Memorandum of DEFENDANTS PHILADELPHIA METAL TRADES COUNCIL, RON AULT AND PHILIP ROWAN in Opposition to PLAINTIFF'S Motion for Preliminary Injunction.(fdc) Additional attachment(s) added on 6/21/2002 (fdc, ).
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Page 1 UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
________________________________________________
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Plaintiff,
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v.
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PHILADELPHIA METAL TRADES COUNCIL, et al.,
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Defendants.
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________________________________________________)
KVAERNER PHILADELPHIA SHIPYARD, INC.,
No. 02-CV-3710
MEMORANDUM OF DEFENDANTS PHILADELPHIA METAL TRADES COUNCIL,
RON AULT AND PHILIP ROWAN IN OPPOSITION TO
PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION
Defendants Philadelphia Metal Trades Council (“PMTC” or “Council”), Ron Ault and
Philip Rowan hereby submit this Memorandum in Opposition to the Motion for Preliminary
Injunction filed by Kvaerner Philadelphia Shipyard, Inc. (“Kvaerner”) on June 11, 2002.
I.
INTRODUCTION
In filing its Motion for Preliminary Injunction, Kvaerner asks this Court to push the
proverbial square peg into a round hole. The Company seeks a “Boys Market” injunction, i.e., an
injunction that restrains picketing allegedly in violation of a no-strike clause in a collective
bargaining agreement and that orders the parties to arbitrate the underlying dispute pursuant to
the agreement’s grievance and arbitration procedure. See Boys Market, Inc. v. Retail Clerks
Union, Local 770, 398 U.S. 235 (1970). However, the facts of this case do not fit within the
Boys Market exception to the Norris-LaGuardia Act’s broad proscription against federal courts
issuing injunctions in labor disputes. See 29 U.S.C. § 104 (2001). Rather, this case falls roundly
within the “exception to the exception”, which provides that an injunction cannot be issuedPage 2 where the underlying dispute is not arbitrable. See Buffalo Forge Co. v. United Steelworkers of
Am., 428 U.S. 397 (1976). Contrary to Plaintiff Kvaerner’s assertions, the underlying dispute in
this case does not concern the subcontracting language in the collective bargaining agreement,
nor does it arise in any other fashion under that agreement. Rather, the underlying dispute, over
which defendant Asbestos Workers Local 14 engaged in picketing, concerns that labor
organization’s unhappiness and desire to advertise that a particular subcontractor who happens to
be working at Kvaerner’s facility is paying wages that are below the area standards for
insulators.
This “area standards” dispute is not arbitrable under the collective bargaining
agreement and, thus, a Boys Market injunction should not issue.
In addition, Kvaerner fails to establish the other prerequisites required for Boys Market
relief, such as establishing irreparable harm to the arbitral process itself. Last, but not least,
Kvaerner has failed to establish any facts that could justify an injunction enjoining these
defendants, especially where there is no evidence they engaged in picketing and that an
injunction against them could further control those who are actually engaged in the picketing.
As explained infra, the Plaintiff’s own motion and supporting papers demonstrate, as a
matter of law, that a preliminary injunction should not be issued. These Defendants respectfully
request that the Court deny the Plaintiff’s Motion for Preliminary Injunction.
II.
A.
STATEMENT OF FACTS
Background: The Philadelphia Metal Trades Council
1.
The Purpose and Composition of the Council
The Philadelphia Metal Trades Council is a labor organization that has been chartered by
the Metal Trades Department (“MTD”) of the American Federation of Labor and Congress of
Industrial Organizations (“AFL-CIO”). (See Declaration of Ron Ault (“Ault Decl.”) ¶ 12. See
2Page 3 The MTD chartered the Council as a local Metal Trades Council.
A local Metal Trades Council provides assistance to affiliated labor organizations in organizing,
collective bargaining and political action. (See Ault Decl. ¶ 18.) Thus, the Council is a “labor
organization” for purposes of the National Labor Relations Act, 29 U.S.C. § 141 et seq., and
Section 301 of the Taft Hartley Act, 29 U.S.C. § 185. See 29 U.S.C. 152(5) (defining “labor
organization”).
The Council provides assistance in organizing, collective bargaining and political action to
those local unions that are affiliated with the Council. (Ault Decl. ¶ 18.) The Council is governed
by a Constitution and Bylaws. (Ault Decl. Ex. 2.) Article II of the Council Constitution and ByLaws provides, “[t]he Philadelphia Metal Trades Council shall be composed of affiliated local
Unions whose membership are employed within the defined jurisdiction. . . .” (Id., Ex. 2 at 1.)
Currently, there are approximately eleven local unions that are affiliated with the Council,
including but not limited to local unions of international unions such as United Association of
Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and
Canada; the International Brotherhood of Electrical Workers; the Sheet Metal Workers International
Association; International Brotherhood of Boilermakers, Blacksmiths, International Brotherhood of
Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers; and the International
Association of Heat, Frost, Insulation and Asbestos Workers.
(Ault Decl. ¶ 13.)
These
international unions are all affiliates of the MTD and the AFL-CIO. (Id. at ¶ 4.)
One of the Council’s affiliates is defendant Insulation and Asbestos Workers Local 14
(“Asbestos Workers 14” or “Local 14”). Asbestos Workers Local 14 is not only an affiliate of
the Council, but also of the local building and construction trades council. (Ault Decl. ¶ 15.)
3Page 4 The Council is autonomous and independent from any and all of its local union affiliates.
(Ault Decl. ¶ 16.) The Council is governed by its Constitution and Bylaws while the local union
affiliates are governed by their own bylaws as well as the constitutions of their parent
international unions. (Id.)
2.
Control of the Council’s Affairs
Until July 1999, an Executive Board controlled the day-to-day operations of the Council.
(Ault Decl. ¶ 17.) Article X of the Council Constitution and Bylaws provides, in relevant part,
that, “[t]he Executive Board of this Council shall consist of the duly elected Council officers and
one representative from each affiliated local union from which no officer is elected….” (Ault
Decl., Ex. 2 at 14.) The Executive Board was “empowered to handle all urgent business and
matters pertaining to the Council, between meetings of the Council, and it shall handle
effectively and properly all matters referred to it by the Council.” Id.
However, in July 1999, for reasons unrelated to the current events, the MTD placed the
Council into “trusteeship” and removed its officers.
(Ault Decl. ¶ 17.)
The day-to-day
operations of the PMTC is now currently in the hands of a Trustee, who since October of last
year has been defendant Ron Ault. (Id. at ¶¶ 19, 20.) Ron Ault is the authorized representative
of the Council; individuals such as Philip Rowan and other former officers of the Council’s
affiliates are not authorized to act on behalf of the Council. (Id. at ¶ 20.)
3.
The Collective Bargaining Relationship at the Philadelphia Shipyard
In 1998, Kvaerner Philadelphia Shipyard, Inc. (“Kvaerner” or “Company”) began
constructing and operating a private, commercial shipyard on the premises of the Philadelphia
Shipyard. (Ault Decl. ¶ 23.) Around the time Kvaerner began its operations, the Company
negotiated with the Council over a first collective bargaining agreement, with the assistance of
4Page 5 the MTD. (Ault Decl. ¶ 23.) The parties successfully reached a collective bargaining agreement
covering Kvaerner’s employees at the shipyard.
The collective bargaining agreement contains a recognition clause that provides the
agreement was being entered in to by Kvaerner and the Council, “consisting of: United
Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the
United States and Canada[;] International Brotherhood of Electrical Workers[;] Iron Workers[;]
Boiler Makers[;] Carpenters[;] Asbestos Workers[;] Sheet Metal Workers[;] Machinists[;]
Laborers[;] Operating Engineers[;] Painters hereinafter referred to as the ‘Union.’”
The
agreement further recognized the “Union” as the exclusive bargaining representative for all
production and maintenance employees of Kvaerner Philadelphia Shipyard, Inc.
