Com. Edison Co. v. Intern. Broth. of Elec. Workers

961 F.Supp. 1169

COMMONWEALTH EDISON COMPANY, Plaintiff, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION NO. 15, Defendant.

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, LOCAL UNION NO. 15, Plaintiff, v. COMMONWEALTH EDISON COMPANY, and Kincaid Generation, L.L.C., Defendants.

No. 96 C 3989.

No. 96 C 7295.

United States District Court, N.D. Illinois, Eastern Division.

February 21, 1997.

Charles A. Werner, James I. Singer, Schuchat, Cook and Werner, St. Louis, MO, James Lockwood, Park Ridge, IL, Ralph H. Loewenstein, Deffenbaugh, Loewenstein, Hagen, Oehlert & Smith, Springfield, IL, for Local 15 Intern. Broth. of Elec. Workers.

Kenneth T. Lopatka, Craig T. Boggs, Matkov, Salzman, Madoff & Gunn, Chicago, IL, Thomas Schanzle-Haskins, Giffing, Winning, Cohen & Bodewes, Springfield, IL, W. Carter Younger, Gary S. Marshall, Pamela L. Ventura, McGuire, Woods, Battle & Boothe, Richmond, VA, for Kincaid Generation LLC.

Brian Jeffrey Gold, Leah Ellen Pazol, Sonja L. Lengnick, Sidley & Austin, Chicago, IL, for Commonwealth Edison.

Robert Shorey Graettinger, Illinois Atty. General's Office, Chicago, IL, Deborah Lynn Barnes, Asst. Atty. Gen., Springfield, IL, for Illinois Commerce Commission.

MEMORANDUM OPINION AND ORDER

ANDERSEN, District Judge.

Plaintiff International Brotherhood of Electrical Workers, Local Union No. 15 ("Local 15") filed suit (Case No. 96 C 7295) against Commonwealth Edison Company ("ComEd"), Kincaid Generation, L.L.C. ("Kincaid"), and the Illinois Commerce Commission ("ICC") alleging that the Asset Sale Agreement negotiated between ComEd and Kincaid for the sale of the Kincaid Generating Station (the "Generating Station") in Sangamon and Christian Counties, Illinois, is in direct violation of the Illinois Collective Bargaining Successor Employer Act, 820 ILCS 10/1 (the "Illinois successor statute"). ComEd and Kincaid have filed separate motions for judgment on the pleadings pursuant to Fed. R.Civ. P. 12(c) arguing that the Illinois successor statute is preempted by § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and by the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq.

ComEd has also filed suit (Case No. 96 C 3989) against Local 15 seeking, among other things, a declaration that ComEd has not violated the Illinois successor statute because it is completely preempted by § 301 of the LMRA, 29 U.S.C. § 185, and by the NLRA, 29 U.S.C. § 151 et seq. ComEd has filed a motion for a judgment on the pleadings¹ in this case as well.

For the following reasons, ComEd's and Kincaid's motions for summary judgment in Case No. 96 C 7295 are granted. ComEd's motion for summary judgment in Case No. 96 C 3989 is also granted.

BACKGROUND

The undisputed facts are as follows. Defendant ComEd is a public utility company that provides electrical power to customers in the State of Illinois. Plaintiff Local 15 is the exclusive bargaining representative of ComEd's bargaining unit employees, including all of the bargaining unit employees at ComEd's Generating Station in Sangamon and Christian Counties, Illinois.

Local 15 and ComEd are parties to a collective bargaining agreement that governs the terms and conditions of employment for ComEd's bargaining unit employees, including all employees at the Generating Station. The collective bargaining agreement provides in part:

This agreement shall be binding upon the parties and their respective successors and assigns. Subject to the Company obtaining all necessary approval of any governmental authority or regulatory body, including but not limited to the Illinois Commerce Commission, and except in cases of liquidation or condemnation or sale or transfer (i) to any entity which has the authority to initiate condemnation proceedings, or (ii) pursuant to any right granted prior to the date hereof, in the event the Company sells or otherwise transfers all or substantially all of its assets to another person, company, corporation, or firm during the term of this Agreement, the Company will require such purchaser or transferee to assume the obligations under this Agreement until the expiration of the term of this Agreement.

(Compl. ¶ 5; Answer ¶ 5). The agreement expires on September 30, 1997.

Defendant Kincaid is a Virginia limited liability company which operates public utility companies. On March 29, 1996, Kincaid entered into an Asset Sale Agreement (the "Sale Agreement") with ComEd for the purchase of ComEd's Generating Station in Sangamon and Christian Counties, Illinois. The Sale Agreement provides in part:

Buyer shall not be subject to the provisions of any collective bargaining agreement between Seller and its employees as a result of the transactions contemplated by this Agreement and Buyer's employment of some or all of the employees of Seller employed at the Plant.

