJAB
issued its decision, finding that Sambe and Donnelly violated
the PLA and Sheet Metal’s CBA by assigning the roofing
work to Carpenters and failing to comply with the Aiges
award. The LJAB further held that if the work was not
reassigned to Sheet Metal, Sambe and Donnelly would be
jointly liable to Sheet Metal for $428,319.26 in lost wages
and benefits.
In the meantime, on June 29, 2007, Sheet Metal filed
suit against Donnelly and Carpenters in the United States
District Court for the District of New Jersey pursuant to
section 301 of the Labor Management Relations Act of 1974
(“LMRA”), 29 U.S.C. § 185,9 seeking declaratory and
8
Sheet Metal’s CBA provides an alternative dispute
resolution mechanism for settling work disputes between the
union and employers: “Grievances not settled as provided in
Section 1 of this Article may be appealed by either party to
the Local Joint Adjustment Board . . . . [A] decision of the
Local Joint Adjustment Board shall be final and binding.”
(District Court Appeals Join Appendix [“D.C. J.A.”] 146.)
9
Section 301 of the LMRA authorizes “[s]uits for
violation of contracts between an employer and a labor
organization representing employees in an industry affecting
11
monetary relief, as well as a preliminary injunction to enforce
the Aiges arbitration award.10 Sheet Metal filed an amended
complaint in August, 2007, adding a claim against Donnelly
for failure to abide by the LJAB arbitration award and joining
Sambe as a defendant.
On December 31, 2007, the Board issued a decision
and order resolving Donnelly’s unfair labor practice charge
against Carpenters. See Local Union No. 623, 351 N.L.R.B.
at 1417. Finding that it had jurisdiction pursuant to section
10(k) of the Act, the Board awarded the disputed roofing
work to Carpenters, “relying on the factors of employer
preference, current assignment and past practice, and
economy and efficiency of operations.” Id. at 1422.
Notwithstanding this award, Sheet Metal continued to pursue
its section 301 lawsuit against Donnelly in the District Court.
On January 11, 2008, Donnelly filed a second unfair labor
practice charge with the Board, this time against Sheet Metal
and asserting that Sheet Metal’s continued pursuit of the
section 301 action after the Board issued the section 10(k)
order constituted an unfair labor practice in violation of
section 8(b)(4)(ii)(D) because it sought reassignment of work
in contravention of a section 10(k) order of the Board.
On March 27, 2008, the District Court denied Sambe
and Donnelly’s motions to vacate the Aiges arbitration award,
finding that it could not evaluate the motions because a
commerce . . . or between any such labor organizations . . . .”
29 U.S.C. § 185(a) (2013).
10
Carpenters was eventually dismissed from the suit.
12
decision on the validity of the PLA was “premature at [that]
time.” (D.C. J.A. 20.) The District Court did, however,
“touch upon the . . . [parties’] dispute regarding the preclusive
effect of the 10(k) decision rendered by the NLRB on
December 31, 2007,” and emphasized that it “disagree[d]”
with Donnelly’s argument that because the Board awarded
the disputed work to Carpenters, “there is no monetary
remedy for [Sheet Metal] even if the PLA is valid and
[Donnelly and Sambe] breached that contract.”11 (D.C. J.A.
21.)
In April, 2008, the Board issued a complaint against
Sheet Metal, contending that its continued maintenance of the
section 301 suit following the Board’s section 10(k) order
was an unfair labor practice in violation of section
8(b)(4)(ii)(D) of the NLRA.12 Following a hearing, on May
11
The District Court did, however, grant Sambe and
Donnelly’s motions to vacate the LJAB award. Sheet Metal
does not challenge that aspect of the District Court’s ruling,
and thus we will not address it.
12
That month, the Board also petitioned to stay Sheet
Metal’s section 301 suit pending its resolution of Donnelly’s
unfair labor practice charge against Sheet Metal. On
September 2, 2008, the District Court denied the Board’s
petition and declined to temporarily stay the section 301 suit.
See Moore-Duncan v. Sheet Metal Workers’ Int’l Ass’n,
Local 27, 624 F. Supp. 2d 367, 377 (D.N.J. 2008). The Board
appealed, and this Court ordered the appeal be deferred
pending disposition of these consolidated appeals. See
Moore-Duncan v. Sheet Metal Workers’ Int’l Ass’n Local
13
29, 2008, an administrative law judge (“the ALJ”) found that
Sheet Metal violated the NLRA by maintaining the section
301 suit against Donnelly and Sambe after the Board issued
its section 10(k) order. Sheet Metal filed exceptions and a
supporting brief.
On June 25, 2008, after the Project was completed,
Sheet Metal filed a second amended complaint in its section
301 action. Sheet Metal no longer requested reassignment of
the Project work, but instead sought monetary damages
against Sambe and Donnelly for breach of contract and
violations of N.J.S.A. § 52:38-1 et. seq., as well as a
declaratory judgment that Donnelly and Sambe are bound by
the Aiges arbitration award. Sheet Metal, Sambe, and
Donnelly subsequently filed cross-motions for summary
judgment.
In December, 2009, the District Court rendered its
decision on the parties’ summary judgment motions. See
Sheet Metal Workers Int'l Ass'n Local Union No. 27 v. E.P.
Donnelly, Inc., 673 F. Supp. 2d 313 (D.N.J. 2009) (“Sheet
Metal I”). The District Court first granted summary judgment
in favor of Donnelly and Sambe on Sheet Metal’s claims for
violations of the New Jersey statute authorizing project labor
agreements, N.J.S.A. 52:38-1 et seq.13 Id. at 331. But the
District Court granted summary judgment in favor of Sheet
Metal on the breach of contract claims, finding that both
Union 27, No. 08-4437 (3d Cir. May 31, 2012) (order
deferring disposition).
13
Sheet Metal does not appeal this portion of the
District Court’s decision.
14
Donnelly and Sambe breached the PLA. See id. The District
Court later awarded Sheet Metal $1.00 in nominal damages
against Sambe. See Sheet Metal Workers Int’l Ass’n Local
Union No. 27 v. E.P. Donnelly, Inc., No. 07-3023, 2010 WL
905616, at *5 (D.N.J. Mar. 9, 2010) (“Sheet Metal II”).
Following a bench trial on the issue of Donnelly’s liability for
compensatory damages, the District Court awarded Sheet
Metal $365,349.75. See Sheet Metal III, 2010 WL 1257741,
at *9. The parties timely filed their respective appeals and
cross-appeal.
On December 8, 2011, the Board issued a decision and
order affirming and reversing in part the ALJ’s August 18,
2008 decision with respect to Donnelly’s unfair labor practice
charge against Sheet Metal. The Board held that Sheet
Metal’s section 301 suit against Donnelly was an unfair labor
practice in violation of section 8(b)(4)(ii)(D) because it
“directly conflict[ed] with the Board’s 10(k) award.” Sheet
Metal Workers’ Int’l Ass’n, Local 27, 357 N.L.R.B. No. 131,
at *4 (Dec. 8, 2011). The Board then “modif[ied] the [ALJ’s]
remedy to require that [Sheet Metal] withdraw its lawsuit
against Donnelly in its entirety.” Id. However, the Board
reversed the ALJ’s decision with respect to Sambe, finding
that Sheet Metal’s claim against Sambe, the general
contractor, did not conflict with the section 10(k) award and
therefore did not constitute an unfair labor practice. Id. at *2.
