Sixth Circuit Upholds Sanctions and Remands Union Dispute to the NLRB

InJuly, 2009, DiPonio Construction Company, Inc. (DiPonio) terminated itscollective bargaining agreement (CBA) with the International Union ofBricklayers and Allied Craftworkers Local 9’s (the Union).  The Union brought a claim for unfair laborpractices (ULP) before the National Labor Relations Board (NLRB) allegingthat DiPonio was required by the National Labor Relations Act (NLRA) to bargainfor a new CBA.  Five days before the NLRBfiled a ULP complaint against DiPonio, DiPonio sought a declaratory judgmentfrom the district court stating that it had properly terminated the CBA.  When the NLRB moved to dismiss DiPonio’s claimfor lack of subject matter jurisdiction, DiPonio amended its complaint toinclude a breach of contract claim and filed a motion to stay the NLRBproceedings.  The timing of the contract claim made it seem motivated by a desire to create jurisdiction in federal court over a dispute over which the NLRB would otherwise have exclusive jurisdiction.

Thedistrict court grantedthe NLRB’s motion to dismiss and imposed sanctions against DiPonio underRule 11 of the Federal Rules of Civil Procedure.  DiPonio appealed to the Sixth Circuit and theUnion sought further sanctions.  Lastmonth, in DiPonio Constrcution Company, Inc. v. Interaitonal Union of Bricklayers and Allied Craftworkers Local 9, theSixth Circuit affirmed the district court’s ruling in its entirety, whilerefusing to impose further sanctions.  TheSixth Circuit found that the question at issue was primarily one ofrepresentation rather than of contractual interpretation, and thus thatresolution of the dispute in a federal court was inappropriate. 

TheNLRB has exclusive jurisdiction over controversies concerning sections 7 or 8of the NLRA, but federal courts have concurrent jurisdiction with the NLRB overcontracts interpretation issues. However, where the matter is primarily one of representation instead ofcontractual interpretation, courts defer to the NLRB. 

Thenature of DiPonio’s bargaining obligations depends on whether the partiesentered into the CBA pursuant to § 8(f) or § 9(a) of the NLRA.  Section 9(a) requires employers to “bargainwith a union that has been designated by a majority of the employees in a unitfor the purposes of collective bargaining with the employer,” while section8(f) “allows unions and employers in the construction industry to enter into CBA’swithout requiring the union to establish that it has the support of a majorityof the employees in the unit covered by the CBA.”  In short, if the CBA is a § 8 contract,DiPonio has no duty to negotiate for a new CBA, but if it is a § 9(a) contract,it does.

Ina 2006 decision, the Sixth Circuit found that a dispute will be treated as“primarily representational” (1) “where the NLRB has already exercisedjurisdiction over a matter and is either considering it or has already decidedthe matter,” or (2) “where the issue is an ‘initial decision’ in therepresentation area.”  Here, the questionof whether the contract was entered into pursuant to § 8(f) or § 9(a) wasalready before the NLRB (the Union’s ULP Complaint).  Thus, the matter was deemed primarilyrepresentational, and the Sixth Circuit handed the case over to the NLRB.

TheSixth Circuit upheld the Rule 11 sanctions that the district court imposed becauseDiPonio’s breach of contract claim was without merit and was filed in order todelay the NLRB proceedings.

[JT and Christina Phillips]