IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY CAMDEN VICINAGE
December 3, 2009
SHEET METAL WORKERS INTERNATIONAL ASSOCIATION LOCAL UNION NO. 27, AFL-CIO, PLAINTIFF,
E.P. DONNELLY, INC., AND SAMBE CONSTRUCTION CO. INC., DEFENDANTS.
The opinion of the court was delivered by: Bumb, United States District Judge
[Dkt. Ents. 90, 91, & 92]
This case arises from a dispute over the assignment of roofing work in the construction of Egg Harbor Township's community center. Plaintiff Sheet Metal Workers International Association Local Union No. 27, AFL-CIO ("Local 27") alleges that by assigning work to a competing union, defendant-contractors E.P. Donnelly, Inc. ("Donnelly") and Sambe Construction Co. Inc. ("Sambe") committed common-law breach of contract and violated New Jersey's statute authorizing project labor agreements, N.J. Stat. Ann. 52:38-1, et seq. This matter now comes before the Court upon motions for summary judgment by all three parties. Donnelly and Sambe have opposed Local 27's motion, and Local 27 has likewise opposed the motions of Donnelly and Sambe. For the reasons stated herein, the Court will grant-in-part and deny-in-part all three motions.
Summary judgment shall be granted if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c); Hersh v. Allen Products Co., 789 F.2d 230, 232 (3d Cir. 1986). A dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the non-moving party." See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "At the summary judgment stage the judge's function is not . . . to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 249. "In making this determination, a court must make all reasonable inferences in favor of the non-movant." Oscar Mayer Corp. v. Mincing Trading Corp., 744 F. Supp. 79, 81 (D.N.J. 1990) (citing Meyer v. Riegel Products Corp., 720 F.2d 303, 307 n.2 (3d Cir. 1983)). However, "the party opposing summary judgment 'may not rest upon the mere allegations or denials of the . . . pleading'; its response, 'by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.'" Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001) (quoting Fed. R. Civ. P. 56(e)).
The facts underlying this litigation are largely undisputed. At the center of this complex case is a simple dispute regarding the assignment of work in the construction of a public community center in Egg Harbor Township, New Jersey ("the Township"). The Township required that all parties participating in the construction project be signatories to a Project Labor Agreement ("PLA"),*fn1 which the Township had adopted as authorized by state law. See N.J. Stat. Ann. § 52:38-1, et seq. Sambe Construction Company ("Sambe") was the general contractor on the project and, as required, was a signatory to the PLA. Sambe subcontracted to E.P. Donnelly Inc. ("Donnelly") the work of installing prefabricated standing seam metal roofing, soffit, fascia, and related trim. Donnelly, as part of its deal with Sambe, signed a letter of assent (the "Letter of Assent") binding it to the PLA, and agreeing that any party to which it subcontracted work would likewise be required to assent to the PLA.
Contrary to the Letter of Assent, however, Donnelly subcontracted with a non-signatory to the PLA, the Brotherhood of Carpenters and Joiners of America Local Union No. 623 ("Local 623"), to perform standing seam metal roofing work on the project. Donnelly apparently hired Local 623 because it had a collective bargaining agreement with that union. However, as mentioned, Local 623 was not a signatory to the PLA and refused to execute the PLA. In other words, Donnelly, by assenting to both the PLA and Local 623's collective bargaining agreement, had created for itself conflicting contractual obligations.*fn2
Another union, Sheet Metal Workers International Association Local 27, AFL-CIO ("Local 27"), which was a PLA signatory, protested Donnelly's wrongful assignment of work to Local 623. Invoking the PLA's provision for settling jurisdictional disputes between unions, Local 27 scheduled a hearing before arbitrator Stanley Aiges. Donnelly then filed an unfair labor practice charge with the National Labor Relations Board against Local 623, which had threatened to picket the project if Donnelly reassigned the roofing work to Local 27. (Local 623, citing its position that the PLA is invalid, declined to participate in the arbitration.) Arbitrator Aiges ultimately awarded the disputed work to Local 27. Local 27 then sought confirmation of the arbitration award by the Local Joint Adjustment Board ("JAB"), which determined that Donnelly and Sambe had violated the PLA and Local 27's collective bargaining agreement, and, further, that Sambe and Donnelly would be responsible for Local 27's wages and benefits in the amount of $428,319.26 if Local 27 was not ultimately awarded the work.*fn3
Local 27 then filed this action against Donnelly and Sambe, as well as Local 623,*fn4 seeking a preliminary injunction to enforce the awards of Arbitrator Aiges and the JAB. The Court, finding no irreparable injury, declined to issue the preliminary injunction.*fn5 The parties proceeded to conduct discovery on the merits of Local 27's allegations.