Sheet Metal timely petitioned this Court for review of the
Board’s December 8, 2011 order, and the Board filed a cross-
petition for enforcement.
II. THE BOARD’S DECEMBER 8, 2011 DECISION
AND ORDER
15
We have jurisdiction to review a decision and order of
the Board pursuant to section 10 of the NLRA. See 29 U.S.C.
§§ 160(e)-(f); see also NLRB v. Cedar Tree Press, Inc., 169
F.3d 794, 795 (3d Cir. 1999). “We review [the Board’s]
factual findings to determine whether they are supported by
substantial evidence on the record as a whole.” Local 30,
United Slate, Tile & Composition Roofers v. NLRB, 1 F.3d
1419, 1422 (3d Cir. 1993) (“Gundle II”). In doing so, we
exercise care not to “displace the Board’s factual inferences
even if [we] would have reached a different conclusion on de
novo review.” NLRB v. Omnitest Inspection Servs., Inc., 937
F.2d 112, 121 (3d Cir. 1991). Although appellate review of
legal questions raised in an NLRB decision and order is
plenary, Cedar Tree Press, 169 F.3d at 795, the Board’s
interpretation of the Act is entitled to deference. St. Margaret
Mem’l Hosp. v. NLRB, 991 F.2d 1146, 1151 (3d Cir. 1993).
“We must enforce a Board order that rests upon an
interpretation of the Act that is not ‘an unreasonable or
unprincipled construction of the statute . . . .’” Gundle II, 1
F.3d at 1422 (citing Ford Motor Co. v. NLRB, 441 U.S. 488,
497 (1979)).
Sheet Metal advances two theories in support of its
argument that the Board’s December 8, 2011 decision is
unenforceable. First, Sheet Metal argues that the Board did
not have jurisdiction to issue the December 31, 2007 section
10(k) order in which it found that Carpenters was entitled to
the disputed work. Alternatively, Sheet Metal contends that
even if the Board had jurisdiction to issue the December 31,
2007 decision and order, it erroneously concluded that Sheet
Metal violated section 8(b)(4)(ii)(D) by pursuing the section
301 case after the section 10(k) order issued. We will address
each argument in turn.
16
A.
The Board has jurisdiction to resolve alleged violations
of section 8(b)(4)(ii)(D) pursuant to section 10(k) of the
NLRA, which provides:
Whenever it is charged that any
person has engaged in an unfair
labor practice within the meaning
of [section 8(b)(4)(ii)(D)], the
Board is empowered and directed
to hear and determine the dispute
out of which such unfair labor
practice shall have arisen, unless,
within ten days after notice that
such charge has been filed, the
parties to such dispute submit to
the Board satisfactory evidence
that they have adjusted, or agreed
upon methods for the voluntary
adjustment of, the dispute.
See 29 U.S.C. § 160(k). To exercise jurisdiction pursuant to
section 10(k), the Board must find “there is reasonable cause
to believe that Section 8(b)(4)(D) of the Act has been
violated.” See In re Int’l Alliance of Theatrical & Stage
Employees, 337 N.L.R.B. 721, 723 (2002). The Board
conducts a three-step inquiry to determine whether this
standard has been satisfied, examining whether there is
reasonable cause to believe that
(1) a union has used a proscribed
17
means – such as picketing or
threatening to picket – to enforce
its claim to the work in dispute;
(2) there are competing claims to
the disputed work between rival
groups of employees; and (3)
there is no agreed-upon method
for resolving the dispute
voluntarily.
Recon Refractory & Constr. Inc. v. NLRB, 424 F.3d 980, 988
(9th Cir. 2005). Once the Board determines that these three
requirements are met, it “will award the disputed work to one
or the other of the vying unions, based on considerations such
as the employer’s past practice, industry custom, and contract
rights.” Id.
Only the third requirement is disputed here. Sheet
Metal contends that the PLA dispute-resolution section
provides the appropriate agreed-upon mechanism to resolve
the work jurisdiction dispute.
“For the Board to find that the parties have agreed
upon a method for the voluntary adjustment to a dispute, all
parties must agree to be bound by the method.” Local 3-90,
W. States Reg’l Council No. 3, 261 N.L.R.B. 615, 617 (1982);
accord Int’l Union of Operating Eng’rs, Local 150, 316
N.L.R.B. 360, 361 n.3 (1995) (“Local 150”). Where there
exists an agreed-upon method for settlement of jurisdictional
disputes, the Board will decline section 10(k) jurisdiction.
See William E. Arnold Co. v. Carpenters Dist. Council of
Jacksonville & Vicinity, 417 U.S. 12, 18 (1974). The Board
has explained that it does so to further Congress’s preference,
18
as expressed through the NLRA, for voluntary resolution of
labor disputes. See id. However, where no agreed-upon
method exists, the Board will exercise jurisdiction pursuant to
section 10(k) and resolve the work dispute itself. See Local
150, 316 N.L.R.B. at 361.
In its December 31, 2007 decision and order resolving
Donnelly’s unfair labor practice charge against Carpenters,
the Board first determined that it had jurisdiction to resolve
the work dispute between Donnelly, the employer, and
Carpenters and Sheet Metal, the unions disputing the work
assignment. See Local Union No. 623, 351 N.L.R.B. at 1419.
The Board rejected Sheet Metal’s argument that an agreed-
upon method of dispute resolution existed because the PLA
contained such a mechanism, reasoning that Carpenters was
not a signatory to the PLA “and therefore is not bound to its
dispute-resolution procedure” set forth in Article 10. Id. The
Board thus concluded that “there [wa]s no agreed-upon
voluntary method to adjust the dispute,” and therefore the
“dispute [was] properly before [it] for determination under
Section 10(k).” Id.
It is undisputed that Carpenters was not a signatory to
the PLA. Sheet Metal acknowledges as much, but argues that
Carpenters was nonetheless bound by the PLA pursuant to
N.J.S.A. § 52:38-4, which provides that “[a]ny [PLA]
negotiated pursuant to this act . . . shall be binding on all
contractors and subcontractors working on the public works
project . . . .” Sheet Metal argues that Carpenters was also
party to the PLA pursuant to the Entities Bound Clause found
in Article 2, section 3, which provides that the PLA is binding
on signatory unions and contractors, and “is further binding
upon any employee of the owner, [General Contractor] or any
19
subcontractor performing work on the [Project] . . . .” (B.
J.A. 100.)
Article 2, section 3 further provides, however, that in
order for a subcontractor to be bound by the PLA, “[t]he
Contractors shall include in any subcontract that they let, for
performance during the term of this Agreement, a
requirement that their subcontractors, of whatever tier,
become signatory and bound by this Agreement . . . .” (B.
J.A. 100) (emphasis added). As noted above, Carpenters did
not sign the PLA, and the CBA between Carpenters and
Donnelly did not obligate Carpenters to become a signatory to
the PLA. On the contrary, the Carpenters/Donnelly CBA
expressly provides that “[n]o project labor agreement (PLA)
may supersede this agreement or any of its provisions or
articles without the mutual consent of the parties,” B. J.A. 33,
and no evidence was offered showing that Carpenters
consented to be bound by the PLA.
Sheet Metal’s argument that Carpenters was bound by
the PLA’s Supremacy Clause is similarly unpersuasive. We
agree with Sambe that the “Supremacy Clause merely
harmonizes the PLA’s provisions with the CBAs of the
signatory Unions, displacing any contrary CBA provisions.”
