International Brotherhood of Electrical Workers Local 48 v. Rosendin Electric, Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

INTERNATIONAL BROTHERHOOD OF No. 3:23-cv-00297-HZ

ELECTRICAL WORKERS LOCAL 48,

Plaintiff, OPINION & ORDER

v.

ROSENDIN ELECTRIC, INC.,

Defendant.

Daniel Hutzenbiler

Charese Rohny

Krista Michelle Cordova

McKanna Bishop Joffe, LLP

1635 NW Johnson St

Portland, OR 97209

Attorneys for Plaintiff

Paula A. Barran

Nicolas K. Ball

Richard C. Hunt

Wilson S. Jarrell

Barran Liebman LLP

601 SW Second Ave Ste 2300

Portland, OR 97204

Attorneys for Defendant

HERNÁNDEZ, District Judge:

Plaintiff International Brotherhood of Electrical Workers Local 48 (“IBEW Local 48”)

sued Defendant Rosendin Electric for violating a collective bargaining agreement (“CBA”)

between the parties. First Am. Compl. (“FAC”), ECF 8. Plaintiff brings claims for breach of

contract and breach of the implied covenant of good faith and fair dealing. Id. Plaintiff also seeks

a declaratory judgment that Defendant has violated specified provisions of the CBA. Id.

Defendant moves for summary judgment on Plaintiff’s claims. ECF 20. For the following

reasons, the Court grants the Motion.

BACKGROUND

Plaintiff “is an unincorporated association organized and operated for the purpose of

collectively representing persons employed by Defendant in Oregon and Washington.” FAC ¶ 2;

Answer ¶ 2, ECF 16. Defendant is a corporation engaged in the electrical contracting business in

Oregon. FAC ¶ 3; Answer ¶ 3. During the time relevant to this case, Defendant “has been bound

by a written collective bargaining agreement between [Plaintiff] and the Oregon-Columbia

Chapter of the National Electrical Contractors Association (‘NECA’)[.]” FAC ¶ 7; Answer ¶ 7;

Barran Decl. Ex. 1 (CBA), ECF 21. The CBA is also referred to as an “Inside Agreement.”

I. Relevant CBA Provisions

Relevant to this Motion, the CBA contains the following provisions on employer and

union rights and covered work:

RECOGNITION CLAUSE:

Section 2.07. The employer recognizes the Union as the exclusive representative of

all its employees performing work within the jurisdiction of the Union for the

purpose of collective bargaining in respect to the rates of pay, wages and hours of

employment.

Barran Decl. Ex. 1 at 9 (Art. II, § 2.07 of CBA).

ANNULMENT/SUBCONTRACTING:

Section 2.20. The Local Union is a part of the International Brotherhood of

Electrical Workers and any violation or annulment by an individual Employer of

the approved Agreement of this or any other Local Union of the IBEW, other than

violations of Paragraph 2 of this Section, will be sufficient cause for the

cancellation of his Agreement by the Local Union after a finding has been made by

the International President of the Union that such a violation or annulment has

occurred.

The subletting, assigning, or transfer by an individual Employer of any work in

connection with electrical work to any person, firm or corporation not recognizing

the IBEW or one of its Local Unions as the collective bargaining representative of

his employees on any electrical work in the jurisdiction of this or any other Local

Union to be performed at the site of the construction, alteration, painting or repair

of a building, structure or other work, will be deemed a material breach of this

Agreement.

All charges of violations of Paragraph 2 of this Section shall be considered as a

dispute and shall be processed in accordance with the provision of this Agreement

covering the procedure for the handling of grievances and the final and binding

resolution of disputes.

Id. at 12-13 (Art. II, § 2.20 of CBA).

SCOPE OF WORK:

Section 3.15a). The policy of the workmen employed under this Agreement is to

promote the use of materials and equipment manufactured, processed or repaired

under economically sound wage, hour and working conditions.

Section 3.1(b). There shall be no restriction of the use of tools or machinery

simplifying work (such as pipe cutting machines, electric and pneumatic drills,

electric hoists and such other tools as may be agreed upon between the employer

and the Union) but all such tools must be operated by workmen employed under

the terms of this agreement and be provided with modern safety features.

Section 3.15(c). Workmen employed under the terms of this Agreement shall do all

electrical construction and erection work and all maintenance thereon. This shall

include the installation and maintenance of all electrical lighting, heating and power

equipment. Such work shall include on-the-job work of welding, burning, brazing,

drilling and shaping of all copper, silver, aluminum, angle iron and brackets to be

used in connection with the installation and erection of electrical wiring on

equipment.

All work of chasing and channeling necessary to complete any electrical work and

all on-the-job handling and moving of any electrical materials, equipment and

apparatus shall be performed by workmen employed under this Agreement. The

cutting and threading of all conduit and nipples shall be performed by workmen

employed under this Agreement. There shall be no restriction covered by this

Agreement on the installation of any materials or equipment that are listed as a

stock item in the electrical industry catalogs or price lists and furnished as a

manufactured product.

Id. at 21 (Art. III, § 3.15 of CBA).

