The opinion
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SHEET METAL WORKERS PENSION Case No. 19-cv-07976-VC
TRUST OF NORTHERN CALIFORNIA,
et al.,
ORDER GRANTING MOTION TO
Plaintiffs, DISMISS THIRD-PARTY
COMPLAINT
v.
Re: Dkt. No. 22
BAY AREA HVAC, INC., et al.,
Defendants.
Local 104 moves to dismiss Bay Area HVAC’s third-party complaint for lack of subject-
matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Local 104 contends that Bay Area HVAC’s state-
law misrepresentation claims are preempted under the doctrine announced in San Diego Building
Trades Council v. Garmon, 359 U.S. 236 (1959), which provides that “[w]hen an activity is
arguably subject to § 7 or § 8 of the [National Labor Relations Act], the States as well as the
federal courts must defer to the exclusive competence of the National Labor Relations Board if
the danger to state interference with national policy is to be averted.” Id. at 245. No typical
preemption doctrine, Garmon safeguards the NLRB’s primary jurisdiction by displacing the
subject-matter jurisdiction of federal and state courts. Longshoremen v. Davis, 476 U.S. 380, 391
(1986); Ethridge v. Harbor House Restaurant, 861 F.2d 1389, 1401 (9th Cir. 1988). So while the
misrepresentation claims meet the test for supplemental jurisdiction under 28 U.S.C. § 1367(a),
Garmon dictates whether these claims are nonetheless earmarked for NLRB adjudication.
Section 8(b)(3) of the NLRA defines unfair labor practices to include a union’s refusal
“to bargain collectively with an employer, provided it is the representative of his employees
subject to the provisions of section 159(a).” 29 U.S.C. § 158(b)(3). Parties subject to this
mandatory bargaining obligation must bargain in good faith, which “necessarily requires that
claims made by either bargainer should be honest claims.” NLRB v. Truitt Manufacturing Co.,
351 U.S. 149, 152 (1956). And at least in some instances, the NLRB arguably has jurisdiction
over claims that an employer or union induced its counterparty to sign a collective bargaining
agreement by fraud or misrepresentation. See Textron Lycoming Reciprocating Engine Div.,
ACVO Corp. v. Automobile Workers, 523 U.S. 653, 662 (1998) (Stevens, J., concurring); Nu
Image, Inc. v. Int’l Alliance of Theatrical Stage Employees, 893 F.3d 636, 641 (9th Cir. 2018).
Here, Local 104 allegedly misrepresented the effect of signing a pre-hire contract that
permits Bay Area HVAC, among other things, to hire construction workers from a hiring hall.
This type of collective bargaining agreement—the product of bargaining between the employer
and a union that has not obtained the majority support of the employees—is allowed only in the
construction industry. 29 U.S.C. § 158(f); see Jim McNeff, Inc. v. Todd, 461 U.S. 260, 266
(1983). Neither party disputes that the agreement at issue satisfies the elements of a Section 8(f)
pre-hire contract. Operating Engineers Pension Trust v. Beck Engineering & Surveying Co., 746
F.2d 557, 562 (9th Cir. 1984).
The alleged misrepresentations by Local 104 arguably violate Section 8(b)(3). To be sure,
the arguments against NLRB jurisdiction are substantial, not least because the statute addresses
only collective bargaining “subject to the provisions of section 159(a)”—meaning, between the
employer and a union that represents a majority of the employees. 29 U.S.C. § 158(b)(3). The
Board has carved out an exception to this general rule for collective bargaining during the term
of a Section 8(f) pre-hire contract, but the Board hasn’t extended Section 8(b)(3) to negotiations
for the initial pre-hire contract or negotiations after the contract expires. John Deklewa & Sons,
282 NLRB 1375, 1386–87 & n.49 (1987). Yet the arguments in favor of NLRB jurisdiction have
not been “authoritatively rejected by the courts or the Board.” Davis, 476 U.S. at 395 (internal
quotation marks omitted). To the contrary, the NLRB has left open “the scope of bargaining
obligations under Section 8(f).” Bricklayers Local No. 3, 162 NLRB 476, 479 (1966). And the
Ninth Circuit, at least on one reading, has suggested that the initial Section 8(f) pre-hire contract
would be a “recognized bargaining relationship” governed by Section 8(b)(3). Operating
Engineers Pension Trust v. Wilson, 915 F.2d 535, 540 (9th Cir. 1990). Faced with two arguable
interpretations, neither of which is foreclosed by precedent, the Board gets first dibs on how best
to implement the NLRA in light of its (often competing) purposes.
Local 104’s motion to dismiss the third-party complaint for lack of subject-matter
jurisdiction is granted. Of course, Bay Area HVAC may raise contract invalidity as a defense to
the trust funds’ claims, an issue for which the allegations of misrepresentations by Local 104 are
presumably relevant. Textron, 523 U.S. at 658; see Rozay’s Transfer v. Local Freight Drivers,
850 F.2d 1321, 1329-30 (9th Cir. 1988).
IT IS SO ORDERED.
Dated: May 30, 2020 Koo.
VINCE CHHABRIA
United States District Judge