Service, Hospital, Nursing Home & Public Employees Union, Local No. 47 v. Commercial Property Services, Inc.

755 F.2d 499
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 21, 1985
DocketNos. 83-3761, 83-3762 and 83-3788
StatusPublished
Cited by15 cases

This text of 755 F.2d 499 (Service, Hospital, Nursing Home & Public Employees Union, Local No. 47 v. Commercial Property Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Service, Hospital, Nursing Home & Public Employees Union, Local No. 47 v. Commercial Property Services, Inc., 755 F.2d 499 (6th Cir. 1985).

Opinion

ROSENN, Senior Circuit Judge.

The novel and underlying issue raised in these proceedings is whether a non-signatory to a collective bargaining agreement who does not stand in a successor relationship to a signatory to the agreement or to its work force can be bound by the grievance and arbitration provisions of that contract. In a suit brought by Service, Hospital, Nursing Home and Public Employees [501]*501Union, Local No. 47, affiliated with the Service Employees International Union, AFL-CIO, (Local 47 or Union), under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1982), Local 47 alleged that the defendant, Commercial Property Services (CPS) through its alter ego, Cleveland Cleaning and Maintenance Co. (CCM) breached a collective bargaining agreement with Local 47. The complaint alleged that the employer violated the collective bargaining agreement by hiring non-union employees to work at several Cleveland buildings operated by First Union Management Co. (First Union). The district court granted Local 47’s motion for summary judgment and ordered CPS and CCM to arbitrate. The court denied Local 47’s request for injunctive relief and dismissed First Union and two companies related to CPS. We affirm in part and reverse in part.

I.

Local 47 has been a party to a series of collective bargaining agreements with the defendant, Commercial Property Services, Inc., covering the employees engaged in the Cleveland area in janitorial and custodial work since the founding of the company in 1974. The most recent of these agreements, effective May 1, 1981, to April 30, 1984, contains three provisions that are pertinent to this proceeding. Article XI is a job security provision and requires a signatory employer who takes over an account previously serviced by another signatory employer to retain the prior employer’s employees at the same wages, terms, and hours of work.1 Article XXI defines in broad terms the scope of the agreement. It provides, in part, that the contract covers as an employer subject to its full terms

any ... corporation, firm, or any other entity which is engaged in janitorial work and is in any way a subsidiary or related entity to any Employer covered by this Agreement. Specifically and without limitation, this Agreement hereby includes any entity engaged in janitorial work which is operated in whole or in part by any officer, director or any person employed by any Employer covered by this Agreement, and further includes any entity engaged in janitorial work in which any investor in any Employer covered by this Agreement has any interest of any kind.

Finally, Article XIX requires the parties to settle any differences “as to the meaning of or application of provisions of this agreement” in a four-step process terminating in final and binding arbitration.

Local 47 also had a three-year contract with National Cleaning Contractors (National), executed in November 1982. Local 47 members employed by National cleaned and maintained two downtown Cleveland office buildings (the Rockwell properties and the Illuminating Building), which were operated by First Union Management, Inc. First Union entered into subcontracts with independent companies for janitorial and custodial services.

When the cleaning contract between National and First Union expired in 1982, First Union solicited bids from other cleaning companies. National and CPS, signatories to a master agreement with Local 47, both submitted bids which were rejected, and First Union ultimately awarded the contract to CCM, a non-union firm. Na[502]*502tional thereupon laid off the Local 47 members whom it previously had employed to clean the First Union buildings. CCM took over the janitorial and custodial services in both buildings in February 1983 with its own non-union employees.

In February 1983, Local 47 discovered that there was a close relationship between CCM and CPS. This discovery drew forth the remainder of the corporate cast in these proceedings. The principal actors are CPS and CCM, and playing a major role because of his relationship with each of them is Patrick Cassese. He and twelve other investors formed CPS, an Ohio corporation, in 1974 and Cassese operated the company and owned 49 percent of its shares. In 1978, CPS created a wholly-owned subsidiary, Total Systems Management, Inc. (TSM) to act as a consulting firm for small tenant buildings. TSM subcontracted all services to other companies, in-eluding both CPS and CCM, employed no one subject to Local 47’s jurisdiction, and ceased business in 1982. In November 1982, Cassese formed Antares, Inc., a Pennsylvania corporation, for the express purpose of purchasing the shares of the other twelve investors in CPS. The district court found that Cassese owned all of the capital stock of Antares which in turn owned 100 percent of CPS.

Jack Cornachio, a nephew of Cassese, acquired the CCM business in 1976. Because of financial difficulties, Cornachio entered into an agreement in October 1982 with Cassese to sell him 70 percent of the shares but with an arrangement to retain 50 percent control. Cornachio continued as president and in control of CCM operations. Cassese’s personal attorney, Robert Rosenfeld, served as one of CCM’s two directors and as its secretary-treasurer. In fact, Cessese personally represented CCM in its successful negotiations with First Union, after CPS’s bid had been rejected.

With the foregoing information in its possession, Local 47 launched its attack on CPS and CCM. First, it sent a letter to Cassese as president of CPS alleging that CPS violated the work preservation clause of the collective bargaining agreement with Local 47 by replacing Local 47 members with non-union employees at the two First Union buildings and at five other buildings, Lakeland Medical, Young Medical, Shaker Medical, Curtis Industries, and Diamond Shamrock. The letter informed CPS that unless it agreed to restore the former employees, Local 47 would seek injunctive relief to compel arbitration.

„T1 , , . . ,, „ When CCM refused to retain the former National employees pending arbitration, Focal 47 filed suit against CPS, CCM First ?T’ Antares> and TSM’ Local 47.als0 iúf a forT a temporary restraining order and First Union mov®d to dlsmiss’ After a hea™« on TSM.2 Loca 47 s motlon’ the court granted First Union s motion and demed Local 47 s. Local 47 then moved for summary judgment. CCM moved for partial summary judgment and Antares and ®ed m°Lons to dismiss.

jn September 1983, the court granted Local 47>s motion for summary judgment, order¡ng CCM and CPS to arbitrate with Local 47 the questions of whether CCM was bound by the terms of the CPS-Local 47 agreement and whether the agreement had been breached. The court dismissed Antares and TSM from the lawsuit and denjed CCM’s motion for partial summary judgment,

. CCM and CPS appeal from the rulings granting Local 47’s motion for summary judgment, and CCM appeals from the denial of its motion for partial summary judgment. Local 47 cross-appeals from the dismissal of First Union, TSM, and Antares and from the denial of injunctive relief.

[503]*503II.

CPS and CCM argue that the court erred in granting Local 47’s motion for summary judgment and ordering them to arbitrate.

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755 F.2d 499, Counsel Stack Legal Research, https://law.counselstack.com/opinion/service-hospital-nursing-home-public-employees-union-local-no-47-v-ca6-1985.