(Sambe Combined Third Step Br. 21). Because Carpenters
was not a signatory to the PLA – a fact that Sheet Metal does
not dispute – the Supremacy Clause does not apply to
Carpenters’ CBA and cannot, as Sambe urges, trump the
CBA between Donnelly and Carpenters and displace the
dispute resolution mechanism contained therein.14
14
Alternatively, Sheet Metal argues that Carpenters
was bound by the PLA under the doctrine of equitable
20
Furthermore, the case law Sheet Metal cites in support
of its position that an agreed-upon dispute resolution
mechanism existed actually counsels in favor of reaching the
opposite conclusion. For example, in Sw. Reg’l Council of
Carpenters, 348 N.L.R.B. 1250 (2006), the Board found that,
notwithstanding the existence of a governing project service
agreement containing a dispute resolution mechanism, there
was no agreed-upon method because “the record show[ed]
that there [were] potentially conflicting forums for resolving
the disputes” among the parties. Id. at 1254. The Board
expressly stated that it was “unnecessary to resolve whether
all the parties” were actually bound by the labor agreement in
question because the fact that the parties disputed whether
they were bound by the agreement alone satisfied the third
jurisdictional requirement for exercising section 10(k)
jurisdiction. Id. Similarly, in Int’l Bhd. of Electrical
Workers, Local Union No. 363, 326 N.L.R.B. 1382 (1998),
the Board found that no agreed-upon voluntary dispute
resolution mechanism existed where the aggrieved union was
a signatory to a PLA which “contain[ed] a specific provision
outlining a procedure for dealing with jurisdictional work
disputes,” but the other parties to the 10(k) proceeding – the
employer who made the disputed work assignment and the
union that received the disputed work –were not signatories.
Id. at 1384. The Board thus concluded that it could properly
estoppel. However, we do not have jurisdiction to consider
this argument because Sheet Metal never raised it before the
Board and fails to point to any “extraordinary circumstances”
justifying its failure to do so. 29 U.S.C. § 160(e).
21
exercise jurisdiction pursuant to section 10(k).15 See id.
Indeed, where, as here, an employer has bound itself to
conflicting labor agreements, “the Board has held that no
determinative agreed-on method exists for resolving the
dispute,” and thus section 10(k)’s third jurisdictional
requirement is satisfied. Int’l Union of Operating Eng’rs,
Local 318, 322 N.L.R.B. 709, 712 (1996).
Affording “due deference to the Board’s expertise in
drawing factual inferences,” Gundle II, 1 F.3d at 1425, we
hold that the Board’s finding that there existed no agreed-
upon voluntary dispute resolution mechanism is supported by
substantial record evidence and is thus “conclusive.” 29
U.S.C. § 160(e); see also Int’l Union of Operating Eng’rs,
Local No. 714 v. Sullivan Transfer, Inc., 650 F.2d 669, 679
(5th Cir. 1981). Accordingly, the Board’s determination that
all three requirements for exercising jurisdiction pursuant to
section 10(k) were satisfied had a “reasonable basis in law”
and will not be disturbed on appellate review. See Ford
15
The remaining cases relied upon by Sheet Metal in
support of this argument are inapposite. Enertech Elec., Inc.
v. Mahoning Cnty. Comm’rs, 85 F.3d 257 (6th Cir. 1996),
involved an appeal from a district court’s grant of summary
judgment, not a decision by the Board in which it determined
that it had section 10(k) jurisdiction. Id. at 259. And in
Laborers Int’l Union of N. Am., Local No. 320, 318 N.L.R.B.
917 (1995), the parties stipulated that there was no agreed-
upon method for voluntary dispute resolution and thus the
Board was not called upon to determine whether the third
requirement for section 10(k) jurisdiction was satisfied. Id. at
918.
22
Motor Co., 441 U.S. at 497 (citation omitted) (internal
quotation marks omitted). The Board properly exercised
jurisdiction pursuant to section 10(k) when it issued the
December 31, 2007 order awarding the disputed work to
Carpenters. Accordingly, Sheet Metal’s contention that it
could not properly have been found to violate section
8(b)(4)(ii)(D) because the Board lacked the authority to issue
its work assignment order is without merit. The Board’s
petition to enforce the December 8, 2011 order cannot be
denied on that ground.
B.
Sheet Metal argues in the alternative that even if the
Board had jurisdiction to issue the section 10(k) award, it
erred in concluding that Sheet Metal violated section
8(b)(4)(ii)(D) by maintaining the section 301 suit against
Donnelly after December 31, 2007, the date of the Board’s
section 10(k) determination awarding the disputed work to
Carpenters.16 See Sheet Metal, 357 N.L.R.B. No. 131, at *3.
16
As the Board correctly pointed out, Sheet Metal’s
section 301 suit became an unfair labor practice only after the
December 31, 2007 section 10(k) decision issued. See Sheet
Metal, 357 N.L.R.B. No. 131, at *5; see also Local Union No.
7, ILWU, 291 N.L.R.B. 89, 92 (1988). Common sense
establishes that Sheet Metal’s section 301 suit could not be
found to conflict with a prior order of the Board, and thus
could not be “coerc[ive]” within the meaning of section
8(b)(4)(ii)(D), until the Board actually issued an order with
which the suit could conflict.
23
In holding that Sheet Metal committed an unfair labor
practice, the Board reasoned:
It is well established that a
union’s lawsuit to obtain work
awarded by the Board under
Section 10(k) to a different group
of employees, or monetary
damages in lieu of the work, has
an illegal objective for purposes
of Bill Johnson’s [Restaurants,
Inc. v. NLRB, 461 U.S. 731
(1983)] footnote 5 and violates
Section 8(b)(4)(ii)(D).
Accordingly, we affirm the
[ALJ’s] finding that, following
the Board’s 10(k) award, [Sheet
Metal’s] maintenance of its 301
lawsuit was incompatible with the
Board’s award and, therefore, had
an objective that was illegal under
Federal law.
Id. The Board rejected Sheet Metal’s argument that the suit
was permissible because it sought “damages only for breach
of the PLA, not pay-in-lieu of assignment of the work.” Id.
The Board explained that the effect of Sheet Metal’s request
for damages, rather than the disputed work itself, was “the
same as the first amended complaint’s request that Donnelly
pay damages for assigning the work to employees represented
by [Carpenters],” and thus Sheet Metal’s attempt to
distinguish its suit from one for pay-in-lieu of work was a
“distinction without a difference.” Id. The Board also
24
reversed the ALJ’s finding that Sheet Metal was entitled to a
declaratory judgment validating the Aiges arbitration award,
because, “[i]f granted, a declaration validating the finding that
Donnelly breached the PLA by assigning the work to the
Carpenters-represented employees would also directly
conflict with the 10(k) award.” Id. at *4. The Board thus
ordered Sheet Metal to “withdraw its lawsuit against
Donnelly in its entirety.”17 Id. “We review to determine
17
The Board reversed the ALJ’s decision with respect
to Sambe, finding, contrary to the ALJ’s determination, that
Sheet Metal’s pursuit of a breach of contract claim against
Sambe did not constitute an unfair labor practice. See Sheet
Metal, 357 N.L.R.B. No. 131, at *2. The Board explained
that “because Sambe did not assign the disputed work directly
to employees, an award against Sambe would not be
inconsistent with the Board’s 10(k) award.” Id.
