1 2 3 4 5 UNITED STATES DISTRICT COURT 6 DISTRICT OF ALASKA 7 8 9 10 CHICAGO BRIDGE AND IRON ) COMPANY, N.V., ) 11 ) Plaintiff, ) 3:18-CV-00100 JWS 12 ) 13 vs. ) ORDER AND OPINION ) 14 ) [Re: Motion at docket 26] 15 FAIRBANKS JOINT CRAFTS ) COUNCIL, AFL-CIO; ) 16 INTERNATIONAL BROTHERHOOD ) OF ELECTRICAL WORKERS, ) 17 LOCAL # 1547, ) 18 ) Defendants. ) 19 ) 20 21 I. MOTION PRESENTED 22 At docket 26, Plaintiff Chicago Bridge and Iron Company, N.V. (CB&I) filed a 23 motion to compel, requesting that the court order Defendant International Brotherhood 24 of Electrical Workers, Local #1547 (IBEW) to produce documents withheld from CB&I 25 26 based upon IBEW's assertion of a "labor relations privilege." IBEW filed its opposition 27 28 -1- 1 at docket 29. CB&I's reply is at docket 30. Oral argument was not requested and would 2 not be of assistance to the court. 3 II. BACKGROUND 4 5 CB&I's complaint alleges breach of contract and seeks declaratory relief 6 pertaining to enforcement of provisions contained within the collective bargaining 7 agreements (CBAs) between the parties. Specifically, the case involves the 8 interpretation of the terms of two CBAs: (1) a 2012-2014 CBA between Defendant 9 Fairbanks Joint Crafts Council, AFL-CIO (FJCC) and a company that CB&I acquired in 10 11 2013 and (2) a 2014-2016 CBA between CB&I and FJCC and "its affiliates," which 12 includes IBEW and other trade unions. Both CBAs address "bargaining unit work of 13 employees of certain employers at U.S. Army Alaska bases under the terms of a DPW 14 Support Services Contract."1 Each CBA has a provision related to pension plans for 15 16 employees that requires CB&I to contribute to a retirement benefit fund (the Fund) 17 according to "Schedule A" of the CBAs.2 18 CB&I alleges that it incurred withdrawal liability under the Fund when CB&I 19 ceased performing the DPW Support Services Contract after the Government re-bid the 20 project and CB&I was disqualified from submitting a bid to retain the support services 21 22 contract because it is not a small business contractor. CB&I alleges that the CBAs 23 require FJCC and IBEW to reimburse CB&I for liability amounts assessed by the Fund 24 because of its early withdrawal. CB&I alleges that "[t]he withdrawal liability incurred by 25 26 27 1Doc. 1 at ¶ 3. 28 2Doc. 1 at ¶ 9. -2- 1 it, and paid to the Fund to date, is in excess of the amounts set forth in Schedule A of 2 each CBA" and therefore "[the] contractual warranty under Section 15.04 of each CBA 3 obligates each union to reimburse CB&I for liability for providing retirement benefits in 4 5 excess of the contribution percentages set forth in Schedule A of the CBA."3 6 In November of 2018, IBEW provided its initial disclosures pursuant to Rule 26 of 7 the Federal Rules of Civil Procedure. Its disclosures included about 20 documents that 8 were redacted or withheld in full based upon what IBEW refers to as a "labor relations 9 privilege" that protects union notes and correspondence from its bargaining files that 10 11 reflect on its strategy, mental impressions, opinions, analysis, or conclusions. CB&I 12 now moves to compel the production of the redacted and withheld documents, arguing 13 that such a privilege is not recognized in federal court. 14 III. DISCUSSION 15 16 Resolution of this case involves determining the parties' obligations related to 17 pension plan contributions under the terms of the applicable CBAs. CB&I contends that 18 discovery related to the negotiation of the CBAs in question is relevant to demonstrate 19 "the intent of the parties concerning Section 15.04 or pension contribution obligations 20 generally" and should be disclosed.4 In its response, IBEW did not challenge the 21 22 relevancy of the redacted or withheld material. Nor did it assert that it is withholding 23 union communications and notes related to contract negotiations based on Rule 26(c) 24 or attorney-client privilege. The only basis for withholding the material is what the IBEW 25 26 27 3Doc. 1 at ¶ 19. 28 4Doc. 26 at p. 5. -3- 1 labels a "labor relations privilege" and therefore the only question for the court at this 2 time is whether such a privilege exists to protect IBEW's internal communications and 3 notes from discovery. 