Court Opinion

ID: 3181076
Source: CourtListenerOpinion
Date Created: 2016-02-29 18:06:09.307959+00
Date Added: 2024-06-11T14:02:57.783657
License: Public Domain

NOT PRECEDENTIAL

                        UNITED STATES COURT OF APPEALS
                             FOR THE THIRD CIRCUIT
                                  ____________

                                       No. 15-2090
                                      ____________

UNITED ASSOCIATION OF JOURNEYMAN AND APPRENTICE PLUMBERS AND
     PIPEFITTERS OF THE UNITED STATES AND CANADA LOCAL 74,

                                                                        Appellant

                                            v.

  INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL 313
                         ____________

                      On Appeal from the United States District Court
                                for the District of Delaware
                                 (D.C. No. 1-12-cv-01060)
                       District Judge: Honorable Gregory M. Sleet
                                       ____________

                                 Argued January 19, 2016

      Before: JORDAN, HARDIMAN, and GREENAWAY, JR., Circuit Judges.

                                (Filed: February 29, 2016)

Martin W. Milz [Argued]
Spear Wilderman
230 South Broad Street, Suite 1400
Philadelphia, PA 19102
              Counsel for Appellant

Claiborne S. Newlin
Meranze, Katz, Gaudioso & Newlin
121 South Broad Street
The North American Building, 13th Floor
Philadelphia, PA 19107

Robert F. O’Brien [Argued]
O’Brien, Belland & Bushinsky
1526 Berlin Road
Cherry Hill, NJ 08003
              Counsel for Appellee
                                       ____________

                                         OPINION*
                                       ____________

HARDIMAN, Circuit Judge.

          The United Association of Journeyman and Apprentice Plumbers and Pipefitters,

Local 74 appeals the District Court’s summary judgment in favor of the International

Brotherhood of Electrical Workers, Local 313. The Court’s summary judgment denied

claims brought by Local 74 arising from a collective bargaining agreement (CBA)

between Local 313 and Cushman and Wakefield, Inc. Because we agree with the District

Court that the CBA requires Local 74 members to remit dues to Local 313, we will

affirm.

                                             I

          Since 2004, members of both Local 74 and Local 313 have worked to maintain

two commercial data centers in Delaware. The property manager, Cushman, has

recognized only Local 313 as the employees’ exclusive bargaining representative. Two
          *
        This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
                                             2
substantially identical CBAs executed in 2004 and 20081 nonetheless refer to Local 74 in

two relevant clauses: a union security clause in § 7(1), and a dues checkoff provision in §

10(a). Section 10(e), an agency shop clause, is also pertinent to the parties’ dispute.

       Under the 2008 CBA, Cushman was obliged to deduct dues from members of both

Local 74 and Local 313 in accordance with each union’s bylaws. Thus, the company

would take 5.25% from the wages of Local 74 members and 3.8% from the wages of

Local 313 members, and remit the combined amount to Local 313. The electricians’

union would then forward the dues collected from Local 74 members to the plumbers’

union while keeping dues collected from its own members. This arrangement was

copacetic to everyone until June 2011 when Local 313 began to keep 3.8% of the wages

from all employees in the bargaining unit, irrespective of the union to which they

belonged. Local 313 did continue to forward dues from Local 74 members over and

above the amount it would have collected from them had they been members of Local

313 (i.e., 1.45% of their wages).

       The plumbers sued the electricians in the District Court alleging that Local 313

was in breach of the 2008 CBA, and that it was violating § 302 of the Labor Management

Relations Act (LMRA) by collecting dues without written authorization from Local 74

members. The plumbers demanded money damages and an injunction. The parties filed

       1
         The 2004 and 2008 CBAs were signed by Cushman’s predecessors, EMCOR
Facilities Services, Inc. and PM Realty Group LP, respectively. Upon becoming property
manager of the data centers in 2009, Cushman assumed the terms and conditions of the
2008 CBA.

                                              3
cross-motions for summary judgment, which were initially considered by a magistrate

judge. Finding the language of the CBA ambiguous, the magistrate judge agreed with

Local 74 and recommended summary judgment in its favor. The District Court disagreed,

however, finding no ambiguity and holding that the terms of the 2008 CBA plainly and

unambiguously required Local 74 members to pay Local 313 under the agency shop

clause in § 10(e). Accordingly, the District Court ordered summary judgment for the

electricians. Local 74 filed this appeal.

