Contractor Must Arbitrate Grievance Caused by Overlapping Jurisdiction
AGC has long cautioned that contractors signing collective bargaining agreements (CBAs) with overlapping jurisdiction do so at their own risk. The latest case in point comes from the U.S. Court of Appeals for the Sixth Circuit (KY, MI, OH, TN).
Highway contractor Trafftech was signatory to prehire agreements with Electrical Workers Local 71 and Laborers Local 860. Both agreements grant the union exclusive jurisdiction over electrical work on traffic signals and highway lighting. After many years of working under the CBA, Local 71 filed 11 grievances against the company for assigning some of the disputed work to members of Local 860. Trafftech refused to participate in the grievance process and, instead, filed a petition for a representational election with the National Labor Relations Board. Local 71 than filed a charge with the Board claiming that Trafftech committed an unfair labor practice by refusing to process grievances, reassigning bargaining unit work, and failing to follow the exclusive hiring hall procedures in the CBA. The union also filed suit in federal district court to compel arbitration of its grievances under §301(a) of the Labor Management Relations Act. The Board deferred jurisdiction to the district, and the district court held in favor of Local 71. The circuit court affirmed, ruling that Trafftech must participate in the arbitration.
The court found that the arbitration claim is governed by the contract and that, therefore, Local 71 permissibly filed a §301 claim to compel arbitration. Under §301, the courts and the Board have concurrent jurisdiction over disputes involving an alleged breach of a CBA. Trafftech argued that the present case was truly a dispute of representation rights, over which the Board has exclusive jurisdiction. The court rejected Trafftech’s argument. Relying on the Supreme Court’s 1964 opinion in Carey v. Westinghouse Electric Corp., the court ruled that the existence of a remedy before the Board on representational issues does not bar a suit for breach of a CBA. “Regardless of whether the dispute was over work assignment (and thus covered by the collective bargaining agreement) or over representation of particular employees (and thus subject to the Board’s exclusive jurisdiction),” the circuit court noted, “the [Supreme] Court concluded that the district court could order arbitration under the auspices of enforcing the collective bargaining agreement.” The issues resolved by the two methods of dispute resolution will not overlap entirely, and arbitration may resolve some issues that the Board’s proceedings cannot.
The court approaches cases like this by distinguishing between disputes that are “primarily representational” and those that are “primarily of contract interpretation.” When a dispute is primarily representational, simply referring to the claim as a “breach of contract” is insufficient to give the court jurisdiction. However, matters primarily of contract interpretation that potentially implicate representational issues remain within the court’s jurisdiction. The court noted that several other circuit courts have adopted a similar approach. Applying the approach to the case at bar, the court concluded that Trafftech’s argument fails. While Trafftech’s filings with the Board raised representational issues, they “did not convert Local 71’s complaint into one that is primarily representational in nature.”
Trafftech also complained that, because Local 860 has also filed grievances against it like those filed by Local 71, the company could face contradictory federal court rulings. The court responded that, even if both disputes do go to arbitration, the arbitrators’ rulings are not likely to be contradictory as a matter of legal enforcement and would merely cause Trafftech financial detriment. If both arbitrators were to rule in favor of the unions, then Trafftech “may have to hire workers from both unions to staff the jobs in question (i.e., some workers might handle the job while others might get paid to watch), but that may well be because Trafftech committed to that very outcome as a matter of contract.” Trafftech can still seek remedy from the Board, but that does not divest the federal court of jurisdiction.
IBEW Local 71 v. Trafftech, Inc., Case No. 05-4392 (6th Cir., 8/23/06).
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