The collective bargaining agreement contains a grievance and arbitration procedure in
Article 16 as well as a “no strike” clause in Article 17. Sections 1 through 3 of the no-strike
clause provide:
SECTION 1. There shall be no strikes, picketing, slowdowns, sit-downs, sit-ins,
sick-outs, cessation of work, boycotts (Whether primary or secondary, refusals to
cross picket-lines, interruptions of operations or any other interference direct or
indirect, with the orderly discharge of the Company’s operations and employees’
duties and functions during the term of this Agreement. It is understood that the
foregoing sentence applies to any strike, slowdown, sick-out, sit-down, sit-in,
refusal to cross picket-lines, or other interference or interruption, direct or indirect
with the operations of the Company in support of or in sympathy with any strike
or other job action by any other union or group of persons. An employee who
engages in any such prohibited activity may be discharged or disciplined.
SECTION 2. the Union, its officers, agents, representatives and members shall
not in any way, directly or indirectly authorize, ratify, assist, encourage,
participate in, sanction, condone or lend support to any strikes, picketing,
slowdowns, sit-is, sit-downs, sick-outs, cessation of work) [sic] [,] boycotts
(whether primary or secondary), interruptions of operations or any other
interference, direct or indirect, with the operations of the Company or employees’
dudes [sic] and functions. Employees who have engaged in such conduct shall be
subject to discharge or other discipline. Should any employee engage in such
conduct without Union authorization or ratification, the Union shall be obligated
5Page 6 to support the Company and endeavor within twenty-four (24) hours after receipt
of written notice thereof from the Company to bring about a cessation of such
conduct. In addition to any other liability, remedy, or right provided in applicable
law, statute or the preceding paragraph, the Union, within twenty-four (24) hours,
upon the company’s request, shall:
A.
B.
C.
D.
Publicly disavow such actions by the employees.
Advise the Vice President of Human Resources in writing that
such employee action has not been authorized or sanctioned by the
Union.
Notify employees of its disapproval of such action and instruct
employees to cease such action and return to work immediately.
Post notices on all bulletin boards advising employees that it
disapproves of such action and instructs them to return to work
immediately.
SECTION 3. If, following such a request by the Company, the Union fails to
order striking employees to abandon the strike, the Union shall be deemed
responsible for the strike and for all damages suffered by the Company from the
time said written request is made.
(See Plaintiff’s Complaint Seeking Preliminary Injunction and Temporary Restraining Order
(“Pl. Compl.”), Ex. A at 15-16.) The collective bargaining agreement also contains a provision
on subcontracting in Article 28. (Id. at 22.)
B.
The Events Underlying Kvaerner’s Motion for Preliminary Injunction
On or about June 11, 2002, members of Asbestos Workers Local 14 set up a picket line
at the Philadelphia Shipyard. (Verification of Michael Giantomaso (“Giantomaso V.S.”) ¶ 9.)
Apparently, two Local 14 officers—Martin Campbell and Stephen Pettit—were present at the
picket line. (Id.)
It is the understanding of the Council that Asbestos Workers Local 14 set up the picket
line to engage in area standards picketing. (Ault Decl. ¶ 35.) In engaging in such picketing,
these defendants are informed, the members of Local 14 were protesting a particular insulation
contractor’s payment of wages to its employees at the shipyard that were below the area
standards for insulators engaged in the building and construction trades. (Id.) Local 14 manned
6Page 7 the picket line with its building and construction trades members. (Id.)
In the Council’s
understanding of the situation, Local 14 was not picketing because of any dispute with Kvaerner
itself or arising under the Kvaerner-PMTC collective bargaining agreement, such as a dispute
over subcontracting. (Id.)
Neither the Council nor its authorized representatives engaged in any picketing at the
Philadelphia Shipyard. (Ault Decl. ¶ 33.) Moreover, no employee at the Shipyard engaged in
any picketing, striking or boycotting in violation of the no-strike clause. (Id.) Furthermore, all
of the employees at the Shipyard reported to work. (Id.) The Council itself does have a dispute
with Kvaerner of many month’s duration over violation of the subcontracting clause; but, as
Exhibit B to plaintiff’s own papers demonstrates, the Council has properly processed that dispute
through the grievance and arbitration procedure of the agreement.
In addition, while Kvaerner complains about an alleged violation of the no-strike clause,
Kvaerner itself may have failed to comply with the provisions of Section 2 of the no-strike
clause. The Company does not allege that it sent any written notice to the Council regarding an
unauthorized work stoppage, strike, picketing or boycott.
Insofar as Defendant Ault is
concerned, he has not received such notice. As explained above, the written notice operates as a
“trigger”, thereby requiring the Council to take certain steps in order to bring an end to an
unauthorized work stoppage. Section 3 also specifically provides that the Union is responsible
for damages only if it fails to take action after receiving that written notice.
Notwithstanding the absence of any written notice, the MTD sent a letter to all of the
Defendants named in Kvaerner’s complaint. (Ault Decl. ¶ 39.) The letter informed the
Defendants of the Court’s temporary restraining order and that the picketing was not authorized
by the Council or the MTD and that both entities disapproved of the picketing. (Id.) The letter
7Page 8 further instructed that all employees should continue to work. (Id.) The MTD sent the letter in
response to the entry of the temporary restraining order. (Id.)
III.
STANDARD FOR OBTAINING A BOYS MARKET INJUNCTION
As the moving party, Kvaerner bears the burden of establishing its entitlement to a Boys
Market injunction. Parade Publications, Inc. v. Philadelphia Mailers Union No. 14, 459 F.2d
369, 373 (3d Cir. 1972). In recognition of the developing role of arbitration as a means of
resolving labor disputes, enforceable under Section 301 of the Labor-Management Relations Act,
the Supreme Court crafted an exception in Boys Market to Section 4 of the Norris-LaGuardia
Act, 29 U.S.C. § 104, which deprives federal courts of jurisdiction to issue injunctions that
would prohibit certain specified acts in connection with a labor dispute, including “(e) Giving
publicity to the existence of, or the facts involved in, any labor dispute, whether by advertising,
speaking, patrolling, or by any other method not involving fraud or violence.” 29 U.S.C. §
104(e). The Supreme Court summarized that burden as follows:
A District Court entertaining an action under Sec. 301 may not grant injunctive
relief against concerted activity unless and until it decides that the case is one in
which an injunction would be appropriate despite the Norris-LaGuardia Act.
When a strike is sought to be enjoined because it is over a grievance which both
parties are contractually bound to arbitrate, the District court may issue no
injunctive order until it first holds that the contract does have that effect; and the
employer should be ordered to arbitrate, as a condition of his obtaining an
injunction against the strike. Beyond this, the District Court must, of course,
consider whether issuance of an injunction would be warranted under ordinary
principles of equity—whether breaches are occurring and will continue or have
been threatened and will be committed; whether they have caused or will cause
irreparable injury to the employer; and whether the employer will suffer more
from the denial of the injunction than will the union from its issuance.
Boys Market, Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235, 254 (1970).
In applying this standard, the District Court should be guided by several fundamental
principles underlying the Supreme Court’s decision in Boys Market. The concept of issuing an
8Page 9 injunction to enjoin a strike and order arbitration represents a “narrow” exception to the NorrisLaGuardia Act, 29 U.S.C. § 101, et seq., from which the District Court draws its limited
injunctive authority in labor disputes. The mere existence of such an exception does not mean
that “injunctive relief is appropriate as a matter of course in every case of a strike over an
arbitrable grievance.” Boys Market, Inc., 398 U.S. at 253-54.
Most significantly in this case,
the Court should never issue an injunction where the underlying dispute is not arbitrable under
the grievance and arbitration procedure. Buffalo Forge Co. v. United Steelworkers of Am., 428
U.S. 397, 407-09 (1976). Any such injunction would not further the parties’ agreement to
arbitrate disputes (since the dispute is not arbitrable) and would only contravene the NorrisLaGuardia Act’s prohibition against issuing injunctions in labor disputes. Id.
IV.
A.
