State Line Construction and Maintenance, LLC v. American Line Builders Chapter NECA

CourtDistrict Court, E.D. Michigan
DecidedJuly 29, 2024
Docket4:24-cv-11047
StatusUnknown

This text of State Line Construction and Maintenance, LLC v. American Line Builders Chapter NECA (State Line Construction and Maintenance, LLC v. American Line Builders Chapter NECA) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Line Construction and Maintenance, LLC v. American Line Builders Chapter NECA, (E.D. Mich. 2024).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

STATE LINE CONSTRUCTION AND Case No. 24-11047 MAINTENANCE, LLC, et al., F. Kay Behm Plaintiffs, United States District Judge v.

AMERICAN LINE BUILDERS CHAPTER NECA, et al.,

Defendants. ___________________________ /

OPINION AND ORDER DENYING PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION (ECF No. 18)

I. PROCEDURAL HISTORY State Line Construction and Maintenance, LLC and its owner, Ernest Coger, filed this suit against American Line Builders Chapter NECA, Local Union No. 17 IBEW, American Line Builders Joint Apprenticeship and Training Committee (ALBAT), and several individuals associated with ALBAT. (ECF No. 1). Plaintiffs bring claims under the Sherman Antitrust Act, 42 U.S.C. §§ 1981, 1985, along with a civil conspiracy claim and a tortious interference claim. Id. On May 7, 2024, Plaintiffs filed a motion for preliminary injunction against Defendant ALBAT only with respect to their antitrust claims. (ECF No. 18). ALBAT filed a response on May 29, 2024 and Plaintiffs filed a reply on June 10, 2024. (ECF Nos. 27, 36). The court held an evidentiary hearing via videoconference on June 13, 2024. (ECF No.

37). The parties submitted post-hearing supplemental briefs. (ECF Nos. 39, 40). For the reasons set forth below, the court DENIES Plaintiffs’ motion for preliminary injunction.

II. FACTUAL BACKGROUND State Line contracts to provide overhead electrical line repair services to non-party DTE Energy, Inc. (“DTE”). (ECF 18-1, Ex. 1, ¶ 7). State Line has been in

operation for 15 years and had, until recently, built a thriving business despite intense competition with other established line contractors. Id. at ¶ 6. State Line is a certified minority business enterprise. Id. at ¶ 9. Its owner,

Ernest Coger, is a pioneer, starting as one of the few minority linemen in the industry 35 years ago, and advancing to own his own company. Id. at ¶¶ 2-4.

Defendant American Line Builders Chapter, NECA (“Association”), is a trade consortium of about 50 overhead line contractors, including many of State Line’s direct competitors. (ECF No. 18-1, Ex. 5). State Line is not a member of

Association. (ECF No. 18-1, Ex. 1, ¶ 11). Therefore, State Line does not pay Association fees, which are substantial. (ECF No. 18-1, Ex. 5). In addition to annual dues, Association imposes fees based on a percentage of each member’s

payroll (typically 1-2%). Id. Defendant Local 17, IBEW (“Local 17”) is a local union that represents

overhead line workers in southeast Michigan. (ECF No. 18-1, Ex. 8). Local 17 is part of non-party International Brotherhood of Electricians (“IBEW”), which represents some 820,000 active and retired members in the U.S. and Canada. Id.

State Line is a union employer, but State Line did not negotiate the collective bargaining agreement (the “CBA”) with Local 17. (ECF No. 18-1, Ex. 1, ¶ 15). Instead, the CBA was negotiated between Local 17 and Association. To obtain

union line workers, State Line signed a “Letter of Assent” binding it to the terms of the CBA. (ECF 18-1, PageID.194, Ex. 7). The CBA does not contain any specific provisions governing apprentices,

except for a wage schedule. Rather, the CBA states that “[t]he Area Training Agreement … shall govern all matters of apprenticeship and training.” Id. at

§ 6.04. The Training Agreement is a separate agreement between the national IBEW and the Association and is also signed by the local unions, including IBEW Local 17. (ECF No. 27-1, at 8). The Training Agreement acknowledges the need

for a supply of trained journey workers and all parties to the Training Agreement agreed and intended that the Area Joint Apprenticeship and Training Committee (“AJATC”) shall be responsible for “all matters of apprenticeship and training.” Id.

at 1. The Training Agreement established the AJATC, which exists as ALBAT. Id. The Training Agreement provides that ALBAT is to establish an apprenticeship

training program and “supervise all matters involving apprenticeship and training.” Id. at 2-3. The same parties to the Training Agreement entered into a Joint Apprenticeship Training Trust Fund Agreement, in accordance with Section

302 of the Labor-Management Relations Act of 1947. Id. at 4. ALBAT is a joint labor-management committee charged with the administration of the apprenticeship program in accordance with the Training

Agreement. ALBAT’s Board of Trustees consists of four members representing employers and four members representing the 4th and 6th IBEW Districts. (ECF No. 27-1, at 2). ALBAT is also an employee welfare benefit fund as defined by

the Employee Retirement Income Security Act (ERISA). ERISA § 3(1); 29 U.S.C. § 1002(1). ALBAT is also a multi-employer plan as defined by ERISA §§ 3(37) and

4001(a)(3); 29 U.S.C § 1002(37). According to ALBAT, as a multi-employer plan, it is maintained pursuant to collective bargaining agreements (CBAs) negotiated between the Association and various local unions. When employers such as State

Line assent to a CBA, they agree to remit contributions to various benefit funds as part of the wage package paid to employees. (ECF No. 18-1, Ex. 9, PageID.218- 223). State Line’s CBA requires that 1% of their labor payroll be paid to ALBAT to finance all matters of apprenticeship and training. (ECF No. 18-1, Ex. 2,

PageID.111-141; ECF No. 27-1 at 4). ALBAT also says that it is registered with the Department of Labor as a joint apprenticeship committee. See 29 C.F.R. § 29.2. As part of the registration

process, ALBAT adopted Area-wide Outside Line Apprenticeship and Training Standards (“Standards”), which have been approved by the federal Office of Apprenticeship pursuant to 29 C.F.R. § 29.5. (ECF No. 18-1, Ex. 9, PageID-111-

141). The Standards set forth ALBAT’s duty to ensure that the apprentices receive proper supervision, adequate and safe equipment and facilities for apprenticeship training and supervision, and safety training for apprentices on jobsites. 29 C.F.R.

§ 29.5. According to ALBAT, if it fails to comply with its Standards, it faces the risk of being deregistered and deregistration would trigger a violation of the Training

Agreement, which requires the program to be registered with the U.S. Department of Labor’s Bureau of Apprenticeship and Training. (ECF No. 27-1, at 2).

Employers who sign the CBA have the option of employing ALBAT apprentices. (ECF No. 18-1, Ex. 9, PageID.213).1 The apprentices then obtain a

1 For example, the CBA provides: portion of their on-the-job training at the employer’s jobsite. Such employers are

obligated to abide by the terms of the Training Agreement and the ALBAT Standards. Id. at PageID.217.2 The CBA explicitly incorporates the Training Agreement, which grants the ALBAT Trustees the authority to establish the

apprenticeship program and its Standards. Id.; see also ECF No. 27-1, at 2. ALBAT’s Standards require that employers who choose to employ apprentices must provide safe conditions of employment. Id. at PageID.125. These

requirements of employing apprentices who need supervision and training are offset by apprentices’ lower hourly wages. Id. at PageID.215.

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State Line Construction and Maintenance, LLC v. American Line Builders Chapter NECA, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-line-construction-and-maintenance-llc-v-american-line-builders-mied-2024.