                                              II2

       Local 74’s contract claim turns on the appropriate legal interpretation of the 2008

CBA. “We interpret collective-bargaining agreements . . . according to ordinary

principles of contract law, at least when those principles are not inconsistent with federal

labor policy.” M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 933 (2015). Our

first task therefore is to determine whether the terms of the 2008 CBA are ambiguous.

See id.; see also 11 Williston on Contracts § 30:4 (4th ed. 2015) (“It is a generally

       2
          The District Court had jurisdiction over Local 74’s claims under § 301 of the
LMRA, which authorizes federal district courts to hear “[s]uits 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”
and grants district courts jurisdiction over labor organizations with either principal offices
or agents residing within their territory. 29 U.S.C. §§ 185(a), (c). Section 302 also grants
district courts jurisdiction “to restrain violations” of that section’s prohibitions on certain
financial transactions between employers and unions. 29 U.S.C. § 186(e). We have
appellate jurisdiction under 28 U.S.C. § 1291. We exercise plenary review over the
District Court’s summary judgment, under the usual summary judgment standard.
Trenton Metro. Area Local of Am. Postal Workers Union v. U.S. Postal Serv., 636 F.3d
45, 52 (3d Cir. 2011).

                                              4
accepted proposition that when the terms of a writing are plain and unambiguous, there is

no room for interpretation or construction since the only purpose of judicial construction

is to remove doubt and uncertainty.”).

       The agency shop clause in § 10(e) of the 2008 CBA provides:

       All employees covered by this agreement shall as a condition of continued
       employment, pay to the Union, the employee’s exclusive collective
       bargaining representative an amount of money equal to that paid by other
       employees in the bargaining unit who are members of the Union . . . .

App. 31. Section 1 of the CBA defines “the Union” as Local 313. App. 26. Therefore, all

employees in the bargaining unit must pay dues to Local 313 as a condition of their

employment, irrespective of the union to which they belong.

       Local 74 raises two arguments against this straightforward reading of the agency

shop clause. First, it argues that this interpretation conflicts with the union security clause

in § 7(1), which conditions employment on membership in “the Union”—i.e., Local

313—but which also provides that “membership in good standing in [Local 74] . . . shall

be considered as compliance with this provision.” App. 27. Because compulsory

membership for the purpose of union security clauses is “whittled down to its financial

core,” e.g., NLRB v. Gen. Motors Corp., 373 U.S. 734, 742 (1963), the plumbers argue

that our straightforward interpretation of § 10(e) either requires an “illegal reading” of

§ 7(1) that mandates full membership, or renders § 7(1) superfluous since both it and

§ 10(e) are satisfied by the payment of dues. Local 74 Br. 21.

                                               5
       We disagree. The plumbers’ assertion that our reading requires an illegal result is

easily dismissed, and we find its superfluity argument unavailing. Both § 7(1) and § 10(e)

effectively require only financial-core membership, and this requirement applies across

the board not only to Local 74’s members, but to Local 313’s members as well. Thus, the

clauses were redundant from the moment they were drafted because an employee could

satisfy both the union security clause and the agency shop clause simply by paying

financial-core dues to Local 313. This makes Local 74’s resort to the canon against

surplusage largely irrelevant because, however the CBA is construed, at least one of its

provisions will be redundant.3 See Marx v. Gen. Revenue Corp., 133 S. Ct. 1166, 1177–

78 (2013); Lamie v. U.S. Trustee, 540 U.S. 526, 536 (2004).

       Second, Local 74 contends that the reference to its bylaws in the dues checkoff

provision of § 10(a) modifies the agency shop clause in § 10(e) because “[f]or the

purpose of this provision, the Bylaws of [Local 74] shall apply with respect to any of its

members employed under this agreement.” App. 30 (emphasis added). The emphasized

portion, the union argues, is at least ambiguous with respect to the scope of the

“provision” to which Local 74’s bylaws apply, making § 10(e)’s meaning unclear. Even

if we agreed that “this provision” encompasses § 10(e), the conclusion that the agency

shop clause expands to permit payment of either Local 313’s or Local 74’s dues is a non

       3
        Nor does our reading of § 10(e) do violence to the dues checkoff provision in
§ 10(a) because the reference to the unions’ bylaws remains relevant to computing the
amount Cushman is obligated to deduct from each employee’s wages.

                                             6
sequitur. To be sure, each employee in the bargaining unit remains bound by the bylaws

of his or her respective union, but that obligation cannot alter the employer’s contractual

duties under § 10(e) to “the Union,” i.e., Local 313, and certainly does not create any

such duties between the unions. Cf. United Bhd. of Carpenters & Joiners of Am., Dresden

Local No. 267 v. Ohio Carpenters Health & Welfare Fund, 926 F.2d 550, 556–57 (6th

Cir. 1991).

