Sheet Metal Workers Int'l Ass'n, Local Union No. 27 - Decision Summary

By National Labor Relations Board

Dec 20, 2013

Sheet Metal Workers Int'l Ass'n, Local Union No. 27, Board Case No. 4-CD-1188(reported at 357 NLRB No. 131) (3d Cir. decided December 13, 2013)

In a published opinion the Court enforced the Board’s order finding that the Sheet Metal Workers International Association, Local Union No. 27, violated Section 8(b)(4)(ii)(D) of the Act by pursing a lawsuit seeking work after the Board had awarded the work to a rival union in a Section 10(k) proceeding.

In 2006, a township in New Jersey authorized a construction project subject to a Project Labor Agreement (“PLA”).The PLA required all contractors working on the project to sign the agreement, and contained a “supremacy provision,” which elevated the PLA over any other collective-bargaining agreements the PLA’s signatories may have signed. Sambe Construction Co. became the general contractor on the project, and it selected E.P. Donnelly, Inc., as the roofing contractor.Both signed the PLA. In turn, Donnelly selected the New Jersey Regional Council of Carpenters/Brotherhood of Carpenters, Local 623 (“the Carpenters”)—with whom it had a preexisting collective bargaining relationship—to perform the work, even though the Carpenters did not sign the PLA.The Sheet Metal Workers—which was party to the PLA—complained about the assignment, given that the Carpenters had not signed the PLA.Donnelly, which now had contractual obligations to the Sheet Metal Workers under the PLA and the Carpenters under its own CBA, refused to reassign the work. An arbitration hearing under the PLA, which the Carpenters did not attend, awarded the work to the Sheet Metal Workers.

The Carpenters asserted that it would picket the site if Donnelly reassigned the work to the Sheet Metal Workers.In turn, Donnelly filed an unfair labor practice charge with the Board under Section 10(k), asserting that the Carpenters violated Section 8(b)(4)(ii)(D) of the Act by threatening to picket to force the reassignment of the roofing work.The Board agreed that 10(k) relief was appropriate, and assigned the work to the Carpenters, looking at traditional factors of employer preference, current assignment, past practice, and economy of operations.

Before the Board’s decision, the Sheet Metal Workers filed a federal court lawsuit under Section 301 of the LMRA against the Carpenters and Donnelly, seeking to confirm the PLA arbitrator’s work assignment and seek damages if the roofing work was not reassigned. However, even after the Board’s awarded the work to the Carpenters in the 10(k) proceeding, the Sheet Metal Workers continued to maintain its federal court lawsuit.In response, Donnelly filed unfair labor practice charges against the Sheet Metal Workers, complaining that the lawsuit unlawfully attempted to coerce reassignment of the work, in contravention of the Board’s 10(k) award to the Carpenters.The Board ultimately concluded that the Sheet Metal Workers’ lawsuit against Donnelly violated the Act “because it directly conflict[ed] with the Board’s 10(k) award.” Around the same time, the federal district court came to the opposite conclusion, ruling in the Sheet Metal Workers’ favor in its suit against Donnelly.In the court’s opinion, given that the project was over and the Sheet Metal Workers were only seeking monetary damages, not reassignment of work, the Board’s 10(k) award did not preclude the lawsuit.Appeals were filed in both the Board and district court actions, which the Third Circuit consolidated for briefing and argument.

The Third Circuit enforced the Board’s order against the Sheet Metal Workers in full, and reversed the district court’s ruling for the Sheet Metal Workers.As to the Board’s order, the Court first concluded that the Board had jurisdiction to convene the original 10(k) hearing. In so finding, the Court rejected the Sheet Metal Workers’ assertion that the PLA’s grievance mechanism, not the Board’s section 10(k) procedures, was the appropriate means to resolve any work-assignment disputes.The Court explained that the Carpenters were not signatories to the PLA, and that various clauses in the PLA could not bring the Carpenters under its coverage against that union’s will.

Second, the Court agreed with the Board that the Sheet Metal Workers’ Section 301 lawsuit unlawfully pursued an “illegal objective” under Bill Johnson’s Restaurants, Inc. v. NLRB, 461 U.S. 731, 737 n.5 (1983), by seeking pay-in-lieu for work assigned to a rival union pursuant to a 10(k) award.Applying its decision in Local 30, United Slate, Tile & Composition Roofers v. NLRB, 1 F.3d 1419, 1426 (3d Cir. 1993) (“Gundle II”), the Court explained 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 . . . .” Per Gundle II, this holding does not waver even where the union’s suit seeks only monetary damages, not actual work reassignment. As the Court explained in Gundle II, “[t]he distinction . . . between seeking the work and seeking payment for the work is ephemeral” because “the valuable part of a right to a particular job is the right be paid for it” and “a jurisdictional dispute between two groups of employees . . . is in essence a dispute as to which shall receive compensation for that work.” 1 F.3d at 1427-28 (quoting NLRB v. Local 1291, Int’l Longshoremen Ass’n, 368 F.3d 107, 110 (3d Cir. 1966)).

The Court further rejected the Sheet Metal Workers’ contention that Gundle II’s predecessor opinion in the 10(j) context, which came out the other way, should control: “[O]ur seemingly inconsistent statements in Gundle I and Gundle II . . . 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.” The court further recognized that decisions in an injunctive relief proceeding are not binding on future panels deciding the case on the merits.The Court clarified, however, that its holding only extended to lawsuits against the assigning employer, and did not preclude suits against another employer, such as a general contractor, that did not possess the power to control its subcontractor’s work assignment.Finally, the Court reversed the district court’s decision in favor of the Sheet Metal Workers, consistent with the Board’s award of work in the 10(k) proceeding.