4 5 In federal question cases such as this, federal common law determines whether 6 there is a privilege.5 Federal courts have "the flexibility to develop rules of privilege on 7 a case-by-case basis."6 However, the Supreme Court has stated that it is "disinclined to 8 exercise this authority expansively."7 An evidentiary privilege should not be applied 9 "unless 'it promotes sufficiently important interests to outweigh the need for probative 10 11 evidence. . . . '"8 Given federal "policy favoring open discovery" privileges must be 12 "strictly construed."9 The party seeking the application of a privilege has the burden to 13 establish the existence of that privilege and its applicability to the particular case.10 14 IBEW cites to Harvey's Wagon Wheel, Inc. v. NLRB11 in support of a labor 15 16 bargaining strategy privilege. In that case, the Ninth Circuit considered whether an 17 employer under investigation by the NLRB for unfair labor practices could obtain access 18 to NLRB investigation documents through a Freedom of Information Act (FOIA) request 19 20 5Kaufman v. Bd. of Trs., 168 F.R.D. 278, 280 (C.D. Cal. 1996); Kerr v. U.S. Dist. Court 21 for N. Dist. of Cal., 511 F.2d 192, 197 (9th Cir. 1975). 22 6Fed. R. Evid. 501. 23 7Univ. of Pa. v. EEOC, 493 U.S. 182, 189 (1990). 24 8Id. (citing Trammel v. United States, 445 U.S. 40, 51 (1980)). 25 9Dowling v. Am. Hawaii Cruises, Inc., 971 F.2d 423, 425 (9th Cir. 1992). 26 10Curry v. Contra Costa City., No. C-12-03940, 2013 WL 4605454, at * 2 (N.D. Cal. 27 Aug. 28, 2013). 28 11550 F.2d 1139 (9th Cir. 1976). -4- 1 while the investigation was ongoing. The NLRB objected to disclosure based on an 2 exclusion provision in FOIA, 5.U.S.C. § 552(b)(7)(A), which exempts investigatory 3 records compiled for law enforcement purposes to the extent that disclosure would 4 5 interfere with enforcement proceedings. The court upheld the lower court's ruling that 6 employee statements made during the course of the NLRB investigation were protected 7 from disclosure under the FOIA exemption but remanded the issue to the lower court to 8 determine whether statements of union agents and representatives would also fall 9 within the exemption.12 When remanding, the court stated that "statements of union 10 11 representatives and agents of the employee . . . should normally be protected from 12 disclosure as a matter of law. Otherwise, the danger of their withholding relevant 13 information for fear of exposing crucial material regarding pending union negotiations 14 would be manifest." IBEW relies on this language in support of a labor relations 15 16 privilege protecting bargaining materials. 17 The court concludes that IBEW's reliance on Harvey's Wagon Wheel is 18 misplaced. The Ninth Circuit analyzed the question of disclosure based on NLRB rules 19 and FOIA exemptions.
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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 DISTRICT OF ALASKA 7 8 9 10 CHICAGO BRIDGE AND IRON ) COMPANY, N.V., ) 11 ) Plaintiff, ) 3:18-CV-00100 JWS 12 ) 13 vs. ) ORDER AND OPINION ) 14 ) [Re: Motion at docket 26] 15 FAIRBANKS JOINT CRAFTS ) COUNCIL, AFL-CIO; ) 16 INTERNATIONAL BROTHERHOOD ) OF ELECTRICAL WORKERS, ) 17 LOCAL # 1547, ) 18 ) Defendants. ) 19 ) 20 21 I. MOTION PRESENTED 22 At docket 26, Plaintiff Chicago Bridge and Iron Company, N.V. (CB&I) filed a 23 motion to compel, requesting that the court order Defendant International Brotherhood 24 of Electrical Workers, Local #1547 (IBEW) to produce documents withheld from CB&I 25 26 based upon IBEW's assertion of a "labor relations privilege." IBEW filed its opposition 27 28 -1- 1 at docket 29. CB&I's reply is at docket 30. Oral argument was not requested and would 2 not be of assistance to the court. 