ARGUMENT
Kvaerner is Not Entitled to Injunctive Relief Because the Company Cannot
Establish that the Underlying Dispute is Arbitrable
As the Supreme Court has noted, an action by an employer against a union to enforce a
no-strike clause in a collective bargaining agreement may involve two disputes. Jacksonville
Bulk Terminals v. International Longshoremen’s Ass’n, 457 U.S. 702, 710 (1982). “First, there
is the ‘underlying dispute’, which is the event or condition that triggers the work
stoppage…[and] [s]econd, there is the parties’ dispute over whether the no-strike pledge
prohibits the work stoppage at issue.” Id. at 710. It is not enough to prove that there may have
been a violation of the no-strike clause. Id. at 721-22. Such a breach may well support a damage
award in arbitration or in court, but in and of itself cannot be the basis for injunctive relief under
the Boys Market exception to Norris-LaGuardia’s anti-injunction provisions. Id. at 722. To
obtain Boys Market injunctive relief, a plaintiff such as Kvaerner must prove that the picketing or
other activity in violation of the no-strike clause was over an “underlying dispute” that is subject
9Page 10 to the grievance and arbitration procedure. Id.; Buffalo Forge Co., 428 U.S. at 406-08; Boys
Market, 309 U.S. at 254. As explained below, the Company cannot meet that burden.
In its moving papers, Kvaerner alleges that the Council and Asbestos Workers Local 14
have engaged in “picketing, strike and boycott activities” in order “to protest plaintiffs’
utilization of a subcontractor to perform certain work pursuant to Article 28 of the Agreement.”
(Pl. Compl. ¶ 14.) The Company further asserts that “defendants are engaging in picketing,
boycott, and strike activity over a contractual issue subject to the CBA’s express grievance
procedure and in violation of the CBA’s no picketing and strike provision.”
(Plaintiffs’
Memorandum of Law in Support of motion for Temporary Restraining Order Without Notice
(“Pl. Memo.”) at 5.) While the Company refers to the Verification of Michael Giantomoso (Pl.
Memo at 5), the verification contains no statement by Mr. Giantomoso that that “picketing” by
Asbestos Workers Local 14 members concerned an underlying dispute involving the
subcontracting provision of the collective bargaining agreement. (See Giantomoso V.S. ¶¶ 1-9.)
In short, Kvaerner thus far has failed to present any evidence, other than allegations and
assertions, with its motion that establishes the underlying dispute is arbitrable. See Elsinore
Shore Assocs. v. Local 54, Hotel Employees and Restaurant Employees Int’l Union, 820 F.2d 62,
68-69 (3d Cir. 1987) (vacating Boys Market injunction where there was no evidence that the
underlying dispute was arbitrable and finding dispute involved extra-contractual controversy
over failure to reach new wage agreements under contractual reopener provision).
Contrary to Kvaerner’s allegations, the underlying dispute in this case involves Asbestos
Workers Local 14’s concern that a non-union insulation contractor, who is performing work at
the Philadelphia Shipyard, is undermining the area standards by paying its employees below the
wage rates for insulators in the building and construction trades in Philadelphia. (Ault Decl. ¶
10Page 11 34.) “Area standards picketing” is concerted activity by union members and individuals “to
protest wage rates that are below the established area standards” and is protected by Section 7 of
the National Labor Relations Act, 29 U.S.C. § 157 (2001). International Longshoremen’s Ass’n
v. Ariadne Shipping Co., 397 U.S. 195, 200-01 (1970). The “area standards picketing” does not
involve a dispute is over whether the insulation contractor should be present at the Shipyard or
even whether that contractor should sign the Kvaerner agreement (which are issues that arguably
implicate the subcontracting provision in the collective bargaining agreement). In engaging in
area standards picketing, Local 14 was not denying or otherwise depriving Kvaerner of its ability
to arbitrate subcontracting issues under the collective bargaining agreement. Buffalo Forge Co.,
428 U.S. at 408. Rather, the dispute underlying the area standards picketing “was not over any
dispute between the Union and the employer that was even remotely subject to the arbitration
provisions of the contract.” Id. at 407. It does not involve any term or condition of the collective
bargaining agreement between Kvaerner and the Council; instead, it involves the sub-par wage
rates paid by the insulation contractor to its own employees, which Local 14 believes are
undermining the area standards in Philadelphia.
Kvaerner’s attempt to cast the “area standards picketing” as an underlying dispute
involving the subcontracting provision further proves that injunctive relief is inappropriate. The
“underlying dispute” is the dispute that triggers the picketing. In this case, as the Council
understands it, the “underlying dispute”, if any, is the non-union insulation contractor’s payment
of wages below the area standards.
The area standards dispute was not triggered by the
subcontracting provision in the collective bargaining agreement; rather, the subcontracting
provision was brought into the case by Kvaerner in response to the area standards picketing.
Jacksonville Bulk Terminals, 457 U.S. at 721. This represents an improper attempt by the
11Page 12 Company to bootstrap the area standards picketing onto an existing grievance that is set to be
arbitrated at the request of the Council. (Pl. Compl., Ex. B.) At most, the Company’s arguments
amount to describing “the effect rather than the cause” of Local 14’s area standards picketing.
Elsinore Shore Assocs., 820 F.2d at 69.
However, such characterizations of the underlying
dispute are insufficient to establish that they are arbitrable. Jacksonville Bulk Terminals, 457
U.S. 721-22; Elsinore Shore Assocs., 820 F.2d at 69.
Without an arbitrable underlying dispute, Kvaerner’s motion amounts to little more than
a request for injunctive relief to enjoin picketing that allegedly violates the no-strike clause. The
Supreme Court has held that the Boys Market exception to Section 104 of the Norris-LaGuardia
Act does not allow a court to enjoin picketing simply because the picketing violates the no-strike
clause. Jacksonville Bulk Terminals, 457 U.S. at 722; Buffalo Forge Co., 428 U.S. at 408. A
court cannot issue a Boys Market injunction merely to enjoin contract violations. Buffalo Forge,
428 U.S. at 409-10. The purpose of a Boys Market injunction is to preserve the arbitration
procedure as a means of resolving arbitrable disputes and to protect it from being undermined by
unilateral acts of one of the parties to the collective bargaining agreement. Id. at 410-11. Given
that Kvaerner cannot establish an arbitrable underlying dispute in this instance, the Company is
not entitled to a Boys Market injunction.
B.
Kvaerner Cannot Establish that the Equities Favor Issuing the Injunction
Even assuming arguendo that Kvaerner could establish the existence of a dispute under
the collective bargaining agreement that is arbitrable, it cannot establish that the equities favor
the issuing of a Boys Market injunction. As explained supra in Section III, Kvaerner must
establish whether breaches of the no-strike clause are occurring or will occur, that the Company
12Page 13 has suffered irreparable injury, and that the Company will suffer more harm if the injunction is
not issued than the Council will suffer if the injunction is issued. Kvaerner fails on all counts.
First, there has been no unlawful picketing that would fall within the no-strike clause. No
employee at the Shipyard has left his or her job and went on strike. No employee at the Shipyard
has left his or her job to man a picket line. No employee at the Shipyard has expressed any
support for Local 14’s picket line by honoring that line and/or slowing down his or her work.
The facts of this case involve a picket by non-employees in protest of the wages paid by an
employer other than Kvaerner itself, an insulator contractor who happens to be performing work
at the Philadelphia Shipyard. Insofar as we are aware, Kvaerner cannot present any evidence to
establish that any employee covered by the agreement breached the no-strike clause or intends to
breach it in the near future.
Second, Kvaerner cannot establish “irreparable harm” as that phrase is utilized in the
Boys Market context.
In its moving papers, the Company claims it will suffer “great and
irreparable damage” in that: “(a) Plaintiff will be unable to perform all of its work; (b) Plaintiff
will be denied the use and possession of its property; (c) Plaintiff will be denied delivery of
essential supplies; (d) Plaintiff’s employees who choose to work will be subject to unlawful
harassment.” (Pl. Compl. ¶ 17.) Setting aside the lack of any evidentiary support for any of these
assertions (not even Mr. Giantomaso addresses the question of what harm will be suffered in his
verification), none of these forms of “great and irreparable damage” constitute irreparable harm
as a matter of law for purposes of obtaining a Boys Market injunction. Because money damages
usually can compensate an employer for any losses occasioned by an unlawful strike, the basis
for finding irreparable harm in such cases usually is where the picketing will frustrate or vitiate
the arbitration process itself. See Local Lodge No. 1266, Int’l Ass’n of Machinists v. Panoramic
13Page 14 Corp., 668 F.2d 276, 285-86 (7th Cir. 1981) (finding irreparable injury is not “simply any injury
resulting from a breach of contract that would not be fully redressed by an arbitral award” but
injury that is so irreparable that it would frustrate arbitration). In this case, Kvaerner cannot
establish any frustration or vitiation of the arbitration process because, in its own papers, it
provides evidence that the process is alive and well. Exhibit B to the Plaintiff’s Complaint is a
letter from Defendant Ault to Mr. Giantomaso in which the Council invokes the arbitration
procedure to resolve the Council’s dispute with Kvaerner over subcontracting. (Pl. Compl., Ex.