In the meantime, proceedings before the NLRB, which had been initiated by Donnelly, continued. On December 31, 2007, the NLRB ruled that Local 623, rather than Local 27, was entitled to the disputed work. Despite this conclusion, the NLRB's ruling, apparently recognizing that Donnelly had created for itself conflicting contractual obligations, stated that Donnelly "would continue to be bound under the terms of the PLA, and the parties to the PLA would retain any rights they may have under state law to bring a suit for damages . . . for any breach of the PLA." United Brotherhood of Carpenters and Joiners of America, Local Union No. 623 and E.P. Donnelly, Inc., and Sheet Metal Workers'International Assoc., Local 27, AFL-CIO, 351 NLRB 1417, 1419-20 (Dec. 31, 2007) (hereinafter "10(k) Decision"). In spite of this proviso, however, Donnelly filed an Unfair Labor Practice charge with the NLRB, pursuant to section 8(b)(4)(ii)(D) of the National Labor Relations Act, as amended, 29 U.S.C. § 158(b)(4)(ii)(D), alleging that Local 27's lawsuit in this Court, by seeking the reassignment of work in contravention of the NLRB's 10(k) Decision, amounted to an unfair labor practice. Administrative Law Judge Joel P. Biblowitz sustained Donnelly's charge. That decision is still pending for final determination by the NLRB.
In light of the NLRB's 10(k) Decision awarding the disputed work to Local 623, and this Court's decision declining to issue a preliminary injunction, Local 623 proceeded to perform the roofing work. The work has now been completed.
Shortly after this Court denied summary judgment earlier in this litigation,*fn6 the NLRB filed an emergent application [Dkt. No. 08-1896] to enjoin Local 27's prosecution of this suit, pursuant to section 10(l) of the National Labor Relations Act, as amended, 29 U.S.C. § 160(l). The Court, finding no incompatibility between the NLRB's 10(k) Decision and the relief sought by Local 27's Second Amended Complaint, denied the NLRB's emergent application.*fn7 The NLRB has appealed that decision to the United States Court of Appeals for the Third Circuit, which has yet to rule.*fn8
Because Local 27 was not enjoined from prosecuting this action, the parties have continued to litigate it. Local 27, Donnelly, and Sambe all now move for summary judgment.
A. Contract Claim
Local 27's Second Amended Complaint asserts two causes of action: common-law breach of contract and violation of New Jersey's statute authorizing project labor agreements, N.J. Stat. Ann. 52:38-1, et seq. The Court begins its analysis with the contract claim.
"To establish a breach of contract claim, a plaintiff has the burden to show that the parties entered into a valid contract, that the defendant failed to perform [its] obligations under the contract and that the plaintiff sustained damages as a result." Murphy v. Implicito, No. L-5998-00, 2005 WL 2447776, *4 (N.J. Super. 2005) (citing Coyle v. Englander's, 199 N.J. Super. 212, 223, 488 A.2d 1083 (1985)). Here, Local 27 alleges that it, Sambe, and Donnelly assented to the PLA, a valid contract; that Sambe and Donnelly breached the PLA by assigning the roofing work to Local 623; and that its damages are equal to the payment it would have received for performing the roofing work.
It is undisputed that Local 27 suffered damages from the assignment of the roofing work to another union. Thus, the only elements of the contract claim at issue are: (1) whether Sambe and Donnelly failed to perform their obligations under the PLA, and (2) whether the PLA is a valid contract.*fn9
1. Failure to Perform PLA Obligations: Preclusive Effect of the Arbitration Award
Turning to the first element, failure to perform PLA obligations, Arbitrator Aiges's ruling specifically found that "Sambe [and] Donnelly violated the . . . PLA by assigning the disputed work to members of . . . Local 623." (Arb. Op. 13-14 [Dkt. Ent. 91:6].) If the Court is bound by this finding, Local 27 will have established that obligations owed under the contract were breached.*fn10
Because Local 27 never sought confirmation of the arbitration award by a court, however, it lacks the status of a judgment. See 9 U.S.C. §§ 9, 13 (establishing the procedure for confirmation of an arbitration award in federal court). Thus, the Court must decide what preclusive effect to give it in this proceeding.*fn11 See Wright, Miller, & Cooper, 18B Federal Practice and Procedure: Jurisdiction § 4475.1 at n.6 (WL 2009) ("Arbitral awards, unreviewed by any court, are not such judgments as are entitled to recognition under the full faith and credit statute, 28 U.S.C.A. § 1738. Any decision to accord preclusive effect thus must be a matter of a judicially fashioned preclusion rule.").
