Opinion ID: 484259
Heading Depth: 1
Heading Rank: 2

Heading: repudiation of the contracts

Text: 21 A & P argues that even if the Union were not in breach of the agreements, A & P was free to repudiate them because the Union had never acquired majority status among A & P's workforce. See Jim McNeff, Inc. v. Todd, 461 U.S. 260, 103 S.Ct. 1753, 75 L.Ed.2d 830 (1983). Implicit in this argument is the contention that A & P, not the AGC, was the relevant bargaining unit for determining majority status and, therefore, the collective bargaining agreements were only prehire agreements with respect to A & P. A & P's repudiation argument is in two parts. A & P asserts that it repudiated the prehire agreements, both by conduct, at some unspecified time after the 1975 contract went into effect, and explicitly by its letters of November 14, 1980. 22 A & P's argument that its conduct prior to November 14, 1980 constituted repudiation is easily dismissed. The argument was never developed at trial and never addressed by the court. There are, consequently, no findings for us to review. Furthermore, we would not remand for findings on this point since the record clearly does not support a claim of repudiation by conduct prior to the November 14, 1980 letter, anymore than it supports A & P's breach of contract claim. On the contrary, A & P's conduct in filing its monthly reports, in entering the 1978 contract, and in failing to take any formal action questioning the performance of the Union constitutes evidence that no repudiation by conduct was effectuated, regardless of A & P's unilateral view of the agreements. 23 The letters of November 14, 1980 are another matter. Clearly, and on their face, the letters constitute a repudiation of the 1978-81 agreement--a repudiation which would be valid if the agreement was determined to be a prehire agreement rather than a full collective bargaining agreement. The district court decided that the 1975 and 1978 agreements could not be prehire agreements with respect to A & P on the grounds that the AGC was the relevant bargaining unit and that A & P had not shown that a majority of employees in the AGC were not members of the Union. According to the court, when A & P assigned its bargaining rights to the AGC its employees, in effect, merged with others in the AGC. Therefore, the judge held that A & P had entered into a full collective bargaining agreement which could not be repudiated. 24 Two questions arise from the district court's ruling that the 1975 and 1978 agreements were full collective bargaining agreements with respect to A & P: (1) whether the federal courts, rather than the NLRB, have jurisdiction to decide the relevant bargaining unit in the context of a contractual dispute in the construction industry, and if so, (2) whether the court correctly determined that the relevant bargaining unit was the AGC and not A & P. Although neither the district court nor the parties raised or examined the jurisdictional point, we raise it sua sponte, since the jurisdictional question must be settled prior to resolution of the repudiation issue.
25 The district court's determination of the appropriate bargaining unit presents this court with a jurisdictional question that we have never before confronted. Initially, we note that section 301(a) of the Labor Management Relations Act (LMRA) vests federal courts with jurisdiction to examine alleged violations of contract agreements: 26 Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties. 27 29 U.S.C. Sec. 185(a). But section 301 is more than jurisdictional; it forms the basis for the development of a federal common law interpreting and enforcing collective bargaining contracts. International Union of Operating Eng'rs v. Superior Rigging & Erecting Co., 602 F.Supp. 913, 916 (N.D.Ga.1984). Section 301 expresses a federal policy that federal courts should enforce these agreements ... and that industrial peace can be best obtained only in that way. Textile Workers Union of Am. v. Lincoln Mills, 353 U.S. 448, 455, 77 L.Ed.2d 912, 917, 1 L.Ed.2d 972 (1957). 