B). Kvaerner has not alleged or submitted evidence that Local 14’s areas standards picketing
threatens this arbitration process and fails to establish irreparable injury for purposes of a Boys
Market injunction.
Finally, the balance of the equities does not favor Kvaerner.
As explained above,
Kvaerner cannot satisfy the other elements of the Boys Market injunction, including irreparable
harm. The Council, Mr. Ault and Mr. Rowan will suffer hardship if an injunction is issued,
given that they did not engage in the picketing and that the Council has been following its
contractual obligations. Enjoined for acts they did not itself engage in, the Defendants could
nevertheless be subject to contempt if violations of the Court’s order should occur in the future.
C.
Even Assuming the Kvaerner Satisfies the Prerequisites for an Injunction,
Kvaerner Cannot Prove that it is Appropriate to Enjoin the Council
Even assuming Kvaerner can demonstrate the equities favor it and even assuming the
Company can establish an arbitrable dispute, Kvaerner still fails to prove that an injunction
should issue against the Council, Mr. Ault or Mr. Rowan. Kvaerner presents no evidence with
its papers that proves the Council, Mr. Ault, Mr. Rowan and/or their authorized representatives
engaged in any picketing or other unlawful acts. At most, the Company presents the assertions
of Mr. Giantomaso in his verification that members of Asbestos Workers Local 14 engaged in
14Page 15 picketing on June 11, 2002. (Giantomaso V.S. ¶ 9.) Thus, by naming the Council and Mr. Ault
and Mr. Rowan as Defendants, Kvaerner’s only basis for holding the Council liable is if it can
impute liability for Local 14’s actions upon these Defendants.
Section 106 of the Norris-LaGuardia Act provides that “[n]o officer or member of any
association or organization, and no association or organization participating or interested in a
labor dispute, shall be held responsible or liable in any court of the United States for the unlawful
acts of individual officers, members, or agents, except upon clear proof of actual participation in,
or actual authorization of, such acts , or ratification of such acts after actual knowledge thereof.”
29 U.S.C. § 106 (2001) (emphasis added). “Clear proof” is “proof which is clear, unequivocal
and convincing.” United Steelworkers of Am. v. Lorain, 616 F.2d 919, 921 (6th Cir. 1980).
Without such evidence, the Company cannot establish liability for purposes of obtaining an
injunction. Kvaerner provides no evidence, let alone clear proof, that the Council, Mr. Ault or
Mr. Rowan actually participated in, authorized or ratified the acts of Local 14.
The Council, Mr. Ault and Mr. Rowan recognize that, in enacting the Labor-Management
Relations Act, Congress established that liability in actions under that statute, such as a Section
301 action, can be established using the common law of agency. See United Mine Workers of
Am. v. Gibbs, 383 U.S. 715, 736 (1966). Kvaerner brought this action as a putative Section 301
action. As explained in the previous sections, however, the Company has failed to establish the
necessary prerequisites for Section 301 jurisdiction to obtain a Boys Market injunction. Thus,
the Council, Mr. Ault and Mr. Rowan believe that Section 6 applies to this case and the Court
should hold Kvaerner to establishing “clear proof” of authorization, participation or ratification.
But even assuming Section 301 jurisdiction exists for issuing an injunction, Kvaerner
fails to satisfy the common law agency standard. See 29 U.S.C. §§ 185(b), 185(e) (2001). See
15Page 16 also Philadelphia Marine Trade Ass’n v. Local 1291, Int’l Longshoremen Ass’n, 909 F.2d 754
(3d Cir. 1990); Pittsburgh-Des Moines Steel Co. v. United Steelworkers of Am., 633 F.2d 302 (3d
Cir. 1980).
See, generally, Carbon Fuel Co. v. United Mine Workers of Am., 444 U.S. 212
(1979) (holding international union cannot be held liable for wildcat strike by local union unless
it is proven international union authorized, instigated, encouraged or ratified strike).
Both Third Circuit cases illustrate how Kvaerner has failed to establish a basis to enjoin
the Council, Mr. Ault and Mr. Rowan. In Philadelphia Marine Trade Ass’n, the Third Circuit
found an absence of any evidence that the international union authorized, instigated, encouraged
or ratified the strike and the court denied the injunctive relief. 909 F.2d at 759. In PittsburghDes Moines Steel Co., the Third Circuit held that a court cannot issue a Boys Market injunction
against an international union because of the local union’s engaging in picketing that breaches a
no-strike clause and that concerns an arbitrable underlying dispute unless the movant makes an
additional showing. Pittsburgh-Des Moines Steel Co., 633 F2.d at 308. In the context of this
case, this additional showing requires Kvaerner to prove (1) that the order enjoining Local 14
“will not be fully effective;” (2) that the steps already taken by the Council “are not likely to be
effective;” and (3) “that specific additional steps, carefully specified in the order, will add
significantly to the deterrent effect of the injunction against the local and its members.” Id.
Even after this heightened showing, the Court should still consider “whether, in the view of the
union, the inevitable intrusion upon the internal affairs of the union, the marginal potential
increase in the effectiveness of the Boys Market injunction is justified.” Id.
In this case, the
standard is not met.
The Company has not set forth any averments as to how an injunction against Asbestos
Workers Local 14 will not be effective, what steps the Council took that were ineffective, and
16Page 17 what steps the Council could take that would be effective. Indeed, there is a dearth of evidence
to support a claim that an order against Local 14 would not be effective. See Pittsburgh-Des
Moines Steel Co., 633 F.2d at 308.
Furthermore, the Council has no control over Asbestos
Workers Local 14 if that local union wants to engage in areas standards picketing on behalf of its
building and construction trades members. The Council cannot discipline Asbestos Workers
Local 14, its officers or its members for their activities. (Ault Decl. ¶¶ 37-38.) The MTD, on
behalf of the Council, sent a letter to all Defendants instructing them that neither the MTD nor
the Council authorized or approved of the picketing and that all employees should return to
work.
There was nothing more that the Council could do in these circumstances.
See
Pittsburgh-Des Moines Steel Co., 633 F.2d at 308.
In addition, as explained above, Section 2 of the no-strike clause requires the Council to
undertake four steps (including sending a letter disavowing the work stoppage or picketing and
ordering employees to return to work, which has already been done) within 24 hours of written
notification by Kvaerner. The Company has not alleged that it has followed this procedure.
Assuming that is the case, the Company’s failure to follow that procedure undermines any claim
against the Council at this point. In such circumstances, the employer should avail itself of the
contractual procedure before it seeks to impose liability upon the Council.
V.
CONCLUSION
In summary, Kvaerner has failed to establish that the facts of this case warrant the
issuance of a Boys Market injunction. Kvaerner’s failure to establish an arbitrable underlying
dispute, its failure to establish the equities favor the Company and its failure to establish that an
injunction is warranted against the PMTC all prove that this case falls within the Buffalo Forge
and Jacksonville Bulk Terminals exception to Boys Market.
17
Accordingly, for the foregoingPage 18 reasons, Defendants Philadelphia Metal Trades Council, Ron Ault and Philip Rowan respectfully
request that the Court deny the Plaintiffs’ Motion for Preliminary Injunction.
Respectfully submitted,
By:
________________________________
Robert Curley (Bar No. 55760)
David Capuano (Bar No. 70238)
O’DONOGHUE & O’DONOGHUE
Constitution Place, Suite 515
325 Chestnut Street
Philadelphia, PA 19106
(215) 629-4970
Robert Matisoff
Keith R. Bolek
O’DONOGHUE & O’DONOGHUE
4748 Wisconsin Avenue, N.W.
Washington, D.C. 20016
(202) 362-0041
Counsel for the Defendants Philadelphia Metal
Trades Council, Ron Ault and Philip Rowan
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UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
________________________________________________
)
)
)
Plaintiff,
)
)
v.
