In the

United States Court of Appeals

For the Seventh Circuit

Nos. 09-1383 & 09-1656

SHEEHY ENTERPRIZES, INC.,

Petitioner,

Cross-Respondent,

v.

NATIONAL LABOR RELATIONS BOARD,

Respondent,

Cross-Petitioner,

and

LABORERS’ INTERNATIONAL UNION OF

NORTH AMERICA, STATE OF INDIANA

DISTRICT COUNCIL,

Intervening-Respondent.

Petition for Review and Cross-Application 

for Enforcement of an Order of the

National Labor Relations Board.

No. 25-CA-30583

ARGUED JANUARY 21, 2010—DECIDED APRIL 20, 2010
2 Nos. 09-1383 & 09-1656

Before EASTERBROOK, Chief Judge, and CUDAHY and

MANION, Circuit Judges.

MANION, Circuit Judge. Without first reading the document he was signing, James Sheehy, the president of

Sheehy Enterprizes, Inc., entered a collective bargaining

agreement with the Laborers’ International Union of

North America, State of Indiana District Council. Under

the terms of that agreement, Sheehy Enterprizes became

obliged to pay its employees union wages and make

union benefit fund contributions on their behalf for all

work it performed in Indiana and four counties in Kentucky. In 2007, when confronted by a union representative, Sheehy claimed that the company was not bound

by the agreement, prompting the union to file an unfair

labor practice charge with the National Labor Relations

Board. The Board’s general counsel then filed a complaint against the company. An administrative law judge

held a hearing and found that Sheehy Enterprizes had

committed an unfair labor practice by repudiating the

collective bargaining agreement, and the Board issued an

order affirming that decision. The company petitions

for review of the Board’s order, and the Board crosspetitions for enforcement of the same. For the reasons

that follow, we deny the company’s petition for review

and grant the Board’s cross-petition for enforcement.

I.

Sheehy Enterprizes, Inc. (“Company”), is an Indiana

construction business that specializes in concrete installation. James Sheehy is the Company’s president and co-
Nos. 09-1383 & 09-1656 3

owner and oversees its day-to-day operations. Until 2003,

the Company’s business was limited to non-union jobs.

But in October 2003, the Company began working as a

subcontractor on a student housing project on the Indiana

University-Purdue University, Indianapolis (“IUPUI”)

campus. The general contractor for the project was Wilhelm Construction, a signatory to a collective bargaining

agreement (“CBA”) between a construction employer

association and the Laborers’ International Union of

North America, State of Indiana District Council (“Union”). Under the CBA, Wilhelm Construction was encouraged to use subcontractors that were signatories to

the CBA and was required to notify the Union if any of

its subcontractors were not. On October 15, 2003, David

Frye, the Union’s local business manager, visited the

IUPUI construction site and noticed that the non-union

Company was working on the project. Frye advised

Wilhelm Construction’s superintendent that this was in

violation of the CBA. The superintendent set up a

meeting between Frye and James Sheehy the next day.

During the meeting, Sheehy signed an agreement that

made the Company a party to the CBA. Sheehy

mistakenly believed that the CBA was limited to the

IUPUI project when, in fact, it covered all concrete work

that the Company would perform in Indiana through

March 31, 2004. Frye told Sheehy that the CBA would not

apply to work that the Company had previously bid. In

accordance with the CBA, the Company paid union

wages and made union benefit-fund contributions for

the duration of the IUPUI project.
4 Nos. 09-1383 & 09-1656

Following the expiration of the CBA on March 31, 2004,

the Company began work on another union project at

IUPUI involving the construction of a parking garage. On

May 21, 2004, Sheehy signed a new agreement binding

the Company to a new CBA (“2004 CBA”)—the one at

issue in this case—that ran from April 1, 2004 until

March 31, 2009. The new CBA was essentially the same

as the prior CBA, covering all work performed by the

Company in Indiana and four counties in Kentucky. But

again, without reading the CBA, Sheehy mistakenly

thought that the Company would be unionized for only

the current IUPUI project rather than for all projects

during the next five years. The Company made union

benefit-fund contributions on behalf of its employees

for the 2004 IUPUI project, the last such contribution

occurring on August 27, 2004.

