RESCO PRODUCTS, INC. v. INTERNATIONAL UNION OF BRICKLAYERS AND ALLIED CRAFTWORKERS

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

RESCO PRODUCTS, INC., )

)

Plaintiff, )

)

v. ) Civil Action No. 20-127

)

INTERNATIONAL UNION OF )

BRICKLAYERS AND ALLIED )

CRAFTWORKERS, )

)

Defendant. )

MEMORANDUM OPINION

Presently before the Court is Plaintiff’s Motion for Summary Judgment (Docket No. 28),

Statement of Undisputed Material Facts (Docket No. 29), Memorandum of Law in Support of

Motion for Summary Judgment (Docket No. 30), and Proposed Order (Docket No. 32);

Defendant’s Response in Opposition to Plaintiff’s Motion (Docket No. 35) and Responsive

Concise Statement of Material Facts (Docket No. 36); Plaintiff’s Response to Defendant’s Concise

Statement of Material Facts (Docket No. 39) and Reply to Defendant’s Response in Opposition to

Plaintiff’s Motion (Docket No. 40); and all attachments to these documents. The Court heard oral

argument on Plaintiff’s motion on February 18, 2021. (Docket No. 45 (Transcript of Proceedings

(“Tr.”)).

For the reasons set forth herein, Plaintiff’s motion is granted in part and denied in part.

I. Factual Background1

Plaintiff Resco Products, Inc. (“Resco”) is a manufacturer of refractory, which is a brick-

like material resistant to heat and chemical and mechanical abrasion that is sold for steel-making

1 The relevant facts are derived from the undisputed evidence of record, and the disputed evidence of record

is read in the light most favorable to the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255

(1986) (“The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.”).

and other heavy industrial applications. (Resco’s Statement of Undisputed Material Facts

(“Resco’s SMF”), Docket No. 29, ¶¶ 1, 2; Declaration of Graham McDonough (“McDonough

Dec.”), Docket No. 28-7, ¶¶ 5, 6). In addition to manufacturing refractory materials at its nine

facilities, Resco provides steel-manufacturing plants with on-site labor to remove old refractory

materials and install new materials, which is an ongoing process known as vessel-relining.

(Resco’s SMF, ¶¶ 3, 13; McDonough Dec., ¶¶ 6, 7, 13). Resco also performs repair work on coke

ovens, a process known as ceramic-welding. (Resco’s SMF, ¶ 14; McDonough Dec., ¶ 14).

Less than 5% of Resco’s revenue stems from its vessel-relining and ceramic-welding

services. (Resco’s SMF, ¶ 20; McDonough Dec., ¶ 20). Such service work accounted for 4.4%

of Resco’s total revenue in 2015, 3.6% in 2016, 3.9% in 2017, 3.5% in 2018, and 3.9% in 2019.

(Id.). Similarly, Resco’s vessel-relining and ceramic-welding services since 2015 have never

exceeded 4.9% of its annual man hours. (Resco’s SMF, ¶ 21; McDonough Dec., ¶ 21). The hours

worked for Resco’s vessel-relining and ceramic-welding services accounted for 4.9% of its total

man hours in 2015, 4.8% in 2016, 4.6% in 2017, 4.1% in 2018, and 4.1% in 2019. (Id.).

Because Resco only performs vessel-relining services for its customers who make it a

significant supplier of their refractory products, none of Resco’s customers purchase its vessel-

relining services without also buying its products. (Resco’s SMF, ¶¶ 15-17; McDonough Dec.,

¶¶ 15-17). In 2019, 5 of Resco’s 1,368 customers (0.37%) purchased vessel-relining or ceramic-

welding services, while in 2018, the same 5 of Resco’s then 809 customers (0.62%) purchased

such services. (Supplemental Declaration of Graham McDonough (“McDonough Supp. Dec.”),

Docket No. 39-1, ¶¶ 6, 7). During both 2018 and 2019, only 2 of those 5 customers purchased

vessel-relining services, one of which was steelmaker North American Stainless (“NAS”). (Id.).

Resco entered into a service agreement with NAS in January 2014 to provide NAS’s Ghent,

Kentucky facility (“Ghent”) with both refractory materials and vessel-relining services. (Resco’s

SMF, ¶ 34; McDonough Dec., ¶ 25). Resco’s work at NAS’s Ghent facility has continued

uninterrupted to the present time. (Resco’s SMF, ¶ 36; McDonough Dec., ¶ 28). In 2019, the

purchase of refractory products accounted for 89% of Resco’s revenue from Ghent, while 11% of

its revenue there stemmed from vessel-relining services. (McDonough Supp. Dec., ¶ 9).

Of the 22 Resco employees currently performing vessel-relining at Ghent, 6 have worked

there since March 2014, and 18 have worked there longer than two years. (Resco’s SMF, ¶ 38;

McDonough Dec., ¶ 29). These employees have never been hired out of a union hiring hall, have

never signed cards showing majority support for a union, and have never voted for, selected, or

otherwise designated any union as their exclusive representative for purposes of collective

bargaining. (Resco’s SMF, ¶¶ 39, 40; McDonough Dec., ¶¶ 30, 31).

In March 2014, Resco entered into a collective bargaining agreement, known as the

Bricklayers’ National Agreement for Refractory Construction (“NRA”), with Defendant

International Union of Bricklayers and Allied Craftworkers (the “BAC” or the “Union”), a labor

organization that represents bricklayers, stone and marble masons, and other craftworkers,

including workers who perform vessel-relining and ceramic-welding work. (Resco’s SMF, ¶¶ 22,

30; McDonough Dec., ¶ 25). The NRA admittedly applies to those of Resco’s employees with

proven majority support for the Union’s exclusive representation pursuant to Section 9(a) of the

National Labor Relations Act (“NLRA”), such as its vessel-relining employees working at

customer locations in Ohio. (Resco’s SMF, ¶¶ 26, 30)

On or about December 18, 2018, the Union initiated a grievance and demanded arbitration

pursuant to the NRA claiming that Resco failed to provide wages and benefits to its vessel-relining

employees working at NAS’s Ghent facility consistent with what is required by the NRA. (Resco’s

SMF, ¶ 48; the Union’s Concise Statement of Material Facts (“Union’s SMF”), ¶ 44; Docket No.