Judicial proceedings ordinarily accord preclusive effect to arbitrations that have already adjudicated the same claims or defenses, even when the award is unconfirmed. See id. at note 8 and accompanying text; see also In re Kaplan, 143 F.3d 807, 815 (3d Cir. 1998) ("Generally applicable res judicata rules must sometimes be adapted to fit the arbitration context."). "If any party dissatisfied with [an arbitration] award were left free to pursue independent judicial proceedings on the same claim or defenses, arbitration would be substantially worthless." Wright, Miller, & Cooper, supra, at § 4475.1. Although the Third Circuit has not yet defined the parameters of according preclusive effect to an unconfirmed arbitration award, the Restatement (Second) on Judgments has summarized the judicial consensus that "a valid and final award by arbitration has the same effects under the rules of res judicata . . . as a judgment of a court" as long as the following five "essential elements of adjudication" are satisfied:
(a) Adequate notice to persons who are to be bound by the adjudication . . . ;
(b) The right on behalf of a party to present evidence and legal argument in support of the party's contentions and fair opportunity to rebut evidence and argument by opposing parties;
(c) A formulation of issues of law and fact in terms of the application of rules with respect to specified parties concerning a specific transaction, situation, or status, or a specific series thereof;
(d) A rule of finality, specifying a point in the proceeding when presentations are terminated and a final decision is rendered; and
(e) Such other procedural elements as may be necessary to constitute the proceeding a sufficient means of conclusively determining the matter in question, having regard for the magnitude and complexity of the matter in question, the urgency with which the matter must be resolved, and the opportunity of the parties to obtain evidence and formulate legal contentions.
Restatement (2d) of Judgments §§ 83, 84 (1982).*fn12 Here, there is no genuine dispute that the procedures governing the arbitration were fair and that the arbitration produced a final award.*fn13
Indeed, the strong preference of federal labor policy for private resolution of labor disputes weighs heavily in favor of attributing preclusive effect to full, fair, and final labor arbitrations. See, e.g., NLRB v. A. Duie Pyle, Inc., 730 F.2d 119, 124 (3d Cir. 1984) (noting that the law gives highly favorable status to private, amicable resolution of labor disputes); NLRB v. Pincus Bros., Inc.-Maxwell, 620 F.2d 367, 372 (3d Cir. 1980) (acknowledging national policy in favor of the private resolution of labor disputes through consensual arbitration). Accordingly, the Court will accord preclusive effect to the arbitration proceeding here.
The scope of an arbitrator's task is defined by contract. See Kaplan, 143 F.3d at 816 ("[T]he scope of the obligation to arbitrate -- and to accept arbitral decisions -- is defined by contract."). Here, Local 27 sought arbitration pursuant to article 10 of the PLA, which establishes the jurisdiction of an arbitrator to resolve jurisdictional disputes, and, further, states that the "jurisdictional award . . . shall be final and binding on the disputing Local Unions and the involved Contractor[s] . . . , and may be enforced in any court of competent jurisdiction." (PLA, art. 10, § 4 [Dkt. Ent. 91:4].)
In his written opinion, Arbitrator Aiges properly found that the PLA, in section 3 of article 10, conferred upon him jurisdiction to settle the work-assignment dispute between Local 27, Sambe, Donnelly, and Local 623. (Arb. Op. 9 [Dkt. Ent. 91:6] ("I am fully convinced this dispute is properly before me for adjudication. It arose over work covered by the PLA. Local 27 sought to follow the procedure set forth in Article 10, Section 3A of the PLA. . . . Local 27 then decided -- as was its right --to invoke the procedure specifically agreed upon under Section 3C to resolve 'all unresolved jurisdictional disputes arising under this [PLA].'").) Because the matter of Arbitrator Aiges's jurisdiction was disputed and resolved before him, this Court is bound by his finding.*fn14 Jurisdiction before Arbitrator Aiges was therefore proper.