During the next three years, the Company worked

mostly for non-union general contractors and did not

pay union wages or make benefit-fund contributions.

Then, on November 1, 2007, Union business agent

Dwight Smith observed several Company employees

working at a Walmart project site in Indianapolis

that had been bid by a general contractor that was a

signatory to the CBA. Not recognizing the workers or

the Company, Smith contacted Frye and relayed the

information. Frye told Smith that the Company was

indeed a party to the CBA and to sign up any employees who did not have union cards. As Smith approached the Company workers, Sheehy met him and

told him that the Company was not a union contractor.
Nos. 09-1383 & 09-1656 5

The Company argues that the two-member panel of the Board 1

lacked authority to hear this dispute due to the absence of a

three-member quorum of the entire Board. The Company

recognizes that our decision in New Process Steel, L.P. v. NLRB,

564 F.3d 840 (7th Cir.), cert. granted, 130 S. Ct. 488 (2009),

(continued...)

Sheehy then spoke with Frye by phone, who informed

him that the 2004 CBA was in force between the Union

and the Company. Sheehy denied being bound by the

2004 CBA but indicated he was willing to work something

out for that particular project. Frye responded that there

was nothing to work out because the 2004 CBA was in

effect. On January 24, 2008, the Union filed an unfair

labor practice charge with the National Labor Relations

Board (“Board”).

Based on the Union’s charge, the Board’s general

counsel filed a complaint against the Company on April 30,

2008. Following a hearing, an administrative law judge

(“ALJ”) concluded that the Company had violated

§§ 8(a)(1) and (a)(5) of the National Labor Relations Act

(“Act”), 29 U.S.C. §§ 151 et seq., by repudiating the 2004

CBA. The ALJ ordered the Company to cease and desist

from refusing to adhere to the 2004 CBA and to make

its employees and the Union whole for any wages or

benefits it had failed to pay. The Company filed its exceptions to the ALJ’s decision with the Board. A twomember panel of the Board affirmed the ALJ’s determinations and adopted his recommended order with

slight modifications not relevant here. The Company

1
6 Nos. 09-1383 & 09-1656

(...continued) 1

forecloses that argument, but raises it so that the issue is

preserved.

The Union has intervened in support of the Board and urges 2

enforcement of its order.

Under § 10(a) of the Act, “[t]he Board is empowered . . . to 3

prevent any person from engaging in any unfair labor practice . . . affecting commerce.” 29 U.S.C. § 160(a).

petitions for review of the Board’s order, and the

Board cross-petitions for enforcement.2

II.

Initially, the Company argues that the Board lacked

authority to decide the dispute because it did not

involve an unfair labor practice. Under § 7 of the Act, 3

employees have the right to bargain collectively through

representatives of their own choosing. 29 U.S.C. § 157.

Section 9(a) provides that the bargaining agent for

the employees in an appropriate unit must be the representative “designated or selected for the purposes of

collective bargaining by the majority of the employees.” Id.

§ 159(a). It is an unfair labor practice under §§ 8(a)(1)

and (b)(1)(A) for an employer or union, respectively, to

interfere with, restrain, or coerce employees in the

exercise of their rights under § 7. Id. §§ 158(a)(1) and

(b)(1)(A). Such a violation occurs when a union and

employer enter a CBA recognizing the union as the exclusive bargaining agent when it does not enjoy the
Nos. 09-1383 & 09-1656 7

Section 8(a)(5) of the Act makes it an unfair labor practice for 4

an employer “to refuse to bargain collectively with the representatives of his employees, subject to the provisions of

section 159(a) of this title.” 29 U.S.C. § 158(a)(5). Where a CBA

is in place, the duty to bargain collectively “mean[s] that no

party to such contract shall terminate or modify such contract.” Id. § 158(d).

support of a majority of employees. Int’l Ladies Garment

Workers’ Union v. NLRB, 366 U.S. 731, 737-38 (1961). But

in § 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. 29 U.S.C.