The CBA includes a provision about a Code of Excellence:

Section 12.01. The parties to this Agreement recognize that to meet the needs of

our customers, both employer and employee must meet the highest levels of

performance, professionalism, and productivity. The Code of Excellence has

proven to be a vital element in meeting the customers’ expectations. Therefore each

IBEW local union and NECA chapter shall implement a Code of Excellence

Program. The program shall include minimum standards as designed by the IBEW

and NECA.

Id. at 38-39 (Art. XII, § 12.01 of CBA).

The CBA also lays out the following grievance procedure:

GRIEVANCES/DISPUTES:

Section 1.05. There shall be a Labor-Management Committee of three representing

the Union and three representing the Employers. It shall meet regularly at such

stated times as it may decide. However, it shall also meet within 48 hours when

notice is given by either party. It shall select its own Chairman and Secretary. The

Local Union shall select the Union representatives and the Chapter shall select the

management representatives.

Section 1.06. All grievances or questions in dispute shall be adjusted by the duly

authorized representative of each of the parties to this Agreement. In the event that

these two are unable to adjust any matter within 48 hours, they shall refer the same

to the Labor-Management Committee.

Section 1.07. All matters coming before the Labor-Management Committee shall

be decided by a majority vote. Four members of the Committee, two from each of

the parties hereto, shall be a quorum for the transaction of business, but each party

shall have the right to cast the full vote of its membership and it shall be counted as

though all were present and voting.

Section 1.08. Should the Labor-Management Committee fail to agree or to adjust

any matter, such shall then be referred to the Council on Industrial Relations for the

Electrical Contracting Industry for adjudication. The Council’s decisions shall be

final and binding.

Section 1.09. When any matter in dispute has been referred to conciliation or

arbitration for adjustment, the provisions and conditions prevailing prior to the time

such matters arose shall not be changed or abrogated until agreement has been

reached or a ruling has been made.

Section 1.10. A grievance must be filed with the Union within five working days

from the alleged grievance or knowledge of the alleged grievance.

Id. at 5-6 (Art. I, §§ 1.05-1.10 of CBA).

II. Grievance 22-097

On March 1, 2022, Josh Carter, a business representative for Plaintiff, visited

Defendant’s QTS Data Center jobsite. Carter Decl. ¶¶ 1, 6, ECF 27. He was accompanied by

Will Hodges, Plaintiff’s assistant business manager, and Garrett Johnson, Defendant’s shop

steward. Id. ¶ 6. Carter “noticed a pile of prefabricated strut racks.” Id. He first believed they had

been built at Defendant’s prefabrication shop, but after inspecting them, he realized they had

been ordered from a third-party vendor, Wesanco. Id. ¶ 7. Carter knew this because the strut

racks were not labeled the way they were at Defendant’s prefabrication shop, and a Wesanco

shipping order was attached to some of the strut racks. Id. During the visit, Johnson confirmed

with Dale Husky at the prefabrication shop that the strut racks had not been assembled there. Id.

¶ 8. Carter, Hodges, and Johnson spoke to the jobsite superintendent, Clint Quinn, who

confirmed that the strut racks had been ordered from a third party. Id. ¶ 9. Quinn suggested that

they speak with Scott Harnar, Defendant’s general superintendent. Id.

Carter contacted Harnar to discuss the strut racks, which he believed had been ordered in

violation of the CBA, and attempted to resolve the matter without filing a grievance. Id. ¶ 10.

Harnar requested an in-person meeting. Id. Plaintiff’s internal Grievance Committee met on

March 3, 2022, and unanimously voted to move forward with a grievance. Id. ¶ 11. Carter was

present at the meeting. Id. Leadership for Plaintiff and management for Defendant met on March

7, 2022. Id. ¶ 12. During the meeting, Harnar agreed that Defendant violated the Inside

Agreement between the parties when it ordered the strut racks. Id.

On March 10, 2022, Carter emailed a suggested remedy for the grievance to Harnar and

other representatives of Defendant’s management. Id. ¶ 13. Harnar responded, “We respectfully

disagree. Rosendin would like to discuss this with NECA.” Id. Ex. P. Plaintiff filed a grievance,

Grievance No. 22-097, on March 14, 2022. Barran Decl. Ex. 3. The grievance alleged that

Defendant violated the CBA “by subcontracting bargaining unit work out to a non-signatory

contractor. Subcontractor-Wesanco prefab of 1170 various racks, not stock items or in their

catalog.” Id. Plaintiffs alleged that this violated sections 2.20, 2.07, 3.15, and 12.01 of the CBA

(cited above). Id.

On May 26, 2022, the parties held a labor-management meeting, and NECA stated that

the parties needed to discuss a possible change to their agreement. Carter Decl. ¶ 15. The parties

met other times to try to settle the grievance, but could not reach an agreement. Id. ¶ 17. The

parties argued their positions on the grievance in front of the Council on Industrial Relations on

August 16, 2022. Id. ¶ 18. Plaintiff’s brief in support of its position stated that sections 2.20 and

3.15(a) and (c) of the CBA were relevant to the dispute. Barran Decl. Ex. 6 at 2-3. Plaintiff’s

primary argument was that the strut racks were not stock items under section 3.15 and thus

needed to have been made by its workers rather than third-party contractors. Id. at 3-6. Plaintiff

also argued that constructing the strut racks was within the scope of work under section 2.20. Id.

at 6. The Council issued a decision stating, “In the instant case, the Council declines to rule.”

