Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-09-02895/USCOURTS-ca7-09-02895-0/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 

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* The Honorable William Hibbler, District Judge for the Northern District of Illinois,

is sitting by designation.

United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois  60604

Argued April 23, 2010

Decided July 28, 2010

Before

Hon. Daniel A. Manion,  Circuit Judge

Hon. Ilana Diamond Rovner,  Circuit Judge

Hon. William J. Hibbler, District Judge*

No. 09‐2895

Parkland Environmental Group, Inc.,

Plaintiff‐Appellant,

v.

Laborers’ International Union of North

America, Laborers’ Local 477,

Defendant‐Appellee.

Appeal from the United States District

Court for the Central District of Illinois

No. 06 CV 03238

Jeanne E. Scott, Judge.

O R D E R

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with

Fed. R. App. P. 32.1

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No. 09‐2895 Page 2

Parkland Environmental Group is a small, family‐owned asbestos abatement

company in Springfield, Illinois.  In March or April of 2004, it signed a “project only”

agreement with Laborers’ Local 477, a local chapter of the Laborers’ International Union of

North America. That single‐page agreement was limited to Parkland’s project at the White

Oaks Mall. Around the same time, Parkland and the Union signed another, much longer,

collective bargaining agreement covering all work done by Parkland in the Local 477

territory from May 1, 2003 to April 30, 2009. Two years later, the Union filed a grievance

against Parkland for performing work in the Local 477 territory without adhering to the

agreement. The grievance was submitted to arbitration with a grievance committee, as

provided in the agreement.

Parkland was surprised by the grievance.  It does not dispute that its vice president,

David Stowers, signed the agreement in question. But it claims that Stowers did not read the

agreement and that the Union led him to believe that this agreement was a “project only”

agreement covering just a project at Washington Street, similar to the White Oaks Mall

agreement. Parkland attended the arbitration and there argued that it was not bound either

by the contract generally, or the arbitration clause specifically, because the agreement was

for one project only and did not apply to the project in dispute. The grievance committee

ruled against Parkland and directed it to pay the Union $21,016.

Parkland sued in federal court to vacate the award under Section 301 of the Labor

Management and Relations Act and the Federal Arbitration Act, 9 U.S.C. § 1 et seq. The

Union counter‐sued for enforcement. Both sides moved for summary judgment, and the

district court granted the Union’s motion. It held that the dispute was within the scope of

the arbitration clause, that Parkland’s only defense—a challenge to the validity of the entire

agreement—was a matter subject to arbitration, and that the arbitration award drew its

essence from the contract.  Parkland appeals.  

Whether Parkland and the Union “agreed to arbitrate [this] dispute is a question for

the courts to decide,” but “if the parties have in fact agreed to arbitrate their dispute, they

have bargained for the arbitrator’s interpretation of their contract, not ours.”  United Steel

Workers Int’l Union v. Trimas Corp., 531 F.3d 531, 535–36 (7th Cir. 2008).  It is clear (and

Parkland no longer really contests) that the dispute was within the scope of the arbitration

clause in the agreement and that the award drew its essence from the contract.  Rather than

challenge the scope of the arbitration clause, Parkland focuses its argument on the validity

and scope of the agreement in the first place.  It does not deny that it signed the agreement,

but only whether it was valid when the Union filed its grievance.  It argues that it was

misled by the Union and signed the agreement believing that it was a project‐only

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No. 09‐2895 Page 3

1

Parkland also seems to argue that the agreement was invalid because the Union did

not obtain the support of a majority of Parkland employees necessary for the Union to be

recognized as the exclusive bargaining entity for Parkland employees under Section 9(a) of

the National Labor Relations Act.  We see no legal reason why the fact that the agreement

had never been converted into a Section 9(a) agreement would prevent it from being a valid

Section 8(f) pre‐hire construction agreement. See Sheehy Enterprizes, Inc. v. N.L.R.B., 602 F.3d

839, 843 (7th Cir. 2010) (“[I]n § 8(f), Congress has carved out an exception to this general

rule for employers in the construction industry. Under that provision, construction

employers can lawfully enter into so‐called “pre‐hire agreements” with unions that do not

have majority support.”).  But even if there were merit to Parkland’s argument regarding

the status of the agreement under Section 9(a), this argument goes to the validity of the

agreement, not its formation.  See Granite Rock Co. v. Teamsters, No. 08‐1214, 561 U.S. ___ ,

2010 WL 2518518 at *7 (June 24, 2010) (“[W]here the dispute at issue concerns contract

formation, the dispute is generally for the courts to decide.”).  This argument, like the claim

of fraud in the inducement, is subject to arbitration under the arbitration clause in this case.

agreement and, further, that it had repudiated the agreement prior to the grievance  by

consistently failing to conform to the agreement.  If at the time of the dispute it was not

bound by the agreement at all, it argues, it was not bound by the arbitration clause.

Therefore, under Parkland’s theory, we must decide whether there was a valid agreement at

the time of the dispute before we can decide whether the parties agreed to arbitrate the

dispute.

Not so.  The scope of an agreement is a term of the agreement and it too is subject to

arbitration.  Id. at 537.  Moreover,  “a challenge to the validity of the contract as a whole, and

not specifically to the arbitration clause, must go to the arbitrator.”  Buckeye Check Cashing,

Inc. v. Cardegna, 546 U.S. 440, 449 (2006).  This includes a claim of fraud in the inducement of

the contract generally, which is similar to what Parkland argues, as opposed to a claim of

fraud in the inducement of just the arbitration provisions.  Id. at 444–45 (citing Prima Paint

Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403–04 (1967)).  Parkland claims that it is

specifically challenging the arbitration clause, but its argument is not particularized to the

arbitration clause: the challenge to the arbitration clause stands or falls with the contract at a

whole, and so it was subject to, and resolved by, arbitration.  Thus, the district court

correctly limited its review to the scope of the arbitration clause and whether the decision

drew its essence from the contract.1

Parkland also argues that because the Union brought its grievance more than six

months after Parkland had allegedly repudiated the agreement, it is barred by the statute of

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No. 09‐2895 Page 4

limitations.  But Parkland did not raise a statute of limitations defense below, so it has

waived this non‐jurisdictional issue on appeal.  McKinney Restoration, Co. v. Illinois Dist.

Council No. 1 of Int’l. Union of Bricklayers & Allied Craftworkers, 392 F.3d 867, 873 (7th Cir.

2004).  The judgment of the district court is therefore AFFIRMED.

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