§ 158(f). The parties agree that the 2004 CBA was a § 8(f)

agreement.

In John Deklewa & Sons, 282 N.L.R.B. 1375, 1387 (1987),

enforced sub nom. International Association of Bridge, Structural & Ornamental Workers, Local 3 v. NLRB, 843 F.2d 770

(3d Cir. 1988) (“Deklewa”), the Board held that a § 8(f)

agreement confers a limited § 9(a) representative status

on a union signatory and that an employer signatory

commits an unfair labor practice under §§ 8(a)(1) and

(a)(5) by unilaterally repudiating the agreement while it

is in force. A few years later in NLRB v. Bufco Corp., 899

4

F.2d 608, 611 (7th Cir. 1990), this court approved the

Deklewa rule in enforcing an order of the Board that,

applying Deklewa, found an employer had committed

an unfair labor practice under §§ 8(a)(1) and (a)(5) by

repudiating its § 8(f) pre-hire agreements with a union.
8 Nos. 09-1383 & 09-1656

The Company also claims that the Board lacked authority 5

over this unfair labor practice dispute because § 301 of the

Labor Management Relations Act, 29 U.S.C. § 185(a), creates a

cause of action for unions to sue for violations of a CBA in

federal court. There is no merit to that argument. Although it

is true that the effect of § 301 is that the Board’s authority over

an unfair labor practice “is not exclusive” when the activity

also constitutes a breach of a CBA, “[t]he authority of the

Board to deal with an unfair labor practice which also violates

a collective bargaining contract is not displaced by § 301 . . . .”

Smith v. Evening News Ass’n, 371 U.S. 195, 197 (1962). Thus, in

such cases, the district courts and the Board have concurrent

jurisdiction. William E. Arnold Co. Carpenters Dist. Council of

Jacksonville & Vicinity, 417 U.S. 12, 18 (1974); McNealy v. Caterpillar, Inc., 139 F.3d 1113, 1123 (7th Cir. 1998). The choice

between these fora was the Union’s prerogative.

Clearly then, under the law of this circuit, the Board

has the authority to hear an unfair labor practice

dispute that, like this one, concerns the unilateral repudiation of a § 8(f) agreement.5

We turn, then, to the merits of the petitions. Our

review of a Board ruling is deferential. We will accept

the Board’s factual findings if they are supported by

substantial evidence in the record considered as a

whole. FedEx Freight E., Inc. v. NLRB, 431 F.3d 1019,

1025 (7th Cir. 2005) (citation omitted). We give special

deference to its credibility determinations and will not

disturb them absent extraordinary circumstances. Id. at

1026. We will uphold the Board’s legal determinations

as long as they are not irrational or inconsistent with the
Nos. 09-1383 & 09-1656 9

In its briefs, the Company contends that our review of the 6

Board’s interpretation of the 2004 CBA is de novo. NLRB v. Int’l

Bhd. of Elec. Workers, Local Union 16, 425 F.3d 1035, 1039 (7th

Cir. 2005). Yet the Company does not challenge the Board’s

interpretation of the agreement and does not advance any

specific argument about how the Board’s interpretation was

incorrect. Therefore, we have no occasion to review the

Board’s interpretation of the 2004 CBA.

There is no evidence in the record that the Union misrepre- 7

sented the terms of the CBA to Sheehy or knew of his

alleged misunderstanding of the nature of the agreement.

Act. Id. Where, as here, the Board adopted the ALJ’s

6

findings of fact and conclusions of law, it is the ALJ’s

determinations that we review. Id.

Sheehy admitted that he signed the 2004 CBA on May 21,

2004, on behalf of the Company, without reading it.7

That agreement was effective until March 31, 2009. But

both Frye and Sheehy testified that on November 1, 2007,

the Company, through Sheehy, denied that it was bound

by the CBA. Thus, substantial and uncontroverted evidence in the record supports the ALJ’s finding that the

Company violated the Act by repudiating the 2004 CBA.

