Cosmopolitan Interior NY Corp. v. Dist. Council 9 Int'l Union of Painters & Allied Trades

600 F.Supp.3d 344

COSMOPOLITAN INTERIOR NY CORPORATION, Plaintiff,

v.DISTRICT COUNCIL 9 INTERNATIONAL UNION OF PAINTERS AND ALLIED TRADES, Defendant.

19-cv-2669 (JSR)

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

Signed April 25, 2022

Adam Casimir Weiss, The Law firm of Adam C. Weiss, PLLC, Glen Cove, NY, for Plaintiff.

Andrew Sal Hoffmann, Hoffmann & Associates, New York, NY, Giacchino James Russo, Michele Joy Harari, Wendell V. Shepherd, Barnes, Iaccarino, & Shepherd, LLP, Elmsford, NY, Michael Christopher Anderson, Shegerian & Associates, Mamaroneck, NY, for Defendant.

OPINION AND ORDER

JED S. RAKOFF, United States District Judge:

This dispute arose from a sight that is not unfamiliar to many New Yorkers: a large, inflatable rat posed outside of an office building, surrounded by union members distributing handbills decrying a tenant or building owner's use of non-union labor. Here, defendant District Council 9 International Union of Painters and Allied Trades ("DC 9" or the "Union") allegedly engaged in unlawful secondary boycotts by arranging such a tableau and utilizing other tactics to apply pressure to the plaintiff, Cosmopolitan Interior NY Corporation ("Cosmopolitan Interior"). Cosmopolitan Interior is a construction subcontractor that provides painting and wall-covering services in commercial spaces throughout New York City. DC 9 represents painters, wallpaper installers, and drywall tapers in the New York City metropolitan area. It is undisputed that DC 9 mounted a concerted campaign against Cosmopolitan Interior, which DC 9 accused of using other unionized companies as "paymasters" to run a so-called "double-breasted" operation to solicit both union and non-union work, a tactic that the union's collective bargaining agreement purportedly prohibits. The question is whether DC 9's tactics rose to the level of unlawful threats and coercion that caused Cosmopolitan Interior's clients -- general contractors and commercial tenants -- to sever ties with the painting company.

Four days into the bench trial of this case, the Court granted in part and denied in part DC 9's motion for judgment on partial findings under Fed. R. Civ. P. 52(c). As explained in a subsequent memorandum order, the Court held that DC 9 did not engage in unlawful secondary activity with respect to its interactions with two unionized painting companies that briefly served as "paymasters" for Cosmopolitan Interior. See ECF 92. But the Court denied DC 9's Rule 52 motion with respect to the Union's interaction with various clients of Cosmopolitan Interior.

Cosmopolitan Interior's amended complaint brought three counts under 29 U.S.C. § 187 alleging that DC 9 engaged in unlawful secondary activity against Cosmopolitan Interior's business associates. ECF 32 at 8-10. The amended complaint articulates three theories of illegal secondary activity: (i) that DC 9 coerced neutral employers to cease doing business with Cosmopolitan Interior because it was not a signatory to DC 9's collective bargaining agreement ("CBA"); (ii) that DC 9 coerced neutral employers to cease doing business with Cosmopolitan Interior to compel it to recognize DC 9 as the representative of its employees and to bargain with DC 9; and (iii) that DC 9 encouraged workers employed by other companies to strike or refuse to work with the object of forcing their employers to cease doing business with Cosmopolitan Interior. Id.

Now, having carefully considered the full record of testimony and evidence submitted at trial, as well as the oral and written arguments of counsel, the Court concludes that Cosmopolitan Interior has failed to prove any of its three claims. Accordingly, the Court grants judgment in favor of DC 9.

I. Findings of Fact

1. Cosmopolitan Interior is a construction contractor that was founded in 2013 and has performed painting and wallpapering services. Cosmopolitan Interior is owned by Moishe Gold. Trial Transcript ("Tr.") at 132.¹

2. DC 9 is a union representing painters, wallpaper installers, and drywall tapers, among other trades. Its President is John Drew. See Plaintiff's Exhibit ("Pl. Ex.") 4.

3. DC 9 has entered a CBA with certain painting contractors that, inter alia, sets "area standard" wages and benefits. See, e.g., Pl. Ex. 4. Painting contractors that are party to the CBA must pay at least the area standard wages and benefits to their workers. Under the CBA, a signatory contractor, before starting any job, must file paperwork with DC 9 "registering" the jobsite and must register with DC 9 any overtime its painters work. The contractor must further submit payroll information and make contributions to DC 9 benefit funds. Tr. 61-62.