Sambe does not petition for review of this portion of
the Board’s decision, and in fact acknowledges that the
Board’s section 10(k) order “does not automatically bar
[Sheet Metal’s] breach of contract claim against Sambe –
because it was Donnelly and not Sambe that assigned the
disputed work . . . .” (Sambe Combined Third Step Br. 2.)
Sambe also acknowledges that a suit for contract damages can
be maintained against general contractors even after the
Board issues a section 10(k) award assigning the disputed
work to another union, but argues that this “exception” does
not apply here, and thus the District Court erred in granting
summary judgment for Sheet Metal on its breach of contract
claim against Sambe. (Sambe Combined Third Step Br. 33.)
We address this argument in Part III(B) infra, in our
25
whether the Board’s finding rests on a reasonable
interpretation of the Act.” Gundle II, 1 F.3d at 1426.
Section 301 of the LMRA authorizes “[s]uits for
violation of contracts between an employer and a labor
organization representing employees in an industry affecting
commerce . . . or between any such labor organizations . . . .”
29 U.S.C. § 185(a). A section 301 lawsuit may be enjoined
as an unfair labor practice pursuant to section 8(b)(4)(ii)(D) in
certain circumstances. In Bill Johnson’s Restaurants, Inc. v.
NLRB, 461 U.S. 731 (1983), the Supreme Court outlined a
two-prong test for determining whether a lawsuit constitutes
an unfair labor practice in violation of section 8(b)(4)(ii)(D).
See id. at 744. Under the Bill Johnson’s “improper
motivation” test, “before a civil suit can be enjoined, both an
improper motivation and a lack of reasonable legal basis for
the suit must be demonstrated.” Hoeber v. Local 30, United
Slate Tile & Composition Roofers, 939 F.2d 118, 122 (3d Cir.
1991) (“Gundle I”); see Bill Johnson’s, 461 U.S. at 744. The
Bill Johnson’s Court recognized that an exception exists,
however, where the lawsuit “has an objective that is illegal
under federal law.”18 461 U.S. at 737 n.5.
discussion of the parties’ appeals from the District Court’s
orders.
18
Although the Supreme Court’s statement in footnote
5 of Bill Johnson’s is technically dictum, we have explained
that the Court’s “dicta are highly persuasive” and are not to
be viewed lightly. Galli v. New Jersey Meadlowlands
Comm’n, 490 F.3d 265, 274 (3d Cir. 2007); see also In re
McDonald, 205 F.3d 606, 612 (3d Cir. 2000). Moreover, as
discussed infra, the “illegal objective” exception articulated
26
We have observed that “[s]ince [Bill Johnson’s], other
courts of appeals and the Board have agreed that pursuit of a
section 301 breach of contract suit that directly conflicts with
a section 10(k) determination has an illegal objective and is
enjoinable as an unfair labor practice under section
8(b)(4)(ii)(D).” Gundle II, 1 F.3d at 1426. We joined those
other Courts of Appeals in the Gundle trilogy of cases. See
Gundle I; Gundle II, 1 F.3d at 1427-29; United Union of
Roofers, Local Union No. 30 v. Gundle Lining Constr. Corp.,
1 F.3d 1429 (3d Cir. 1993) (“Gundle III”). We revisit the
issue now to clarify our jurisprudence.
The Gundle cases, as here, involved a work dispute
between an employer, Gundle Lining Construction
Corporation, and two unions, Local 30 and Local 172. See
Gundle I, 939 F.2d at 119. Gundle had a contract to perform
liner installation work at a New Jersey county landfill and
subcontracted the work to Local 30 via a “Memorandum
Agreement” in which it also became a party to Local 30’s
CBA. Id. at 119-120. After the project was completed,
Gundle began another project at the landfill, for which it hired
Local 172, rather than Local 30, to perform the lining work.
See id. at 120. “Local 30 took the position that this work was
covered by the Memorandum Agreement, and therefore that
Gundle was contractually bound to hire Local 30’s workers.”
Id. When work began on the second project, Local 30
employees picketed the worksite. Id.
in footnote five has achieved the status of law in the majority
of the Courts of Appeals.
27
In response, Gundle filed an unfair labor practice
charge against Local 30, alleging that the union violated
section 8(b)(4)(ii)(D) of the NLRA by picketing the worksite.
Id. Local 30, in turn, filed a grievance with the Joint
Conference Board (“JCB”) pursuant to its CBA, alleging that
Gundle breached the Memorandum Agreement by hiring
Local 172 for the second landfill project. Id. In January,
1990, the JCB issued an award in Local 30’s favor, finding
that Gundle violated the Memorandum Agreement and was
required to compensate Local 30 employees. Id. Local 30
subsequently filed a section 301 lawsuit seeking to enforce
the JCB’s arbitration award. Id. In June, 1990, the NLRB
“issued its 10(k) decision, awarding the disputed work to
Local 172.” Id. Local 30 continued to pursue its section 301
suit, and the NLRB petitioned under section 10(l) of the
NLRA, 29 U.S.C. § 160(l), to temporarily enjoin the suit until
the NLRB issued its decision resolving Gundle’s unfair labor
practice charge. See id. at 121. The District Court denied the
petition for injunctive relief, and the NLRB appealed. See id.
at 122.
We reviewed the Board’s appeal in Gundle I, where
we ultimately affirmed the District Court’s denial of the
Board’s petition for an injunction. See id. at 128. In so
holding, we explained that “[i]n a § 10(l) injunction
proceeding, our standard of review involves three separate
determinations – determinations that the district court must
make before it may issue a § 10(l) injunction.” Id. at 123.
First, we reviewed de novo “the district court’s determination
as to whether there [was] a substantial legal theory explicit or
implicit in the case that would support a finding that an unfair
labor practice had occurred.” Id. (internal quotation marks
deleted). We concluded that the Board’s theory that “the
28
filing and prosecution of Local 30’s lawsuit is inherently
coercive, because it brings pressure to bear on Gundle to
reassign its linear installation work from Local 172 to Local
30” was “on its face” sufficient to establish “a substantial and
nonfrivolous legal theory on the basis of which Local 30’s §
301 enforcement lawsuit could possibly constitute an unfair
labor practice.” Id. at 123-24.
Having found that a substantial legal theory existed,
we then “appl[ied] a deferential standard of review” to the
District Court’s determination that the second requirement for
injunctive relief – a showing that the facts of the case fit the
Board’s legal theory – was not satisfied. Id. at 123. We
concluded that the District Court did not clearly err in finding
the Board “failed to demonstrate that the facts of th[e] case fit
within [its] theory” that Local 30 was acting to coerce Gundle
into reassigning the disputed work through its section 301 suit
and thus the suit was not enjoinable under the Bill Johnson’s
“improper motivation” test. Id. at 124, 128. We explained:
[I]f we were to hold that Local
30’s lawsuit necessarily
constitutes improper coercion, we
would be creating a rule under
which an employer could
unilaterally avoid a union contract
. . . Such a result does not reflect
the intent of Congress in creating
the mechanism of the 10(l)
injunction, and we will not permit
§ 10(l) to be abused in such a
manner. There may well be
circumstances – such as those
29
described by the Supreme Court
in Bill Johnson’s – in which a
lawsuit is used improperly or
coercively. This is not such a
case, however, and the district
court’s findings of fact on this
issue are not clearly erroneous.
See id. at 125.