21-6 (Letter dated Jan. 11, 2019, regarding “Request for Arbitration over Grievance with Resco

Products, Inc.”)). Relatedly, several of the Union’s affiliated employee benefit funds asserted

ERISA claims against Resco seeking allegedly delinquent benefit contributions for its Ghent

employees as purportedly required by the NRA. See Knowles v. Resco Products, Inc., No. 1:19-

cv-5035-TWP-MPB (S.D. Ind.) (the “Indiana Litigation”). On January 17, 2019, Resco filed an

unfair labor practice charge against the Union (that was later dismissed), in which Resco argued

that its Ghent employees are not covered by the NRA. (Union’s SMF, ¶ 47).

II. Procedural Background

On January 27, 2020, Resco filed this action seeking relief under the Declaratory Judgment

Act, 28 U.S.C. § 2201 (“DJA”), and Sections 301 and 303 of the Labor Management Relations

Act, 29 U.S.C. §§ 185, 187 (“LMRA”). In Count I of the Complaint, Resco seeks a declaration

by the Court that it has no obligations under the NRA with respect to its employees in Ghent,

Kentucky because the NRA does not qualify as a pre-hire agreement that covers work performed

by them. (Docket No. 1, ¶¶ 37-45).

In Count II of the Complaint, Resco avers that the Union has acted in violation of Sections

8(b)(1), 8(b)(4)(ii)(A), 8(d), 8(e) and 9(a) of the NLRA, thereby engaging in conduct defined as

unfair labor practices under Section 303(a) of the LMRA, 29 U.S.C. § 187(a). (Docket No. 1,

¶¶ 46-52). Resco seeks damages that it has allegedly sustained due to such actions by the Union

pursuant to Section 303(b) of the LMRA, 29 U.S.C. § 187(b), including the cost of this lawsuit.

(Docket No. 1, ¶ 51).

In response to the Complaint, the Union filed a Counterclaim against Resco under Section

301 of the LMRA, 29 U.S.C. § 185, asking the Court for a judgment declaring that Resco’s failure

to submit to arbitration constitutes a breach of the NRA, and for an order compelling Resco to

arbitrate the Union’s grievance involving the Ghent employees, as well as costs and attorney fees.

(Docket No. 21, ¶¶ 46-52 (Count I)).

On June 8, 2020, Resco filed a motion for summary judgment in its favor on both of its

claims and as to the Union’s counterclaim. (Docket No. 28 at 3, “Wherefore” clause; Docket No.

30 at 20-21). Specifically, Resco asks for an order declaring that it owes no obligations to the

Union or any other party under the NRA as it pertains to Resco’s employees at NAS’s Ghent

facility. (Resco’s Proposed Order, Docket No. 32). Resco’s summary judgment motion is

presently before the Court.

III. Summary Judgment Standard and Supporting Factual Positions

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

and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Anderson

v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The parties must support their position by “citing

to particular parts of materials in the record, including depositions, documents, electronically

stored information, affidavits or declarations, stipulations (including those made for purposes of

the motion only), admissions, interrogatory answers, or other materials.” Fed. R. Civ. P.

56(c)(1)(A). “[T]he mere existence of some alleged factual dispute between the parties will not

defeat an otherwise properly supported motion for summary judgment; the requirement is that

there be no genuine issue of material fact.” Anderson, 477 U.S. at 247-48 (emphasis in original).

A disputed fact is material if it might affect the outcome under the substantive law. See Boyle v.

County of Allegheny, 139 F.3d 386, 393 (3d Cir. 1998) (citing Anderson, 477 U.S. at 247-48).

Summary judgment is unwarranted where there is a genuine dispute about a material fact, that is,

one where a reasonable jury, based on the evidence presented, could return a verdict for the non-

moving party with regard to that issue. See Anderson, 477 U.S. at 248.

When deciding a motion for summary judgment, the Court must draw all inferences in a

light most favorable to the non-moving party without weighing the evidence or questioning the

witnesses’ credibility. See Boyle, 139 F.3d at 393. The movant has the burden of demonstrating

the absence of a genuine issue of material fact, while the non-movant must establish the existence

of each element for which it bears the burden of proof at trial. See Celotex Corp. v. Catrett, 477

U.S. 317, 323 (1986). If the movant has pointed to sufficient evidence of record to demonstrate

that no genuine issues of fact remain, the burden is on the non-movant to search the record and

detail the material controverting the movant’s position. See Schulz v. Celotex Corp., 942 F.2d

204, 210 (3d Cir. 1991). Rule 56 requires the non-moving party to go beyond the pleadings and

show, through the evidence of record, that there is a genuine issue for trial. See Celotex, 477 U.S.

at 324.

Here, Resco supports its motion with two declarations signed by its Vice President of

Finance Graham McDonough (Docket Nos. 28-7 and 39-1). Although the Union denies that many

of the facts supported by Mr. McDonough’s declarations are undisputed (or material), it does not

cite to record evidence to support its denials or otherwise respond in accordance with Local Rule

56.C.1 of the Local Rules of Court for the Western District of Pennsylvania.

Local Rule 56.C.1 specifically requires that the party opposing a motion for summary

judgment file a separate concise statement, which responds to each numbered paragraph in the

moving party’s Concise Statement of Material Facts by:

a. admitting or denying whether each fact contained in the moving

party’s Concise Statement of Material Facts is undisputed and/or

material;

b. setting forth the basis for the denial if any fact contained in the moving

party’s Concise Statement of Material Facts is not admitted in its

entirety (as to whether it is undisputed or material) with appropriate

reference to the record . . .; and

c. setting forth in separately numbered paragraphs any other material

facts that are allegedly at issue, and/or that the opposing party asserts

are necessary for the Court to determine the motion for summary

judgment.

LCvR 56.C.1.