4. On certain construction sites in New York City, customers and general contractors require that all subcontractors employ union labor and pay area standard wages for each unionized trade. These jobs are referred to as "union jobs" or "union work." See, e.g., Tr. 224; 248-249. The CBA prohibits signatory companies from running a "double breasted" operation, a term which refers to performing both union work at union wages and non-union work at non-union wages, whether under a company's own name or under the name of a separate company owned by an associate. Tr. 479; DX-A at 30-31.

5. Cosmopolitan Interior was primarily a sales company that would prepare estimates and bid on interior painting projects in and around New York City. Cosmopolitan Interior was not a signatory to the DC 9 CBA. Therefore, Cosmopolitan Interior could not supply its own union labor for union jobs. Tr. 169-170.

6. When Cosmopolitan Interior was selected for a non-union (i.e., "open shop") job, it would subcontract the work to a non-union painting company. Cosmopolitan Interior subcontracted much of its non-union work to JLM Decorating, Inc., a company that was also owned by Gold and which operates out of the same office space as Cosmopolitan Interior at 111 John Street. Tr. 128, 283, 313, 501. JLM Decorating was not a DC 9 CBA signatory and paid wages and benefits below union scale. Tr. 501-502. During the period 2013-2018, Cosmopolitan Interior would give its open shop work to JLM Decorating, which would pay painters less than area standard wages and benefits. Tr. 313, 336-338.

7. Companies that are not signatories to the DC 9 CBA may bid for union work, but the DC 9 CBA requires that the non-union company must engage a subcontractor that is a signatory to the DC 9 CBA. See, e.g., Tr. 248. Under DC 9's interpretation of the CBA, a union subcontractor may supply labor to a non-union contractor, provided that the subcontractor has a contractual relationship with the client contractor and, inter alia, supervises the painters. Tr. 70-71.

8. From 2013 until late July 2018, Cosmopolitan Interior, when selected for union work, deployed union labor through the auspices of another company, Cosmopolitan Interiors USA Corp. ("Cosmopolitan USA"), which was a signatory to the DC 9 CBA until the summer of 2018. Tr. 135, 297. Cosmopolitan USA was owned by Joel Friedman, and, for at least some portion of the period from 2013 through 2018, Cosmopolitan USA and Cosmopolitan Interior occupied the same office space at 111 John Street in Manhattan, along with JLM Decorating. Cosmopolitan Interior also supplied the materials, supervision, and project management for union jobs for which Cosmopolitan USA registered the jobs with DC 9 and paid the workers. Tr. 306-309.

9. The evidence showed that Cosmopolitan Interior and Cosmopolitan USA operated as alter egos, and many people, both inside and outside the company, were unaware that they were separate entities or at least unaware of the differences between them. According to Gold, when Friedman formed his company, Friedman and Gold intentionally chose the name Cosmopolitan USA, very close to the name of Gold's existing company, Cosmopolitan Interior, so that the two companies could work together and customers would not know the difference. Tr. 296-298. Employees testified that they were not aware of the differences between the two Cosmopolitan entities. For instance, a senior project manager who handled union jobs and worked for Cosmopolitan Interior in the 111 John Street office testified that he did not understand what Friedman's function was in the office, and that he was familiar with Cosmopolitan USA only by virtue of his involvement in this lawsuit, and that he "was not privy to any of that at the time" and did not know the difference between the two entities. Tr. 122-123. Specifically, he was not aware that Cosmopolitan USA was registering union jobs with DC 9, and he believed in 2018 and 2019 that Cosmopolitan Interior was a DC 9 CBA signatory. Tr. 123. Similarly, industry veterans who had done business with "Cosmo" for years were not aware that there were multiple entities or that the union painters sent to jobsites on which Cosmopolitan Interior was the subcontractor of record were actually employed by Cosmopolitan USA. See, e.g., Tr. 234 (NYSE). And even though Joel Friedman was not an officer of Cosmopolitan Interior, Tr. 246, he nonetheless would sign contracts on behalf of Cosmopolitan Interior, see PX-23, Tr. 236.

10. At some point before autumn 2018, following several disputes with DC 9 that resulted in DC 9 filing grievances with a Joint Trade Board arbitral panel, Friedman informed Gold that Cosmopolitan USA would no longer operate. Therefore, Cosmopolitan Interior lost its primary source of subcontracted union labor. Tr. 142, 177-178.

11. In late 2018, after Cosmopolitan USA was no longer operating, Gold approached other companies that were signatories to the DC 9 CBA, seeking a new subcontracting relationship to enable him to deploy union labor to conduct business union jobsites. Tr. 178.

A. Par Wall

12. Among the companies Gold approached was Par Wall Finishing, Inc. ("Par Wall"), a drywall taping subcontractor owned by Brian Gordon. Par Wall was a signatory to the DC 9 CBA and employed union drywall tapers, but it...