Finally, we reviewed the third factor that is considered
in determining whether to grant injunctive relief pursuant to
section 10(l): the District Court’s “discretionary decision” to
grant injunctive relief upon finding that it is “the just and
proper remedy.” Id. at 123, 125 (internal quotation marks
omitted). Reviewing for abuse of discretion, we concluded
that “there [were] at least three reasons why the [District
Court’s] denial of injunctive relief was proper.” Id. at 126.
First, the Congressional purpose
behind the enactment of § 10(l)
was not to enjoin legal action, but
was rather to enjoin clear
obstacles and impediments to
business, such as strikes, pickets,
and boycotts. . . . Therefore, the
district court, in focusing on the
large objectives of the Act,
correctly held that prosecution of
Local 30’s suit did not create the
degree of harm necessary to
justify an injunction. . . .
[Second,] [i]njunctive relief under
30
10(l) is only a temporary measure.
. . . Since Gundle would still risk
a later revival of the lawsuit, any
incentive that Gundle presently
has to reassign the work to Local
30 so as to avoid double liability
would continue even if the
injunction issued. . . . Third, the
substantive arguments that the
NLRB and Gundle raise before us
could all have been raised as a
defense in Local 30’s § 301 suit
which seeks to enforce the
[JCB’s] decision in favor of Local
30. . . . An injunction is thus not
the only means by which the
Board could achieve its objective
– and indeed . . . injunctions
against the prosecution of a
lawsuit are a highly disfavored
remedy.
Id. at 126-27 (internal quotation marks and citations deleted).
We thus declined in Gundle I to disturb the District Court’s
denial of injunctive relief. Id. at 128.
On July 20, 1992, the NLRB rendered its decision on
Gundle’s unfair labor practice charge, holding that Local 30
committed unfair labor practices in violation of section
8(b)(4)(ii)(D) “by picketing and maintaining its section 301
suit” after the Board’s section 10(k) order issued, and further
ordering Local 30 to withdraw the suit. See Gundle II, 1 F.3d
at 1422. Local 30 petitioned for review, and the Board cross-
31
petitioned for enforcement. See id. at 1420. We reviewed
these petitions in Gundle II, where we explained that the
“[t]he crux of the issue . . . [was] whether the arbitration
award for Local 30 is inconsistent with or contrary to the
Board’s assignment of the work to Local 172” such that Local
30’s suit to enforce the award constituted an unfair labor
practice under Bill Johnson’s “illegal objective” exception.
Id. at 1427.
We answered this question in the affirmative and
expressly rejected Local 30’s argument that its section 301
suit was not contrary to the Board’s section 10(k) decision
because the suit did not seek the disputed work, but instead
sought to enforce an arbitration award for pay-in-lieu of work
damages. See id. In so holding, we explained that “[t]he
distinction Local 30 seeks to draw between seeking the work
and seeking payment for the work is ephemeral.” Id. We
relied on our rationale in NLRB v. Local 1291, Int’l
Longshoremen’s Ass’n, 368 F.2d 107 (3d Cir. 1966), cert.
denied, 386 U.S. 1033 (1967), that
the valuable part of a right to a
particular job is the right to be
paid for it. Thus, a jurisdictional
dispute between two groups of
employees as to which is entitled
to certain work is in essence a
dispute as to which shall receive
compensation for that work. The
opportunity sought to perform
labor is significant only as a
means of obtaining compensation.
It follows that if workmen, who
32
are entitled to a job under the
terms of the labor contract, agree
to forego the obligation of
working but not the concomitant
right to payment, they have not
disclaimed any significant right.
Gundle II, 1 F.3d at 1427-28 (quoting Local 1291, 368 F.2d at
110). We emphasized that making a distinction between
seeking the work from seeking damages for not receiving the
work would be inconsistent with Carey v. Westinghouse Elec.
Corp., 375 U.S. 261 (1964). There, the Supreme Court held
that a Board’s ruling “take[s] precedence” over a conflicting
arbitration award. Gundle II, 1 F.3d at 1428 (quoting Carey,
375 U.S. at 272). Finding that Local 30’s section 301 suit
conflicted with the Board’s prior section 10(k) award because
it sought to enforce an arbitration award “to recover damages
for work awarded to another union,” we thus upheld “the
Board’s interpretation of the Act to treat maintenance of the
section 301 lawsuit to enforce an arbitration award against
Gundle for pay-in-lieu of work as an unfair labor practice.”
Id. at 1428-29.
Sheet Metal acknowledges that the majority of Courts
of Appeals, including our Court, have held that “‘there is no
material difference between seeking work and seeking
payment in lieu of work.’”19 (Sheet Metal B. Br. 36) (quoting
19
Since our decisions in the Gundle cases, the
majority of our sister Courts of Appeals have likewise held
that a section 301 suit for damages or to enforce an
arbitrator’s award of pay-in-lieu of work constitutes an unfair
labor practice where the suit directly conflicts with a section
33
Gundle II, 1 F.3d at 1427-28). But according to Sheet Metal,
Gundle II is not controlling because it does not involve a PLA
and is “inconsistent” with Gundle I. (Sheet Metal B. Br. 37.)
Sheet Metal thus urges this Court to hold that a section 301
10(k) determination by the Board. See, e.g., T. Equip. Corp.
v. Mass. Laborers’ Dist. Council, 166 F.3d 11, 19 (1st Cir.
1999) (“We agree with the Third Circuit that there can be no
logical distinction between ‘seeking the work and seeking
payment for the work.’”) (citing Gundle II, 1 F.3d at 1427);
ILWU v. N.L.R.B., 884 F.2d 1407, 1414 (D.C. Cir. 1989)
(“[I]f petitioners were entitled to assert contract claims
against [a union the Board deemed entitled to disputed work
in a section 10(k) proceeding], in contravention of the
Board’s section 10(k) award, the very purpose of section
10(k) – to authorize the Board to resolve the jurisdictional
dispute – would be totally frustrated . . . [W]hatever [a]
union’s motivation and no matter how persuasive its
contractual case, a union cannot force an employer to choose
between a Board section 10(k) award and a squarely contrary
contract claim.”); see also Small v. Operative Plasterers’ &
Cement Masons’ Int’l Ass’n Local 200, 611 F.3d 483, 492-93
(9th Cir. 2010); UAW & its Local 1519 v. Rockwell Int’l
Corp., 619 F.2d 580, 585 (6th Cir. 1980). The Board, “whose
construction of the Act is entitled to deference,” Gundle II, 1
F.3d at 1428, has similarly held that a section 301 suit that
conflicts with a section 10(k) order constitutes an unfair labor
practice under the NLRA. See, e.g., Sheet Metal, 357
N.L.R.B. No. 131, at *3; ILWU, Local 13, 290 N.L.R.B. 616,
616-17 (1988), enf’d 884 F.3d at 1413-14; Local 32, ILWU,
271 N.L.R.B. 759, 763 (1984), enf’d sub nom. ILWU, Local
32 v. Pac. Mar. Ass’n, 773 F.2d 1012 (9th Cir. 1985), cert.
denied 476 U.S. 1158 (1986).
34
suit for breach of contract damages is permissible, even in the
face of a conflicting section 10(k) award by the Board, where
it seeks merely damages, not the disputed work itself. The
Board, for its part, argues that Sheet Metal’s position “is
premised on a theory squarely rejected by this Court[] . . . in
Gundle [II].” (Board Br. 21.) The Board concludes that,
under Gundle II and the Board’s own precedent, it
“reasonably found that [Sheet Metal’s] lawsuit, seeking pay
for work that the Board awarded to the Carpenters, is
incompatible with the Section 10(k) Determination, and
therefore has an objective that is illegal under federal law.”
