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CFM Associates, Inc. v. International Brotherhood of Electrical Workers Local No. 269

March 3, 2010


On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-3631-07.

Per curiam.


Argued October 19, 2009

Before Judges Lisa, Baxter and Alvarez.

Plaintiffs, CFM Associates, Inc. (CFM) and its principal, Jeffrey Marko, filed a two-count complaint against defendants International Brotherhood of Electrical Workers Local Union 269 (Local 269) and its business manager, Charles L. Marciante, alleging (1) tortious interference with prospective economic advantage arising out of its relationship with Wachovia Bank, and (2) unfair labor practices under the National Labor Relations Act (NLRA) and the Labor Management Relations Act (LMRA).*fn1 After discovery was completed, defendants' summary judgment motion was granted, and an order was entered dismissing the complaint.

Plaintiffs appeal from that order. They argue (1) the court mistakenly exercised its discretion in hearing defendants' untimely summary judgment motion, (2) the court erred in determining that it lacked jurisdiction, (3) the court erred in dismissing its secondary boycott claim under federal labor law, (4) the court erred in determining that their state law claims were preempted under the NLRA or LMRA, and (5) their state law

claims were meritorious and should have survived summary judgment.

The first argument lacks sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). With respect to the second argument, we disregard any error the trial court might have made regarding lack of jurisdiction and analyze the issues under a de novo standard of review. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We reject plaintiffs' remaining arguments and affirm.


Local 269 maintained a variety of benefit funds for its members, including its Annuity Fund, which is overseen and controlled by a Board of Trustees. Local 269 deposited this fund, which was very substantial, with Wachovia Bank, which served as both the administrator and investment company for the fund from about 2001 or 2002 until May 15, 2007. Local 269 also maintained other accounts with Wachovia Bank.

Wachovia Bank operates facilities throughout New Jersey. It uses general contractors for its construction, repair and renovation needs. It apparently had an unwritten policy of utilizing union labor when such activities occurred within a union's geographic jurisdiction. This policy was a selling point for Local 269 in choosing Wachovia to manage the Annuity Fund, and the union relied upon Wachovia's representations in selecting Wachovia.

CFM is a general contractor and project management company. Wachovia began assigning work projects to CFM in or about 2000. Beginning in 2003, Wachovia began a practice of having contractors regularly performing work for it sign a Standard Form of Agreement (SFA), which did not provide for specific awards of work, but controlled the terms and conditions in the event a project was assigned to that contractor. The SFAs required contractors to provide Wachovia with a list of proposed subcontractors for Wachovia's approval. CFM signed an SFA on August 11, 2003. In the ensuing years, Wachovia became CFM's major source of business, accounting for seventy-five to eighty percent of CFM's revenues.

Despite Wachovia's preference for union labor and the SFA's provision requiring approval of subcontractors, CFM used nonunion labor on several Wachovia projects. In 2003, CFM used nonunion carpenters on a Wachovia project. When a business agent from a carpenter's union reported this to a Wachovia project manager, that individual told Marko to use union labor on projects going forward. In June 2005, CFM was working on a project in Lawrenceville, which is within Local 269's jurisdiction. Marciante observed that Storm Electric, a nonunion contractor, was working on the job. Storm Electric had been hired without CFM's knowledge by CCM, a subcontractor of CFM's on the project. Marciante informed Wachovia, which in turn contacted Marko and reminded him again to use union subcontractors.

In July 2006, CFM was performing work at a Wachovia branch in Hopewell, also within Local 269's jurisdiction. CFM had employed a subcontractor which in turn hired Storm Electric. This was brought to Wachovia's attention by Local 269. Wachovia contacted Marko, who said he would rectify the situation. Marko then contacted Marciante, informing him of his concern that Wachovia would cease giving him projects. Marciante replied "[t]he wheels are in motion, I'm not going to stop it," by which Marciante was "[r]eferring to what Jeff Marko said, they are going to take me off the preferred bidder list." However, Marciante denied asking Wachovia to terminate its relationship with CFM.

Despite Marciante's denial of pressuring Wachovia to terminate its relationship with CFM, Marko claimed that in two telephone conversations Marciante had indicated otherwise. In a call in 2005, Marciante allegedly tried to pressure Marko into signing a collective bargaining agreement (CBA) with Local 269, stating that "[t]he Union has a lot of money with Wachovia and they... will do what we tell them to do." Marko further claimed that in a call on August 3, 2006 Marciante stated that Local 269 had "a lot of money with Wachovia and they will either fire you, or we... will pull all our... money out [of] there."

Wachovia claimed it had more general concerns about CFM's performance, unrelated to any union issues. According to Wachovia Senior Vice President of Corporate Real Estate Robert F. Colletti, CFM's lack of supervision of its job sites and the work of its subcontractors was very disconcerting to Wachovia. This inadequate oversight and consequential failure to provide satisfactory reports of job status concerned Wachovia because, among other things, it led to CFM's inadvertent use of nonunion labor. Colletti was particularly embarrassed about CFM's use of nonunion labor. Unions were customers of Wachovia and Colletti "valued Wachovia's business relationship with its customers, including its business relationship with [Local 269]."

Colletti made the decision to cease using CFM. He claimed the decision was based on Wachovia's concerns about CFM's poor supervision and reliability, and was unrelated to union issues or any possibility that the union would take its business elsewhere. For summary judgment purposes, applying the Brill*fn2 standard, we accept the record evidence demonstrating that, despite Colletti's purported reason for dismissing CFM, the decision was made, at least in part, in response to union pressure.

Indeed, during the summer of 2006, the Board of Trustees of the Annuity Fund decided to re-bid for a new administrator. It did so primarily because it was seeking better rates. After presentations by various companies, the Board selected New York ...

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