In denying statements of fact based on Mr. McDonough’s declarations, the Union called

Mr. McDonough’s statements “bare assertions” and “conclusory statements,” but it frequently did

not cite to any record evidence to show the basis for its denials. (Docket No. 36). Additionally,

the Union did not reply in any way to Resco’s response to its SMF, which cited to Mr.

McDonough’s attached supplemental declaration. The Union also never sought leave to file a

reply to Resco’s response to its SMF or to Mr. McDonough’s supplemental declaration, nor did it

notify the Court of any need to conduct discovery in order to reply to that response or declaration.

See Sproull v. Golden Gate Nat’l Senior Care, LLC, No. 2:08-cv-1107, 2010 WL 339858, at *3-4

(W.D. Pa. Jan. 22, 2010) (considering summary judgment filings under Fed. R. Civ. P. 56 and

LCvR 56, and declining to strike the moving party’s reply documents, but permitting the non-

moving party to file a sur-reply thereto). Moreover, at oral argument, the Union made clear that

discovery was unnecessary in this matter and that the parties were “pretty much in agreement” as

to the material facts. (Tr. at 32).

Additionally, Federal Rule of Civil Procedure 56(c)(4) provides that declarations in support

of summary judgment are properly “made on personal knowledge, set out facts that would be

admissible in evidence, and show that the . . . declarant is competent to testify on the matters

stated.” Here, Mr. McDonough declared that his testimony is based on his personal knowledge,

the facts to which he testified concern details regarding Resco’s financial and employment

information which would be admissible in evidence in this matter, and his current position as well

as his prior position as Resco’s Corporate Controller show that he is competent to testify on the

matters addressed in his declarations. (McDonough Dec., ¶¶ 3-4). The Union has not come

forward with any evidence to show that Mr. McDonough does not satisfy all three requirements.

Accordingly, the Court finds that the Rule 56(c)(4) requirements are met with regard to Mr.

McDonough’s declarations. Therefore, the Union’s characterization of Mr. McDonough’s

declaration as consisting of “bare assertions” or “conclusory statements,” without appropriate

reference to the record to support such a claim, is insufficient to form the basis for the Union’s

denial of facts based on such declarations.

The Union’s SMF also indicates that it can neither confirm nor deny whether many facts

are undisputed because Resco filed for summary judgment before the parties conducted discovery.

(Docket No. 36). In response to Resco’s summary judgment motion, the Union could have shown,

by affidavit or declaration pursuant to Federal Rule of Civil Procedure 56(d), that for specified

reasons it could not present facts essential to justify its opposition, in which case the Court could

have deferred consideration of the motion and allowed time for the parties to take discovery. The

Union, however, made no such request and instead responded with blanket denials that lacked

citation to evidence to support such denials. Moreover, in response to the Court’s questioning

during oral argument as to whether there are material facts in dispute or whether further discovery

is necessary in order for the Court to resolve the issues, counsel for the Union responded, “I don’t

think so, Your Honor. I think, with respect to the material facts, we’re pretty much in agreement.”

(Tr. at 32).

The Court may deem facts to be admitted when responsive summary judgment materials

have failed to comply with the Local Rules. See Keith v. Charter Communications, Inc., Civ. No.

1:18-cv-110, 2020 WL 2394997, at *2 (W.D. Pa. May 12, 2020); Marinkovic v. Battaglia, Case

Nos. 1:14-cv-49 and 2:18-cv-388, 2019 WL 4600207, at *2 (W.D. Pa. Sept. 23, 2019); Harris v.

Astellas Pharmaceuticals, Civ. No. 13-1663, 2015 WL 5638023, at *1 n.1 (W.D. Pa. Sept. 14,

2015); Jankowski v. Demand, Civ. No. 06-618, 2008 WL 1901347, at *1 (W.D. Pa. Apr. 25, 2008).

Here, the Union did not satisfy the Local Rules, as described, supra. Therefore, in

accordance with Local Rule 56, facts based on Mr. McDonough’s declarations set forth in Resco’s

SMF and Resco’s response to the Union’s SMF will, for the purpose of deciding Resco’s motion

for summary judgment, be deemed admitted where they are not specifically denied or otherwise

controverted by a separate concise statement with appropriate reference to the record as described

in the rules. See LCvR 56.B-56.E; Fed. R. Civ. P. 56(e).

IV. Discussion

A. The National Labor Relations Act

The National Labor Relations Act, 29 U.S.C. § 151 et seq. (“NLRA” or the “Act”),

provides:

Employees shall have the right to self-organization, to form, join, or

assist labor organizations, to bargain collectively through

representatives of their own choosing, and to engage in other concerted

activities for the purpose of collective bargaining or other mutual aid or

protection, and shall also have the right to refrain from any or all of such

activities . . . .

29 U.S.C. § 157. According to Section 9(a) of the NLRA, representatives designated by “the

majority of the employees in a unit appropriate for” collective bargaining “shall be the exclusive

representatives of all the employees in such unit for the purposes of collective bargaining.” 29

U.S.C. § 159(a). Majority support for a labor union can be demonstrated through an election

process, see 29 U.S.C. § 159(e), or by a labor union coming forward with signed authorization

cards from more than 50 percent of a bargaining unit’s employees, in which case an employer can

recognize the union voluntarily, see NLRB v. Gissel Packing Co., 395 U.S. 575, 596-97 (1969).

Generally, the NLRA prohibits employers and unions from entering into collective bargaining

agreements unless the union is supported by a majority of the relevant bargaining unit’s employees.

The NLRA includes an exception to this prescribed process for employers “engaged

primarily in the building and construction industry.” See 29 U.S.C. § 158(f). Under Section 8(f)

of the NLRA, it is not an unfair labor practice for such an employer to “make an agreement

covering employees engaged (or who, upon their employment, will be engaged) in the building

and construction industry with a labor organization of which building and construction employees

are members.” Id. These agreements permitted by Section 8(f), which do not require the same

demonstration of majority support, are commonly known as “pre-hire agreements.” At issue here

is whether Resco is an employer “engaged primarily in the building and construction industry” so

that the parties’ NRA could be construed as a valid a pre-hire agreement covering Resco’s Ghent

employees.