)
)
PHILADELPHIA METAL TRADES COUNCIL, et al.,
)
)
Defendants.
)
________________________________________________)
KVAERNER PHILADELPHIA SHIPYARD, INC.,
No. 02-CV-3710
MEMORANDUM OF DEFENDANTS PHILADELPHIA METAL TRADES COUNCIL,
RON AULT AND PHILIP ROWAN IN OPPOSITION TO
PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION
Defendants Philadelphia Metal Trades Council (“PMTC” or “Council”), Ron Ault and
Philip Rowan hereby submit this Memorandum in Opposition to the Motion for Preliminary
Injunction filed by Kvaerner Philadelphia Shipyard, Inc. (“Kvaerner”) on June 11, 2002.
I.
INTRODUCTION
In filing its Motion for Preliminary Injunction, Kvaerner asks this Court to push the
proverbial square peg into a round hole. The Company seeks a “Boys Market” injunction, i.e., an
injunction that restrains picketing allegedly in violation of a no-strike clause in a collective
bargaining agreement and that orders the parties to arbitrate the underlying dispute pursuant to
the agreement’s grievance and arbitration procedure. See Boys Market, Inc. v. Retail Clerks
Union, Local 770, 398 U.S. 235 (1970). However, the facts of this case do not fit within the
Boys Market exception to the Norris-LaGuardia Act’s broad proscription against federal courts
issuing injunctions in labor disputes. See 29 U.S.C. § 104 (2001). Rather, this case falls roundly
within the “exception to the exception”, which provides that an injunction cannot be issued
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where the underlying dispute is not arbitrable. See Buffalo Forge Co. v. United Steelworkers of
Am., 428 U.S. 397 (1976). Contrary to Plaintiff Kvaerner’s assertions, the underlying dispute in
this case does not concern the subcontracting language in the collective bargaining agreement,
nor does it arise in any other fashion under that agreement. Rather, the underlying dispute, over
which defendant Asbestos Workers Local 14 engaged in picketing, concerns that labor
organization’s unhappiness and desire to advertise that a particular subcontractor who happens to
be working at Kvaerner’s facility is paying wages that are below the area standards for
insulators.
This “area standards” dispute is not arbitrable under the collective bargaining
agreement and, thus, a Boys Market injunction should not issue.
In addition, Kvaerner fails to establish the other prerequisites required for Boys Market
relief, such as establishing irreparable harm to the arbitral process itself. Last, but not least,
Kvaerner has failed to establish any facts that could justify an injunction enjoining these
defendants, especially where there is no evidence they engaged in picketing and that an
injunction against them could further control those who are actually engaged in the picketing.
As explained infra, the Plaintiff’s own motion and supporting papers demonstrate, as a
matter of law, that a preliminary injunction should not be issued. These Defendants respectfully
request that the Court deny the Plaintiff’s Motion for Preliminary Injunction.
II.
A.
STATEMENT OF FACTS
Background: The Philadelphia Metal Trades Council
1.
The Purpose and Composition of the Council
The Philadelphia Metal Trades Council is a labor organization that has been chartered by
the Metal Trades Department (“MTD”) of the American Federation of Labor and Congress of
Industrial Organizations (“AFL-CIO”). (See Declaration of Ron Ault (“Ault Decl.”) ¶ 12. See
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The MTD chartered the Council as a local Metal Trades Council.
A local Metal Trades Council provides assistance to affiliated labor organizations in organizing,
collective bargaining and political action. (See Ault Decl. ¶ 18.) Thus, the Council is a “labor
organization” for purposes of the National Labor Relations Act, 29 U.S.C. § 141 et seq., and
Section 301 of the Taft Hartley Act, 29 U.S.C. § 185. See 29 U.S.C. 152(5) (defining “labor
organization”).
The Council provides assistance in organizing, collective bargaining and political action to
those local unions that are affiliated with the Council. (Ault Decl. ¶ 18.) The Council is governed
by a Constitution and Bylaws. (Ault Decl. Ex. 2.) Article II of the Council Constitution and ByLaws provides, “[t]he Philadelphia Metal Trades Council shall be composed of affiliated local
Unions whose membership are employed within the defined jurisdiction. . . .” (Id., Ex. 2 at 1.)
Currently, there are approximately eleven local unions that are affiliated with the Council,
including but not limited to local unions of international unions such as United Association of
Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and
Canada; the International Brotherhood of Electrical Workers; the Sheet Metal Workers International
Association; International Brotherhood of Boilermakers, Blacksmiths, International Brotherhood of
Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers; and the International
Association of Heat, Frost, Insulation and Asbestos Workers.
(Ault Decl. ¶ 13.)
These
international unions are all affiliates of the MTD and the AFL-CIO. (Id. at ¶ 4.)
One of the Council’s affiliates is defendant Insulation and Asbestos Workers Local 14
(“Asbestos Workers 14” or “Local 14”). Asbestos Workers Local 14 is not only an affiliate of
the Council, but also of the local building and construction trades council. (Ault Decl. ¶ 15.)
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The Council is autonomous and independent from any and all of its local union affiliates.
(Ault Decl. ¶ 16.) The Council is governed by its Constitution and Bylaws while the local union
affiliates are governed by their own bylaws as well as the constitutions of their parent
international unions. (Id.)
2.
Control of the Council’s Affairs
Until July 1999, an Executive Board controlled the day-to-day operations of the Council.
(Ault Decl. ¶ 17.) Article X of the Council Constitution and Bylaws provides, in relevant part,
that, “[t]he Executive Board of this Council shall consist of the duly elected Council officers and
one representative from each affiliated local union from which no officer is elected….” (Ault
Decl., Ex. 2 at 14.) The Executive Board was “empowered to handle all urgent business and
matters pertaining to the Council, between meetings of the Council, and it shall handle
effectively and properly all matters referred to it by the Council.” Id.
However, in July 1999, for reasons unrelated to the current events, the MTD placed the
Council into “trusteeship” and removed its officers.
(Ault Decl. ¶ 17.)
The day-to-day
operations of the PMTC is now currently in the hands of a Trustee, who since October of last
year has been defendant Ron Ault. (Id. at ¶¶ 19, 20.) Ron Ault is the authorized representative
of the Council; individuals such as Philip Rowan and other former officers of the Council’s
affiliates are not authorized to act on behalf of the Council. (Id. at ¶ 20.)
3.
The Collective Bargaining Relationship at the Philadelphia Shipyard
In 1998, Kvaerner Philadelphia Shipyard, Inc. (“Kvaerner” or “Company”) began
constructing and operating a private, commercial shipyard on the premises of the Philadelphia
Shipyard. (Ault Decl. ¶ 23.) Around the time Kvaerner began its operations, the Company
negotiated with the Council over a first collective bargaining agreement, with the assistance of
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the MTD. (Ault Decl. ¶ 23.) The parties successfully reached a collective bargaining agreement
covering Kvaerner’s employees at the shipyard.
The collective bargaining agreement contains a recognition clause that provides the
agreement was being entered in to by Kvaerner and the Council, “consisting of: United
Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the
United States and Canada[;] International Brotherhood of Electrical Workers[;] Iron Workers[;]
Boiler Makers[;] Carpenters[;] Asbestos Workers[;] Sheet Metal Workers[;] Machinists[;]
Laborers[;] Operating Engineers[;] Painters hereinafter referred to as the ‘Union.’”
The
agreement further recognized the “Union” as the exclusive bargaining representative for all
production and maintenance employees of Kvaerner Philadelphia Shipyard, Inc.