3 II. BACKGROUND 4 5 CB&I's complaint alleges breach of contract and seeks declaratory relief 6 pertaining to enforcement of provisions contained within the collective bargaining 7 agreements (CBAs) between the parties. Specifically, the case involves the 8 interpretation of the terms of two CBAs: (1) a 2012-2014 CBA between Defendant 9 Fairbanks Joint Crafts Council, AFL-CIO (FJCC) and a company that CB&I acquired in 10 11 2013 and (2) a 2014-2016 CBA between CB&I and FJCC and "its affiliates," which 12 includes IBEW and other trade unions. Both CBAs address "bargaining unit work of 13 employees of certain employers at U.S. Army Alaska bases under the terms of a DPW 14 Support Services Contract."1 Each CBA has a provision related to pension plans for 15 16 employees that requires CB&I to contribute to a retirement benefit fund (the Fund) 17 according to "Schedule A" of the CBAs.2 18 CB&I alleges that it incurred withdrawal liability under the Fund when CB&I 19 ceased performing the DPW Support Services Contract after the Government re-bid the 20 project and CB&I was disqualified from submitting a bid to retain the support services 21 22 contract because it is not a small business contractor. CB&I alleges that the CBAs 23 require FJCC and IBEW to reimburse CB&I for liability amounts assessed by the Fund 24 because of its early withdrawal. CB&I alleges that "[t]he withdrawal liability incurred by 25 26 27 1Doc. 1 at ¶ 3. 28 2Doc. 1 at ¶ 9. -2- 1 it, and paid to the Fund to date, is in excess of the amounts set forth in Schedule A of 2 each CBA" and therefore "[the] contractual warranty under Section 15.04 of each CBA 3 obligates each union to reimburse CB&I for liability for providing retirement benefits in 4 5 excess of the contribution percentages set forth in Schedule A of the CBA."3 6 In November of 2018, IBEW provided its initial disclosures pursuant to Rule 26 of 7 the Federal Rules of Civil Procedure. Its disclosures included about 20 documents that 8 were redacted or withheld in full based upon what IBEW refers to as a "labor relations 9 privilege" that protects union notes and correspondence from its bargaining files that 10 11 reflect on its strategy, mental impressions, opinions, analysis, or conclusions. CB&I 12 now moves to compel the production of the redacted and withheld documents, arguing 13 that such a privilege is not recognized in federal court. 14 III. DISCUSSION 15 16 Resolution of this case involves determining the parties' obligations related to 17 pension plan contributions under the terms of the applicable CBAs. CB&I contends that 18 discovery related to the negotiation of the CBAs in question is relevant to demonstrate 19 "the intent of the parties concerning Section 15.04 or pension contribution obligations 20 generally" and should be disclosed.4 In its response, IBEW did not challenge the 21 22 relevancy of the redacted or withheld material. Nor did it assert that it is withholding 23 union communications and notes related to contract negotiations based on Rule 26(c) 24 or attorney-client privilege. The only basis for withholding the material is what the IBEW 25 26 27 3Doc. 1 at ¶ 19. 28 4Doc. 26 at p. 5. -3- 1 labels a "labor relations privilege" and therefore the only question for the court at this 2 time is whether such a privilege exists to protect IBEW's internal communications and 3 notes from discovery. 4 5 In federal question cases such as this, federal common law determines whether 6 there is a privilege.5 Federal courts have "the flexibility to develop rules of privilege on 7 a case-by-case basis."6 However, the Supreme Court has stated that it is "disinclined to 8 exercise this authority expansively."7 An evidentiary privilege should not be applied 9 "unless 'it promotes sufficiently important interests to outweigh the need for probative 10 11 evidence. . . . '"8 Given federal "policy favoring open discovery" privileges must be 12 "strictly construed."9 The party seeking the application of a privilege has the burden to 13 establish the existence of that privilege and its applicability to the particular case.10 14 IBEW cites to Harvey's Wagon Wheel, Inc. v. NLRB11 in support of a labor 15 16 bargaining strategy privilege. In that case, the Ninth Circuit considered whether an 17 employer under investigation by the NLRB for unfair labor practices could obtain access 18 to NLRB investigation documents through a Freedom of Information Act (FOIA) request 19 20 5Kaufman v. Bd. of Trs., 168 F.R.D. 278, 280 (C.D. Cal. 1996); Kerr v. U.S. Dist. Court 21 for N. Dist. of Cal., 511 F.2d 192, 197 (9th Cir. 1975). 22 6Fed. R. Evid. 501. 23 7Univ. of Pa. v. EEOC, 493 U.S. 182, 189 (1990). 24 8Id. (citing Trammel v. United States, 445 U.S. 40, 51 (1980)). 25 9Dowling v. Am. Hawaii Cruises, Inc., 971 F.2d 423, 425 (9th Cir. 1992). 26 10Curry v. Contra Costa City., No. C-12-03940, 2013 WL 4605454, at * 2 (N.D. Cal. 27 Aug. 28, 2013). 