B. The Declaratory Judgment Act and the Labor Management Relations Act

1. Subject Matter Jurisdiction

As a preliminary matter, the Court must determine whether it has subject matter jurisdiction

over this controversy. The DJA provides that “[i]n a case of actual controversy within its

jurisdiction . . . any court of the United States, upon the filing of an appropriate pleading, may

declare the rights and other legal relations of any interested party seeking such declaration, whether

or not further relief is or could be sought.” 28 U.S.C. § 2201(a). Because the DJA has only

“procedural effect” and does not create subject matter jurisdiction, “a court must find an

independent basis for jurisdiction before it can consider a declaratory judgment action.” Mack

Trucks, Inc. v. Int’l Union, 856 F.2d 579, 583 n.4 (3d Cir. 1988) (citing Fed. Kemper Ins. Co. v.

Rauscher, 807 F.2d 345, 351-52 (3d Cir. 1986)).

Here, both Resco and the Union seek relief pursuant to Section 301 of the LMRA,2 which

confers jurisdiction on the federal courts, stating that “[s]uits for violation of contracts between an

employer and a labor organization . . . may be brought in any district court of the United States

having jurisdiction of the parties.” 29 U.S.C. § 185. See Bethlehem Mines Corp. v. United Mine

Workers of America, 344 F. Supp. 1161, 1161-62 (W.D. Pa. 1972); see also Textron Lycoming

Reciprocating Eng. Div. v. United Auto., Aerospace and Agric. Implement Workers of America,

Int’l Union, 523 U.S. 653, 658 (1998) (“[A] declaratory judgment plaintiff accused of violating a

collective-bargaining agreement may ask a Court to declare the agreement invalid.”); Joseph W.

Davis, Inc. v. Int’l Union of Operating Eng’rs, 636 F. Supp. 2d 403, 410 (E.D. Pa. 2008) (citing

Textron and explaining that “[b]efore a district court can exercise § 301 jurisdiction in a

declaratory judgment suit, a plaintiff must show that it has been accused of violating the terms of

a collective bargaining agreement”); American Sterilizer Co. v. Local Union No. 832, 278 F. Supp.

637, 642 (W.D. Pa. 1968) (noting that the jurisdiction of district courts “over suits arising out of

collective bargaining agreements is settled by Section 301 . . . . [and] includes the power to order

specific performance of an agreement to arbitrate”). Furthermore, a DJA action brought under

Section 301 allows a party accused of breaching an agreement to seek a declaration of its rights

and obligations under the agreement without having to wait for the non-breaching party to bring

2 Resco also seeks relief pursuant to Section 303 of the LMRA, which states, “Whoever shall be injured in his

business or property by reason [of] any violation of subsection [303(a)] may sue therefor in any district court of the

United States . . . and shall recover the damages by him sustained and the cost of the suit.” 29 U.S.C. § 187(b).

an action to enforce the agreement. See Mack Trucks, Inc. v. Int’l Union, 671 F. Supp. 1027, 1032

(E.D. Pa. 1987). The Court therefore finds that it has jurisdiction over the claims presented here

pursuant to Section 301 of the LMRA because Resco has been accused of breaching the NRA.

Although district courts may entertain actions for declaratory relief under the DJA, they

are not required to exercise jurisdiction over such matters. Rather, the decision whether to exercise

jurisdiction under the DJA is within the “sound and reasoned discretion” of the district court, and

the Third Circuit has set forth a list of factors that a court may consider in deciding whether to

exercise jurisdiction under the DJA, including, but not limited to:

1. the likelihood that a federal court declaration will resolve the uncertainty of

obligation which gave rise to the controversy;

2. the convenience of the parties;

3. the public interest in settlement of the uncertainty of obligation;

4. the availability and relative convenience of other remedies;

5. a general policy of restraint when the same issues are pending in a state

court;

6. avoidance of duplicative litigation;

7. prevention of the use of the declaratory action as a method of procedural

fencing or as a means to provide another forum in a race for res judicata;

and

8. (in the insurance context) an inherent conflict of interest between an

insurer’s duty to defend in a state court and its attempt to characterize that

suit in federal court as falling within the scope of a policy exclusion.

Reifer v. Westport Ins. Corp., 751 F.3d 129, 146 (3d Cir. 2014).

In this case, a declaration by the Court will resolve the uncertainty of Resco’s obligations

under the NRA, if any, with respect to its employees working at NAS Ghent. The parties have

made no argument that they are inconvenienced by having this dispute resolved by this Court, nor

have they claimed that any other remedy is more available or more convenient than that which the

Court can provide. Additionally, a declaration resolving this controversy serves the public’s

interest in maintaining stable contractual relations and in promoting labor peace and stability. The

issues involved in this action are not also pending in a state court, nor is there duplicative litigation

(rather, the Indiana litigation has been stayed pending the outcome of the Court’s ruling in this

case). This action does not present an instance of procedural fencing, and it does not involve a

race for res judicata. The Court also takes note of the fact that the LMRA’s stated purpose is to

promote industrial peace and responsibility and to allow for the development of a consistent body

of labor law, and that Section 301 is to be liberally interpreted in order to effectuate these purposes.

See Mack Trucks, Inc., 671 F. Supp. at 1033 (citing Textile Workers Union v. Lincoln Mills, 353

U.S. 448, 454-55 (1957); Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95 (1962); Smith v.

Evening News Ass’n, 371 U.S. 195, 199-200 (1962)).

Beyond these Reifer factors, the Union urges the Court to decline exercising jurisdiction

because Resco previously and unsuccessfully sought to persuade the Office of the General Counsel

for the National Labor Relations Board (“NLRB” or “Board”) to prosecute unfair labor practice

(“ULP”) charges against the Union. (Docket No. 35 at 17-19). Also, albeit in a footnote, the

Union argues that the Court should not exercise jurisdiction here because the NLRB has already

considered and subsequently declined to prosecute Resco’s claims which, it asserts, are final and

cannot be appealed to the District Court under the Garmon preemption doctrine.3 (Id. at 17 n.6).