The collective bargaining agreement contains a grievance and arbitration procedure in
Article 16 as well as a “no strike” clause in Article 17. Sections 1 through 3 of the no-strike
clause provide:
SECTION 1. There shall be no strikes, picketing, slowdowns, sit-downs, sit-ins,
sick-outs, cessation of work, boycotts (Whether primary or secondary, refusals to
cross picket-lines, interruptions of operations or any other interference direct or
indirect, with the orderly discharge of the Company’s operations and employees’
duties and functions during the term of this Agreement. It is understood that the
foregoing sentence applies to any strike, slowdown, sick-out, sit-down, sit-in,
refusal to cross picket-lines, or other interference or interruption, direct or indirect
with the operations of the Company in support of or in sympathy with any strike
or other job action by any other union or group of persons. An employee who
engages in any such prohibited activity may be discharged or disciplined.
SECTION 2. the Union, its officers, agents, representatives and members shall
not in any way, directly or indirectly authorize, ratify, assist, encourage,
participate in, sanction, condone or lend support to any strikes, picketing,
slowdowns, sit-is, sit-downs, sick-outs, cessation of work) [sic] [,] boycotts
(whether primary or secondary), interruptions of operations or any other
interference, direct or indirect, with the operations of the Company or employees’
dudes [sic] and functions. Employees who have engaged in such conduct shall be
subject to discharge or other discipline. Should any employee engage in such
conduct without Union authorization or ratification, the Union shall be obligated
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to support the Company and endeavor within twenty-four (24) hours after receipt
of written notice thereof from the Company to bring about a cessation of such
conduct. In addition to any other liability, remedy, or right provided in applicable
law, statute or the preceding paragraph, the Union, within twenty-four (24) hours,
upon the company’s request, shall:
A.
B.
C.
D.
Publicly disavow such actions by the employees.
Advise the Vice President of Human Resources in writing that
such employee action has not been authorized or sanctioned by the
Union.
Notify employees of its disapproval of such action and instruct
employees to cease such action and return to work immediately.
Post notices on all bulletin boards advising employees that it
disapproves of such action and instructs them to return to work
immediately.
SECTION 3. If, following such a request by the Company, the Union fails to
order striking employees to abandon the strike, the Union shall be deemed
responsible for the strike and for all damages suffered by the Company from the
time said written request is made.
(See Plaintiff’s Complaint Seeking Preliminary Injunction and Temporary Restraining Order
(“Pl. Compl.”), Ex. A at 15-16.) The collective bargaining agreement also contains a provision
on subcontracting in Article 28. (Id. at 22.)
B.
The Events Underlying Kvaerner’s Motion for Preliminary Injunction
On or about June 11, 2002, members of Asbestos Workers Local 14 set up a picket line
at the Philadelphia Shipyard. (Verification of Michael Giantomaso (“Giantomaso V.S.”) ¶ 9.)
Apparently, two Local 14 officers—Martin Campbell and Stephen Pettit—were present at the
picket line. (Id.)
It is the understanding of the Council that Asbestos Workers Local 14 set up the picket
line to engage in area standards picketing. (Ault Decl. ¶ 35.) In engaging in such picketing,
these defendants are informed, the members of Local 14 were protesting a particular insulation
contractor’s payment of wages to its employees at the shipyard that were below the area
standards for insulators engaged in the building and construction trades. (Id.) Local 14 manned
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the picket line with its building and construction trades members. (Id.)
In the Council’s
understanding of the situation, Local 14 was not picketing because of any dispute with Kvaerner
itself or arising under the Kvaerner-PMTC collective bargaining agreement, such as a dispute
over subcontracting. (Id.)
Neither the Council nor its authorized representatives engaged in any picketing at the
Philadelphia Shipyard. (Ault Decl. ¶ 33.) Moreover, no employee at the Shipyard engaged in
any picketing, striking or boycotting in violation of the no-strike clause. (Id.) Furthermore, all
of the employees at the Shipyard reported to work. (Id.) The Council itself does have a dispute
with Kvaerner of many month’s duration over violation of the subcontracting clause; but, as
Exhibit B to plaintiff’s own papers demonstrates, the Council has properly processed that dispute
through the grievance and arbitration procedure of the agreement.
In addition, while Kvaerner complains about an alleged violation of the no-strike clause,
Kvaerner itself may have failed to comply with the provisions of Section 2 of the no-strike
clause. The Company does not allege that it sent any written notice to the Council regarding an
unauthorized work stoppage, strike, picketing or boycott.
Insofar as Defendant Ault is
concerned, he has not received such notice. As explained above, the written notice operates as a
“trigger”, thereby requiring the Council to take certain steps in order to bring an end to an
unauthorized work stoppage. Section 3 also specifically provides that the Union is responsible
for damages only if it fails to take action after receiving that written notice.
Notwithstanding the absence of any written notice, the MTD sent a letter to all of the
Defendants named in Kvaerner’s complaint. (Ault Decl. ¶ 39.) The letter informed the
Defendants of the Court’s temporary restraining order and that the picketing was not authorized
by the Council or the MTD and that both entities disapproved of the picketing. (Id.) The letter
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further instructed that all employees should continue to work. (Id.) The MTD sent the letter in
response to the entry of the temporary restraining order. (Id.)
III.
STANDARD FOR OBTAINING A BOYS MARKET INJUNCTION
As the moving party, Kvaerner bears the burden of establishing its entitlement to a Boys
Market injunction. Parade Publications, Inc. v. Philadelphia Mailers Union No. 14, 459 F.2d
369, 373 (3d Cir. 1972). In recognition of the developing role of arbitration as a means of
resolving labor disputes, enforceable under Section 301 of the Labor-Management Relations Act,
the Supreme Court crafted an exception in Boys Market to Section 4 of the Norris-LaGuardia
Act, 29 U.S.C. § 104, which deprives federal courts of jurisdiction to issue injunctions that
would prohibit certain specified acts in connection with a labor dispute, including “(e) Giving
publicity to the existence of, or the facts involved in, any labor dispute, whether by advertising,
speaking, patrolling, or by any other method not involving fraud or violence.” 29 U.S.C. §
104(e). The Supreme Court summarized that burden as follows:
A District Court entertaining an action under Sec. 301 may not grant injunctive
relief against concerted activity unless and until it decides that the case is one in
which an injunction would be appropriate despite the Norris-LaGuardia Act.
When a strike is sought to be enjoined because it is over a grievance which both
parties are contractually bound to arbitrate, the District court may issue no
injunctive order until it first holds that the contract does have that effect; and the
employer should be ordered to arbitrate, as a condition of his obtaining an
injunction against the strike. Beyond this, the District Court must, of course,
consider whether issuance of an injunction would be warranted under ordinary
principles of equity—whether breaches are occurring and will continue or have
been threatened and will be committed; whether they have caused or will cause
irreparable injury to the employer; and whether the employer will suffer more
from the denial of the injunction than will the union from its issuance.
Boys Market, Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235, 254 (1970).
In applying this standard, the District Court should be guided by several fundamental
principles underlying the Supreme Court’s decision in Boys Market. The concept of issuing an
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injunction to enjoin a strike and order arbitration represents a “narrow” exception to the NorrisLaGuardia Act, 29 U.S.C. § 101, et seq., from which the District Court draws its limited
injunctive authority in labor disputes. The mere existence of such an exception does not mean
that “injunctive relief is appropriate as a matter of course in every case of a strike over an
arbitrable grievance.” Boys Market, Inc., 398 U.S. at 253-54.
Most significantly in this case,
the Court should never issue an injunction where the underlying dispute is not arbitrable under
the grievance and arbitration procedure. Buffalo Forge Co. v. United Steelworkers of Am., 428
U.S. 397, 407-09 (1976). Any such injunction would not further the parties’ agreement to
arbitrate disputes (since the dispute is not arbitrable) and would only contravene the NorrisLaGuardia Act’s prohibition against issuing injunctions in labor disputes. Id.
IV.
A.