Barran Decl. Ex. 7. Grievance 22-097 is the basis of this lawsuit.

III. Grievance 22-116

On November 17, 2022, Plaintiff filed Grievance 22-116 against Defendant. Barran Decl.

Ex. 5. Plaintiff alleged that Defendant violated the CBA “by subcontracting bargaining unit work

out to a non-signatory contractor. The subcontractor provided a custom product not listed in their

electrical industry catalog or parts list.” Id. Plaintiff alleged that the order violated sections 2.20,

2.07, 3.15, and 12.01 of the CBA. Id.

Plaintiff explained that “[o]n November 3, 2022, Business Representative Wayne Tanner

was made aware that prefabricated trapeze hangers had been delivered to Rosendin[.]” Barran

Decl. Ex. 8 at 3. Plaintiff filed Grievance 22-116, which was later expanded to include

prefabrication of device boxes. Id. The parties agreed that Wesanco and ISAT were the

companies used to build the trapeze hangers, and PROFAB was used to build the device boxes.

Id. The Labor-Management Committee addressed the grievance on July 12, 2023. Id. The parties

had not reached an agreement but had not yet declared impasse. Id. However, Defendant filed for

the Council to review the grievance. Id.

On July 31, 2023, Plaintiff submitted a brief to the Council in support of Grievance 22-

116. Barran Decl. Ex. 8. In the brief, Plaintiff wrote:

This is not the first time that Local 48 and NECA have been in front of CIR

regarding a violation of the scope of work covered by the Inside Agreement. In

August of 2022, the parties presented Grievance #22-097, which addressed the

choice by signatory contractor Rosendin Electric, Inc. (Rosendin) to have strut

racks built by non-bargaining unit members.

Id. at 2. Plaintiff continued: “The parties are before you again over this same prefabrication

issue. Rosendin continues to have strut racks (specifically trapeze hangers) built by workers that

are not covered by the Inside Agreement, and has now expanded that contract violation to

include construction of” other items. Id. Plaintiff explained that although it believed several

provisions of the CBA were relevant to the grievance, “the most decisive language is found in

Article III, Section 3.15(c), which addresses the scope of work.” Id. Plaintiff wrote that it “put

aside arguments around such issues as the definition of subcontracting and if the work requires

an electrical license” because “[t]he resolution should ultimately rest on how CIR interprets

Section 3.15(c)[.]” Id. at 4.

On August 15, 2023, the Council found “that external guidance on the dispute would

hinder the recent progress made between the parties to reach resolution[.]” Barran Decl. Ex. 9 at

1. The Council concluded “that a local resolution of the issues would be advantageous.” Id. It

stated, “The grievance is therefore remanded back to the parties, and they are directed to

continue their efforts to reach a mutually agreeable resolution to their dispute.” Id. The Council

directed the parties “to seek the assistance of the Executive Director of the Western Region of

NECA and the IBEW Ninth District International Vice-President, who shall each make

themselves available to facilitate a resolution between the parties.” Id. It is undisputed that the

parties have not reached a resolution on Grievance 22-116. Def. Mot. 24; Pl. Resp. 10, ECF 25.

Carter opines that “further negotiations between Rosendin and IBEW, Local 48 regarding

prefabricated items would be futile.” Carter Decl. ¶ 19.1

1 Both parties mention other grievances that involve either different alleged violations of the

CBA by Defendant or violations of the CBA by an employer other than Defendant. See Def.

Mot. 7-8 (addressing Grievances 22-096 and 22-098), 11 n.4 (addressing Grievance 22-115); Pl.

Resp. 7-11 (addressing Grievances 22-096, 22-098, and 22-115). The Court concludes that these

grievances are not germane to this case and therefore declines to address them further.

IV. Procedural History

Plaintiff filed suit on March 1, 2023, based on Grievance 22-097. Compl., ECF 1.

Plaintiff’s first claim for relief, for breach of contract, alleges that Defendant violated the CBA

by ordering the strut racks from a third-party fabricator. FAC ¶¶ 24-28. Plaintiff’s second claim

for relief, for breach of the implied covenant of good faith and fair dealing, alleges that in

ordering the strut racks from a third party, Defendant “undermine[d] the contractual policy of

‘promot[ing] the use of materials and equipment manufactured, processed or repaired under

economically sound wage, hour and working conditions’ as stated in Article III, Section 3.15 of

the CBA.” Id. ¶¶ 29-34.

Defendant moved to dismiss the case for failure to state a claim. ECF 9. The Court denied

the motion. Op. & Ord., ECF 14. In so ruling, the Court held that Plaintiff had adequately

pleaded exhaustion of the grievance procedure. Id. at 7. Defendant then answered the FAC,

asserting as its first affirmative defense that Plaintiff failed to exhaust the grievance process

outlined in the CBA. Answer ¶ 43. On January 11, 2024, Defendant filed the present Motion for

Summary Judgment. The Court took the Motion under advisement on February 15, 2024.

STANDARDS

Summary judgment is appropriate if there is no genuine dispute as to any material fact

and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The

moving party bears the initial responsibility of informing the court of the basis of 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.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)

(quoting former Fed. R. Civ. P. 56(c)).