(Board Br. 20) (citation omitted) (internal quotation marks
omitted).
We agree with the Board that Gundle II controls the
disposition of this appeal. Gundle II is not, as Sheet Metal
suggests, “inconsistent” with Gundle I merely because in the
latter we stated in dicta that “‘we cannot agree with the
NLRB that seeking enforcement of an arbitral award based on
a breach of contract to assign work is identical to seeking the
disputed work itself.’” (Sheet Metal B. Br. 37) (quoting
Gundle I, 939 F.2d at 124 n.10). We made this statement in
the context of reviewing the District Court’s conclusion that
the Board failed to satisfy second requirement for obtaining
injunctive relief, i.e., demonstrating that the facts of the case
supported the Board’s articulated legal theory that Local 30’s
section 301 suit had an improper motivation and thus
constituted an unfair labor practice. See Gundle I, 939 F.2d at
124. In this procedural posture, we were required to “uphold
the district court’s finding that Local 30’s § 301 suit was not
improperly motivated unless that finding [was] clearly
erroneous.” Id. at 125. In Gundle II, on the other hand, we
were required to defer to “the Board’s interpretation of the
35
Act to treat maintenance of the section 301 lawsuit to enforce
an arbitration award against Gundle for pay-in-lieu of work as
an unfair labor practice” so long as that interpretation was
reasonable. See 1 F.3d at 1429. Thus, our seemingly
inconsistent statements in Gundle I and Gundle II as to the
propriety of section 301 suits for breach of contract damages
in the face of a conflicting 10(k) award are explained, in part,
by the highly deferential standards of review we appropriately
applied in each case, standards which required us to defer to
the differing conclusions of the District Court and Board,
respectively.
Moreover, as we pointed out in Gundle II, the
statements in Gundle I concerning why Local 30’s section
301 suit for breach of contract damages did not satisfy the Bill
Johnson’s “improper motivation” test are “not controlling” in
cases such as Gundle II, where a party seeks to enjoin a
section 301 suit under the “illegal objective” exception. Id. at
1429 n.13. The “improper motivation” and “illegal
objective” tests require different showings in order to
establish that the suit in question is enjoinable pursuant to
section 8(b)(4)(ii)(D), and thus the Gundle I Court’s
statements concerning whether a section 301 suit for breach
of contract damages satisfies the “improper motivation” test
are not dispositive in determining whether the same suit may
alternatively be enjoined under the “illegal objective”
exception.20 See Bill Johnson’s, 461 U.S. at 737 n.5, 744.
20
The Gundle I Court never considered whether Local
30’s suit could have been enjoined under the “illegal
objective” exception, nor should it have, for our charge in that
case was solely to review the propriety of the District Court’s
decision to deny the Board’s petition for an injunction. As
36
Furthermore, because “a section 10(l) proceeding is
independent of the proceeding on the merits,” any
“speculation” we expressed in Gundle I concerning Local
30’s ability to obtain contract damages against Gundle in the
face of a contrary 10(k) decision by the Board “is not binding
on us in the context of an appeal on the merits.”21 Gundle II,
1 F.3d at 1425 n.9. Indeed, although in Gundle I we
discussed supra, the District Court concluded that the second
requirement for injunctive relief was not satisfied because the
Board failed to show that the facts of the case satisfied the
legal theory that the suit was enjoinable under the “improper
motivation” test proffered by the Board. See Gundle I, 939
F.2d at 124-25. The Gundle I Court was only called upon to
consider the “improper motivation” test and, except upon a
finding of clear error, was required to defer to the District
Court’s conclusion that the facts of the case did not fit that
legal theory. See id. at 123.
21
Sheet Metal also attempts to distinguish Gundle II
on the ground that the section 301 suit at issue in that case
was premised upon an alleged breach of Local 30’s CBA,
whereas Sheet Metal’s section 301 suit, in contrast, is
predicated upon a purported breach of the PLA. However,
the PLA is a type of CBA, and thus we cannot agree that
Gundle II is distinguishable simply because it involved a
CBA rather than a PLA. See N.J.S.A. § 52:38-2 (“‘Project
labor agreement’ means a form of pre-hire collective
bargaining agreement covering terms and conditions of a
specific project.”); see also Phoenix Eng’g, Inc. v. MK-
Ferguson of Oak Ridge Co., 966 F.2d 1513, 1518 (6th Cir.
1992).
37
expressed doubt about the propriety of a section 301 suit to
enforce an arbitration award where the Board has issued a
section 10(k) order, we expressly left open the question of
whether an arbitration award that conflicts with a 10(k) order
of the Board is an unfair labor practice pursuant to section
8(b)(4)(ii)(D). See Gundle I, 939 F.2d at 124 n.10 (“We
express no opinion, of course, on the merits of Local 30’s
enforcement action.”). We answered this question in the
affirmative in Gundle II, where, considering the merits of
Local 30’s section 301 suit to enforce the arbitration award,
we held in no uncertain terms that a section 301 suit for
breach of contract damages is identical to seeking the
disputed work and is thus “coercive” for the purposes of
section 8(b)(4)(ii)(D). See Gundle II, 1 F.3d at 1427-29.
Thus, it is our more recent holding in Gundle II, rather than
our earlier dicta in Gundle I, that controls. See ACLU of N.J.
ex rel. Lander v. Schundler, 168 F.3d 92, 98 n.6 (3d Cir.
1999) (“[I]t is the tradition of this court that the holding of a
panel in a reported opinion is binding on subsequent panels . .
. [W]e have repeatedly held that dicta are not binding.”)
(citation omitted) (internal quotation marks omitted).
Twenty years ago, we warned that “if a union is
permitted to recover damages for work awarded to another
union in a section 10(k) proceeding, the policy underlying
section 8(b)(4)(ii)(D) of protecting employers from the
detrimental impact of jurisdictional disputes would be
severely undermined.” Gundle II, 1 F.3d at 1428. As the
Supreme Court explained in Carey, the section 10(k)
grievance procedure furthers the policies of the Act and
effectuates Congress’s intent in enacting the NLRA to
“actively encourage[] voluntary settlements of work
assignment controversies between unions.” See 375 U.S. at
38
266. These policy concerns, which motivated our decision in
Gundle II, are equally persuasive today. Heeding the
principles of stare decisis that guide our jurisprudence, we
thus hold, in accordance with our two decade-old precedent,
that the Board’s interpretation of the Act at issue here –
treating the pursuit of a lawsuit for pay-in-lieu of work in the
face of a contrary work assignment order of the Board as an
unfair labor practice – is a reasonable one. See Morrow v.
Balaski, 719 F.3d 160, 182 (3d Cir. 2013) (en banc) (Smith,
J., concurring) (“Absent . . . exceptional intervening
developments, the essence of stare decisis is that the mere
existence of [our precedent] becomes a reason for adhering to
[its] holding[] in subsequent cases.”) (citation omitted)
(internal quotation marks omitted).