       The remainder of Local 74’s arguments require us to delve into extrinsic evidence

to resolve the ambiguities the union has identified in the 2008 CBA. Because we agree

with the District Court that the CBA is not ambiguous, that exercise is unnecessary.

                                      *      *      *

       For the reasons stated, we will affirm the District Court’s summary judgment.4

       4
         To the extent that Local 313 retained dues without valid “written assignment[s]”
from Local 74 members under § 302 of the LMRA, 29 U.S.C. § 186(c)(4)—an issue
upon which we do not opine—money damages are not available under this section, see,
e.g., Bakerstown Container Corp. v. Int’l Bhd. of Teamsters, Local 538, 884 F.2d 105,
107–08 (3d Cir. 1989), and injunctive relief is a moot point because a new CBA executed
in December 2011 no longer references Local 74. See Supp. App. 91–113; see also
Cushman & Wakefield Inc., 360 N.L.R.B. No. 10, at *7–*10 (Nov. 19, 2013).

                                             7
GREENAWAY, JR., Circuit Judge, concurring in the judgment in part and concurring in
part.

       I agree with the majority that Local 74’s breach of contract claim fails. However,

I write separately because I reach this conclusion on different grounds. Local 74 has

failed to demonstrate that a valid contract existed between it and Local 313 as to the

forwarding of deducted dues.1

       The majority characterizes Local 74’s breach of contract claim as “alleging that

Local 313 was in breach of the 2008 CBA.” Maj. Op. at 3. Accordingly, it proceeds to

analyze whether Local 313 violated the CBA. In doing so, the majority overlooks both

the language of Local 74’s Complaint and “ordinary principles of contract law.” Maj Op.

at 4 (quoting M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 933 (2015)).

       Count I of the Complaint contains Local 74’s allegations with respect to its breach

of contract claim. See App. 316. The Complaint alleges that Local 313 had an

“agreement” with Local 74 to “forward dues and fees deducted from Local 74 members’

paychecks to Local 74.” Id. The Complaint further alleges that “Local 313’s departure

from the longstanding practice of forwarding the appropriate amounts deducted from

employee paychecks pursuant to their authorization and the collective bargaining

agreement constitutes a breach of the agreement between the two labor organizations.”

Id. (emphasis added).

       1
          I concur with the majority’s opinion with respect to Local 74’s LMRA § 302
claim that no remedy is available for any violation that may have occurred. See Maj. Op.
at 7 n.4.
                                             1
       The language of the Complaint makes clear that Local 74 is alleging the breach of

an “agreement between [Local 313 and Local 74]” about the forwarding of deducted dues

by Local 313 to Local 74—not a breach of the CBA. The CBA is not an “agreement

between [Local 313 and Local 74]” and does not address the forwarding of deducted dues

by Local 313 to Local 74. In fact, the Complaint explicitly distinguishes between the

CBA, which it states governs the deduction of dues by the employer, and the “agreement

between [Local 313 and Local 74]” it alleges was breached, which it states governs the

forwarding of those deducted dues by Local 313 to Local 74.2

       Nor could the Complaint properly invoke the CBA as the contract that was

breached. Both the 2004 CBA and the 2008 CBA were signed only by the employer and

Local 313, and, as such, Local 74 is not listed as a “party” to either CBA. App. 2, 26. As

a non-party to the CBA, Local 74 plainly does not have standing to sue for breach of the

contract unless it is a third-party beneficiary. See In re Stone & Webster, Inc., 558 F.3d
234, 241 (3d Cir. 2009) (citing Guardian Constr. Co. v. Tetra Tech Richardson, Inc., 583
A.2d 1378, 1386 (Del. Super. Ct. 1990)); 13 Williston on Contracts § 37:1 (4th ed. 2015).

       2
          The majority’s construction of the breach of contract claim to allege a violation
of the CBA appears to be based on Local 74’s construction of the claim in the District
Court and on appeal. See, e.g., Pl.’s Mem. Supp. Mot. Summ. J. 1 (“This is an action
by . . . Local 74 . . . to recover dues monies . . . seized without authorization by . . . [Local
313] . . . in violation of a collective bargaining agreement . . . .”); Local 74 Br. 2 (“Did
the District Court err in its construction of the relevant language of the collective
bargaining agreement?”).