ARGUMENT
Kvaerner is Not Entitled to Injunctive Relief Because the Company Cannot
Establish that the Underlying Dispute is Arbitrable
As the Supreme Court has noted, an action by an employer against a union to enforce a
no-strike clause in a collective bargaining agreement may involve two disputes. Jacksonville
Bulk Terminals v. International Longshoremen’s Ass’n, 457 U.S. 702, 710 (1982). “First, there
is the ‘underlying dispute’, which is the event or condition that triggers the work
stoppage…[and] [s]econd, there is the parties’ dispute over whether the no-strike pledge
prohibits the work stoppage at issue.” Id. at 710. It is not enough to prove that there may have
been a violation of the no-strike clause. Id. at 721-22. Such a breach may well support a damage
award in arbitration or in court, but in and of itself cannot be the basis for injunctive relief under
the Boys Market exception to Norris-LaGuardia’s anti-injunction provisions. Id. at 722. To
obtain Boys Market injunctive relief, a plaintiff such as Kvaerner must prove that the picketing or
other activity in violation of the no-strike clause was over an “underlying dispute” that is subject
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to the grievance and arbitration procedure. Id.; Buffalo Forge Co., 428 U.S. at 406-08; Boys
Market, 309 U.S. at 254. As explained below, the Company cannot meet that burden.
In its moving papers, Kvaerner alleges that the Council and Asbestos Workers Local 14
have engaged in “picketing, strike and boycott activities” in order “to protest plaintiffs’
utilization of a subcontractor to perform certain work pursuant to Article 28 of the Agreement.”
(Pl. Compl. ¶ 14.) The Company further asserts that “defendants are engaging in picketing,
boycott, and strike activity over a contractual issue subject to the CBA’s express grievance
procedure and in violation of the CBA’s no picketing and strike provision.”
(Plaintiffs’
Memorandum of Law in Support of motion for Temporary Restraining Order Without Notice
(“Pl. Memo.”) at 5.) While the Company refers to the Verification of Michael Giantomoso (Pl.
Memo at 5), the verification contains no statement by Mr. Giantomoso that that “picketing” by
Asbestos Workers Local 14 members concerned an underlying dispute involving the
subcontracting provision of the collective bargaining agreement. (See Giantomoso V.S. ¶¶ 1-9.)
In short, Kvaerner thus far has failed to present any evidence, other than allegations and
assertions, with its motion that establishes the underlying dispute is arbitrable. See Elsinore
Shore Assocs. v. Local 54, Hotel Employees and Restaurant Employees Int’l Union, 820 F.2d 62,
68-69 (3d Cir. 1987) (vacating Boys Market injunction where there was no evidence that the
underlying dispute was arbitrable and finding dispute involved extra-contractual controversy
over failure to reach new wage agreements under contractual reopener provision).
Contrary to Kvaerner’s allegations, the underlying dispute in this case involves Asbestos
Workers Local 14’s concern that a non-union insulation contractor, who is performing work at
the Philadelphia Shipyard, is undermining the area standards by paying its employees below the
wage rates for insulators in the building and construction trades in Philadelphia. (Ault Decl. ¶
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34.) “Area standards picketing” is concerted activity by union members and individuals “to
protest wage rates that are below the established area standards” and is protected by Section 7 of
the National Labor Relations Act, 29 U.S.C. § 157 (2001). International Longshoremen’s Ass’n
v. Ariadne Shipping Co., 397 U.S. 195, 200-01 (1970). The “area standards picketing” does not
involve a dispute is over whether the insulation contractor should be present at the Shipyard or
even whether that contractor should sign the Kvaerner agreement (which are issues that arguably
implicate the subcontracting provision in the collective bargaining agreement). In engaging in
area standards picketing, Local 14 was not denying or otherwise depriving Kvaerner of its ability
to arbitrate subcontracting issues under the collective bargaining agreement. Buffalo Forge Co.,
428 U.S. at 408. Rather, the dispute underlying the area standards picketing “was not over any
dispute between the Union and the employer that was even remotely subject to the arbitration
provisions of the contract.” Id. at 407. It does not involve any term or condition of the collective
bargaining agreement between Kvaerner and the Council; instead, it involves the sub-par wage
rates paid by the insulation contractor to its own employees, which Local 14 believes are
undermining the area standards in Philadelphia.
Kvaerner’s attempt to cast the “area standards picketing” as an underlying dispute
involving the subcontracting provision further proves that injunctive relief is inappropriate. The
“underlying dispute” is the dispute that triggers the picketing. In this case, as the Council
understands it, the “underlying dispute”, if any, is the non-union insulation contractor’s payment
of wages below the area standards.
The area standards dispute was not triggered by the
subcontracting provision in the collective bargaining agreement; rather, the subcontracting
provision was brought into the case by Kvaerner in response to the area standards picketing.
Jacksonville Bulk Terminals, 457 U.S. at 721. This represents an improper attempt by the
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Company to bootstrap the area standards picketing onto an existing grievance that is set to be
arbitrated at the request of the Council. (Pl. Compl., Ex. B.) At most, the Company’s arguments
amount to describing “the effect rather than the cause” of Local 14’s area standards picketing.
Elsinore Shore Assocs., 820 F.2d at 69.
However, such characterizations of the underlying
dispute are insufficient to establish that they are arbitrable. Jacksonville Bulk Terminals, 457
U.S. 721-22; Elsinore Shore Assocs., 820 F.2d at 69.
Without an arbitrable underlying dispute, Kvaerner’s motion amounts to little more than
a request for injunctive relief to enjoin picketing that allegedly violates the no-strike clause. The
Supreme Court has held that the Boys Market exception to Section 104 of the Norris-LaGuardia
Act does not allow a court to enjoin picketing simply because the picketing violates the no-strike
clause. Jacksonville Bulk Terminals, 457 U.S. at 722; Buffalo Forge Co., 428 U.S. at 408. A
court cannot issue a Boys Market injunction merely to enjoin contract violations. Buffalo Forge,
428 U.S. at 409-10. The purpose of a Boys Market injunction is to preserve the arbitration
procedure as a means of resolving arbitrable disputes and to protect it from being undermined by
unilateral acts of one of the parties to the collective bargaining agreement. Id. at 410-11. Given
that Kvaerner cannot establish an arbitrable underlying dispute in this instance, the Company is
not entitled to a Boys Market injunction.
B.
Kvaerner Cannot Establish that the Equities Favor Issuing the Injunction
Even assuming arguendo that Kvaerner could establish the existence of a dispute under
the collective bargaining agreement that is arbitrable, it cannot establish that the equities favor
the issuing of a Boys Market injunction. As explained supra in Section III, Kvaerner must
establish whether breaches of the no-strike clause are occurring or will occur, that the Company
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has suffered irreparable injury, and that the Company will suffer more harm if the injunction is
not issued than the Council will suffer if the injunction is issued. Kvaerner fails on all counts.
First, there has been no unlawful picketing that would fall within the no-strike clause. No
employee at the Shipyard has left his or her job and went on strike. No employee at the Shipyard
has left his or her job to man a picket line. No employee at the Shipyard has expressed any
support for Local 14’s picket line by honoring that line and/or slowing down his or her work.
The facts of this case involve a picket by non-employees in protest of the wages paid by an
employer other than Kvaerner itself, an insulator contractor who happens to be performing work
at the Philadelphia Shipyard. Insofar as we are aware, Kvaerner cannot present any evidence to
establish that any employee covered by the agreement breached the no-strike clause or intends to
breach it in the near future.
Second, Kvaerner cannot establish “irreparable harm” as that phrase is utilized in the
Boys Market context.
In its moving papers, the Company claims it will suffer “great and
irreparable damage” in that: “(a) Plaintiff will be unable to perform all of its work; (b) Plaintiff
will be denied the use and possession of its property; (c) Plaintiff will be denied delivery of
essential supplies; (d) Plaintiff’s employees who choose to work will be subject to unlawful
harassment.” (Pl. Compl. ¶ 17.) Setting aside the lack of any evidentiary support for any of these
assertions (not even Mr. Giantomaso addresses the question of what harm will be suffered in his
verification), none of these forms of “great and irreparable damage” constitute irreparable harm
as a matter of law for purposes of obtaining a Boys Market injunction. Because money damages
usually can compensate an employer for any losses occasioned by an unlawful strike, the basis
for finding irreparable harm in such cases usually is where the picketing will frustrate or vitiate
the arbitration process itself. See Local Lodge No. 1266, Int’l Ass’n of Machinists v. Panoramic
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Corp., 668 F.2d 276, 285-86 (7th Cir. 1981) (finding irreparable injury is not “simply any injury
resulting from a breach of contract that would not be fully redressed by an arbitral award” but
injury that is so irreparable that it would frustrate arbitration). In this case, Kvaerner cannot
establish any frustration or vitiation of the arbitration process because, in its own papers, it
provides evidence that the process is alive and well. Exhibit B to the Plaintiff’s Complaint is a
letter from Defendant Ault to Mr. Giantomaso in which the Council invokes the arbitration
procedure to resolve the Council’s dispute with Kvaerner over subcontracting. (Pl. Compl., Ex.