28 The Supreme Court has held that, under section 301(a) of the LMRA, federal courts have jurisdiction to enforce an arbitration clause even if the contract dispute involves a representational question and even though an alternative remedy before the Board [i.e., a unit clarification petition] is available. Carey v. Westinghouse Elec. Corp., 375 U.S. 261, 268, 84 S.Ct. 401, 407, 11 L.Ed.2d 320 (1964). Thus section 301 can provide parties to a labor contract with an independent forum for resolution of representational disputes in addition to NLRB disposition. The Court stated: 29 But the existence of a remedy before the Board for an unfair labor practice does not bar individual employees from seeking damages for breach of a collective bargaining agreement in a state court, as we held in Smith v. Evening News Assn., 371 U.S. 195 [83 S.Ct. 267, 9 L.Ed.2d 246]. We think the same policy considerations are applicable here; and that a suit either in the federal courts, as provided by Sec. 301(a) of the Labor Management Relations Act of 1947 ... or before such state tribunals as are authorized to act ... is proper, even though an alternative remedy before the Board is available, which, if invoked by the employer, will protect him. 30 375 U.S. at 268, 84 S.Ct. at 407 (citations omitted). 31 A later Supreme Court case appeared to narrow the scope of the Carey decision. In South Prairie Const. Co. v. Operating Eng'rs, 425 U.S. 800, 96 S.Ct. 1842, 48 L.Ed.2d 382 (1976) (per curiam), the Court held that a federal circuit court lacked jurisdiction, on appeal of an NLRB decision, to make an initial determination of which set of employees constituted the appropriate bargaining unit and must remand the case to the NLRB for an initial determination. Crucial to the outcome in South Prairie, in our view, was the fact that the NLRB had already assumed initial jurisdiction in the dispute, yet had not made a ruling on the relevant bargaining unit. 32 The arguably conflicting positions of the Court in Carey and South Prairie have produced a good deal of comment and analysis. Some courts have managed to avoid deciding representational issues raised as contractual disputes, while others have held that federal courts can resolve bargaining unit disputes that arise in the limited context of a genuine section 301 contract dispute, at least where a dispute containing a representational issue is not pending before the NLRB. 6 33 We take the latter position and elect to follow the reasoning of the Fifth Circuit in Carpenters Local Union No. 1846 v. Pratt-Farnsworth, 690 F.2d 489 (5th Cir.1982), cert. denied, 464 U.S. 932, 104 S.Ct. 335, 78 L.Ed.2d 305 (1983). In Carpenters Local, a union brought a section 301 action to enforce a collective bargaining agreement against a non-signatory employer, arguing that the employer was either the alter ego of the signatory employer or that the two employers constituted only a single employer under the single employer doctrine. The district court held that the NLRB had exclusive jurisdiction to determine which employer was the appropriate bargaining unit under the single employer doctrine. The Fifth Circuit reversed, emphasizing that the bargaining unit issue must be understood in the context of a section 301 action: 34 We have seen that in deciding whether a collective bargaining agreement has been breached, the federal courts have been directed by Congress to create a federal common law of contract, fashioned from the policy of our national labor laws, applicable to collective bargaining agreements. Lincoln Mills, supra 353 U.S. at 456-57, 77 S.Ct. at 917-918. We are faced here with one of the most fundamental questions that can arise in a contract suit, namely: who is bound by this contract? To say that the courts and not the Board are solely entitled to pass upon contractual disputes and at the same time to deny the courts the power to determine in a fashion consistent with the policy of our national labor laws the identity of the persons or entities obligated by the contract is self-contradictory. If anything, the power to enforce a contract must necessarily include the ability to decide who is bound by the contract. No question is more basic to the existence of contractual rights. Thus to the extent that the identity of the obligees is bound up in representational issues, the federal courts must be empowered to decide those issues for the purpose of determining contractual rights and obligations. 35 Id. at 518 (emphasis added). Cf. Kaiser Steel v. Mullins, 455 U.S. 72, 102 S.Ct. 851, 70 L.Ed.2d 833 (1982) (district court had jurisdiction to entertain unfair labor practice defense under Sec. 8(e) of the NLRA where necessary to resolve contract dispute). 36 In short, the Fifth Circuit held that under the narrow circumstances of Carpenters Local 7 the district court may decide the appropriateness of the bargaining unit when such a determination is essential to resolution of a genuine contractual claim. 