Arbitrator Aiges cited two reasons for his determination that the roofing work should have been assigned to Local 27, rather than Local 623. The primary justification for his ruling was founded in article 10, section 2(b), of the PLA, which requires work assignments to be made "according to area practice . . . ." (PLA, art. 10, § 2(b).) Because "[t]he vast majority of projects involving similar work in South Jersey has been performed by Local 27 members," Arbitrator Aiges determined that "area practice" compelled assignment of the work to Local 27. (Arb. Op. 12 [Dkt. Ent. 91:6].) Secondarily, Arbitrator Aiges, citing a letter by the Egg Harbor Township Administrator, explained that the work should have been assigned to a PLA signatory. As Local 27 had assented to the PLA, while Local 623 had not, this further required assignment of the work to Local 27. (Arb. Op. 12-13.) On these two grounds, Arbitrator Aiges found that "Sambe [and] Donnelly violated the . . . PLA by assigning the disputed work to members of . . . Local 623."*fn15
(Arb. Op. 13-14.) This Court is bound by his finding.*fn16
Accordingly, Local 27 has established as a matter of law that obligations owed by Sambe and Donnelly under the PLA were not performed.
2. Validity of the PLA
Having established that the assignment of work to Local 623 violated the PLA and caused damage to Local 27, Local 27 will have proven its breach of contract claim if the PLA is a valid contract. For the following reasons, the Court holds that it is.
i. Lawfulness of the PLA under the NLRA
Sambe and Donnelly first argue that the PLA is an invalid pre-hire agreement under the National Labor Relations Act. Generally, the NLRA preempts state regulation of labor policy. See Northern Illinois Chapter of Associated Builders and Contractors, Inc. v. Lavin, 431 F.3d 1004, 1005 (7th Cir. 2005) ("Federal law preempts all state regulation of those aspects of labor relations that are arguably protected, arguably prohibited, or left to the domain of market forces."). However, the Supreme Court has held that when a government entity acts as a market participant rather than a regulator, normal preemption rules do not apply. See Wisconsin Dept. of Industry, Labor and Human Relations v. Gould Inc., 475 U.S. 282, 289 (1986). In Boston Harbor, the Supreme Court applied that rule to pre-hire agreements like the PLA. Building & Const. Trades Council of Metropolitan Dist. v. Associated Builders & Contractors of Massachusetts/Rhode Island, Inc., 507 U.S. 218, 229-30 (1993) (hereinafter "Boston Harbor").
At issue in Boston Harbor was a pre-hire agreement created by a general contractor, Kaiser Engineers, Inc., which had been retained by a state agency to manage an environmental cleanup job. Kaiser Engineers, Inc. negotiated a "Master Labor Agreement" to govern hiring of subcontractors, which the state agency then formally adopted. The First Circuit held that the pre-hire agreement was preempted by federal law, as it constituted "pervasive" state "intrusion into the bargaining process." 935 F.2d 345, 353 (1st Cir. 1991). If the state were the actual employer, the First Circuit reasoned, the pre-hire agreement would be permissible;*fn17 however, the state's role was that of regulator, not employer, and such regulation is preempted by the NLRA. Id. at 354-55. The Supreme Court disagreed. The Court held that a state agency hiring a contractor acts as a market participant, not a regulator, that may "manage its own property when it pursues its purely proprietary interests . . . [as a] private [actor] would be permitted [to do]." Boston Harbor, 507 U.S. at 231-32. The crux of the Court's decision was that where pre-hire agreements are at issue, the same rules govern public and private market participants. See id. at 233 ("[W]hen the [State], acting in the role of purchaser of construction services, acts just like a private contractor would act, and conditions its purchasing upon the very sort of labor agreement that Congress explicitly authorized and expected frequently to find, it does not 'regulate' the workings of the market forces that Congress expected to find; it exemplifies them.").
Sambe and Donnelly try to distinguish Boston Harbor from the facts of this case by noting that a private contractor, Kaiser Engineers, Inc., created the pre-hire agreement in Boston Harbor, while Egg Harbor Township, the public purchaser, created it here.
This amounts to a distinction without a difference. As the Third Circuit has explained, "[A]fter Boston Harbor, preemption analysis only comes into play when the state's activity in question constitutes 'regulation.' But a state will not be subject to preemption analysis when it acts as a 'market participant.'" Hotel Employees & Restaurant Employees Union, Local 57 v. Sage Hospitality Resources, LLC, 390 F.3d 206, 213 (3d Cir. 2004). There is no dispute that Egg Harbor Township acted as any private developer would in requiring that Sambe and its subcontractors assent to the PLA as a precondition to participating in construction of the public community center.*fn18
The fact that the entity negotiating the pre-hire agreement here was public rather than private is of no moment, as numerous courts have applied the Boston Harbor rule to public project labor agreements. See, e.g., Colfax Corp. v. Illinois State Toll Highway Authority, 79 F.3d 631, 634-35 (7th Cir. 1996); Lott Constructors, Inc. v. Camden County Bd. of Chosen Freeholders, No. 93-5636, 1994 WL 263851, *13-19 (D.N.J. Jan. 31, 1994) (Simandle); George Harms, 137 N.J. at 14-16; New York State Chapter, Inc. v. New York State Thruway Authority, 620 N.Y.S.2d 855, 856-57 (N.Y. App. Div. 1994). Sambe and Donnelly have not cited to a single court that has adopted their narrow reading of Boston Harbor, and this Court finds no reason to do so here.*fn19
Accordingly, federal preemption does not undermine the validity of the PLA in this case.