In response, the Company argues that the general counsel’s complaint was barred because the Union’s January 24,

2008, charge (upon which the complaint was based) was

filed more than six months after the Union allegedly

learned (in 2004 and 2005) of the Company’s repudiation

of the 2004 CBA. Section 10(b) of the Act provides that

“no complaint shall issue based upon any unfair labor
10 Nos. 09-1383 & 09-1656

practice occurring more than six months prior to the

filing of the charge with the Board.” 29 U.S.C. § 160(b). The

Company, however, did not assert this statute of limitations affirmative defense until it filed its exceptions to

the ALJ’s decision with the Board. The Board did not

consider the defense because it was untimely, having not

been raised in the Company’s answer or at the hearing

with the ALJ. The Board’s refusal to address the Company’s § 10(b) defense conformed with its usual practice

(not challenged by the Company) of deeming waived

affirmative defenses that are not raised in an answer to

the general counsel’s complaint or at the hearing before

the ALJ. Geske & Sons v. NLRB, 103 F.3d 1366, 1371

n.8 (7th Cir. 1997); NLRB v. Wizard Method, Inc., 897 F.2d

1233, 1236 (2d Cir. 1990) (citing Fed. Mgmt. Co., 264

N.L.R.B. 107, 107 (1982)). Similarly, we will not consider

this argument that was not properly presented in the

administrative proceeding. Id.

The Company did argue to the ALJ—based on what it

termed a “common law waiver theory”—that by waiting

until several years after it first learned of the Company’s

repudiation of the CBA to bring an unfair labor practice charge, the Union impliedly waived its right to complain of the Company’s actions. In rejecting that argument, the ALJ chose not to credit Sheehy’s testimony

that he told Frye on two occasions in 2004 and 2005 that

the Company would not follow the CBA for non-union

projects. Instead, the ALJ credited Frye’s testimony that

he did not speak with Sheehy between May 2004

and November 2007 and did not learn that the Company

was not complying with the CBA until November 2007.
Nos. 09-1383 & 09-1656 11

In challenging that finding, the Company does not suggest that extraordinary circumstances exist that would

justify our disregarding the ALJ’s credibility determination. And where, as here, the ALJ chose between two

conflicting views of the evidence, the substantial evidence standard of review requires us to uphold his

factual finding that the Union did not learn of the Company’s repudiation until November 2007. New Process

Steel, 564 F.3d at 844 (citation omitted). The ALJ’s rejection of the Company’s “common law waiver” argument

was thus appropriate.

Last, the Company claims that the Board should have

deferred from hearing this unfair labor practice dispute

in favor of the arbitration procedures provided for in the

CBA, which is its usual policy when such grievance

remedies are available under a CBA. Collyer Insulated

Wire, 192 N.L.R.B. 837, 839 (1971); see also Chicago Tribune

Co. v. NLRB, 974 F.2d 933, 938 (7th Cir. 1992). But the

Company failed to make this non-jurisdictional argument

to the Board, which means that absent extraordinary

circumstances—and none are claimed by the Company—we may not consider it. 29 U.S.C. § 160(e).

III.

Based on the foregoing reasons, we conclude that

substantial evidence in the record supports the ALJ’s

finding that the Company committed an unfair labor

practice by unilaterally repudiating the 2004 CBA. The

Company waived its affirmative defense that the § 10(b)

statute of limitations bars the Board’s complaint, and the
12 Nos. 09-1383 & 09-1656

ALJ’s rejection of the Company’s common law waiver

argument is supported by substantial evidence. Furthermore, because the Company failed to present to the Board

its argument that the Board should have deferred from

hearing this dispute in favor of arbitration, we cannot

consider it. We have examined all other arguments advanced by the parties and see nothing that requires comment. Accordingly, the Company’s petition for review is

DENIED and the Board’s cross-petition for enforcement

of its order is GRANTED.

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