D.A. Nolt, Inc. v. Local Union No. 30

143 F. Supp. 3d 229, 204 L.R.R.M. (BNA) 3517, 2015 U.S. Dist. LEXIS 143531, 2015 WL 6378601
CourtDistrict Court, E.D. Pennsylvania
DecidedOctober 22, 2015
DocketCIVIL ACTION NO. 12-5810
StatusPublished
Cited by1 cases

This text of 143 F. Supp. 3d 229 (D.A. Nolt, Inc. v. Local Union No. 30) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
D.A. Nolt, Inc. v. Local Union No. 30, 143 F. Supp. 3d 229, 204 L.R.R.M. (BNA) 3517, 2015 U.S. Dist. LEXIS 143531, 2015 WL 6378601 (E.D. Pa. 2015).

Opinion

MEMORANDUM

Anita B. Brody, District Judge.

Plaintiff D.A. Nolt, Inc. (“Nolt”), a roofing contractor, brings suit against Defendants Local Union No. 30 and its associated union benefits funds (collectively “Local 30”). Nolt moves for summary judgment and requests the following relief: a declaratory judgment that two provisions of a project labor agreement (“PLA”) among the parties are illegal under New Jersey law; a declaratory judgment that Nolt is not legally bound by these PLA provisions; and a judgment that vacates an arbitration award pursuant to the PLA provisions at issue. In the alternative, Nolt requests an order modifying the arbitration award to correct an error in the arbitrator’s calculation of the award amount. Local 30 also moves for summary judgment and requests a judgment affirming the arbitrator’s award and entry of judgment against Nolt. Additionally, Local 30 seeks reasonable attorneys’ fees and costs. Diversity jurisdiction exists over Nolt’s claims pursuant to 28 U.S.C. § 1332. For the reasons stated below, I will deny in part and grant in part Plaintiffs Motion for Summary Judgment and grant Defendants’ Motion for Summary Judgment.

I. Background

The South Jersey Building and Construction Trades Council (“Trades Council”) and Greater Egg Harbor Regional High School District executed a PLA that governed two construction projects for which Nolt was general contractor. Nolt is a signatory to the PLA for its work on these projects. Local Union No. 30 is a member of the Trades Council and a signatory to the PLA. The PLA requires contractors to hire only union employees, wifh two exceptions. The PLA permits a contractor to fill up to twelve percent of its workforce with non-union employees who meet certain conditions. The PLA also permits a contractor to fill open spots in the workforce with non-union employees, above the twelve percent cap, if the local union is unable to fill open spots within a forty-eight hour period. Nolt took advantage of both of these provisions, using union and non-union employees to conduct work on the project.1

Article 11, Section 2 of the PLA, entitled “Employee Benefit Funds,” requires that:

The Contractors agree to pay contributions on behalf of all employees covered by this Agreement to the established employee benefit funds in the amount designated in the appropriate collective bargaining agreement.

Pl.’s Mot. Summ. J. Ex. E, at 40.2

Local 30 interprets this provision to require Nolt to pay contributions to the [233]*233Funds for all employees working on the project, union and non-union alike. Nolt concedes that on its face, the operative PLA language seems to apply to all employees covered by the PLA. PL’s Mot. Summ. J. 2. Nolt contends, however, that when “read in any meaningful context,” the provision is inapplicable to non-union employees hired pursuant to the stated exceptions provided for by the PLA. Id.

The “Employee Benefit Funds” section of the PLA also includes a procedure to follow in the event that a contractor fails to pay these funds:

In the event of any delinquency a meeting will be held immediately between the Union, the delinquent contractor, the [Trades Council] President and the Construction Manager. A statutory fringe benefit payment arrangement shall be facilitated at this meeting.

PL’s Mot. Summ. J. Ex. E, at 40.

The PLA agreement also contains a section entitled “Grievance & Arbitration Procedure,” located at Article 9. PL’s Mot. Summ. J. Ex. E, at 27. This section provides that:

Any question, dispute or claim arising out of, or involving the interpretation or application of this Agreement ... shall be considered a grievance and shall be resolved pursuant to the exclusive procedure of the steps described below; provided, in all cases, that the question, dispute or claim arose during the term of this Agreement.

Id. The Grievance & Arbitration Procedure section sets out a three-step dispute resolution process. First, a signatory to the PLA who has a dispute with another PLA signatory must meet and confer with the signatory regarding the dispute. Id. at 28. If, after conferring, the signatories do not reach a settlement within three days, the dispute “shall be reduced to writing” and proceed to Step 2. Id. The written copy of the grievance must describe the dispute, state the date on which the grievance occurred, and specify the provisions of the PLA alleged to have been violated. Id. at 27-28. Step 2 requires representatives from the Trades Council, union, contractor, and construction manager to meet within five days of the written grievance to “arrive at a satisfactory settlement.” Id.

If the parties cannot resolve a grievance through the first two steps of the procedure, they may proceed to Step 3 and submit the grievance to an arbitrator. PL’s Mot. Summ. J. Ex. E, at 29. At the end of Step 3 of the dispute resolution process, the agreement states:

The Arbitrator shall have authority to make decisions only on the issues presented to him and shall not have the [234]*234authority to change, add to, delete or modify any provision of this agreement.

Id.

When this dispute first arose, Local 30 sought resolution through arbitration pursuant to Article 9, the Grievance and Arbitration provision of the PLA. Nolt brought this action, seeking to enjoin Local 30 from pursuing claims against Nolt through arbitration, and requesting a declaratory judgment finding that the PLA provisions were illegal insofar as they could be interpreted to require Nolt to pay into the funds for Nolt’s non-union employees. On February 7, 2013, I stayed this case and compelled arbitration. I found that the arbitration provision in the PLA required the arbitrator to interpret the meaning of “all employees” in.the Employee Benefit Funds provision.3

Arbitrator J.J. Pierson issued an Opinion and Award on September 25, 2014, following two days of arbitration hearings. Opinion and Award, Pl.’s Mot. Summ. J. Ex. I (“Opinion and Award”). The arbitrator found that Local 30 had properly raised a grievance pursuant to the PLA procedures. Opinion and Award, at 20. The arbitrator determined that he had jurisdiction to interpret the Employee Benefit Funds provision and address Local 30’s demand for payment of benefits for Nolt’s non-union employees. Id. The arbitrator interpreted the Employee Benefit Funds provision that requires contractors to pay benefits to union benefit funds on behalf of “all employees covered by this agreement” to include all employees employed by Nolt, regardless of union affiliation:

It is the opinion of this Arbitrator that the obligations imposed by Article 11 applied to Nolt, regardless of whether Nolt’s employees were members of Local 30 (‘union’) or not members of Local 30 (‘non-union’) .... Nolt, a Contractor performing under a recognized PLA, was unequivocally required to pay contributions to Local 30’s employee benefit fund on behalf of all employees performing covered work under the PLA, whether union or nonunion affiliated.

Opinion and Award, at 22-24.

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143 F. Supp. 3d 229, 204 L.R.R.M. (BNA) 3517, 2015 U.S. Dist. LEXIS 143531, 2015 WL 6378601, Counsel Stack Legal Research, https://law.counselstack.com/opinion/da-nolt-inc-v-local-union-no-30-paed-2015.