690 F.2d at 517. In such a situation, federal court jurisdiction exists notwithstanding the availability of a unit determination by the NLRB if one of the parties filed an unfair labor practice charge or sought unit clarification. Id. at 519. 37 The holding in Carpenters Union does not ignore the holding of South Prairie. While South Prairie does have language to the effect that determination of the appropriate bargaining unit lies within the discretion of the NLRB, South Prairie was not an action to enforce a collective bargaining agreement under section 301. Arguably, South Prairie simply held that a court of appeals, in exercising its power to review decisions of an administrative body, should not presume to decide in the first instance issues within the authority of the agency to decide. Initial factual determinations in such situations should be made by the administrative tribunal. As Carpenter's Local points out, South Prairie need not apply in a section 301 action, at least where there is no previous or pending NLRB determination of the appropriateness of the bargaining unit. Id. at 513-21. 38 We find that the representational issue before us attaches to a genuine section 301 contract dispute as a collateral issue and that the case is not so 'primarily representational' as to preclude section 301 jurisdiction. United Bhd. of Carpenters & Joiners of Am. v. W.T. Galliher Bros., Inc., 787 F.2d 953, 954 (4th Cir.1986) (citing International Bhd. of Elec. Workers v. Iowa Elec. Light & Power Co., 668 F.2d 413, 419 (8th Cir.1982)). See also International Union of Operating Eng'rs v. Superior Rigging, 602 F.Supp. 913, 917-18 (N.D.Ga.1984). A representational issue such as the relevant bargaining unit question facing us here, which happens to be subsumed in the determination of the respective rights of the parties under the contract, does not change the essentially contractual nature of this case. 39 In sum, we hold that section 301 confers upon this court the power to resolve representational issues essential to the adjudication of a contract claim, including those over which the NLRB has concurrent jurisdiction, at least where the same representational question is not pending before the NLRB or where the NLRB's jurisdiction has not been invoked with respect to the dispute between the parties. We, accordingly, determine that the federal courts can decide the relevant bargaining unit in the case before us, and we turn now to a review of the district court's decision on that issue. 40
41 The district court determined that the AGC was the proper unit for assessing Union status and that A & P had not shown that the Union did not enjoy majority status in that unit. As a result of A & P's assignment of its rights to the AGC, the court held that A & P could not repudiate the agreements as prehire agreements and was fully liable under them. We disagree, finding instead, for the reasons discussed below, that A & P was the relevant unit for determining union support. Therefore, since there was no Union majority status in A & P, the agreements remained repudiable prehire agreements. 42 The parties did not fully brief the threshold question of whether section 8(f) can be invoked after an employer has assigned its bargaining rights to an MEBU in which the majority of the employees are presumably represented by the Union. In turn, the district court did not elaborate on the reasoning underlying its conclusion that the MEBU was the relevant bargaining unit but merely cited McNeff v. Todd, 461 U.S. 260, 103 S.Ct. 1753, 75 L.Ed.2d 830 (1983), and NLRB v. Tahoe Nugget, Inc., 584 F.2d 293 (9th Cir.1978), cert. denied, 442 U.S. 921, 99 S.Ct. 2847, 61 L.Ed.2d 290 (1979), to support its holding. McNeff, however, simply stands for the proposition that a section 8(f) prehire agreement, prior to repudiation, is enforceable under section 301 against an employer by a union that has not established majority support in the relevant unit. McNeff, 461 U.S. at 266, 103 S.Ct. at 1756. The Court did not directly address the question of the relevant bargaining unit, although policy concerns raised by the Court suggest that the relevant unit would be the single employer. The two policy considerations discussed by the Court are (1) the workers' right to select their own bargaining representative and (2) Congress' intent that section 8(f) agreements be arrived at voluntarily and remain voidable. 