Int'l Ass'n of Sheet Metal, Air, Rail, & Transp. Local Union No. 10 v. A-1 Refrigeration of Hibbing, Inc.

447 F.Supp.3d 844

INTERNATIONAL ASSOCIATION OF SHEET METAL, AIR, RAIL, AND TRANSPORTATION LOCAL UNION NO. 10, Plaintiff and Counterclaim Defendant,

v.A-1 REFRIGERATION OF HIBBING, INC. d/b/a A-1 Refrigeration Heating and Air Conditioning, Inc., Defendant and Counterclaimant.

File No. 18-cv-1960 (ECT/LIB)

United States District Court, D. Minnesota.

Signed April 10, 2020

Justin D. Cummins, Cummins & Cummins PLLP, Minneapolis, MN, for Plaintiff International Association of Sheet Metal, Air, Rail, and Transportation Local Union No. 10.

Joseph J. Roby, Jr. and Susan Waldie, Johnson, Killen & Seiler, P.A., Duluth, MN, for Defendant A-1 Refrigeration of Hibbing, Inc. d/b/a A-1 Refrigeration Heating and Air Conditioning, Inc.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Eric C. Tostrud, United States District Judge

The International Association of Sheet Metal, Air, Rail, and Transportation Local Union No. 10 ("Local 10") seeks enforcement of an arbitration award against A-1 Refrigeration of Hibbing, Inc. The arbitration award was issued pursuant to a collective bargaining agreement (or "CBA") between Local 10 and the Sheet Metal, Air Conditioning & Roofing Contractors Association ("SMARCA") in effect from 2017 to 2020. A bench trial was held to determine whether A-1 was bound by this CBA. Based on the testimony and exhibits introduced at trial and the arguments of counsel, the Court concludes that A-1 was bound to this CBA. Therefore, the arbitration award rendered against A-1 shall be enforced, and judgment shall be entered for Local 10 and against A-1 with respect to all claims asserted in this case.

FINDINGS OF FACT

1. Local 10 is an unincorporated labor organization that represents employees in the sheet metal industry in Minnesota, South Dakota, North Dakota, and four northern-Wisconsin counties. Compl. ¶ 4 [ECF No. 1]; Test. of Michael McCauley, Trial Tr. 201–202 [ECF No. 100].

2. A-1 is an employer in the sheet metal industry, among others. Answer and Second Am. Countercl. ¶ 6 [ECF No. 40]; Test. of Richard Lees, Trial Tr. 312–17 [ECF No. 101].

3. A-1 is co-owned by Richard Lees and Ernie Aikey. Lees Test., Trial Tr. 312; Test. of Ernie Aikey, Trial Tr. 355.

4. Since at least 2001, Local 10 bargained for and enforced collective bargaining agreements it negotiated with SMARCA. McCauley Test., Trial Tr. 220; Test. of Dennis Marchetti, Trial Tr. 114–15; Pl.’s Exs. 10–16; Def.’s Exs. 1, 9, 16, 21, 29, 32, 36.

5. From 2001 to 2020 there always has been in effect a CBA negotiated by Local 10 and SMARCA. Pl.’s Exs. 10–16 (CBAs in effect 2001–2004, 2004–2007, 2007–2010, 2010–2011, 2011–2014, 2014–2017, 2017–2020); Def.’s Exs. 1, 9, 16, 21, 29, 32, 36 (same).

6. SMARCA is "a nonprofit organization that represents sheet metal contractors ... all over the state of Minnesota, a few counties in Wisconsin, over the entire state of North Dakota, [and] over the entire state of South Dakota." Test. of James Bigham, Trial Tr. 242.

7. SMARCA's "main function" is to represent employers at the bargaining table in CBA negotiations with Local 10. Id. at 257.

8. During CBA negotiations, a Local 10 representative negotiates the terms of a CBA with a SMARCA representative. Id. at 244, 246–47; Marchetti Test., Trial Tr. 154; McCauley Test., Trial Tr. 220.

9. An employer may apply to be a SMARCA member, and in so doing, assign its bargaining rights to SMARCA. Bigham Test., Trial Tr. 259.

10. SMARCA represents approximately seventy percent of the total number of employers bound by a given CBA. Id. at 244.

11. When SMARCA and Local 10 agree on a CBA, that CBA binds all SMARCA-member employers. Id. at 260.

12. A-1 has never been a member of SMARCA. Id. at 261; Lees Test., Trial Tr. 318.

13. Nor did anyone representing A-1 sit at the bargaining table to negotiate a CBA with Local 10 on A-1's behalf between 2001 and 2018. Bigham Test., Trial Tr. 258; Lees Test., Trial Tr. 317; McCauley Test., Trial Tr. 220; Test. of Douglas Christy, Trial Tr. 187; Marchetti Test., Trial Tr. 154–55.

14. Non-SMARCA-member employers wishing to be bound by a CBA may sign an "agree-to-be-bound" contract instead of signing the CBA itself. Marchetti Test., Trial Tr. 114; see, e.g. , Pl.’s Ex. 23.

15. In late 2001, Dennis Marchetti, then Local 10's business agent, had two meetings with Lees about A-1 becoming a Local 10 employer. Marchetti Test., Trial Tr. 157–58; Lees Test., Trial Tr. 320.

16. During the first meeting, Lees was threatened that if A-1 did not consider becoming a Local 10 employer, Local 10 would organize and picket a high-profile A-1 job site. Lees Test., Trial Tr. 321.

17. As a result of these meetings, Lees and Marchetti reached an agreement. Id. at 324.

18. Pursuant to that agreement, on December 23, 2001, Lees signed an agree-to-be-bound contract with Local 10 on behalf of A-1. Id. at 326; Dennis Marchetti Test., Trial Tr. 124–25; Pl.’s Ex. 24; Def.’s Ex. 2.