3 In San Diego Building Trades Council v. Garmon, 359 U.S. 236, 245 (1959), the Supreme Court held that

when activity is arguably subject to Sections 7 and 8 of the NLRA, the states and the federal courts must defer to the

exclusive competence of the NLRA. At oral argument, however, counsel for the Union conceded that the decision by

the NLRB’s Office of General Counsel suggests “caution” for the Court in deciding whether to exercise jurisdiction

here, but it does not involve issue preclusion or res judicata that would preclude the Court from deciding this issue

independently of the NLRB. (Tr. at 27).

As noted, supra, in 2019, after the Union filed its grievance regarding Resco’s Ghent

employees and demanded arbitration pursuant to the NRA, Resco filed ULP charges with Region

9 of the NLRB. (Union’s SMF, ¶ 47). Similar to its allegations here, Resco’s ULP charges

asserted that the Union violated the NLRA by unlawfully attempting to act as its Ghent employees’

collective bargaining representative and attempting to enforce a pre-hire agreement in relation to

those employees, which was prohibited by the NLRA and not excepted by Section 8(f) because

Resco is not engaged primarily in the building and construction industry. (Docket No. 36-1 at 23).

The NLRB’s Regional Director declined to issue a complaint to prosecute Resco’s ULP charge.

(Id. at 105-06 (Dismissal correspondence from the NLRB, Region 9, dated Apr. 22, 2019)). The

NLRB’s Office of the General Counsel subsequently denied Resco’s appeal of that dismissal,

agreeing with the Regional Director’s conclusion that the Union had a reasonable basis for

attempting to enforce the NRA with respect to Resco’s Ghent employees. (Id. at 23-24 (Decision

from the NLRB Office of the General Counsel, dated Oct. 23, 2019)).

While the Court recognizes the similarity between Resco’s claims in this action and the

ULP charges it previously filed with the NLRB, the Court finds that Resco is not seeking judicial

review of the NLRB’s discretionary decision not to prosecute its ULP charges. Rather, Resco is

asking the Court to declare whether a collective bargaining agreement validly applies to certain of

its employees, which is a determination for which this Court has independent jurisdiction afforded

to it by Section 301 of the LMRA, 29 U.S.C. § 185. In fact, in Smith v. Evening News Ass'n, 371

U.S. 195, 197 (1962), the Supreme Court explained that other cases before it had involved

collective bargaining agreement actions arising under Section 301 of the LMRA, and it had

expressly refused to apply the pre-emption doctrine of Garmon in such instances: “[W]e likewise

reject that doctrine here where the alleged conduct of the employer, not only arguably, but

concededly, is an unfair labor practice within the jurisdiction of the National Labor Relations

Board.” Id. The Supreme Court concluded that, “[t]he authority of the Board to deal with an

unfair labor practice which also violates a collective bargaining contract is not displaced by

[Section] 301, but it is not exclusive and does not destroy the jurisdiction of the courts in suits

under [Section] 301.” Id. Accordingly, the Court finds that it is not preempted from considering

Resco’s claims by Garmon, nor is it necessary for the Court to refrain from considering the claims

simply because the NLRB’s Office of General Counsel previously chose, in its discretion, to

refrain from prosecuting Resco’s ULP charges.4

Accordingly, upon consideration of all of the above factors, the Court finds it appropriate

to exercise its discretionary jurisdiction over the parties’ claims here.

2. The Parties’ Claims Under Section 301 of the LMRA

Resco argues that the NRA is not a valid pre-hire agreement applicable to its Ghent

employees pursuant to Section 8(f) of the NLRA, and that a declaration regarding Resco’s

obligations under that agreement as it pertains to its Ghent employees is appropriate because:

(1) Section 9(a) of the NLRA requires that a majority of employees in a bargaining unit

demonstrate support for a labor union before that labor union is designated as being the exclusive

representative of such employees; (2) Congress provided a limited exception to Section 9(a)’s

majority-support requirement, which applies only to employers engaged primarily in the building

and construction industry; and (3) Resco is not engaged primarily in the building and construction

industry as its vessel-relining services is only incidental to its principal pursuit of manufacturing

refractory products. (Docket No. 30 at 2). Therefore, Resco contends, the NRA can only be

4 Furthermore, the administrative decision to which the Union refers was not made by the NLRB nor was any

NLRB decision issued in that matter. Rather, the prosecutorial arm of the NLRB simply decided in its sole discretion

not to pursue the charges that Resco had filed. (Docket No. 36-1 at 23-24).

considered a Section 9(a) agreement covering employees who have demonstrated majority support

for the Union’s representation and, since its Ghent employees have never manifested support for

the Union, the NRA does not cover those employees and Resco is entitled to its requested

declaration from the Court. (Id.).

The Union, on the other hand, contends that the Court should not be drawn into the parties’

dispute, which it claims should be resolved through the grievance and arbitration process provided

by the NRA which, it claims, does cover Resco’s Ghent employees. More specifically, the Union

argues that the NRA does cover Resco’s Ghent employees because Section 8(f) applies to Resco

which is engaged primarily in the building and construction industry – at least at the Ghent facility.

Although, as discussed, supra, the Union urges the Court to decline to exercise its discretionary

jurisdiction over this matter. The Union also asserts that, if the Court does exercise its discretionary

jurisdiction here, it should find that Resco is not entitled to the declaratory and other relief that it

seeks. Moreover, the Union’s Counterclaim, although not specifically asking for relief under the

DJA, does request a “judgment declaring” that Resco breached the NRA by failing to submit to

the grievance and arbitration procedure set forth in that agreement, an order compelling Resco to

submit the grievance involving its Ghent employees to arbitration under the NRA, and an award

of costs and attorney fees incurred in defending itself against the Complaint and in prosecuting its

Counterclaim. (Docket No. 21 at 17-18, “Wherefore” clause).