We take this opportunity to clarify, however, that our
holding applies to suits for damages against the employer that
made the disputed work assignment and thus becomes subject
to the conflicting demands of section 301 suit for damages, on
one hand, and the Board’s 10(k) order, on the other. Since
our decision in Gundle II, the Board and other Courts of
Appeals have so distinguished between suits for contract
damages against contractors not responsible for making the
disputed work assignment and suits against the assigning
employer, declining to extend our holding in Gundle II to
prohibit suits against the non-assigning contractors. See, e.g.,
Local Union 33, United Bhd. of Carpenters & Joiners of Am.,
289 N.L.R.B. 1482, 1484 (1988); Miron Constr. Co., Inc. v.
Int’l Union of Operating Eng’rs, Local 139, 44 F.3d 558,
565-67 (7th Cir. 1995). We are persuaded by their reasoning.
As the Seventh Circuit explained in Miron,
39
a union’s mere pursuit of its
contractual remedies against the
general contractor, absent a
demand that the subcontractor
reassign the work, does not
amount to coercion in
contravention of the § 10(k)
award. 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.
The element of coercion is what
distinguishes [a suit against a
general contractor] from [that at
issue in Gundle II].
44 F.3d at 566; see also Advance Cast Stone Co. v. Bridge,
Structural & Reinforcing Iron Workers, Local Union No. 1,
376 F.3d 734, 742 (7th Cir. 2004) (explaining that a suit
against the contractor who did not make the disputed work
assignment “[does] not implicate the general principle that the
NLRB’s § 10(k) determination takes precedence over an
arbitrator’s award”).
We therefore conclude that the Board’s interpretation
of the Act as prohibiting maintenance of Sheet Metal’s
section 301 lawsuit to seek contract damages and enforce the
Aiges arbitration award against Donnelly was not erroneous
as a matter of law. See Gundle II, 1 F.3d at 1429.
40
Accordingly, we will deny Sheet Metal’s petition for review
and grant the Board’s cross-petition for enforcement.
III. THE DISTRICT COURT’S ORDERS
Finally, we turn to the parties’ appeals from the
District Court’s orders denying Sambe’s and Donnelly’s
motions to vacate the Aiges arbitration award, and granting
summary judgment in favor of Sheet Metal on its breach of
contract claims against Sambe and Donnelly. The District
Court had jurisdiction under section 301 of the LMRA, 29
U.S.C. § 185(a), and we have appellate jurisdiction pursuant
to 28 U.S.C. § 1291.
A.
Sambe and Donnelly first moved to vacate the Aiges
arbitration award pursuant to the Federal Arbitration Act, 9
U.S.C. § 10, in October, 2007. After the Board issued its
section 10(k) order granting the disputed work to Carpenters,
Donnelly filed a supplement to its cross-motion to vacate,
arguing that the section 10(k) decision precluded the District
Court from granting Sheet Metal’s request to enforce the
Aiges award and seeking vacatur of the award. On March 27,
2008, the District Court denied the motions to vacate because
“it disagree[d] with the implied end of Donnelly’s position –
that there is no monetary remedy for [Sheet Metal] even if the
PLA is valid and [Sambe and Donnelly] breached that
contract.” (D.C. J.A. 21.) We exercise de novo review over a
district court’s denial of a motion to vacate an arbitration
award. See Dluhos v. Strasberg, 321 F.3d 365, 369 (3d Cir.
2003).
41
We agree with Sambe and Donnelly that the District
Court erred when it refused to vacate the Aiges award. It is
well-established that where an arbitration award squarely
conflicts with a later Board ruling, the arbitration award must
yield to the Board’s decision. This principle derives from the
Supreme Court’s decision in Carey v. Westinghouse Elec.
Corp., 375 U.S. 261 (1964), where the Court stated in dicta
that “[s]hould the Board disagree with [an] arbiter . . . the
Board’s ruling would, of course, take precedence,” because
“[t]he superior authority of the Board may be invoked at any
time.” Id. at 272. Relying upon the Supreme Court’s dicta in
Carey, the majority of the Courts of Appeals have since held
that a section 10(k) award nullifies a contrary arbitration
award. See, e.g., Pac. Mar. Ass’n, 773 F.2d at 1021 (“The
policies underlying the supremacy doctrine, as enunciated by
the Supreme Court in Carey and the overwhelming body of
circuit and district court decisions, indicate that a section
10(k) decision must be given precedence over an arbitrator’s
contrary decision.”); see also Teamsters Union Local No. 115
v. DeSoto, Inc., 725 F.2d 931, 936 (3d Cir. 1984); Local
1519, 619 F.2d at 583; Local 7-210, Oil, Chemical & Atomic
Workers v. Union Tank Car Co., 475 F.2d 194, 199 (7th Cir.
1973); New Orleans Typographical Union No. 17 v. NLRB,
368 F.2d 755, 767 (5th Cir. 1966). The appropriate remedy,
then, is to vacate the conflicting arbitration award. See T.
Equip. Corp., 166 F.3d at 19; see also Pac. Mar. Ass’n, 773
F.2d at 1020.
The Aiges arbitration award squarely conflicted with
the Board’s section 10(k) decision by holding, contrary to the
section 10(k) order, that Sheet Metal was entitled to the
disputed work and by directing that the work be reassigned
“to members of Sheet Metal Workers Local 27.” (D.C. J.A.
42
296.) Thus, the District Court was required as a matter of law
to vacate the Aiges award and erred by declining to do so.
Accordingly, we will vacate the District Court’s order of
March 27, 2008 and remand with directions to vacate the
Aiges arbitration award.
B.
We turn next to Donnelly’s, Sambe’s, and Sheet
Metal’s respective appeals from the District Court’s orders
granting summary judgment in favor of Sheet Metal. We
review the District Court’s grant of summary judgment de
novo, “applying the same standard as the District Court.” Pa.
Coal Ass’n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995). “This
requires that we view the underlying facts and all reasonable
inferences therefrom in the light most favorable to the party
opposing the motion.” Id. Summary judgment is proper
where no genuine dispute exists as to any material fact, and
the moving party is entitled to judgment as a matter of law.
See Fed. R. Civ. P. 56(a).
1.
As to Donnelly’s appeal, affirmance of the Board’s
decision and order of December 8, 2011, compels reversal of
the District Court’s entry of judgment in favor of Sheet Metal.
As we explained in Gundle III, it follows from our decision to
enforce an order of the Board finding that a union committed
an unfair labor practice by maintaining a section 301 suit that
directly conflicts with a section 10(k) award that the union “is
prohibited from the continued maintenance of [its] section
301 suit.” 1 F.3d at 1430. Accordingly, we will vacate the
orders of the District Court granting summary judgment in
43
favor of Sheet Metal and finding Donnelly liable for breach
of contract damages in the amount of $365,349.75, and
remand with directions to enter judgment in favor or
Donnelly. See id.; see also New Orleans Typographical
Union No. 17, 368 F.2d at 768.
2.
Finally, we turn to Sambe’s and Sheet Metal’s appeals
from the District Court’s orders granting summary judgment
in favor of Sheet Metal on its breach of contract claim and
awarding Sheet Metal nominal damages of $1.00. To prevail
on a breach of contract claim under New Jersey law, a
plaintiff must establish three elements: (1) the existence of a
valid contract between the parties; (2) failure of the defendant
to perform its obligations under the contract; and (3) a causal
relationship between the breach and the plaintiff’s alleged
damages.22 See Coyle v. Englander's, 488 A.2d 1083, 1088
(N.J. Super. Ct. App. Div. 1985). The Supreme Court of New
Jersey has instructed that “[w]here the terms of a contract are
clear and unambiguous there is no room for interpretation or
construction and we must enforce those terms as written.”