Once the moving party meets its initial burden of demonstrating the absence of a genuine

issue of material fact, the burden then shifts to the nonmoving party to present “specific facts”

showing a “genuine issue for trial.” Fed. Trade Comm’n v. Stefanchik, 559 F.3d 924, 927–28

(9th Cir. 2009) (internal quotation marks omitted). The nonmoving party must go beyond the

pleadings and designate facts showing an issue for trial. Bias v. Moynihan, 508 F.3d 1212, 1218

(9th Cir. 2007) (citing Celotex, 477 U.S. at 324).

The substantive law governing a claim determines whether a fact is material. Suever v.

Connell, 579 F.3d 1047, 1056 (9th Cir. 2009). The court draws inferences from the facts in the

light most favorable to the nonmoving party. Earl v. Nielsen Media Rsch., Inc., 658 F.3d 1108,

1112 (9th Cir. 2011). If the factual context makes the nonmoving party’s claim as to the

existence of a material issue of fact implausible, that party must come forward with more

persuasive evidence to support its claim than would otherwise be necessary. Matsushita Elec.

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

DISCUSSION

The Court concludes that it cannot grant Plaintiff the relief sought because the grievance

process has not been exhausted, and this Court’s continued involvement would contravene

federal labor law and the policies it embodies. The Court also concludes that it lacks jurisdiction

to vacate the Council’s decision on Grievance 22-097. The Court therefore dismisses Plaintiff’s

claims without prejudice.

I. The Labor Management Relations Act

The Labor Management Relations Act (“LMRA”), 29 U.S.C. § 141 et seq., governs

Plaintiff’s claims. The statute contains a subchapter on conciliation of labor disputes. 29 U.S.C.

§§ 171-183. The subchapter’s statement of policy emphasizes that collective bargaining and

negotiation between employers and employees is the preferred method to resolve labor disputes.

Id. § 171. The Supreme Court has described federal labor law as “a statutory scheme premised

on the centrality of the right to bargain collectively and the desirability of resolving contract

disputes through arbitration.” Livadas v. Bradshaw, 512 U.S. 107, 117 (1994). See also United

Paperworkers Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 38 (1987) (The goal of the

LMRA is to promote “the speedy resolution of grievances by private mechanisms[.]”). “The

grievance procedure is . . . a part of the continuous collective bargaining process.” United

Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 581 (1960). “The processing of

disputes through the grievance machinery is actually a vehicle by which meaning and content are

given to the collective bargaining agreement.” Id.

The LMRA gives district courts jurisdiction over “[s]uits for violation of contracts

between an employer and a labor organization representing employees in an industry affecting

commerce[.]” 29 U.S.C. § 185(a) (Section 301 of the LMRA). The Supreme Court has held that

this provision “authoriz[es] federal courts to create a uniform body of federal common law to

adjudicate disputes that arise out of labor contracts.” Columbia Exp. Terminal, LLC v. Int’l

Longshore & Warehouse Union, 23 F.4th 836, 841 (9th Cir. 2022), cert. dismissed sub

nom. Columbia Exp. Terminal, LLC v. ILWU, 142 S. Ct. 2094 (2022) (citing Curtis v. Irwin

Indus., Inc., 913 F.3d 1146, 1151 (9th Cir. 2019); Textile Workers Union v. Lincoln Mills, 353

U.S. 448, 450-51 (1957)). “[A] ‘central tenet of federal labor-contract law under § 301 is that the

arbitrator, not the court, has the responsibility to interpret the labor contract in the first

instance.’” Id. (quoting Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220 (1985)) (cleaned up).

Accordingly, § 301 preempts state-law claims that are grounded in the CBA or require

interpretation of the CBA. Id.

A plaintiff seeking to enforce a right provided by a CBA generally must exhaust the

CBA’s grievance procedures before suing. See Allis-Chalmers Corp., 471 U.S. at 219 (“Perhaps

the most harmful aspect of the Wisconsin decision [holding that § 301 did not preempt the

plaintiff’s state-law tort claim] is that it would allow essentially the same suit to be brought

directly in state court without first exhausting the grievance procedures established in the

bargaining agreement.”); Nat’l Post Off. Mail Handlers Loc. No. 305, LIUNA, AFL-CIO v. U.S.

Postal Serv., 594 F.2d 988, 991 (4th Cir. 1979) (citing Republic Steel Corp. v. Maddox, 379 U.S.

650, 652-53 (1965); United Steelworkers v. Am. Mfg. Co., 363 U.S. 564, 566 (1960)) (“It is a

well-established principle of labor law that a union and its members must exhaust the remedies

provided in their collective bargaining agreement with the employer before they seek judicial

intervention.”); Columbia Exp. Terminal, 23 F.4th at 848 (stating that plaintiff employer was

“simply required to exhaust the grievance process to which it agreed in the CBA before it can

proceed in federal court with [its] claims”).