Upon consideration of the issues presented, the Court notes, first, that questions of

arbitrability are appropriate for the courts to decide. See Opalinski v. Robert Half Int’l Inc., 761

F.3d 326, 335 (3d Cir. 2014). Although the Union urges the Court to order Resco to submit to

arbitration of the dispute under the NRA, noting the strong federal policy in favor of resolving

disputes through arbitration, the issue before the Court is whether the NRA applies to the parties

in the first place such that the dispute falls under that agreement and should be submitted to

arbitration, i.e., whether there is an arbitrable dispute here. That issue of arbitrability is properly

before the Court.

The main issue before the Court is whether Resco is an employer “engaged primarily in

the building and construction industry” as set forth in Section 8(f) of the NLRA, 29 U.S.C.

§ 158(f), such that the NRA would constitute a valid pre-hire agreement that is applicable to its

employees who perform vessel-relining work at NAS’s Ghent facility. (Docket Nos. 30 at 12; 35

at 8).

Section 8(f) provides an exception to the general rule that an employer who signs a

collective bargaining agreement with a union which does not represent a majority of the

employer’s present workforce commits an unfair labor practice and that such an agreement is void

and unenforceable. See NLRB v. Local Union No. 103, Int’l Ass’n of Bridge Workers (Higdon

Constr. Co.), 434 U.S. 335, 344-45, 351-52 (1978). The statutory text of Section 8(f) expressly

provides:

It shall not be unfair labor practice . . . for an employer engaged

primarily in the building and construction industry to make an

agreement covering employees engaged (or who, upon their

employment, will be engaged) in the building and construction industry

with a labor organization of which building and construction employees

are members . . . because . . . the majority status of such labor

organization has not been established . . . .

29 U.S.C. § 158(f). Accordingly, the following three prerequisites must exist for an agreement to

constitute a valid and enforceable pre-hire agreement pursuant to Section 8(f): first, it must cover

employees who are engaged in the building and construction industry; second, it must be with a

labor organization of which building and construction employees are members; and third, it must

be with an employer engaged primarily in the building and construction industry.

Here, it is evident that the Union’s members perform building and construction work. And,

while the parties seemingly dispute whether Resco’s Ghent employees have been engaged in

building and construction work, for purposes of deciding Resco’s motion, the Court shall construe

the factual record in the light most favorable to the Union and thus consider the vessel-relining

services performed by Resco’s Ghent employees to qualify as building and construction work.

Accordingly, the issue of whether Resco is an employer “engaged primarily in the building and

construction industry” is the only remaining issue to be resolved here.

According to the United States Supreme Court, “in interpreting a statute a court should

always turn first to one, cardinal canon before all others,” the plain meaning of the language of the

statute. Connecticut Nat’l Bank v. Germain, 503 U.S. 249, 253-54 (1992) (“We have stated time

and again that courts must presume that a legislature says in a statute what it means and means in

a statute what it says there.”). The plain language and the ordinary meanings of words in a statute

are the starting point in construing meaning “and will be determinative unless there is an apparent

ambiguity or expression of legislative intent to the contrary.” Gaibis v. Werner Continental, Inc.,

565 F. Supp. 1538, 1548 (W.D. Pa. 1983) (citing Bread Political Action Committee v. FEC, 455

U.S. 577, 580 (1982)), vacated on other grounds, Vosch v. Werner Continental, Inc., 734 F.2d 149

(3d Cir. 1984).

Examining the plain language of the statute here necessitates discerning the meaning of the

word “primarily” in order to determine whether Resco is an “employer engaged primarily in the

building and construction industry.” The word “primarily” is clear and unambiguous5 and is

5 Resco proffers a portion of the legislative history of Section 8(f) to show that when Congress used the word

“primarily,” it intended that Section 8(f) apply only to those employers engaged in building and construction work “as

generally understood to mean “for the most part,” “chiefly,” or “mostly.” See https:

//www.merriam-webster.com/dictionary/primarily (last visited March 25, 2021).

Although the parties seemingly do not disagree as to the plain meaning of Section 8(f),

they admittedly disagree as to the criteria the Court should consider when applying it to the

evidentiary record here for the purpose of determining whether Resco is “engaged primarily in the

building and construction industry.” In other words, how should the Court quantify Resco’s

building and construction work to determine whether it is engaged primarily (i.e., chiefly or

mostly) in building and construction or whether it is engaged primarily (again, chiefly or mostly)

in manufacturing?

In presenting their arguments, the parties concede that the NLRB and courts have not

previously fashioned a clear and consistent standard to be used in determining what it means to be

engaged primarily in the building and construction industry. (Tr. at 15, 23, 26). Therefore, both

parties rely on a relatively small number of decisions by federal courts and the NLRB that address

this issue – all of which are extremely fact-specific – but which, when considered together, provide

the Court with some guidance in making its determination here.

an integral and important part of their regular operations rather than to those with whom such undertakings are only

incidental to their principal pursuit.” (Docket No. 28-1 at 9, Senate Rep. No. 82-1509, at 8 (1952)). See also Operating

Eng’rs Pension Trust v. Beck Eng’g & Surveying Co., 746 F.2d 557, 563 (9th Cir. 1984); NLRB v. W.L. Rives Co.,

328 F.2d 464, 469 (5th Cir. 1964). Resco’s reference to this Senate Committee Report also suggests that manufacturers

who also engage in extensive construction activity could be covered by Section 8(f), but only if they used nonregular

employees on an intermittent, short-term basis. (Docket No. 30 at 10-11.) However, because the plain text of Section

8(f) at issue in this case is clear and unambiguous, the Court need not consult the legislative history. See, e.g., Hughes

Aircraft Co. v. Jacobson, 525 U.S. 432, 438 (1999) (“As in any case of statutory construction, our analysis begins with

the language of the statute. And where the statutory language provides a clear answer, it ends there as well.” (internal

quotations and citations omitted)); Conn. Nat’l. Bank v. Germain, 503 U.S. 249, 253-54 (1992) (“[C]ourts must

presume that a legislature says in a statute what it means and means in a statute what it says there.”); In re Visteon

Corp., 612 F.3d 210, 219-220 (3d Cir. 2010) (“It is for Congress, not the courts, to enact legislation. When courts

disregard the language Congress has used in an unambiguous statute, they amend or repeal that which Congress

enacted into law. Such a failure to defer to the clearly expressed statutory language of Congress runs contrary to the

bedrock principles of our democratic society.”).

