Charter Commc'ns, Inc. v. Local Union No. 3, Int'l Bhd. of Elec. Workers

338 F.Supp.3d 242

CHARTER COMMUNICATIONS, INC., Plaintiff,

v.LOCAL UNION NO. 3, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, Lance Van Arsdale, in his capacity as Assistant Business Manager, Maintenance Division of Local No. 3, Derek Jordan, in his capacity as Business Representative of Local No. 3, Sean Fitzpatrick, in his capacity as Business Representative of Local No. 3, and "John Does" (names being fictitious, all of whom are unknown to plaintiff, all of persons being members of or acting in concert with IBEW Local No. 3), Defendants.

17 Civ. 2471 (PGG)

United States District Court, S.D. New York.

Signed September 19, 2018

Daniel Shay Kirschbaum, George Peter Clark, Jr., Kenneth A. Margolis, Kauff McGuire & Margolis LLP, New York, NY, for Plaintiff.

John H. Byington, III, Marty Gerard Glennon, Archer, Byington, Glennon & Levine, LLP, Melville, NY, for Defendants.

MEMORANDUM OPINION & ORDER

Paul G. Gardephe, United States District Judge

Plaintiff Charter Communications, Inc. ("Charter") seeks leave to file a Third Amended Complaint ("TAC") against Local 3 of the International Brotherhood of Electrical Workers, AFL-CIO (the "Union"), asserting a claim under Section 303 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 187, for "unlawful secondary boycotting." (See Mot. to Amend (Dkt. No. 66); TAC (Dkt. No. 66-1) ¶¶ 1-3, 6, 33-40) During collective bargaining negotiations, the Union proposed a change to the subcontracting provision of the collective bargaining agreement ("CBA"), under which Plaintiff would only be permitted to subcontract work to companies "paying wages and benefits identical to" the wages and benefits provided under the CBA. (TAC (Dkt. No. 66-1) ¶¶ 14-17) Plaintiff alleges that the Union's subcontracting proposal constitutes an unlawful union signatory clause, and that the Union's subsequent strike "in support of that demand" is an "unfair labor practice" in violation of Section 303 of the LMRA. (See id. ¶¶ 16-20, 22, 33-40)

On October 10, 2017, this Court granted Defendants' motion to dismiss the Second Amended Complaint ("SAC").¹ (Order (Dkt. No. 61) ) This Court held that the SAC failed to state a claim under LMRA Section 303 because it did not "plausibly allege that the Union was insisting on an unlawful union signatory clause," and the Court declined to exercise supplemental jurisdiction over Plaintiff's remaining claim against the Union and several Union representatives under Section 807 of the New York Labor Law ("NYLL"). (Oct. 10, 2017 Tr. (Dkt. No. 64) at 9:20-22, 13:22-14:19)²

Pending before the Court is Plaintiff's motion for leave to file a Third Amended Complaint (TAC"). (See Mot. (Dkt. No. 66); TAC (Dkt. No. 66-1) ) The proposed TAC pleads only an LMRA Section 303 claim against the Union.

The Union contends that Charter's motion to amend should be denied, because: (1) Charter has not demonstrated "good cause" for its untimely amendment; and (2) the proposed amendment would be futile. (Def. Br. (Dkt. No. 68) )

For the reasons stated below, Plaintiff's motion for leave to file a Third Amended Complaint will be denied.

BACKGROUND ³

I. FACTS

Plaintiff Charter offers cable, Internet, and phone services to residential, commercial and governmental subscribers. (TAC (Dkt. No. 66-1) ¶ 6) Defendant is Local 3 of the International Brotherhood of Electrical Workers. (Id. at 1) The Union represents 1,700 cable technicians who work for Charter. (Id. ¶ 9)

The CBA between Charter and the Union has expired (see id. ¶ 23), and Charter and the Union have been engaged in negotiations regarding a new CBA since February 6, 2017. (Id. ¶ 13) Kevin Smith – Charter's Group Vice President of Labor and Employee Relations – has acted as Charter's chief representative in the negotiations, while Derek Jordan and Lance Van Arsdale have represented the Union. (Id. )

A. The Union's March 26, 2017 Proposed Revision to the Subcontracting Provision

On March 26, 2017, the Union submitted forty-four proposed revisions to the CBA. (Id. ¶¶ 14, 16) Among the proposed revisions was a change to Section 7 of the CBA, which addresses the subcontracting of work. (Id. ¶¶ 14-15) The previous CBAs between Charter and the Union contained the following subcontracting provision:

SECTION 7 - SUBCONTRACTING AND CONTRACTING OUT WORK

A. The Company shall have the right to enter into sub-contracts of the work referred to in Section 6 of this Agreement with companies paying wages and benefits similar to this Agreement and providing such sub-contracting is not done for the purpose of laying off employees.