(Asset Sale Agreement ¶ 8.10; Compl. ¶¶ 12-13; Answer ¶¶ 12-13). The Sale Agreement also permits Kincaid to establish its own employment level at the generating Station and the terms and conditions for such employment, but requires Kincaid to offer positions to ComEd's bargaining unit employees who apply for non-supervisory positions up to the employment level established by Kincaid. (Asset Sale Agreement ¶ 6.12). If a majority of the non-supervisory employees hired by Kincaid were formerly employed by ComEd in the bargaining unit represented by Local 15, Kincaid will recognize Local 15 as the exclusive bargaining representative of employees holding non-supervisory positions at the Generating Station. (Asset Sale Agreement ¶ 6.12).

The sale of the Generating Station is subject to approval by the defendant ICC. On May 13, 1996, ComEd filed a petition with the ICC pursuant to § 7-102 of the Illinois Public Utilities Act, 220 ILCS 5/7-102, requesting approval of the Sale Agreement. Local 15 opposes the sale and, consequently, moved to intervene in the proceedings. The ICC granted Local 15's motion to intervene on September 25, 1996. Oral argument on the pending petition was conducted on January 21, 1997. The ICC has not yet issued a decision.

Local 15 objects to the sale of the Generating Station because the Sale Agreement does not require Kincaid to assume ComEd's obligations under the collective bargaining agreement negotiated with Local 15. According to Local 15, this constitutes a violation of the Illinois successor statute, 820 ILCS 10/1, which makes a new employer liable for the obligations of a predecessor's collective bargaining agreement when the agreement contains a "successor clause." The statute provides in part:

Where a collective bargaining agreement between an employer and a labor organization contains a successor clause, such clause shall be binding upon and enforceable against any successor employer who succeeds to the contracting employer's business, until the expiration date of the agreement therein stated. No such successor clause shall be binding upon or enforceable against any successor employer for more than 3 years from the effective date of the collective bargaining agreement between the contracting employer and the labor organization.

820 ILCS 10/1(a). A "successor employer" is defined as "any purchaser, assignee, or transferee of a business the employees of which are subject to a collective bargaining agreement, if such purchaser, assignee, or transferee conducts or will conduct substantially the same business operation, or offer the same service, and use the same physical facilities, as the contracting employer." 820 ILCS 10/1(b). The Illinois successor statute further provides:

An employer who is a party to a collective bargaining agreement containing a successor clause has the affirmative duty to disclose the existence of such agreement and such clause to any successor employer. Such disclosure requirement shall be satisfied by including in any contract of sale, agreement to purchase, or any similar instrument of conveyance, a statement that the successor employer is bound by such successor clause as provided for in the collective bargaining agreement. Failure of an employer to disclose the existence of a collective bargaining agreement containing a successor clause as required by subsection (d) shall not effect the enforceability of such collective bargaining agreement against a successor employer.

820 ILCS 10/1(d). Additionally, the statute imposes a fine not to exceed $5,000 on an employer that fails to comply with its provisions. 820 ILCS 10/2.

On July 1, 1996, ComEd filed suit against Local 15 in the United States District Court for the Northern District of Illinois, Eastern Division (Case No. 96 C 3989) seeking, among other things, a declaration that ComEd has not violated the Illinois successor statute because it is completely preempted by § 301 of the LMRA, 29 U.S.C. § 185, and by the NLRA, 29 U.S.C. § 151 et seq. Jurisdiction over this action is premised on 28 U.S.C. § 1331 and 29 U.S.C. § 185.

On July 18, 1996, Local 15 filed suit (Case No. 96 C 7295) against ComEd, Kincaid, and the ICC in the Circuit Court of Sangamon County, Illinois, alleging that the Sale Agreement between ComEd and Kincaid for the sale of the Generating Station is in direct violation of the Illinois successor statute because the Sale Agreement expressly provides that Kincaid is not required to assume ComEd's obligations under the collective bargaining agreement negotiated with Local 15. (Compl. ¶ 17-18). Local 15 seeks an order compelling ComEd to incorporate in the Sale Agreement the terms of the current collective bargaining agreement between ComEd and Local 15 and an order that those terms and conditions are binding on Kincaid. (Compl. ¶ 19). Local 15 further requests that "the Court enjoin the ICC, ComEd, and Kincaid, from the continued processing of a Petition before the ICC containing an Asset Sale Agreement with provisions that are in direct violation of an Illinois statute; that the Court enjoin the ICC...