Kutzin v. Pirnie, 591 A.2d 933, 936 (1991) (citation omitted)
(internal quotation marks omitted); accord Tamarind Resort
Assocs. v. Gov’t of V.I., 138 F.3d 107, 110-11 (3d Cir. 1998)
(“We have consistently embraced the basic common law
principle that a contract is unambiguous if it is reasonably
capable of only one construction.”). “We therefore will
affirm a grant of summary judgment in a breach of contract
action only where the contract is unambiguous and the
22
There is no dispute that New Jersey law governs the
contract claims herein.
44
moving party is entitled to judgment as a matter of law.”
Tamarind Resort Assocs., 138 F.3d at 111.
In reviewing Sheet Metal’s motion for summary
judgment, the District Court determined that only the first two
elements of the breach of contract claim were at issue because
it was “undisputed that [Sheet Metal] suffered damages from
the assignment of the roofing work to another union.” Sheet
Metal I, 673 F. Supp. 2d at 319. The District Court held that
the second element was satisfied as a matter of law because
the Aiges award finding that Sambe violated the PLA by
assigning the work to Carpenters was entitled to preclusive
effect, and thus the District Court was bound by that
conclusion. Id. at 322. The District Court rejected Sambe’s
argument that the Aiges award was not enforceable because it
conflicted with the Board’s 10(k) determination. See id. at
320 n.10.
The District Court alternatively held that, even if the
Aiges award did not have preclusive effect, “the undisputed
evidence demonstrates” that Sambe breached the PLA by
failing to assure that Donnelly complied with the Agreement,
as required by Article 3, Section 1.23 Id. at 322 n.16. The
23
Article 3, section 1 provides in pertinent part:
[T]he General Contractor shall
require all Contractors of
whatever tier who have been
awarded contracts for the work
covered by this Agreement, to
accept and be bound by the terms
and conditions of this Project
45
District Court determined, without further explanation, that
“[a]lthough Sambe argues that it discharged its contractual
duty by requiring Donnelly to execute the Letter of Assent,
the PLA clearly required Sambe to ‘assure [Donnelly’s]
compliance,’ which, it is undisputed, it did not do.” Id. The
District Court thus concluded that “there is no genuine issue
of material fact as to whether Sambe . . . failed to perform
[its] PLA obligations,” and Sambe was liable for breach of
contract as a matter of law. Id.
Sambe challenges the District Court’s conclusion that
the Aiges award was entitled to preclusive effect and thus the
second element of Sheet Metal’s breach of contract claim was
satisfied as a matter of law. According to Sambe, the Aiges
award should not have been given preclusive effect because it
conflicted with the Board’s section 10(k) order, and therefore
it should have been vacated and could not have formed the
basis for Sambe’s breach of contract liability. We agree. For
the reasons discussed in parts II(B) and III(A) supra, the
District Court was required to vacate the Aiges arbitration
award following the Board’s section 10(k) decision, and
committed reversible error by failing to do so.
Agreement by executing the
Letter of Assent (Attachment A)
prior to commencing work. The
General Contractor shall assure
compliance with this Agreement
by the Contractors.
(B. J.A. 103.)
46
It does not follow, however, that Sambe is absolved of
contract liability under Gundle II. Sambe acknowledges that
Gundle II does not apply to Sheet Metal’s suit against Sambe
“in the same manner respecting Donnelly,” but urges this
Court to apply Gundle II to find that Sheet Metal was
prohibited from continuing its section 301 suit against both
Donnelly and Sambe. (Sambe Combined Third Step Br. 33.)
We will not do so. As we explained in part II(B)
supra, there is a distinction between a breach of contract suit
against the assigning employer and one against an employer
with no authority to assign the disputed work. Contrary to
Sambe’s suggestion, this is a distinction with “relevance” and
one that has significant “bearing upon the facts of the instant
matter.” (Sambe Combined Third Step Br. 35.) As the
general contractor on the Project, with no power to make or
amend the disputed work assignment, Sambe was not subject
to the “conflicting demands” of an order by the Board, on the
one hand, or complying with an arbitration order contrary to a
decision of the Board, on the other. See Local 33, 289
N.L.R.B. at 1483. Thus, we cannot agree with Sambe that the
District Court erred by refusing to find that Sheet Metal was
prohibited from continuing its section 301 suit against Sambe
after the Board’s 10(k) decision issued.
We do find, however, that the District Court erred in
its alternative holding that even if the Aiges award did not
have preclusive effect, summary judgment was warranted
because there was “no genuine issue of material fact as to
whether Sambe” failed to satisfy its obligation under Article
3, section 1 of assuring Donnelly’s compliance with the PLA.
Sheet Metal I, 673 F. Supp. 2d at 322 n.16. First, as Sambe
points out, the word “assure” is “susceptible to more than one
47
interpretation.” (Sambe D.C. First Step Br. 50.) The phrase
“assure compliance” could be interpreted as a guarantee that
Sambe’s subcontractors would adhere to all terms of the PLA.
But the phrase “assure compliance” may also reasonably be
interpreted to mean that Sambe would procure its
subcontractors’ assent to the PLA, thereby “assuring” that
they, too, were bound by the PLA’s terms. Because the
phrase “assure compliance” is ambiguous, summary
adjudication of the contract claim against Sambe was
foreclosed. See Tamarind Resort Assocs., 138 F.3d at 111.
Furthermore, the District Court erred by finding that
there existed no genuine dispute of material fact concerning
whether Sambe “assure[d]” Donnelly’s compliance with the
PLA sufficient to defeat Sheet Metal’s summary judgment
motion. See Sheet Metal I, 673 F. Supp. 2d at 322 n.16. The
record contains evidence that Sambe notified Donnelly of
Sheet Metal’s claim to the work after Donnelly assigned it to
Carpenters, and further reflects that Sambe asked Donnelly to
resolve the claim. Donnelly then pursued its unfair labor
practice charge that resulted in the assignment of the work to
Carpenters. Thus, contrary to the District Court’s conclusion,
it is not “undisputed” that Sambe failed to assure Donnelly’s
compliance with the PLA. See id. Rather, there exists a
genuine dispute of material fact concerning to what extent, if
at all, Sambe acted to ensure that Donnelly complied with the
PLA’s hiring requirements, and thus whether Sambe satisfied
its obligations under the PLA. Summary judgment was
therefore improper.
As such, we hold that although the District Court was
not required to deny Sheet Metal’s summary judgment
motion on its contract claim against Sambe on the ground that
48
the suit impermissibly sought breach of contract damages
from the general contractor following a section 10(k) order of
the Board, the District Court erred in granting summary
judgment for Sheet Metal because the contract provision at
issue is ambiguous and, furthermore, there exists a triable
issue of fact concerning whether Sambe satisfied its
obligations under the PLA. Accordingly, we will vacate the
District Court’s orders granting summary judgment for Sheet
Metal and awarding it nominal damages of $1.00. See UPMC
Health Sys. v. Metro. Life Ins. Co., 391 F.3d 497, 504 (3d Cir.
2004).
IV.
For the foregoing reasons, we will deny Sheet Metal’s
petition for review of the District Court’s December 8, 2011
decision and order, and grant the Board’s cross-application
for enforcement. We will vacate the orders of the District
Court with respect to Donnelly and remand with directions to
enter judgment in favor of Donnelly. We will likewise vacate
the orders of the District Court with respect to Sambe and
remand for the District Court to address the issue of contract
liability in accordance with this opinion.
49