       However, Local 74 may not argue a breach of contract claim that was not in its
Complaint without amending its Complaint to allege such a claim. And, of course, Local
74’s argument in its summary judgment papers cannot effect an amendment to its
Complaint. See Shanahan v. City of Chi., 82 F.3d 776, 781 (7th Cir. 1996).
                                               2
       Thus, Local 74 argues, as it must, that it is a third-party beneficiary of the CBA.

However, Local 74 has provided no argument in support of its purported third-party

beneficiary status under the CBA beyond the conclusory allegation in its supplemental

briefing that it is a third-party beneficiary. See Local 74 Suppl. Br. 2−3. Accordingly,

any argument that Local 74 is a third-party beneficiary of the CBA has been waived. See

Reynolds v. Wagner, 128 F.3d 166, 178 (3d Cir. 1997); accord Kane Enters. v.

MacGregor (USA) Inc., 322 F.3d 371, 376 n.3 (5th Cir. 2003) (waiver of a third-party

beneficiary argument).

       Moreover, even if the argument were not waived, Local 74’s claim to be a third-

party beneficiary with standing to sue Local 313 under the contract would fail. It is

axiomatic that a litigant may only sue a contracting party as a third-party beneficiary for

the contracting party’s breach of a promise it made in the contract. See Triple C Railcar

Serv., Inc. v. City of Wilmington, 630 A.2d 629, 633 (Del. 1993) (“[A] third person, who

is, in effect, a stranger to the contract, may enforce a contractual promise in his own right

and name if the contract has been made for his benefit.” (emphasis added)); Restatement

(Second) of Contracts § 304 (Am. Law. Inst. 2015) (“A promise in a contract creates a

duty in the promisor to any intended beneficiary to perform the promise, and the intended

beneficiary may enforce the duty.”); 13 Williston on Contracts § 37:1 (4th ed. 2015). An

examination of the relevant provisions of the CBA—§ 10 and § 7—reveals that Local

313 makes no relevant promises in the CBA that it could have breached.

       Section 10 of the CBA addresses the remittal of deducted dues by the employer to

Local 313—not the forwarding of those deducted dues by Local 313 to Local 74. See

                                             3
Ohio App. 30 (“[T]he Company . . . agrees to checkoff and remit to the Union dues and

assessments of employees covered by this agreement pursuant to the following

rules . . . .” (emphasis added)); id. (referencing the “obligations of the Company under

this provision” (emphasis added)). Local 313 therefore does not make any promises in

§ 10 about the forwarding of deducted dues to Local 74.

         Similarly, the union security clause in § 7(1) contains a promise made only by

employees of the bargaining unit—not Local 313. See App. 27 (“All present bargaining

unit employees . . . shall remain members of the Union in good standing as a condition of

employment.” (emphasis added)).

         The CBA simply does not address the gravamen of Local 74’s breach of contract

claim: the fate of the deducted dues once the employer has remitted them to Local 313.

As such, Local 313 makes no promises in the CBA about forwarding the deducted dues it

receives from the employer to Local 74. Local 74 cannot claim to be a third-party

beneficiary of the CBA entitled to sue Local 313 for breach of a promise that does not

exist.

         Thus, I cannot join the majority’s opinion as it continues the fundamental error

made by both the Magistrate Judge and the District Court in assuming that Local 74 has

properly brought a claim for breach of the CBA. In my view, such a claim is foreclosed

by the Complaint, Local 74’s non-party status under the CBA, and the lack of any

relevant promises in the CBA that Local 313 could have breached.

                                              4
       Rather, I would inquire as to whether the “agreement between [Local 313 and

Local 74]” about the forwarding of deducted dues referenced in the Complaint does, in

fact, exist. The resolution of this question is straightforward.

       The only references in the record to any such contract between Local 313 and

Local 74 are that such a contract does not exist.3 See Suppl. App. 68 (“There was nothing

in writing, no agreements, no reciprocals or anything between Local 313 and Local 74 as

far as dues.”); App. 231 (“There’s no written agreement governing how much of the dues

assessments should be remitted [by Local 313 to Local 74] . . . .”).

       Accordingly, I would affirm the District Court’s summary judgment on the breach

of contract claim on the basis that Local 74 has failed to identify the “agreement between

[Local 313 and Local 74]” about the forwarding of deducted dues referenced in its

Complaint.

       3
          When pressed at oral argument, Local 74 argued for the first time in this
litigation that an implied-in-fact contract existed between it and Local 313 as to the
forwarding of deducted dues. At this late stage of the litigation, this new argument has
been waived. See Pichler v. UNITE, 542 F.3d 380, 396 n.19 (3d Cir. 2008).
                                              5