28 11550 F.2d 1139 (9th Cir. 1976). -4- 1 while the investigation was ongoing. The NLRB objected to disclosure based on an 2 exclusion provision in FOIA, 5.U.S.C. § 552(b)(7)(A), which exempts investigatory 3 records compiled for law enforcement purposes to the extent that disclosure would 4 5 interfere with enforcement proceedings. The court upheld the lower court's ruling that 6 employee statements made during the course of the NLRB investigation were protected 7 from disclosure under the FOIA exemption but remanded the issue to the lower court to 8 determine whether statements of union agents and representatives would also fall 9 within the exemption.12 When remanding, the court stated that "statements of union 10 11 representatives and agents of the employee . . . should normally be protected from 12 disclosure as a matter of law. Otherwise, the danger of their withholding relevant 13 information for fear of exposing crucial material regarding pending union negotiations 14 would be manifest." IBEW relies on this language in support of a labor relations 15 16 privilege protecting bargaining materials. 17 The court concludes that IBEW's reliance on Harvey's Wagon Wheel is 18 misplaced. The Ninth Circuit analyzed the question of disclosure based on NLRB rules 19 and FOIA exemptions. The language relied on by IBEW is only dicta—there was no 20 holding related to a categorical privilege that would protect all labor negotiations and 21 22 strategies from disclosure in all circumstances—and must be read in light of the 23 circumstances of that case. The case here does not involve FOIA disclosure 24 exemptions or an ongoing NLRB employer investigation. Moreover, disclosure of 25 26 27 28 12Id. at 142-43. -5- 1 documents related to contract terms of an expired CBA does not threaten to "expos[e] 2 crucial material regarding pending union negotiations."13 3 IBEW also cites Mallick v. International Brotherhood of Electrical Workers14 as 4 5 another federal court case that recognizes a privilege for labor bargaining strategy. 6 Mallick involved a claim brought by a union member against the union under the Labor- 7 Management Reporting and Disclosure Act. The member sought access to union 8 financial records related to litigation in which he was not a party. In determining 9 whether the member was entitled to view such records the court weighed his interest in 10 11 gaining access to the materials under the statute against the possible harm to the 12 union.15 In doing so, it indicated that if "disclosure of [the financial] information would be 13 comparable to . . . a union's disclosure of organizing strategy, negotiating plans, or other 14 secrets, then examination should be refused."16 15 16 Again, the case is inapposite. The Mallick court was not addressing pretrial 17 discovery of materials related to prior negotiations of expired CBAs. Moreover, the 18 court was not deciding whether the requested financial records were privileged but 19 rather whether the member's showing of "just cause" for access under the applicable 20 statute was outweighed by the union's financial interest in nondisclosure. "Mallick, at 21 22 most, suggests that disclosure of the documents would be harmful to the union."17 It 23 13Id. at 1143. 24 25 14749 F.2d 771 (D.C. Cir. 1984). 26 15Id. at 783-85. 27 16Id. at 785. 28 17Patterson v. Heartland Indus. Partners, LLP, 225 F.R.D. 204, 207 (N.D. Ohio 2004). -6- 1 does not persuasively establish a federal privilege categorically protecting material 2 related to a union's bargaining strategy. 3 IBEW also relies on NLRB cases and a NLRB general counsel advisory opinion 4 5 for its assertion that labor relations privilege has been applied by courts to protect notes 6 and communications by bargaining team members as to strategy. NLRB cases and 7 advisory opinions, however, are not binding on this court.18 While NLRB cases may be 8 granted deference on matters of labor policy and collective bargaining,19 IBEW fails to 9 cite a case suggesting that such deference should extend to matters involving federal 10 11 privileges. 