Brock Industrial Services, LLC v. Laborers' International Union of North America Construction

          Argued April 11, 2018

          Appeals from the United States District Court for the Southern District of Illinois. No. 16-CV-780-NJR-DGW - Nancy J. Rosenstengel, Judge.

          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 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 disputes-disputes over whether the Laborers or another union is entitled to perform work-are instead subject to a tripartite 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 involved 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 Management 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 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 jurisdictional 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 provides: "Except for jurisdictional disputes and those involving 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 unresolved 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 employees 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, unresolved work-jurisdiction disputes must be submitted to a Permanent Umpire. Because this process typically involves three parties-the employer plus the two competing unions-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 Carpenters. 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 Subcommittee complaining that Brock violated the agreement by terminating the Laborers and assigning work to the Carpenters. 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, lockouts, work stoppages, or picketing arising out of any juris-dictional dispute. Work will continue as originally assigned, pending resolution of the dispute." The ...