ii. Lawfulness of the PLA under New Jersey's Project Labor Agreement Statute
Sambe and Donnelly next argue that the PLA violates New Jersey's statute authorizing project labor agreements, N.J. Stat. Ann. § 52:38-1, et seq. The statute provides, in relevant part:
A public entity may include a project labor agreement in a public works project on a project-by-project basis, if the public entity determines, taking into consideration the size, complexity and cost of the public works project, that, with respect to that project the project labor agreement will meet the requirements of section 5 of this act, including promoting labor stability and advancing the interests of the public entity in cost, efficiency, skilled labor force, quality, safety and timeliness.
N.J. Stat. Ann. § 52:38-3. Section 5 continues:
Each project labor agreement executed pursuant to the provisions of this act shall:
a. Advance the interests of the public entity, including the interests in cost, efficiency, quality, timeliness, skilled labor force, and safety;
b. Contain guarantees against strikes, lock-outs, or other similar actions; . . .
f. Fully conform to all statutes, regulations, executive orders and applicable local ordinances regarding the implementation of set-aside goals for women and minority owned businesses, the obligation to comply with which shall be expressly provided in the project labor agreement . . . .
N.J. Stat. Ann. § 52:38-5. Sambe and Donnelly contend that the Township adopted the PLA without making a predicate determination that the enumerated requirements were met.
Specifically, Sambe and Donnelly cite the Township Administrator's admission "that the Township never performed any study regarding the need for a project labor agreement" as evidence that the Township failed to make the statutorily required findings. (Sambe's Mot. Br. 27.) However, the statute does not require municipalities to perform a study, and Defendants have cited nothing in support of their conclusion that the Township did not make the required determinations. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) ("[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." (citing Fed. R. Civ. P. 56(c)). Moreover, article 1 of the PLA explicitly makes many of the findings set forth in the statute, including a statement that its purpose is "to provide for efficiency, safety, quality construction, and the timely completion of a construction project . . . in a manner designed to afford lower reasonable costs to [the Township], and for the advancement of public policy objectives." (PLA, art. 1.)
As to the statute's requirement that project labor agreements "[c]ontain guarantees against strikes, lock-outs, or other similar actions," N.J. Stat. Ann. § 52:38-5(b), article 7 of the PLA specifically bars such activity, and the dispute resolution procedures of articles 9 and 10 exist to avert these sorts of work disruptions. As to the statute's requirement that project labor agreements "conform to all statutes, regulations, executive orders and applicable local ordinances regarding the implementation of set-aside goals for women and minority owned businesses, the obligation to comply with which shall be expressly provided in the project labor agreement," N.J. Stat. Ann. § 52:38-5(f), section 4 of article 4 of the PLA, as well as article 15 of the PLA, satisfy this requirement. Accordingly, the arguments that the PLA does not comply with New Jersey's project labor agreement statute are unavailing.*fn20
3. Enforceability of the PLA
Having found that the PLA is a valid contract, that its obligations were unfulfilled, and that Local 27 suffered resulting damages, Local 27 has satisfied all of the elements required to establish a breach of contract claim. Sambe and Donnelly advance the further defense that the PLA is unenforceable in this Court. For the following reasons, the Court rejects this defense.
i. Arbitration Award and the 10(k) Decision
Sambe and Donnelly resurrect their contention that the PLA is unenforceable because enforcement would conflict with the NLRB's 10(k) Decision. This argument has been raised in one form or another at each stage of this litigation, and the Court has rejected it every time -- most notably, in its September 2, 2008 Opinion. Moore-Duncan v. Sheet Metal Workers' Int'l Ass'n, Local 27, AFL-CIO, 624 F. Supp. 2d 367, 373-75, 77 (D.N.J. 2008) (slip op. at 13-19, 22-24). It does so again now. Accord Lamb's Chapel v. Center Moriches Union Free School Dist., 508 U.S. 384, 398 (1993) (Scalia, J., concurring) (comparing a revived legal argument to a "ghoul in a late-night horror movie that repeatedly sits up in its grave and shuffles abroad, after being repeatedly killed and buried").*fn21
Sambe and Donnelly are quite right that Arbitrator Aiges and the NLRB differed on whether the disputed work should be assigned to Local 27 or Local 623. To the extent that Arbitrator Aiges ordered that the work be assigned to Local 27, his award certainly conflicted with the 10(k) Decision. But Local 27 does not seek enforcement of that portion of Arbitrator Aiges's award; rather, Local 27 seeks only monetary damages for breach of the PLA. Enforcement of the PLA with an award of monetary damages against Sambe and Donnelly does not conflict with the NLRB's 10(k) Decision resolving the jurisdictional dispute between Local 27 and Local 623.