461 U.S. at 268-69, 103 S.Ct. at 1757-58. Such concerns are not served by a conclusion that the MEBU, rather than A & P, is the unit in which majority status is measured. Such a conclusion would permit a construction industry employer unilaterally to determine the exclusive bargaining representative of its employees by signing a pact with an MEBU. The union party to the MEBU's collective bargaining agreement would then become the employees' sole representative whether or not it established majority status, and the agreement would become nonrepudiable. This result ignores Congress' intent under section 8(f) to carve out only a limited exception from the majority status requirement for collective bargaining and denies democratic choice to the workers. McNeff at 268-69, 103 S.Ct. at 1757-58. 43 McNeff also points out that [o]ne factor prompting Congress to enact Sec. 8(f) was the uniquely temporary, transitory and sometimes seasonal nature of much of the employment in the construction industry. Congress recognized that construction industry unions often would not be able to establish majority support with respect to many bargaining units. Id. at 266, 103 S.Ct. at 1756. We read this statement as addressing and extending only to the McNeff determination that unions need not establish majority support in the relevant unit before attempting to enforce monetary obligations assumed by an employer under a prehire agreement. 8 The statement should not be read to prevent the employer from repudiating the agreement at any time prior to the union's establishment of majority support as to that employer, even in the case of a project-by-project employer such as A & P. See, e.g., Jordan & Nobles Constr. Co. v. New Mexico Dist. Council of Carpenters, 802 F.2d 1253 (10th Cir.1986); Painters Local Union No. 164 v. Epley, 764 F.2d 1509 (11th Cir.1985), cert. denied, --- U.S. ----, 106 S.Ct. 1636, 90 L.Ed.2d 182 (1986). 44 The district court also incorrectly extended the holding of NLRB v. Tahoe Nugget, Inc., 584 F.2d 293 (9th Cir.1978) to this case. Admittedly, the courts may imply majority union support among an employer's workforce when a non-construction employer joins an MEBU and continue to imply it after the employer leaves the MEBU. NLRB v. Tahoe Nugget, Inc.; see also NLRB v. Roger's I.G.A., Inc., 605 F.2d 1164 (10th Cir.1979) (once an employer has joined an MEBU, then a presumption of majority union support continues, until rebutted, even after withdrawal from the MEBU). However, this is not the case with a construction employer who can invoke section 8(f). Section 8(f) specifically permits an employer in the construction industry to enter into a prehire agreement when majority support for the union has not been established. 29 U.S.C. Sec. 158(f). The act of joining an MEBU does not imply or establish majority support among the employees of the individual employer, since such a finding would negate Congress' intent to allow repudiation of prehire bargaining agreements in the construction industry. See McNeff, 461 U.S. at 266-67, 103 S.Ct. at 1756-57 (citing NLRB v. Local 103, Int'l Ass'n of Bridge Workers (Higdon), 434 U.S. 335, 346, 98 S.Ct. 651, 658, 54 L.Ed.2d 586 (1978) (entering a prehire agreement does not make a union the representative of an employer's employees)). Nor can a presumption of continued majority support even after withdrawal arise in this case, since majority support was never shown to exist. 45 We find support for our position concerning the appropriate unit for determining union majority support in the Fifth Circuit's decision in Baton Rouge Bldg. & Constr. Trades Council v. E.C. Schafer Constr. Co., 657 F.2d 806 (5th Cir. Unit A Oct. 1981). In Schafer, the employer initially signed prehire agreements with the Carpenters', Operating Engineers', and Laborers' unions. Subsequently, the employer authorized an MEBU to represent it in future negotiations with the Carpenters' and Operating Engineers' unions. Upon failure of the employer to comply with the agreement negotiated by the MEBU, the Carpenters' Union brought suit for failure, among other things, to make required pension fund contributions. The Fifth Circuit, reversing the district court's decision that the employer had merged with the MEBU, held that absent employee assent, the employer's joining the MEBU could not ipso facto transform the employer's prehire agreements into collective bargaining agreements. The court stated: 46 The trial court concluded that the February 6 letter [MEBU authorization form] effectively merged the company with the other member companies of the Associated General Contractors as one large bargaining unit. Thenceforth, it became irrelevant whether a majority of Schafer's employees favored the union so long as a majority of those employed by the Associated General Contractors were union people. Upon that merger into the multiemployer bargaining unit, the relevant unit for determination of union majority became that multiemployer workforce. Since there was no substantial doubt about the union sympathies of that larger body of workers, the prehire agreements thereby matured into collective bargaining agreements. 