(Id. ¶ 15 (emphasis added) )

The Union's March 26, 2017 proposal states: "Section 7A – DELETE ‘SIMILAR TO THIS AGREEMENT’ AND ADD ‘IDENTICAL TO THIS AGREEMENT.’ " (Id. ¶ 16) (emphasis in original) If the Union's proposal were adopted, Section 7A of the CBA would read as follows:

SECTION 7 - SUBCONTRACTING AND CONTRACTING OUT WORK

A. The Company shall have the right to enter into sub-contracts of the work referred to in Section 6 of this Agreement with companies paying wages and benefits identical to this Agreement and providing such sub-contracting is not done for the purpose of laying off employees.

(Id. ¶ 17 (emphasis in original) )

After the Union submitted its proposed revisions, Charter asked Van Arsdale to explain the meaning of the new language in Section 7 of the CBA. (Id. ) Van Arsdale responded that the new language " ‘means that you can only subcontract with contractors that have this agreement.’ " (Id. ) Charter then asked whether the proposed language meant that Charter could only subcontract "with ‘Local 3 contractors.’ " (Id. ) Van Arsdale responded: " ‘No; I'm saying you can only contract with contractors with the same agreement.’ " (Id. (emphasis omitted) )

Charter rejected several of the Union's proposed revisions, including the subcontracting proposal. (Id. ¶ 19) In response, Van Arsdale "cut off" the March 26 negotiation session, stating: " ‘[t]he foremen are a strike issue, the JIB [benefits plans] is a strike issue and subcontracting is a strike issue. We are done for the day.’ " (Id. (emphasis omitted) )

On March 28, 2017, the Union went on strike, and "well over 1,000 [Charter] employees ... engaged in a work stoppage ... in support of [the Union's] bargaining demands." (Id. ¶ 20) The strike has continued to date, with hundreds of Charter employees picketing outside of Charter's facilities in New York City and northern New Jersey. (Id. ¶¶ 20-21)

On March 28, 2017, Charter filed an unfair labor practice charge with the National Labor Relations Board. (See Van Arsdale Decl., Ex. E (Mar. 28, 2017 NLRB charge) (Dkt. No. 37-5) at 2) Charter alleged that the Union was violating Section 8(b)(4)(A) of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158(b)(4)(A), by engaging in a strike with the "object of forcing or requiring" Charter to agree to an unlawful union signatory clause prohibited by Section 8(e) of the NLRA. (See id. )

B. The Union's March 31. 2017 Revised Proposal

In a March 31, 2017 email to Smith, Union representative Derek Jordan addressed the Union's proposed revision regarding subcontracting:

Kevin -- It has come to our attention that Time Warner Cable/Charter Spectrum has misconstrued and mischaracterized our proposal concerning Section 7A of the 2009-2013 CBA, our proposal No. 35. For the avoidance of any misunderstanding and to ensure as best we can that you understand our proposal as given across the table in these negotiations, we replace our written proposal No. 35 with the following:

35) SECTION 7A - DELETE AND REPLACE: The Company shall have the right to enter into sub-contracts of the work referred to in Section 6 of this Agreement with companies paying wages and benefits for such work at least identical in cost to this Agreement, the amount of which to be paid to employees by direct payment in their paycheck or by separate check, or alternatively, only with respect to benefits provided for under Sections 17-18 and 20-21 of this Agreement, by employee benefit contributions on behalf of employees performing such work in an amount at least at the rate provided for in those Sections of this Agreement, and paid to one or more bona fide employee benefit plans, and providing such sub-contracting is not done for the purpose of laying off employees working under this Agreement.

Please let us know if you wish to discuss this or any other bargaining issue.

Derek

(See Van Arsdale Decl., Ex. F (Mar. 31, 2017 email) (Dkt. No. 37-6) at 2 (emphasis added); TAC (Dkt. No. 66-1) ¶ 22)⁴ Charter claims that the Union tendered this revised proposal "for the ostensible purpose of curing the illegality of [its] March 26 proposal." (TAC (Dkt. No. 66-1) ¶ 22)

Charter subsequently withdrew its NLRB charge, and the NLRB case was closed on April 3, 2017. (See Van Arsdale Decl., Ex. G (Apr. 3, 2017 NLRB Letter Approving Withdrawal Request) (Dkt. No. 37-3) at 2; Charter Communications, Inc., N.L.R.B. Case No. 02-CC-195746, https://www.nlrb.gov/case/02-CC-195746) On April 6, 2017, Charter filed the instant case. (See Cmplt. (Dkt. No. 1) )

C. Wages and Benefits "Identical To This Agreement"

Charter contends that the Union's March 26, 2017 proposal constitutes an unlawful union signatory clause under Section 8(e) of the NLRA, 29 U.S.C. § 158(e). (See TAC (Dkt. No. 66-1) ¶¶ 36-39) According to Charter, the proposal's requirement that Charter subcontract only "with companies paying wages and benefits identical to this Agreement" is "tantamount to [a requirement] that Charter enter into subcontracts only with companies that have collective bargaining agreements [with the Union]." (Id. ¶¶ 23(d)-(e), 26, 31 (emphasis in original) ).

Employee benefits under the parties' now-expired CBA are provided exclusively by one of five benefit funds (the "Funds"), which are maintained as "jointly-trusteed employee benefit fund[s] within the meaning of Section 302 of the LMRA, 29 U.S.C. § 186 (commonly referred to as the Taft-Hartley...