Resco argues that Section 8(f) is a statutory exception that should be interpreted narrowly,

and that its building and construction work should be measured in proportion to its business as an

entire enterprise. See Pekowski Enters., Inc., 327 NLRB 413, 428 (1999) (“It is also a familiar

canon that a statutory provision, which, like Section 8(f) creates an exception to the general scheme

of a statute, will be strictly construed.”). Resco also asserts that Section 8(f) requires that an

employer’s participation in the building or construction process be more than minimal or

insubstantial in order for it to be considered “engaged primarily” in that process. See e.g., Union

Asphalts & Roadoils, Inc. v. MO-KAN Teamsters Pension Fund, 857 F.2d 1230, 1234-35 (8th Cir.

1988) (summarizing how Section 8(f) has been applied in various frequently cited cases).

In further support of its position, Resco asserts that its “business model” is most analogous

to the employer in Frick Co., 141 NLRB 1204 (1963). In that case, the NLRB considered whether

the employer, a manufacturer of refrigerators that also provided installation services, was engaged

primarily in building and construction. See id. The NLRB noted that less than 1% of the

employer’s revenue came from such installation services, and it held that, if total gross income

from building and construction work is the proper measure of that work, then the employer in Frick

was clearly not engaged primarily in such work. See id. at 1208. The NLRB further found that,

given the obvious preponderance of the employer’s manufacturing operations in that case –

whatever the applicable criterion – it could not be found to be engaged primarily in building and

construction work. See id. Moreover, Resco notes that Frick involved installation work in a

building under construction (unlike Resco, which does no work at construction sites), but the

employer was still found to be not engaged primarily in the building and construction industry

when examining its operations “as a whole.” Id.

In further support of its argument, Resco cites to Pekowski Enters., Inc., 327 NLRB at 413,

in which an employer, whose business involved setting up and fabricating exhibits for trade shows

and conventions, was found to be not engaged primarily in the building and construction industry.

The NLRB found in Pekowski that, while the employer’s workers did considerable construction

work, such work was “incidental” to the employer’s mission of producing trade shows. See id. at

428-29. Resco also cites to Cent. Ariz. Dist. Council of Carpenters (Wood Surgeons, Inc.), 175

NLRB 390 (1969), in which an employer manufactured, sold and delivered cabinets. The

employer in that case guaranteed that costs of installation would not exceed a certain amount, and

its employees may have done a certain amount of installation work, but the NLRB found that those

employees were not primarily construction workers. See id. at 391-92. In so finding, the Board

noted that the cost of installation was only a fraction of total receipts from the employer’s sale,

delivery, and installation contracts, and was an even lesser fraction of revenues from the sale of all

of its products. See id.

Resco argues that it is most similar to the employer in Frick since less than 5% of its

revenue comes from its vessel-relining and ceramic-welding services, less than 5% of its man

hours are attributable to such work, and less than 1% of its customers purchase such services from

it. (Resco’s SMF, ¶¶ 20, 21; McDonough Supp. Dec., ¶¶ 6, 7). Therefore, Resco concludes that,

like the employer in Frick, its services are merely incidental to its manufacturing endeavors and

its involvement in the construction process is only minimal, so the Court should find that the

vessel-relining work performed by its Ghent employees is not covered by the NRA because that

modicum of building and construction work is not enough to establish Resco as being engaged

primarily (i.e., “most” or “chiefly”) in the building and construction industry as required by Section

8(f).

The Union argues, however, that the Court should apply Section 8(f) by quantifying

Resco’s vessel-relining services solely in relation to its manufacturing work at Resco’s Ghent

facility alone rather than considering it in relation to its business as a whole. In support of its

argument, the Union asserts that this case is most analogous to Zidell Explorations, Inc., 175

NLRB 887 (1969), in which the employer at issue purchased a missile site from the United States

Department of Defense with the intention of dismantling it. The employer in Zidell was primarily

engaged in the business of dismantling ships and barges (generally considered to be part of the

shipbuilding industry), but in that instance, the employer had engaged workers to dismantle the

missile site. See id. at 889. Although the NLRB concluded that the shipbuilding industry is not

part of the building and construction industry as those terms are used in Section 8(f), it also found

that the employer’s entirely separate operation of dismantling the missile site was consonant with

Congress’s intentions and objectives under that statute. See id. In so finding, the NLRB looked

not at the employer’s revenue, but at the fact that the employer “frequently engaged in transitory

on-site operations in the construction industry similar to those performed at the missile sites and

. . . employed the skilled craftsmen and operators normally associated with the building and

construction industry required to accomplish its objectives.” Id.

The Union contends that the Eleventh Circuit adopted the Board’s reasoning in Zidell, and

that it applied similar reasoning in a case that is factually analogous to the present case, A.L.

Adams Constr. Co. v. Georgia Power Co., 733 F.2d 853 (11th Cir. 1984). A.L. Adams involved

significant construction work by a power company at a nuclear power plant. See id. The Union

points out that the court in A.L. Adams held that, although the major portion of the employer’s

business involved the production and sale of electricity, it could still “seek the protection of § 8(f)”

and could “take advantage of § 8(f) if it is sufficiently engaged in construction work at one site.”

Id. at 857.

Additionally, the Union argues that the holding of Zidell has been followed in other

decisions, citing Hoover, Inc., 240 NLRB 593 (1979). In Hoover, the NLRB found that an

employer was not engaged primarily in the building and construction industry where it operated

sand and gravel quarries and delivered material to construction sites, but did no work at the sites.

See id. at 599. The Union also points to Constr., Bldg., Materials & Misc. Drivers, Local 83, in

which the Board stated that if an employer routinely engages in construction, the determination of

whether it is engaged primarily in construction is made “without regard to whether the greater

amount of revenue comes from the labor or from the materials,” to argue that comparison of

revenues is not an appropriate way to determine whether Section 8(f) applies to an employer. 243

NLRB 328, 331 (1979).