If a plaintiff has failed to exhaust the grievance procedure, the defendant may move for

summary judgment on the plaintiff’s claims based on failure to exhaust, and the district court

should review the record to determine whether there are any genuine disputes of material fact

relevant to exhaustion. Albino v. Baca, 747 F.3d 1162, 1171 (9th Cir. 2014). “If a motion for

summary judgment is denied, disputed factual questions relevant to exhaustion should be

decided by the judge, in the same manner a judge rather than a jury decides disputed factual

questions relevant to jurisdiction and venue.” Id. at 1170-71. However, if the district court grants

the motion for summary judgment, it must view the facts in the light most favorable to the

plaintiff. Id. at 1173.

Courts have a limited role in reviewing arbitrators’ decisions. They can decide whether

the arbitration agreement covers the dispute or whether the arbitrator had power to render a

decision. Warrior & Gulf. Nav. Co., 363 U.S. at 582 (“[T]he judicial inquiry under s 301 must be

strictly confined to the question whether the reluctant party did agree to arbitrate the grievance or

did agree to give the arbitrator power to make the award he made.”). “Courts are not authorized

to review the arbitrator’s decision on the merits despite allegations that the decision rests on

factual errors or misinterprets the parties’ agreement.” Major League Baseball Players Ass’n v.

Garvey, 532 U.S. 504, 509 (2001). If a court finds that an arbitrator’s “procedural aberrations

rise to the level of affirmative misconduct,” the court should not decide the case on the merits; it

should vacate the award and leave open the possibility of further proceedings if permitted under

the governing agreement. Id. at 510. If the arbitrator’s award is unclear, the district court should

remand it to the arbitrator to clarify and interpret the award. Hanford Atomic Metal Trades

Council, AFL-CIO v. Gen. Elec. Co., 353 F.2d 302, 307-08 (9th Cir. 1965) (district court

properly remanded award to arbitral board to clarify uncertainty in its terms rather than

interpreting the award itself). See also Sunshine Min. Co. v. United Steelworkers of Am., AFL-

CIO, CLC, 823 F.2d 1289, 1295 (9th Cir. 1987) (“It is firmly established that the courts may

resubmit an existing arbitration award to the original arbitrator for interpretation or

amplification.”).

II. Application

A. Breach of Contract Claim

Applying the above legal principles to the facts, the Court concludes that it cannot grant

the relief Plaintiff seeks. Plaintiff asks the Court to try the case by jury, enter judgment that

Defendant breached Sections 2.07, 3.15, and 12.01 of the CBA, and award damages. FAC 9.

Plaintiff also asks the Court to order Defendant to restore the disputed work to Plaintiff and to

stop breaching the CBA. Id. In the alternative, Plaintiff asks for a declaratory judgment that

Defendant breached the specified provisions of the CBA. Id. In granting this relief, the Court

would be required to interpret and apply provisions of the CBA that are the subject of an

unexhausted grievance. This the Court cannot do.

Defendant argues that the Council’s decision remanding Grievance 22-116 prevents the

Court from evaluating Grievance 22-097 on the merits because the two grievances are so similar.

Def. Mot. 6. Defendant points out that both grievances allege subcontracting of work to an

outside subcontractor and allege violations of the same provisions of the CBA. Id. at 9.

Defendant also points to language in Plaintiff’s own brief in support of Grievance 22-116 that

characterizes the disputes as involving the same issue. Id. at 10. Defendant states that since the

Council remanded the grievance to the parties, they continue to seek a resolution, but have not

reached agreement. Id. at 12. Defendant argues that the parties are still bound by the Council’s

directive to continue to negotiate. Id. Defendant also notes that the CBA provides that when a

dispute is referred to arbitration, the status quo is not to be changed until an agreement has been

reached or a ruling has been made. Id. at 6 (citing CBA § 1.09). Defendant argues that all of

Plaintiffs’ claims must be dismissed because of failure to exhaust the grievance process. Id.

Plaintiff acknowledges the general rule that “courts are prohibited from examining the

merits of the underlying industrial dispute in actions brought to enforce or vacate a labor

arbitration award.” Pl. Resp. 18. Plaintiff argues that this case is different because the arbitrator

declined to rule, and provides several reasons in support of the argument that the grievance

process has been exhausted. The Court concludes that Plaintiff’s arguments lack merit.

In ruling on Defendant’s motion to dismiss, the Court held that Plaintiff had adequately

pleaded exhaustion. Op. & Ord. 7. Plaintiff argues that the matter has been resolved and

exhaustion has been established. Pl. Resp. 15. Defendant notes that the FAC did not disclose that

Grievance 22-116 was pending, and states that this new information should change the Court’s

analysis. Def. Mot. 17. Defendant is correct. At the motion to dismiss stage, the Court addressed

exhaustion based on the limited allegations in the FAC and minimal argument from the parties

on the issue. On the present record, the Court concludes that Plaintiff has not exhausted the

grievance process, for the reasons discussed below.

Plaintiff argues that Grievance 22-116 is different from Grievance 22-097. Pl. Resp. 11-

12. According, to Plaintiff, the two grievances are “very similar,” but they involve “different

prefabricated items, that were delivered to a different building on different dates, and affected

different hours, resulting in different damages.” Id. at 11 (citing Carter Decl., Bachman Decl. Ex.