12 Aside from the lack of precedential value, the NLRB cases are not clearly 13 supportive of IBEW's position in this litigation. The NLRB case often cited for 14 establishing a privilege for internal union communications and bargaining strategy is 15 16 Berbiglia, Inc.20 In that case the NLRB was addressing an unfair labor practice dispute. 17 The administrative law judge revoked an employer's subpoena for communications 18 between the union and its members and other organizations which might show the 19 union's reasons for a strike. She found that the employer was on a "fishing expedition" 20 and that requiring the union to disclose its communications would be "subversive of the 21 22 very essence of collective bargaining and the quasi-fiduciary relationship between a 23 24 25 18See Parra v. Basha's, Inc., No. Civ-02-591, 2001 WL 25781409, at *5, n.2 (D. Ariz. 26 Oct. 2, 2003). 27 19See, e.g., NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 786 (1990). 28 20233 NLRB 1476 (1977) -7- 1 union and its members."21 She went on to state that for collective bargaining to work, 2 "the parties must be able to formulate their positions and devise their strategies without 3 fear of exposure. This necessity is so self-evident as apparently never to have been 4 5 questioned."22 The court reasoned that the communications sought would "expos[e] 6 crucial material regarding pending union negotiations."23 Her decision was upheld by 7 the NLRB. 8 However, the case the Berbiglia opinion cited in reliance for its position that the 9 necessity to protect internal union communications has never been questioned is 10 11 Harvey's Wagon Wheel, which, as noted above, dealt with disclosure of investigatory 12 files under FOIA. Moreover, a more recent NLRB decision rejected the argument that 13 Berbiglia created a blanket privilege for union negotiation and strategy materials, stating 14 that it could find "no substantial authority for the notion that a bargaining party's strategy 15 16 records enjoy some special, categorical insulation from discovery in an unfair labor 17 practice prosecution where the party's strategy is a relevant subject . . ."24 The NLRB 18 decisions that do invoke Berbiglia to protect internal union documents involve union 19 grievances and disputes under an existing collective bargaining agreement, which is not 20 the case presented here. 21 22 23 24 25 21Id. at 1495. 26 22Id. 27 23Id. 28 24Taylor Lumber & Treating, Inc., 326 NLRB 1298, 1300 (1998). -8- 1 Other federal district courts have denied the recognition of a labor relations 2 privilege that would protect union materials related to bargaining strategy.25 A Northern 3 District of California court rejected the assertion of a union-employee communications 4 5 privilege, stating that there is no published Ninth Circuit authority supporting such a 6 privilege and citing an unpublished Ninth Circuit case that held it would not apply such a 7 privilege.26 In the unpublished case, the Ninth Circuit said there was no precedent 8 providing the authority to apply a union-employee communications privilege and that it 9 was not going to "continue the evolutionary development of testimonial privileges by 10 11 recognizing a new privilege in this case."27 12 In light of the court's obligation to construe privileges narrowly and in the absence 13 of binding precedent recognizing the existence of a labor relations privilege protecting 14 union materials related to bargaining strategy, IBEW's basis for nondisclosure is 15 16 rejected. IBEW asserts no other basis for nondisclosure, and therefore CB&I is entitled 17 to the relevant redacted and withheld material. 18 19 20 21 22 23 24 25Soc'y of Prof'l Eng'g Emps. in Aerospace, v. Boeing Co., Nos. 05-1251, 07-1043, 2009 25 WL 3711599, at * (D. Kan. Nov. 3, 2009); Patterson, 225 F.R.D. at 207 (N.D. Ohio 2004); Int'l Bhd. of Teamsters, Airline Div. v. Frontier Airlines, Inc., No. 11-cv-02007, 2012 WL 1801979, at 26 * 5 (D. Colo. May 16, 2012). 27 26Curry, 2013 WL 4605454, at *3. 28 27Kyei v. Or. Dep't of Transp., 497 Fed. Appx. 711, 713 (9th Cir. 2012). -9- 1 IV. CONCLUSION 2 Based on the preceding discussion, Plaintiff's motion at docket 26 is GRANTED. 3 Defendant IBEW shall provide the withheld and redacted material within 14 days of this 4 5 order. 6 DATED this 23rd day of June 2019. 7 8 /s/ JOHN W. SEDWICK SENIOR JUDGE, UNITED STATES DISTRICT COURT 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -10-