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Cremation Society of Illinois Inc. v. International Brotherhood of Teamsters Local 727

United States Court of Appeals, Seventh Circuit

August 28, 2017

Cremation Society of Illinois, Inc., Plain tiff-Appellant,
v.
International Brotherhood of Teamsters Local 727, Defendant-Appellee.

          Argued February 22, 2017

         Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 14 C 2017 - Jorge L. Alonso, Judge.

          Before Bauer and Williams, Circuit Judges, and DeGuilio, [*] District Judge.

          BAUER, CIRCUIT JUDGE.

         Sullivan Olson, Inc. ("Sullivan Olson"), which is now Cremation Society of Illinois, Inc., filed suit against the International Brotherhood of Teamsters Local No. 727 ("the Union"), under Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a), seeking a declaration that it had properly repudiated and was no longer bound by the collective bargaining agreement with the Union. The Union counterclaimed for a confirmation of an arbitration award and to compel arbitration pursuant to the LMRA and the Federal Arbitration Act, 9 U.S.C. §§ 4 and 6. It also filed a third-party complaint against Cremation Society. The district court ruled in the Union's favor on cross-motions for summary judgment. Cremation Society appeals the district court's rulings. For the following reasons, we affirm.

         I. BACKGROUND

         A. Parties

         Sullivan Olson operated a funeral home known as Olson Burke/Sullivan Funeral & Cremation Center ("OBS") in Chicago, Illinois, until it was purchased by Cremation Society on December 31, 2013, merged into Cremation Society in April 2014, and ceased to exist as an entity thereafter. The Company's President and sole shareholder was Gerald Sullivan. Sullivan is also the President and one of two shareholders of Cremation Society (the other shareholder being his wife). Cremation Society also conducts business in the funeral services industry under the name OBS, and has nine other locations in northern Illinois.

         The Union is a labor organization affiliated with the International Brotherhood of Teamsters. Sullivan Olson's relationship with the Union began after a settlement stemming from an unrelated lawsuit brought by the trustee of the Union's benefit funds. The Union's bargaining relationship with Cremation Society terminated in 2007.

         B. Compliance Agreement and Collective Bargaining Agreement

         On October 7, 2003, Sullivan Olson executed a Compliance Agreement, binding it to the terms and conditions of the Union's collective bargaining agreement ("CBA") with the Funeral Directors Services Association of Greater Chicago ("FDSA"). The Compliance Agreement provided that it would remain in effect until June 30, 2007, and from year to year thereafter. However, it could be terminated by either party upon written notice to the other at least 60 days prior to June 30 of 2007, or any subsequent year.

         The CBA between the Union and the FDSA recognized that the Union was the exclusive collective bargaining agent for all employees performing "bargaining unit work." As defined in the CBA, "bargaining unit work" is "the performance of embalming, whether in training or licensed, funeral directing, whether training or licensed, and auto livery chauffeur services." The definition also explicitly includes "removals, transportation of remains, embalming, funeral directing and all other work historically done by the bargaining unit."

         Article 19 of the CBA set out a grievance and arbitration procedure for "[a]ny complaint, grievance or dispute arising under or concerning the meaning, application, or compliance with the terms of this Agreement between the Employer and the Union and/or an employee." This article provides that, if the employer cannot resolve the dispute in two required meetings, then the grievance may be referred to the Grievance Board ("Board"), which is made up of three individuals selected by the FDSA and three individuals selected by the Union. The Board is required to conduct a hearing and render a decision on the referred grievance. If the Board fails to hold a hearing or issues a split decision, the Union or employer may submit the matter to arbitration. Either a majority decision of the Board or a decision of the arbitrator is final and binding upon the parties.

         C. ...


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