The Court acknowledges that the Third Circuit case Local 30 II appears at first pass to support the proposition that "there is no material difference between seeking work and seeking payment in lieu of work . . . ." Local 30, United Slate, Tile & Comp'n Roofers, Damp & Waterproof Workers Ass'n, AFL-CIO v. NLRB, 1 F.3d 1419, 1427-28 (3d Cir 1993) (hereinafter "Local 30 II"). The precedential value of this proposition is a matter of dispute, however, since the Third Circuit adopted what appears to be an opposite view two years earlier, in Local 30 I. See Hoeber ex rel. NLRB v. Local 30, United Slate, Tile & Comp'n Roofers, Damp and Waterproof Workers Ass'n, ALF-CIO, 939 F.2d 118, 124 n.10 (3d Cir. 1991) (hereinafter "Local 30 I") ("We cannot agree with the NLRB that seeking enforcement of an arbitral award based on a breach of contract to assign work is identical to seeking the disputed work itself.").
Even were Local 30 II construed as a reversal of Local 30 I, the present case is distinguishable from Local 30 II in a number of important respects. First, here, the NLRB's 10(k) Decision includes the specific qualification that, "An award of the disputed work to Local 623 [does] not . . . invalidate the PLA. [Donnelly] continue[s] to be bound under the terms of the PLA, and the parties to the PLA . . . retain any rights they may have under state law to bring a suit for damages against [Donnelly] for any breach of the PLA." 10(k) Decision, 351 NLRB at 1419-20 (emphasis added). The 10(k) Decision continued, "Both Local 623 and (arguably) Local 27 have separate binding contracts with [Donnelly], and [Donnelly's] obligations under one contract cannot be used to void its obligations under the other." Id. at 1420. Thus, unlike Local 30 II, the 10(k) Decision here distinguished its award of work from this contract-enforcement damages action. A finding that this damages action conflicts with the 10(k) Decision -- when the 10(k) Decision limited itself so as to permit this damages action -- would be nonsensical.
Second, Local 30 II presented a run-of-the-mill jurisdictional dispute between two unions claiming entitlement to a work assignment based upon their respective collective bargaining agreements. Indeed, the 10(k) procedure exists to resolve these otherwise intractable disputes, and must immunize employers for breaching collective bargaining agreements when carrying out a 10(k) determination. See Carey v. Westinghouse Elec. Corp., 375 U.S. 261, 272 (1964) ("Should the Board disagree with the arbiter, . . . the Board's ruling would, of course, take precedence; and if the employer's action had been in accord with that ruling, it would not be liable for damages under § 301."). Here, the Court is presented with a substantially different set of facts. At issue is not mere resolution of competing collective bargaining agreements; it is a project labor agreement -- a super-contract of sorts*fn22 -- barring the assignment of work to non-parties. As this Court has explained:
Under [Defendants'] reasoning, any time the Board assigns disputed work to one party, all of the employer's related contractual obligations disappear. An employer could assume contractual obligations it had no intention of performing, and to the possible detriment of others, only to be absolved of those obligations under the guise of a 10(k) jurisdictional dispute decision of the Board. Petitioner's argument taken to its logical conclusion would eviscerate project labor agreements such as the PLA at issue here, giving contractors a license to sign on to projects with no intention of performing their contractual obligations. Local 30 II did not so hold, and neither does the Court today.
Moore-Duncan v. Sheet Metal Workers' Int'l Ass'n, Local 27, AFL-CIO, 624 F. Supp. 2d 367, 375-76 (D.N.J. 2008).
