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Pro Fab Sheet M Inc. v. Sheet Metal Workers International Association Local 20

United States District Court, N.D. Indiana, Hammond Division

September 19, 2014

Pro Fab Sheet M Inc.; Plaintiff,
v.
Sheet Metal Workers International Association Local 20; Defendant.

OPINION AND ORDER

JOSEPH S. VAN BOKKELEN, District Judge.

In this lawsuit, Plaintiff, a sheet metal fabricator, alleges that Defendant, Sheet Metal Workers International Association Local 20, has failed to abide by the terms of a collective bargaining agreement. Plaintiff makes two state law claims and two federal claims associated with Defendant's alleged misconduct. First, Plaintiff alleges that the union breached the collective bargaining agreement and tortuously interfered with its business relationship with Arctic Engineering, who is one of its customers. Plaintiff's two federal claims allege unfair labor practices by Defendant that are prohibited by Section 7 (29 U.S.C. § 157) and Section 8(b) (29 U.S.C.S. § 158(b)) of the National Labor Relations Act. Section 7 protects an employee's right to seek or abstain from union membership and Section 8(b)(4) prohibits a union from trying to compel a third party to cease doing business with the union's primary employer as a result of their dispute. In response, Defendant union has filed a motion to dismiss or stay all of Plaintiff's claims.

A. Background

Plaintiff employs numerous Union employees who fabricate sheet metal for commercial construction uses. (DE 1, Compl. at 1.) The relationship between Plaintiff and the Union is governed by a collective bargaining agreement. (DE 1, Compl. at 1-2.) This Agreement requires that an injured party, either the employer or the union, provide written notice of any grievance, which commences a dispute resolution process that mandates arbitration to resolve the dispute. (DE 1, Compl. at 4.)

Plaintiff alleges that on October 2, 2013, a union representative removed the union labels that Plaintiff affixes to its products from their manufacturing facility. (DE 1, Compl. at 5.) These labels inform Plaintiff's customers that the products were fabricated by union employees. The removal of these labels is critical for Plaintiff's operations because products that do not possess the union label may be rejected by contractors or union members responsible for installing the products. (DE 1, Compl. at 5.) After confiscating the union labels, the union representative informed Pro Fab's vice president of his actions. (DE 1, Compl. at 5.) Days after removing the labels from Plaintiff's facility, Defendant notified Plaintiff that this action was taken in response to a shortage of benefit payments due to the union. (DE 1, Compl. at 8.) The union representative never provided the employer with notice of his grievance or arbitrate this dispute as required by the collective bargaining agreement. (DE 1, Compl. at 5-6.)

After removing the union labels from Plaintiff's facility, Defendant notified Arctic Engineering, one of Plaintiff's customers, of its actions. On October 2, the same day the labels were seized by the union, Arctic Engineering contacted Plaintiff and relayed that they would not accept or install Plaintiff's product without these labels. (Compl. at 6.) Previously, Arctic Engineering placed an order with Plaintiff that was to be delivered on October 4, 2013. ( Id. ) On October 3, 2013, Arctic Engineering relayed to Plaintiff that the union was contemplating allowing them to accept the delivery of Plaintiff's goods, even without the stickers. (Compl. at 7.) On October 4, 2013, Plaintiff's goods were delivered and Arctic Engineering relayed to Plaintiff that the union had expressly permitted the delivery. ( Id. ) Plaintiff does not allege that any other customers were contacted by Defendant or any other deliveries affected by the removal of the union labels by Defendant.

In response to the Union's seizure of the labels Plaintiff pursued a temporary restraining order requiring the immediate return of the union labels and filed a Complaint alleging unfair labor practices, breach of contract, and tortuous interference with a business relationship. (DE 1, Compl.; DE 2, Mot. Temp. Rest. Order.) This Court granted Plaintiff's request for a temporary restraining order and required Defendant to return the union labels October 16, 2013, eleven days after they had been seized by the Union. (DE 11, Order at 4.)

In response to Plaintiff's Complaint, Defendant union has moved to dismiss or stay all of Plaintiff's claims. Defendant maintains that Plaintiff's federal claims, both involving unfair labor practices, must be dismissed because this court lacks jurisdiction of Section 7 claims and because Plaintiff has failed to properly state a claim alleging unfair labor practices prohibited by Section 8(b)(4) of the National Labor Relations Act. Next, Defendant contends that the alleged breach of contract claim must be dismissed or stayed pending the results of contractually mandated arbitration. Defendant also asserts that the tortious interference claim, raised under state law, is preempted by federal labor law because it requires the Court to interpret the collective bargaining agreement.

B. Standard for Evaluating a Motion to Dismiss

Dismissing a case is appropriate if the complaint sets forth no viable cause of action upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). In assessing the propriety of dismissal under Rule 12(b)(6), the Court must accept all well-pleaded factual allegations in the complaint and the inferences reasonably drawn from them as true and in the light most favorable to Plaintiff. Johnson v. Rivera, 272 F.3d 519, 520 (7th Cir. 2001).

A complaint is not required to contain detailed factual allegations, and plaintiffs' claims are subject to dismissal only if it is clear that they can prove no set of facts consistent with the allegations in the complaint that would entitle them to relief. Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007). The Court is not required to accept Plaintiffs' legal conclusions. Pursuant to Rule 8(a)(2), plaintiffs must provide a ground to their entitlement to relief, which requires more than labels and conclusions. Fries v. Helsper, 146 F.3d 452, 456 (7th Cir. 1998).

C. Analysis

Defendant asserts that all federal claims must be dismissed because this Court lacks jurisdiction over § 7 claim and Plaintiff has failed to state a claim upon which relief can be granted for violating § 8(b). Defendant is correct. This Court lacks jurisdiction over unfair labor practices claims raised pursuant to § 7 and Plaintiff has failed to state a cognizable claim that Defendant violated § 8(b). Thus, with all federal claims dismissed before trial, this Court will forego exercising supplemental jurisdiction over the two state claims.

Plaintiff's suit against Defendant raises two claims for unfair labor practices. One claim alleges that Defendant has coerced, harassed, and intimidated employees to make claims against Plaintiff. These claims would then be used by Defendant to force Plaintiff to hire certain members of the union. Plaintiff alleges that this conduct violates § 7 and § 8(b). Plaintiff's second unfair labor practices claim alleges that Defendant has engaged in harassing and intimidating conduct designed to force Plaintiff to hire certain members of the union and ...


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