47 The district court's analysis assumes what is not the case; that an employer, by its action alone and without the acquiescence of its employees, can commit itself to membership in an MEBU. 48 657 F.2d at 810 (footnotes omitted). Implicit in that statement is the conclusion that the relevant unit for determining union majority support is the individual employer's workforce, not the multiemployer workforce. In the case of A & P, since there was no showing of union majority support in A & P, the agreements at issue were in reality prehire agreements with respect to A & P and remained subject to repudiation. 49 The Trustees in the case before us contend that Schafer 's rationale concerning the appropriate unit for determining majority support is invalid in light of McNeff. The Trustees cite an Eleventh Circuit case, Trustees of the Atlanta Ironworkers v. Southern Stress Wire Corp., 724 F.2d 1458 (11th Cir.1983), which concluded that McNeff overruled the Eleventh Circuit's result in Laborers Dist. Council v. McDowell Contractors, 680 F.2d 94 (11th Cir.1982) (per curiam), which had, in turn, relied on NLRB v. Haberman Const. Co., 641 F.2d 351 (5th Cir. Apr. 1981) (en banc ). Therefore, the argument goes, since Schafer relied on McDowell and Haberman, Schafer must have been overruled as well. 50 We disagree. First, we conclude that only the portion of Schafer relying on McDowell and Haberman was overruled by McNeff. Thus, only Schafer 's holding that majority status was a prerequisite to the enforcement by a union of prehire agreements is negated. Second, the Eleventh Circuit's determination in Southern Stress that its previous holding in McDowell (and, by implication, the Haberman decision) had been overruled by McNeff did not extend to the issue of the appropriate unit for determining majority support. Thus, the cases relied upon by the Trustees have no application to the issue before us. The Trustees simply ignore the dual aspects of Schafer and assume that because McNeff overruled McDowell and Haberman, which supported an unrelated aspect of the Schafer decision, somehow the related portion of Schafer was also overruled. 51 Finally, the Trustees' analysis fails to recognize that McNeff expressly permits an employer to repudiate a prehire agreement at any time prior to the establishment of majority support in the relevant unit. McNeff, 461 U.S. at 269, 103 S.Ct. at 1758. Where a construction employer desires to enter into agreements with a union under section 8(f), whether such construction industry employer joins an MEBU after signing a separate prehire agreement, as in Schafer, or does so without signing a separate prehire agreement, as in this case, does not change the union status of the employer's workforce. Therefore, where a union lacks majority support in that workforce, the employer retains the right to repudiate that agreement under section 8(f). Thus in our case, what may have been a true collective bargaining agreement between other members of the AGC and the Union was only a prehire agreement between A & P and the Union subject to repudiation under 8(f). 52 We conclude that the district court erred in determining that the appropriate unit for assessing union support was the AGC rather than A & P. Absent employee assent, we cannot accept the view that assignment of a construction employer's rights to an MEBU effects a merger, transforming prehire agreements into nonrepudiable contracts on the basis of presumed union majority status in the multiemployer work force. See Schafer, 657 F.2d at 813. We therefore reverse that portion of the district court's decision. 53 Furthermore, we hold that the letters on or about November 14, 1980, disavowing any contract with the Union at seven specific worksites, constituted a repudiation on their face and, therefore, A & P is not liable for any payments under the contract after its repudiation.