Relatedly -- third -- the 10(k) procedure serves to provide swift resolution to normal work-assignment disputes that arise between unions, not to exonerate employers which have acted with unclean hands. See Associated General Contractors of America v. International Union of Operating Engineers, 529 F.2d 1395, 1397 (9th Cir. 1976). Unlike in Local 30 II, the wrongdoing alleged here occurred at two moments: first, in Donnelly's execution of the Letter of Assent, and second, in Donnelly's ultimate assignment of the roofing work to Local 623. What distinguishes this case is not that Donnelly found itself stuck between conflicting obligations (indeed, labor disputes regularly result from unforeseen conflicting obligations); it is that Donnelly voluntarily created the foreseeable conflict.
The one-page Letter of Assent executed by Donnelly contains only three substantive provisions (each one sentence long): first, that Donnelly agrees to be bound by the PLA; second, that Donnelly certifies that "it has no commitments or agreements, which would preclude full compliance" with the PLA; and third, that all project participants must execute an identical Letter of Assent. Despite these simple terms, Local 623's collective bargaining agreement with Donnelly was a conflicting commitment, since Local 623 -- a union to which Donnelly was already obligated -- was not a party to the PLA. Stunningly, Donnelly has defended its unconscientious conduct by claiming it "never saw the PLA itself . . . and was not aware that the Carpenters were not included in the PLA." (Donnelly's Stat. Mat. Fcts. ¶ 5.) Walking blindfolded through one's business affairs does not excuse the ensuing collision.*fn23 The 10(k) procedure exists so disputed work may proceed (as it has here), not to insulate an unscrupulous employer from the consequences of its misconduct. Such an employer was not before the Third Circuit in Local 30 II.*fn24
The Court therefore reaffirms its holding that a damages award in this action will not conflict with the 10(k) Decision. Accordingly, the 10(k) Decision will not impede enforcement of the PLA.
ii. Exhaustion of Contractual Remedies
Finally, Sambe and Donnelly argue that the PLA is unenforceable before this Court because Local 27 did not exhaust the private remedies available under the PLA before initiating this action. Citing Third Circuit and Supreme Court precedents, Sambe and Donnelly contend that Local 27 was required to seek redress under the arbitration procedures of both articles 9 and 10 of the PLA. See Republic Steel Corp. v. Maddox, 379 U.S. 650, 652 (1965) ("[F]ederal labor policy requires that individual employees wishing to assert contract grievances must attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress."); Whittle v. Local 641, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO, 56 F.3d 487, 490 (3d Cir. 1995). This argument misapplies these precedents. Although Sambe and Donnelly are quite right that labor-dispute plaintiffs are required to pursue contractual remedies such as arbitration before seeking federal court enforcement, there is no requirement that such plaintiffs pursue every alternative private remedy where the controlling contract offers more than one. Here, Local 27 could have chosen to pursue the remedy contemplated in article 9, or that in article 10, of the PLA. Local 27 selected the route prescribed by article 10. In doing so, it satisfied the exhaustion requirement.
Accordingly, Local 27 has established all three elements of its breach of contract claim, and the operative contract is enforceable in this Court. Thus, the Court finds as a matter of law that Sambe and Donnelly are liable for common-law breach of contract.*fn25 Summary judgment shall be granted to Local 27 on this count.*fn26
B. Private Right of Action under New Jersey's PLA Statute
The Court now turns to the second cause of action asserted by Local 27: violation of New Jersey's statute authorizing project labor agreements, N.J. Stat. Ann. § 52:38-1, et seq. Sambe and Donnelly contend that the statute does not create a private right of action. The Court agrees.
To determine whether a statute implies a right of action, New Jersey courts consider "whether the plaintiff is 'one of the class for whose especial benefit the statute was enacted;' whether there is any evidence that the Legislature intended to create a private cause of action under the statute; and whether implication of a private cause of action in this case would be 'consistent with the underlying purposes of the legislative scheme.'" Matter of State Com'n of Investigation, 108 N.J. 35, 41, 527 A.2d 851 (1987) (quoting Cort v. Ash, 422 U.S. 66, 78 (1975)). In other words, the touchstone in finding an implied right of action is the legislative intent. See Liberty Bell Bank v. Deitsch, No. 08-0993, 2008 WL 4276925, *3 (D.N.J. Sept. 9, 2008) ("This factor alone, without regard to the others, has been dispositive in recent cases."). In addition to a general presumption against finding a civil remedy when none is explicitly conferred, R.J. Gaydos Ins. Agency, Inc. v. National Consumer Ins. Co., 168 N.J. 255, 271, 773 A.2d 1132 (2001), federal courts are reluctant to innovate a state right of action when the state's own courts have not done so, Swerhun v. Guardian Life Ins. Co. of America, 979 F.2d 195, 795 (11th Cir. 1992) (citing A&E Supply Co., Inc. v. Nationwide Mut. Fire Ins. Co., 798 F.2d 669, 674 (4th Cir. 1986)).