B). Kvaerner has not alleged or submitted evidence that Local 14’s areas standards picketing
threatens this arbitration process and fails to establish irreparable injury for purposes of a Boys
Market injunction.
Finally, the balance of the equities does not favor Kvaerner.
As explained above,
Kvaerner cannot satisfy the other elements of the Boys Market injunction, including irreparable
harm. The Council, Mr. Ault and Mr. Rowan will suffer hardship if an injunction is issued,
given that they did not engage in the picketing and that the Council has been following its
contractual obligations. Enjoined for acts they did not itself engage in, the Defendants could
nevertheless be subject to contempt if violations of the Court’s order should occur in the future.
C.
Even Assuming the Kvaerner Satisfies the Prerequisites for an Injunction,
Kvaerner Cannot Prove that it is Appropriate to Enjoin the Council
Even assuming Kvaerner can demonstrate the equities favor it and even assuming the
Company can establish an arbitrable dispute, Kvaerner still fails to prove that an injunction
should issue against the Council, Mr. Ault or Mr. Rowan. Kvaerner presents no evidence with
its papers that proves the Council, Mr. Ault, Mr. Rowan and/or their authorized representatives
engaged in any picketing or other unlawful acts. At most, the Company presents the assertions
of Mr. Giantomaso in his verification that members of Asbestos Workers Local 14 engaged in
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picketing on June 11, 2002. (Giantomaso V.S. ¶ 9.) Thus, by naming the Council and Mr. Ault
and Mr. Rowan as Defendants, Kvaerner’s only basis for holding the Council liable is if it can
impute liability for Local 14’s actions upon these Defendants.
Section 106 of the Norris-LaGuardia Act provides that “[n]o officer or member of any
association or organization, and no association or organization participating or interested in a
labor dispute, shall be held responsible or liable in any court of the United States for the unlawful
acts of individual officers, members, or agents, except upon clear proof of actual participation in,
or actual authorization of, such acts , or ratification of such acts after actual knowledge thereof.”
29 U.S.C. § 106 (2001) (emphasis added). “Clear proof” is “proof which is clear, unequivocal
and convincing.” United Steelworkers of Am. v. Lorain, 616 F.2d 919, 921 (6th Cir. 1980).
Without such evidence, the Company cannot establish liability for purposes of obtaining an
injunction. Kvaerner provides no evidence, let alone clear proof, that the Council, Mr. Ault or
Mr. Rowan actually participated in, authorized or ratified the acts of Local 14.
The Council, Mr. Ault and Mr. Rowan recognize that, in enacting the Labor-Management
Relations Act, Congress established that liability in actions under that statute, such as a Section
301 action, can be established using the common law of agency. See United Mine Workers of
Am. v. Gibbs, 383 U.S. 715, 736 (1966). Kvaerner brought this action as a putative Section 301
action. As explained in the previous sections, however, the Company has failed to establish the
necessary prerequisites for Section 301 jurisdiction to obtain a Boys Market injunction. Thus,
the Council, Mr. Ault and Mr. Rowan believe that Section 6 applies to this case and the Court
should hold Kvaerner to establishing “clear proof” of authorization, participation or ratification.
But even assuming Section 301 jurisdiction exists for issuing an injunction, Kvaerner
fails to satisfy the common law agency standard. See 29 U.S.C. §§ 185(b), 185(e) (2001). See
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also Philadelphia Marine Trade Ass’n v. Local 1291, Int’l Longshoremen Ass’n, 909 F.2d 754
(3d Cir. 1990); Pittsburgh-Des Moines Steel Co. v. United Steelworkers of Am., 633 F.2d 302 (3d
Cir. 1980).
See, generally, Carbon Fuel Co. v. United Mine Workers of Am., 444 U.S. 212
(1979) (holding international union cannot be held liable for wildcat strike by local union unless
it is proven international union authorized, instigated, encouraged or ratified strike).
Both Third Circuit cases illustrate how Kvaerner has failed to establish a basis to enjoin
the Council, Mr. Ault and Mr. Rowan. In Philadelphia Marine Trade Ass’n, the Third Circuit
found an absence of any evidence that the international union authorized, instigated, encouraged
or ratified the strike and the court denied the injunctive relief. 909 F.2d at 759. In PittsburghDes Moines Steel Co., the Third Circuit held that a court cannot issue a Boys Market injunction
against an international union because of the local union’s engaging in picketing that breaches a
no-strike clause and that concerns an arbitrable underlying dispute unless the movant makes an
additional showing. Pittsburgh-Des Moines Steel Co., 633 F2.d at 308. In the context of this
case, this additional showing requires Kvaerner to prove (1) that the order enjoining Local 14
“will not be fully effective;” (2) that the steps already taken by the Council “are not likely to be
effective;” and (3) “that specific additional steps, carefully specified in the order, will add
significantly to the deterrent effect of the injunction against the local and its members.” Id.
Even after this heightened showing, the Court should still consider “whether, in the view of the
union, the inevitable intrusion upon the internal affairs of the union, the marginal potential
increase in the effectiveness of the Boys Market injunction is justified.” Id.
In this case, the
standard is not met.
The Company has not set forth any averments as to how an injunction against Asbestos
Workers Local 14 will not be effective, what steps the Council took that were ineffective, and
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what steps the Council could take that would be effective. Indeed, there is a dearth of evidence
to support a claim that an order against Local 14 would not be effective. See Pittsburgh-Des
Moines Steel Co., 633 F.2d at 308.
Furthermore, the Council has no control over Asbestos
Workers Local 14 if that local union wants to engage in areas standards picketing on behalf of its
building and construction trades members. The Council cannot discipline Asbestos Workers
Local 14, its officers or its members for their activities. (Ault Decl. ¶¶ 37-38.) The MTD, on
behalf of the Council, sent a letter to all Defendants instructing them that neither the MTD nor
the Council authorized or approved of the picketing and that all employees should return to
work.
There was nothing more that the Council could do in these circumstances.
See
Pittsburgh-Des Moines Steel Co., 633 F.2d at 308.
In addition, as explained above, Section 2 of the no-strike clause requires the Council to
undertake four steps (including sending a letter disavowing the work stoppage or picketing and
ordering employees to return to work, which has already been done) within 24 hours of written
notification by Kvaerner. The Company has not alleged that it has followed this procedure.
Assuming that is the case, the Company’s failure to follow that procedure undermines any claim
against the Council at this point. In such circumstances, the employer should avail itself of the
contractual procedure before it seeks to impose liability upon the Council.
V.
CONCLUSION
In summary, Kvaerner has failed to establish that the facts of this case warrant the
issuance of a Boys Market injunction. Kvaerner’s failure to establish an arbitrable underlying
dispute, its failure to establish the equities favor the Company and its failure to establish that an
injunction is warranted against the PMTC all prove that this case falls within the Buffalo Forge
and Jacksonville Bulk Terminals exception to Boys Market.
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Accordingly, for the foregoing
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reasons, Defendants Philadelphia Metal Trades Council, Ron Ault and Philip Rowan respectfully
request that the Court deny the Plaintiffs’ Motion for Preliminary Injunction.
Respectfully submitted,
By:
________________________________
Robert Curley (Bar No. 55760)
David Capuano (Bar No. 70238)
O’DONOGHUE & O’DONOGHUE
Constitution Place, Suite 515
325 Chestnut Street
Philadelphia, PA 19106
(215) 629-4970
Robert Matisoff
Keith R. Bolek
O’DONOGHUE & O’DONOGHUE
4748 Wisconsin Avenue, N.W.
Washington, D.C. 20016
(202) 362-0041
Counsel for the Defendants Philadelphia Metal
Trades Council, Ron Ault and Philip Rowan
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