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Bechtel Corp. v. Local 215

November 12, 1976

BECHTEL CORPORATION AND BECHTEL POWER CORPORATION, APPELLANTS
v.
LOCAL 215, LABORERS' INTERNATIONAL UNION OF NORTH AMERICA, AFL-CIO; HENRY DEPOLO, INDIVIDUALLY AND AS BUSINESS MANAGER; AND ANDREW POLLICK, INDIVIDUALLY AND AS BUSINESS AGENT OF LOCAL 215, LABORERS' INTERNATIONAL UNION OF NORTH AMERICA, AFL-CIO



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA D.C. Civil Action No. 75-245

Author: Rosenn

Before ADAMS, ROSENN and GARTH, Circuit Judges

ROSENN, Circuit Judge

This appeal prexents several important issues pertaining to the proper forum for the determination of an employer's claim for damages growing out of two separate work stoppages allegedly in violation of labor contracts. The work stoppages resulted from jurisdictional disputes between Local 215, Laborers International Union of North America, AFL-CIO ("Local 215" or " the Union") and two other unions over assignment of work at a construction site in Berwick, Pennsylvania, where Bechtel Corporation and its wholly owned subsidiary Bechtel Power Corporation portion ("Bechtel") are engaged in the construction of two nuclear power plants.

I.

The power plants are known collectively as the Susquehanna Steam Electric Generating Station and their construction commenced in October 1973 and is scheduled for completion in 1971. Bechtel employs approximately 1200 manual building trades employees at the two construction sites and has contracted with subcontractors who employ approximately 100 additional persons. Wages, hours, and working conditions for Bechtel's employees are governed by the terms of several collective bargaining agreements entered into between Bechtel or its representative and various unions, including Local 215.

Bechtel alleges that in November 1974 a jurisdictional dispute arose between Local 215 and Local 489 of the Ironworkers Union concerning the performance of certain work on the power plants.*fn1 Thereafter, on December 16 and 17, 1974, representatives of Local 215 induced a work stoppage and picketing at the project, resulting in the refusal to work of a majority of Bechtel's employees. In February 1975, a second jurisdictional dispute arose, this time between Local 215 and the Plumbers and Pipefitters Union, Local 254. This controversy also resulted in a work stoppage and picketing, for which Bechtel alleges the defendant Local 215 was responsible.

On February 24, 1975, Bechtel, as plaintiff, filed a complaint in the United States District Court for the Middle District of Pennsylvania alleging claims for damages because of Local 215's violations of its contractual obligations with Bechtel and of the Labor Management Relations Act. One claim was asserted under section 301 and the other under section 303 of the Act, as amended, 29 U.S.C. §§ 185, 187 (1970), ("the Act").*fn2 Local 215, the defendant, filed motions to dismiss both causes of action*fn3 and a motion for a more definite statement. By its motions to dismiss, Local 215 contended that (1) the proper forum for resolving Bechtel's section 301 claim is arbitration under the contracts, not the district court, and (2) the section 303 action should be dismissed pending arbitration of the section 301 claim.

The district court denied the Union's motion to dismiss but it entered an order directing the parties to submit the breach of contract claims to arbitration in accordance with the collective bargaining agreements entered into between the parties. It also stayed Bechtel's section 303 claim pending arbitration or until further order of the court. In staying Bechtel's section 303 claim, the district court indicated that the underlying jurisdictional dispute between the unions also should be arbitrated and that the arbitration should also determine whether Local 215 was entitled to the work in dispute. Bechtel appealed to this court.*fn3A We affirm, although our reason for staying the section 303 action differs significantly from that set forth by the district court.

On appeal, Bechtel contends that the district court erred (1) in directing arbitaation of its section 301 claim in the face of the express exclusion of such claims from arbitration under the collective bargaining agreement, and (2) in staying the trial of its claim under section 303 pending a determination by an arbitrator as to which union is entitled to the work for which Local 215 struck, and (3) in concluding that a union which strikes over an assignment of work may not be held liable for damages under section 303 if the striking union is ultimately determined to be entitled to the disputed work.

II.

Bechtel claims in the action it instituted in the district court that the work stoppages induced by the union violated a "no-strike" provision of the collective bargaining agreement between it and the union and it seeks damages in the sum of $60,000. The Union concedes in its brief in this court that section 301 of the Act "permits a party to a labor contract to sue in federal court for breaches of that contract." An action under section 303 also lies when an employer in an industry affecting interstate commerce sustains damages when a union engages in a jurisdictional strike that is unlawful under section 8(b)(4)(d) of the Act, 29 U.S.C. § 158(b)(4)(d).*fn4 The Company alleged that the work stoppages and strike were conducted in violation of section 8(b)(4)(d) and that it suffered damages as a result of the union's conduct. The resolution of the issues depends in large part on the interpretation of two separate collective bargaining agreements entered into between Bechtel and the Union.

On October 2, 1973, Bechtel entered into a written collective bargaining agreement with various trade unions representing employees on the power plants project. Among the signatories to that contract ("Local Agreement") were Local 215 and Bechtel. Article XI specifically prohigited "strikes, work stoppages, or slowdowns of any kind, for any reason, by the Unions or employees" and Argicle XII*fn5 provided for the assignment of work by the employer and the settlement of jurisdictional disputes specifically by the National Joint Board. The arbitration article of the contract, Article XIII, however, was qualified and provided:

[The] parties hereby agree that all questions or grievances involving the meaning, interpretation, and application of this Agreement other than trade jurisdictional disputes arising under Article XII or damages arising from any work stoppage or ...


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