Here, the legislative intent weighs against finding a private right of action. The purpose of the statute is to authorize the use of restrictive project labor agreements. See N.J. Stat. Ann. § 52:38-3 ("A public entity may include a project labor agreement in a public works project on a project-by-project basis . . . ."). The statute aimed to expand the powers of state and local government agencies by allowing them to adopt master pre-hire agreements. The New Jersey Legislature enacted the statute in response to a line of executive orders and state Supreme Court decisions that cast doubt upon the power of state entities to employ project labor agreements.*fn27 First, in September 1993, Governor James Florio signed Executive Order 99 requiring the successful bidders for public construction projects to execute project labor agreements. Then, in March 1994, Governor Christine Todd Whitman issued Executive Order 11, which softened the mandate of its predecessor by permitting the use of project labor agreements when state departments, on a project-by-project basis and with publicly disclosed findings, determine that they "will promote labor stability and advance the state's interest in cost efficiency, quality, safety and/or timeliness."
26 N.J.R. 1558-59 (Apr. 18, 1994). Shortly thereafter, in July 1994, the New Jersey Supreme Court struck down the use of a particularly restrictive project labor agreement by a state agency, because it exceeded the agency's statutory power. In that case, George Harms Construction Co., Inc. v. New Jersey Turnpike Authority, the Court explained:
The New Jersey Legislature has delegated authority to purchase construction services to State agencies through a comprehensive set of bidding laws. We have not previously understood those laws to confer on a public entity the authority to specify a sole source of construction services or to denote a specific union affiliation as a characteristic of the lowest-responsible bidder or as a bid specification. When it has desired to do so in the past, the Legislature has specifically provided authorization for limitations on the source of construction services. . . . [However,] we do not believe that the standards of delegation set forth in our public-bidding laws yet embrace specifications for the type of project-labor agreement in this case. 137 N.J. at 43-44. A year later, the New Jersey Supreme Court affirmed its prior holding, and again invited the Legislature --this time in even more stark terms -- to change state law:
[W]e recognize that the Legislature is better suited than the judiciary to determine the size, complexity and cost of projects that justify recourse to a PLA. We also believe that the Legislature is better suited to accommodate the several interests of labor, management, and the public. Until such time as the Legislature acts, however, we are obligated to adjudicate such bid specifications case-by-case.
Tormee Const., 143 N.J. at 151 (citations omitted).
Then, in January 2002, Governor James McGreevey issued Executive Order 1, which again authorized the use of project labor agreements. Executive Order 1 was supplemented by the Legislature's enactment of the statute now before this Court, N.J. Stat. Ann. § 52:38-1, et seq., which authorizes the use of project labor agreements for state projects, as well as those of counties, municipalities, and school districts. In other words, Governor McGreevey and the Legislature accepted the New Jersey Supreme Court's invitation to provide blanket authority for the use of restrictive project labor agreements.
Given this background, there is little basis to conclude that the statute was enacted to provide a civil remedy against project labor agreement violators. Although Local 27, a union and PLA signatory, can rightly claim to be "one of the class for whose especial benefit the statute was enacted," State Com'n of Investigation, 108 N.J. at 41 (quoting Cort, 422 U.S. at 78), this alone is insufficient to establish a right of action. The legislative history demonstrates that the statute's main function is to delegate power to state and local agencies, not to create a personal right. See Wisniewski v. Rodale, Inc., 510 F.3d 294, 301 (3d Cir. 2007) (holding that the legislature's intention of creating a personal right is a prerequisite to finding a private right of action). Although the statute states that project labor agreements "shall be binding on all contractors and subcontractors working on the public works project," N.J. Stat. Ann. § 52:38-4, this is merely a restatement of the general law of contracts, not a recognition of any new rights. Accordingly, as a private right of action is inconsistent with both the legislative history and the overall statutory scheme, the Court holds that the statute does not confer a civil remedy.
For the aforementioned reasons, summary judgment will be granted-in-part and denied-in-part as to all parties. Summary judgment will be granted in favor of Sambe and Donnelly, and against Local 27, as to the statutory claim. Summary judgment will be granted in favor of Local 27, and against Sambe and Donnelly, as to the breach of contract claim. The parties shall promptly confer, and, within two weeks, advise the Court whether a genuine issue of material fact exists as to damages. If so, the Court is prepared to conduct a trial on the matter of damages to begin on January 4, 2010.
RENÉE MARIE BUMB UNITED STATES DISTRICT JUDGE