K, ECF 26). Plaintiff acknowledges that the prefabrication issue is the same in both grievances:

Defendant ordered “strut racks (specifically trapeze hanger) built by workers who are not

covered by the Inside Agreement[.]” Id. at 12. Grievance 22-116 was, as Plaintiff notes, more

expansive than Grievance 22-097, as Plaintiff alleged that Defendant ordered several other

prefabricated items from outside sources as well. Id.; see Bachman Decl. Ex. L at 2 (Brief in

support of Grievance 22-116).

The Court concludes that the differences between Grievance 22-097 and 22-116 are not

material. Plaintiff concedes that Grievance 22-116 alleges the same violations of the CBA as

Grievance 22-097. That it also alleges other violations of the CBA based on additional

prefabricated products does not change the analysis. The issue raised in Grievance 22-097—

whether Defendant violated the CBA by ordering prefabricated strut racks from a non-signatory

company—is before the arbitrators in Grievance 22-116. Even the fabricator is the same: both

Grievance 22-097 and Grievance 22-116 allege that Defendant ordered the strut racks from

Wesanco. Bachman Decl. Ex. D at 1 (Brief in support of Grievance 22-097), Ex. L at 3 (Brief in

support of Grievance 22-116). Grievance 22-116 also alleges that strut racks were ordered from a

second company, ISAT. Id. Ex. L at 3. The second company is immaterial because Grievance

22-116 encompasses the order of the same product from the same company as Grievance 22-097.

Plaintiff’s own brief in support of Grievance 22-116 acknowledged that the legal issues were the

same as in Grievance 22-097. Bachman Decl. Ex. L at 2.

It does not matter that the dates of the violations, locations of the jobsites, or hours of

work are different between the two grievances. See Bachman Decl. ¶ 32, Carter Decl. ¶ 14; Pl.

Resp. 8. Both grievances ask the arbitrators to decide the same legal issue. Resolution of the

central issue in Grievance 22-116—whether Section 3.15 of the CBA permits Defendant to order

the strut racks from a non-signatory third party rather than have Plaintiff’s workers fabricate

them—would also resolve that issue for Grievance 22-097. A difference in calculation of

damages based on different dates, hours, and jobsites does not create a genuine dispute of

material fact on exhaustion. If the Court allowed Plaintiff’s suit to proceed, it would undermine

the Council’s judgment that continued negotiation between the parties was the appropriate course

of action and intrude on the Council’s role of interpreting the CBA in the first instance.

Plaintiff argues that further negotiation between the parties would be futile. Pl. Resp. 16.

It relies on Carter’s declaration. Carter states, “Given previous efforts, my three years of

bargaining experience, and Rosendin’s current positions on the CBA provisions, further

negotiations between Rosendin and IBEW, Local 48 regarding prefabricated items would be

futile.” Carter Decl. ¶ 19. Defendant counters that “futility is not an exception to the rule that a

court may not take over the role of an arbitrator.” Def. Reply 10, ECF 29. Defendant states that

Plaintiff “has an exclusive remedy with the National Labor Relations Board as to whether there

was a failure to bargain in good faith.” Id. (citing 29 U.S.C. §§ 158(a)(1), (5)). And Defendant

asserts that Carter’s declaration is irrelevant because the NLRB, not the Court, has jurisdiction

over collective bargaining. Id. at 11. Defendant also notes that Plaintiff cites no legal authority in

support of its futility argument. Id.

The Court agrees with Defendant that no futility exception applies here. Plaintiff points to

no precedential cases finding exhaustion of the grievance process futile in a dispute between a

union and an employer. The Ninth Circuit has recognized a futility exception to the exhaustion

requirement for cases in which an employee sues an employer for violation of the CBA or a

union for breach of the duty of fair representation. Carr v. Pac. Mar. Ass’n, 904 F.2d 1313, 1317

(9th Cir. 1990). Courts recognize that a risk of bias exists there because the group to which the

employee must submit a grievance is generally made up of representatives chosen by the

defendant employer or union. See id. (citing Steele v. Louisville & Nashville Ry., 323 U.S. 192,

206 (1944)). Here, in contrast, the grievance procedure in the CBA sets various stages at which

the grievance must be considered by bodies made up of representatives from both sides,

culminating in review by a neutral arbitrator. Barran Decl. Ex. 1 at 5-6 (Art. I, §§ 1.05-1.10 of

CBA). In hearing a grievance, the Council sits an equal number of representatives for each side.

Id. Exs. 7, 9 (Council rulings listing six employer representatives and six union representatives).

There is no inherent risk of bias. Plaintiff does not argue that it cannot get a fair hearing from the

Council or that it faces bias during any other stage of the grievance process. No evidence in the

record suggests that the Council is biased.

Even assuming a futility exception might apply, Plaintiff has not shown a genuine dispute

over whether exhaustion would be futile. The Council remanded Grievance 22-116 to the parties

to continue to negotiate a resolution. Grievance 22-116 addresses the same legal issue as

Grievance 22-097 (indeed, Carter’s declaration as to futility refers to the issue of “prefabricated

items” rather than a specific grievance). Plaintiff argues that the two sides tried to negotiate a

resolution as directed by the Council, but they are entrenched in their positions, so further

negotiations are futile. Pl. Resp. 16. Assuming this is true, the next course of action is to notify

the Council that the parties have complied with the directive to negotiate further on Grievance

22-116 and are at an impasse. If the Council agrees that further negotiation is futile and the issue

is ripe for ruling, it can proceed to interpret the disputed provisions of the CBA and issue a

decision. Plaintiff does not argue that the Council cannot do so or that it would not give Plaintiff

a fair hearing. Even viewing the record in the light most favorable to Plaintiff, exhaustion would

not be futile.