19. The agree-to-be-bound contract signed by Lees stated in full: "I hereby agree to abide by the labor agreement negotiated between Northern Minnesota Division of SMARCA of Minnesota, Inc., and Sheet Metal Workers’ International Association, Local Union Number 10, effective May 1, 2001 with an expiration date of April 30, 2004." Pl.’s Ex. 24; Def.’s Ex. 2.

20. Also pursuant to the agreement with Marchetti, Lees became a dues-paying member of Local 10, and Aikey became a dues-paying member of the Pipefitters Union, Local 589. Lees Test., Trial Tr. 325; Def.’s Exs. 3–4.

21. Only A-1 commercial work was covered by the arrangement, not residential or service work performed by A-1. Lees Test., Trial Tr. 323.

22. Pursuant to the agreement with Marchetti, Lees signed and submitted a New Contractor Form with the Sheet Metal Local #10 Control Board Trust Fund ("the Fund"). Def.’s Ex. 5.

23. A-1 never signed another agree-to-be-bound contract regarding any of the subsequent CBAs after 2004. Marchetti Test., Trial Tr. 164; Christy Test., Trial Tr. 188; McCauley Test., Trial Tr. 222–23, 227; Lees Test., Trial Tr. 327.

24. A-1 never signed any CBA with Local 10. Marchetti Test., Trial Tr. 164; Christy Test., Trial Tr. 188; McCauley Test., Trial Tr. 222–23, 227; Lees Test., Trial Tr. 327.

25. The process of negotiating a new CBA to replace an expiring CBA was described in Article XXVII of each CBA. See Pl.’s Exs. 10–16, at Art. XXVII; Def.’s Exs. 1, 9, 16, 29, 32, 36, at Art. XXVII.

26. Article XXVII provided that "[i]n the event ... notice of reopening [of negotiations] is served [not less than ninety (90) days prior to the expiration date], this Agreement shall continue in force and effect until conferences relating thereto have been terminated by either party." Id.

27. Notices of reopening were sent to employers Local 10 believed to be bound by the in-effect CBA. McCauley Test., Trial Tr. 203.

28. In determining which employers were bound by the CBA and should therefore receive notices of reopening, "one of the biggest things" Local 10 considered was whether an employer paid union organizing dues. Id. at 204.

29. Local 10 also considered whether an employer used Local 10's hiring hall and paid CBA-required membership dues. Id.

30. If appropriate notice of reopening were served, Local 10 would negotiate a new CBA with SMARCA and non-SMARCA-member employers to replace the expiring CBA. See Pl.’s Exs. 10–16, Def.’s Exs. 1, 9, 16, 21, 29, 32, 36.

31. On January 14, 2004, Local 10's business manager and president sent a notice of reopening to A-1. Def.’s Ex. 7.

32. After the January 14, 2004 notice of reopening was sent to A-1, Local 10 and SMARCA negotiated and agreed upon a new CBA, effective May 1, 2004 to April 30, 2007. Pl.’s Ex. 11; Def.’s Ex. 9.

33. This process repeated itself prior to the expiration of every CBA from 2001–2017, with A-1 receiving reopening letters from Local 10 prior to Local 10 and SMARCA negotiating a new CBA. Def.’s Exs. 7 (January 14, 2004 Notice of Reopening), 17 (January 12, 2009 Notice of Reopening), 19 (January 4, 2010 Notice of Reopening), 27 (January 7, 2011 Notice of Reopening), 31 (January 13, 2014 Notice of Reopening), 35 (January 4, 2017 Notice of Reopening).

34. A-1 never objected to receiving the reopening letters. McCauley Test., Trial Tr. 203.

35. Every CBA in effect from 2001 to 2020 covered the rates of pay and conditions of employment for employees performing specific types of work ("CBA-covered work"). Pl.’s Exs. 10–16, at Art. I; Def.’s Exs. 1, 9, 16, 21, 29, 32, 36, at Art. I.

36. CBA-covered work under each CBA includes, but is not limited to,

the (a) manufacture, fabrication, assembling, handling, erection, installation, dismantling, conditioning, adjustment, alteration, repairing and servicing of all ferrous or non-ferrous metal work and all other materials used in lieu thereof and of all air-veyor systems and air-handling systems, regardless of material used, including the setting of all equipment and all reinforcements in connection therewith; (b) all lagging over insulation and all duct lining; (c) testing and balancing of all air-handling equipment and duct work; (d) the preparation of all shop and field sketches used in fabrication and erection including those taken from original architectural and engineering drawings or sketches.

Pl.’s Ex. 16, at Art. I; Def.’s Ex. 36, at Art. I; see also Pl.’s Exs. 10–15, at Art. I; Def.’s Exs. 1, 9, 16, 21, 29, 32, at Art. I.

37. A-1 conducted business as it related to CBA-covered work consistently with the CBAs in effect from 2001 to July 2018.

38. Every CBA from 2001 to 2020 required employers to ensure that employees who performed CBA-covered work were dues-paying members of Local 10. Pl.’s Ex. 10–16, at Art. V, sec. 1; Def.’s Ex. 1, 9, 16, 21, 29, 32, 36, at Art. V, sec. 1.

39. From 2001 to July 2018, A-1 ensured that Lees, who performed CBA-covered work, was a dues-paying member of Local 10. McCauley Test., Trial Tr. 216–17; Lees Test., Trial Tr. 293; Pl.’s Ex. 49.

40. From 2010 to July 2018, A-1 ensured that Aikey, who performed CBA-covered work, was a...