Lippert Tile Co. v. International Union of Bricklayers & Allied Craftsmen

724 F.3d 939, 2013 WL 3942909, 196 L.R.R.M. (BNA) 2481, 2013 U.S. App. LEXIS 15876
CourtCourt of Appeals for the Seventh Circuit
DecidedAugust 1, 2013
Docket12-2658
StatusPublished
Cited by37 cases

This text of 724 F.3d 939 (Lippert Tile Co. v. International Union of Bricklayers & Allied Craftsmen) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lippert Tile Co. v. International Union of Bricklayers & Allied Craftsmen, 724 F.3d 939, 2013 WL 3942909, 196 L.R.R.M. (BNA) 2481, 2013 U.S. App. LEXIS 15876 (7th Cir. 2013).

Opinion

WILLIAMS, Circuit Judge.

Brothers Les and Jeffrey Lippert own a tile installation business that employs union workers. Some of their customers require or prefer that union workers be employed for tile installation projects, but others prefer nonunion labor because they can be cheaper. So in 2004 the brothers created a new tile installation company that employed non-union workers solely to serve this market. Pursuant to the governing collective bargaining agreement, the union filed a grievance with the joint arbitration committee (“JAC”), seeking union benefits for the non-union tile installers working for the new company. After the JAC granted this relief, the companies petitioned to vacate the award in federal district court, arguing that the new company should not have been bound by the arbitration award because it was not a to the collective bargaining agreement. However, the district court granted the union’s motion to enforce the award on summary judgment, finding that the nominally new company could be treated as one and the same with the old company for purposes of the agreement under the “single employer” doctrine. The companies appealed.

The companies first argue that the arbitration award is unenforceable because the National Labor Relations Board has never found that the non-union laborers are in the same bargaining unit as the union laborers. They maintain that such a finding is required to determine whether disputes concerning the non-union workers are subject to arbitration under the collective bargaining agreement. We do not resolve this issue because the companies waived this argument by failing to present it to the JAC. The companies next challenge the district court’s finding that they are a “single employer,” but we agree with the district court that the companies, which are centrally operated by the same entity, are one and the same for purposes of arbitrability under the contract. Finally, they assert that the JAC was tainted because the union representative who filed the grievance also sat on the JAC, but nothing in the contract forbids this practice. Therefore, we affirm.

I. BACKGROUND

The following facts are undisputed. Brothers Les and Jeff Lippert established Lippert Tile Company, Inc. (“Lippert Tile”), a floor tile installation company, in 2000. Lippert Tile services customers in the four-county Greater Milwaukee area. The Bricklayers and Allied Craftsmen, District Council of Wisconsin and its Local 5 (collectively, the “union”) represent the tile installation workers of Lippert Tile. The governing collective bargaining agree *942 ment (“CBA”) between the union and Lip-pert Tile provided for certain benefits and wages for the employees and prohibited Lippert Tile from “sublet[ting], assigning] or transferring] any work covered by this Agreement to be performed at the site of a construction project to any person, firm or corporation except where the Employer signifies and agrees in writing to be bound by the full terms of this Agreement and complies with all of the terms and conditions of this Agreement.” The CBA also provided for the creation of a joint arbitration committee, consisting of “three (3) Employers and three (3) Representatives of the Union for the purpose of deciding disputes, which may arise in connection with the application of this agreement.” (In the case of a tie, the CBA provided for referral to the Wisconsin Employment Relations Commission for resolution.) The CBA added, “In the event an Employer or the Union does not comply with the Award of the arbitrator, the other party shall have the right to use all legal and economic recourse.”

Lippert Tile’s market for tile installation work includes general contractors subject to their own collective bargaining agreements, project owners having or wanting to use union-represented tile contractors, and government-regulated entities tending to use union labor due to prevailing wage regulations (the “union market”). Over the last 10 years, however, this market has been declining, and more customers in the region have sought non-union tile installers, generally because they are 25% to 45% cheaper (the “non-union market”). Because the Lippert brothers believed it was futile for Lippert Tile to try and compete in this growing non-union market, the brothers in 2004 created a new tile installation company, DeanAlan, that would only use non-union workers and compete only in the non-union tile installation market for the same four counties. (The creation of a non-union company for this purpose is known as “double-breasting.”) They also created the Lippert Group, a corporate entity that would provide management services to both tile installation companies. Subsequently, Lippert Tile continued providing tile installation services to the union market, while DeanAlan provided tile installation services to the non-union market in the same area.

All three companies — Lippert Tile, DeanAlan, and the Lippert Group — lease office and warehouse space in the same building which is owned by the Lippert brothers. DeanAlan also rents trucks from, and orders its supplies through, Lip-pert Tile. The Lippert Group provides administrative services for the other two companies, maintaining business records, processing payroll, handling billing, and managing bank accounts. The Lippert Group also supplies both companies with office and warehouse staff, including salesmen and estimators, who decide which company will bid on a project and how much to bid. At the same time, the companies do not share space within the building and have separate lease arrangements (though with the same owners). They do not share equipment. They have different corporate officers, separate bank accounts, separate lines of credit, and separate insurance programs. And because the whole point of creating DeanAlan was to serve the non-union market with non-union labor, the companies naturally have separate employees and separate customers.

In 2010, the union director, Jeffrey Leekwee, discovered that DeanAlan had been created to perform non-union tile installation work in the same region, and filed a grievance against the three companies with the JAC. He alleged that this setup violated the CBA’s assignment provision because it essentially assigned Lip-pert Tile’s work to DeanAlan workers without giving DeanAlan workers the same *943 union benefits. The companies argued as a threshold matter that the grievance was not arbitrable because DeanAlan and the Lippert Group were not parties to the CBA. The union responded that all three companies should essentially be considered a “single employer,” i.e., that DeanAlan and the Lippert Group were the same entity as Lippert Tile, and that all three were therefore bound by the arbitrability provisions of the CBA. The companies also raised a host of procedural objections, including the fact that Leekwee himself sat on the six-member JAC, which allegedly biased the JAC against the companies. At no point, however, did the companies argue to the JAC that the dispute was not arbitrable because the non-union workers were not in the same bargaining unit as the union workers covered by the CBA. Nor does any party suggest that they were not given ample opportunities to present arguments before the JAC.

In March 2011, the JAC upheld the grievance and adopted the union’s requested decision and award.

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724 F.3d 939, 2013 WL 3942909, 196 L.R.R.M. (BNA) 2481, 2013 U.S. App. LEXIS 15876, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lippert-tile-co-v-international-union-of-bricklayers-allied-craftsmen-ca7-2013.