Next, Plaintiff argues that the Council relinquished jurisdiction over Grievance 22-097.

Pl. Resp. 17. Plaintiff states that “here an arbitrator declined to rule, and thus failed to provide a

vehicle for meaning or content.” Id. Plaintiff asserts that on this procedural posture, “[s]ome

form of judicial review is necessary because the arbitrator ‘personally relinquished jurisdiction of

the dispute, [and] the arbitration process would be left at a dead standstill’” without intervention

from the Court. Id. (quoting New United Motor Mfg., Inc. v. Auto Workers Loc. 2244, 617 F.

Supp. 2d 948, 955 (N.D. Cal. 2008)). Defendant counters that New United Motor involved a

petition to vacate an arbitration award and that it “involved an arbitrator who explicitly declined

the request to decide a remedy after ruling on the merits.” Def. Reply 9. Defendant also states

that “[t]he court did not contemplate taking over the case (as Local 48 requests this Court to do)

and instead declined to vacate the arbitration award.” Id. Defendant is correct. In addition, the

arbitrator in New United Motor was selected by the parties. 617 F. Supp. 2d at 950. Here, as

Defendant points out, “[t]he Council cannot relinquish jurisdiction because the Council is the

decision maker and final arbitrator” designated by the CBA. Def. Reply 9. The Court rejects

Plaintiff’s argument that the Council relinquished jurisdiction over Grievance 22-097. The

Council declined to rule. Its decision said nothing about relinquishing jurisdiction. There is no

basis to conclude that the Council relinquished jurisdiction. If Plaintiff was uncertain about the

meaning of the decision or what further action was available, it could have contacted the Council

to seek clarification.

Plaintiff similarly asserts that in declining to rule, the Council manifested an infidelity to

its obligation. Pl. Resp. 19. Plaintiff states, “Even if the court here found that declining to rule is

a final order, the Council’s declining to rule as a final order, manifests an infidelity of the

arbitrator’s obligation to decide cases, and a relinquishment in this particular dispute.” Id. In

support, Plaintiff cites United Steelworkers of America v. Enterprise Wheel & Car Corp., 363

U.S. 593, 597 (1960). In Enterprise Wheel, the Supreme Court stated:

[A]n arbitrator is confined to interpretation and application of the collective

bargaining agreement; he does not sit to dispense his own brand of industrial

justice. He may of course look for guidance from many sources, yet his award is

legitimate only so long as it draws its essence from the collective bargaining

agreement. When the arbitrator’s words manifest an infidelity to this obligation,

courts have no choice but to refuse enforcement of the award.

Id. As Defendant states, this case stands for the proposition that a court should refuse to enforce

an award where it manifests an infidelity to the arbitrator’s obligation to rely on the CBA. Def.

Reply 12. Plaintiff cites no authority for the proposition that the arbitrator’s “infidelity” to the

obligation permits the Court to interpret the CBA in the arbitrator’s stead. And as Plaintiff

acknowledges, no explanation was provided for why the Council declined to rule. Pl. Resp. 19.

The Council’s decision may not have helped Plaintiff resolve the grievance, but there is no basis

for the Court to infer any inappropriate purpose from the Council’s decision not to rule. Events

following the Council’s decision on Grievance 22-097 indicate there was no inappropriate

purpose. The Council did not decline to rule on Grievance 22-116, instead remanding to the

parties to continue negotiating, and directing them to seek assistance in doing so. Barran Decl.

Ex. 9. The legal issues raised in Grievance 22-097 are still live and still undergoing the grievance

process.

Plaintiff argues that the Council’s decision on Grievance 22-097 was not a final order. Pl.

Resp. 20. The Court agrees. Declining to rule is not a final award—it is not an award at all.

Defendant argues that even if no award was entered, the Court can and should vacate and remand

Grievance 22-097 to the Council for further proceedings. Def. Reply 12. The Court concludes

that it lacks jurisdiction to either affirm the Council’s decision or vacate and remand it. “The

arbitrator’s award must normally be final and binding before such review is undertaken.”

Millmen Loc. 550, United Bhd. of Carpenters & Joiners of Am., AFL-CIO v. Wells Exterior

Trim, 828 F.2d 1373, 1375 (9th Cir. 1987). “Only in the most extreme cases will judicial review

of a nonfinal award be proper.” Id. The Court agrees with Plaintiff that the present situation is

unusual. But it is not the type of situation where judicial review is appropriate. The Ninth Circuit

has indicated that review of a nonfinal award may be appropriate when the court “must decide

the merits of the appeal in order to determine the interim nature of the arbitrator’s award.”

Sunshine Min. Co. v. United Steelworkers of Am., AFL-CIO, CLC, 823 F.2d 1289, 1294 n.4 (9th

Cir. 1987). Review of a nonfinal award may also be appropriate when all that remains is a

ministerial act, such as computing back pay or applying a final piece of evidence when the

arbitrator has already indicated how it should be applied. Millmen Loc. 550, 828 F.2d at 1375

n.1. Here there is no award for the Court to review and no decision to vacate. The proper course

under these circumstances is for the Court to dismiss the case so that the parties can return to the

arbitrator to request clarification or guidance.

Defendant also asserts that Plaintiff could have sought to vacate the Council’s decision

under the Federal Arbitration Act (“FAA”). Def. Mot. 5. “[T]he FAA is applicable toward all

collective bargaining agreements except those involving employees engaged directly in channels

of commerce.” Cascade Steel Rolling Mills, Inc. v. United Steelworkers Int’l Union Loc. 8378,

No. 21-CV-01090-YY, 2022 WL 5247555, at *8 (D. Or. Aug. 12, 2022), findings and

recommendation adopted, No. 21-CV-01090-YY, 2022 WL 16781999 (D. Or. Nov. 8, 2022)

(citing Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 109 (2001) (holding that only contracts

of employment for transportation workers are exempt from the Federal Arbitration Act)). Under

the FAA, a district court may vacate an award “upon the application of any party to the

arbitration” if, among other reasons, “the arbitrators exceeded their powers, or so imperfectly

executed them that a mutual, final, and definite award upon the subject matter submitted was not

made.” 9 U.S.C. § 10(a)(4). Defendant argues that the Court should vacate and remand

Grievance 22-097 to the Council. Def. Reply 12. Because there is no award to vacate, even an

unclear or imperfect one, the Court concludes that it lacks authority to vacate the Council’s

decision. In sum, the Court cannot decide Plaintiff’s breach of contract claim or vacate the

Council’s decision, so the claim must simply be dismissed.

B. Claim for Breach of the Implied Covenant of Good Faith & Fair Dealing

Defendant moves for summary judgment on Plaintiff’s claim for breach of the implied

covenant of good faith and fair dealing because it is preempted by § 301 and the grievance

process has not been exhausted. Def. Mot. 24-26. Plaintiff appears to have pleaded the claim

under federal law. FAC 8 (pleading the claim under the Restatement (Second) of Contracts §

205, not Oregon common law). In ruling on Defendant’s motion to dismiss, the Court recognized

that the LMRA governs interpretation of the CBA. Op. & Ord. 9. Plaintiff’s claim is not

preempted by § 301 because it was not brought as a state-law claim. See Jackson v. S. California

Gas Co., 881 F.2d 638, 642 (9th Cir. 1989) (explaining that § 301 preempts state-law claims).

Regardless, it must be dismissed because, just like Plaintiff’s breach of contract claim, it is the

subject of a pending grievance. The claim is based on the same facts as the breach of contract

claim and rests on a violation of the contractual policy in Section 3.15 of the CBA. FAC ¶¶ 31-

32. Section 3.15 is the provision at issue in Grievances 22-097 and 22-116. Plaintiff states that

the claim is an alternative basis for the breach of contract claim. Pl. Resp. 32. The claim must

therefore be dismissed for the same reasons as the breach of contract claim. Plaintiff argues that

genuine disputes of fact remain on the merits of the claim. Pl. Resp. 30-32. Because there is no

genuine dispute as to whether Plaintiff failed to exhaust the grievance process, the Court declines

to address the merits of the claim.

C. Claim for Declaratory Relief

Plaintiff seeks in the alternative a declaratory judgment that Defendant has breached

Sections 2.07, 3.15, and/or 12.01 of the CBA. FAC 9. Defendant argues that granting this relief

would be inappropriate because the issue was or could have been raised in pending grievance

proceedings. Def. Mot. 26-27. This issue was raised in Grievances 22-097 and 22-116. Plaintiff’s

request for declaratory relief asks the Court to decide the same issues that are the subject of the

ongoing grievance process. It would not be appropriate to grant this relief. The Court dismisses

Plaintiff’s claim for declaratory relief.

D. Resolution of this Case

The Court cannot decide Plaintiff’s claims or grant the relief Plaintiff seeks because

doing so would require the Court to resolve a dispute that is undergoing the grievance process.

The Council has instructed the parties to continue negotiating a resolution, and it is not the

Court’s place to override that instruction. The Court therefore declines to address the parties’

arguments about the merits of the claims. See Def. Mot. 17-23; Pl. Resp. 22-30. The material

issues of fact Plaintiff identifies pertain to the merits of the claims. Pl. Resp. 12-13. They are not

material to the analysis of whether the Court can reach the merits. Plaintiff has not identified

genuine disputes of material fact on the exhaustion issue, and it has cited no legal authority

supporting the Court’s ability to entertain the claims on the current procedural posture. The

Court lacks jurisdiction to vacate and remand the Council’s decision on Grievance 22-097

because the Council declined to rule, so there is no final award to review. The Court will

therefore dismiss Plaintiff’s claims without prejudice.

CONCLUSION

Defendant’s Motion for Summary Judgment [20] is GRANTED. The Court dismisses

Plaintiff’s First Amended Complaint [8] without prejudice.

IT IS SO ORDERED.

DATED:___A_p_r_il_ 1_1_,_ _2_0_2_4_________.

______________________________

MARCO A. HERNÁNDEZ

United States District Judge