The Court finds, however, that upon careful consideration of the underlying facts of the

various cases cited by the parties, the cases cited by the Union are not the most analogous to the

factual record presented here. Additionally, because the cases are all very fact-specific,

consideration of distinguishing factors among them is critical in determining how relevant the

holdings in those cases are to the case pending before the Court.

For example, in Zidell, the NLRB emphasized that the employer commonly dismantled

ships, factories and other structures to salvage materials which it then used for construction

purposes, and it contrasted the facts there with Frick where the employer was a manufacturer that

only “incidentally” installed its products. See 175 NLRB at 889 n.7. The NLRB further noted in

Zidell that the employer, although primarily involved in the business of dismantling ships and

barges, had frequently engaged in transitory construction activities like those at the missile site,

had built factories and warehouses, and had even erected a complete plant. See id. at 889. Here,

in contrast, Resco is not alleged to be involved in transitory building or construction projects like

the employer in Zidell, and its service work has been performed at steel-manufacturing plants and

on coke ovens but not at traditional construction sites. (Resco’s SMF, ¶¶ 13, 14; McDonough

Dec., ¶¶ 13, 14, 16, 17).

Also, while A.L. Adams appears to support the Union’s argument that Resco’s work at the

Ghent site alone is sufficient to establish that it is engaged primarily in the building and

construction industry, even if Resco is largely involved in manufacturing, upon closer scrutiny,

the employer in A.L. Adams appears to have operated as a general contractor for a significant

amount of construction work at the nuclear project site at issue, including for the erection of an

administration building and in an initial hiring of 150 craftsmen at the site. See 733 F.2d at 854.

Whereas, there are no allegations that Resco has ever operated as a general contractor, its vessel-

relining work accounted for only 11% of its revenue at the Ghent facility at issue in this case, and

the services provided at Ghent involve only 22 Resco employees. (Resco’s SMF, ¶¶ 36, 38;

McDonough Dec., ¶ 29; McDonough Supp. Dec., ¶ 9;) Since A.L. Adams and the present case

involve vastly different factual scenarios, the holding of A.L. Adams – an antitrust case which

states that an employer “may take advantage of § 8(f) if it is sufficiently engaged in construction

work at one site,” and which found the employer’s significant involvement in construction to be

sufficient – is not determinative in this case. 733 F.2d at 857.

Similarly, Hoover, 240 NLRB at 593, and Local 83, 243 NLRB at 328, are also not

necessarily supportive of the Union’s position. While certain dicta from Local 83 appears to be

helpful to the Union here, the Board in that case ruled that the Section 8(f) exception did not apply

to the employer, citing to cases that are readily distinguishable from the present case, including

Zidell, discussed supra, and Carpet, Linoleum and Soft Tile Local Union No. 1247 (Indio Paint

and Rug Center), 156 NLRB 951 (1966). See 243 NLRB at 331. In Indio, the Board considered

how to evaluate various types of business enterprises and noted that where a “firm’s gross revenue

sources happen to provide the single persuasive touchstone with respect to Section 8(f) questions,”

statutory determinations should be based upon the portion of the firm’s gross revenue which

regularly derives from contract construction, without regard to whether it came from labor alone

or from labor and materials combined. 156 NLRB at 960. However, the Board also explained that

when business enterprises devote “their facilities, time, effort, and funds principally to contract

construction, whether as general building contractors, heavy construction contractors, or special

trade contractors,” they should be considered to be engaged primarily in building and construction

work. Id. The Board further advised that gross revenue should not be the only factor considered,

but that:

wherever relevant, triers of fact should consider the proportion of their

physical plant and mobile equipment devoted to servicing or performing

such work, the percentage of their total personnel directly concerned

with such work, the relative degree to which their personnel devote

productive time to such work, as well as the proportion of their “total

gross income” derived therefrom.

Id. (emphasis in original). So, in another highly fact-specific determination, the Board in Indio

ultimately found that the employer was engaged primarily in building and construction (involving

the sale and installation of floor coverings, drapes and counters) where approximately 93% of its

overall sales included installation, approximately 62% of its work was for general contractors for

residential and commercial construction, and 12 of the company’s 15 employees were installers.

See id. at 954. The employer at issue in Indio is thus altogether different from Resco, which has

very little vessel-lining tied to its sales and which performs no work for general contractors.

(McDonough Supp. Dec., ¶¶ 6, 7). Notably, the Board in Indio also considered the employer’s

gross revenue rather than its revenue from a particular installation worksite in making its decision.

Hoover, too, is distinguishable from the present case. See 240 NLRB at 593. The Union

cites to Hoover in support of its argument that the Court should look at Ghent alone in determining

whether Section 8(f) applies to Resco, indicating that the Board noted there that at “other locations

of this employer, it was clearly engaged in construction . . . and that at those sites was admittedly

primarily engaged in construction and at those locations could effectuate 8(f) agreements.”

(Docket No. 35 at 9-10 (citing Hoover, 240 NLRB at 599 n.17 (emphasis added by the Union in

its brief))). In the footnote in Hoover to which the Union cites, however, the Board appears to

have been referring to an employer in another case who had made an argument similar to that made

by the employer in Hoover. In that case, Forest City/Dillon-Tecon Pacific, 209 NLRB 867 (1974),

the employer was engaged in the planning and construction of buildings across the United States,

and the issue there was whether the employer could make a Section 8(f) agreement involving

workers at its precast concrete plant since its entire operations were allegedly part of the building

and construction industry (the Board ruled that it could not). The facts of Forest City are thus

nearly opposite to the situation here: in Forest City, the employer argued that it was engaged

primarily in the building and construction industry overall, and it wanted the Board to find that it

could enter into a Section 8(f) agreement with its employees at one of its manufacturing facilities;

whereas here, Resco argues that it is not engaged primarily in the building and construction

industry, and it asks the Court to find that it could not enter into a Section 8(f) agreement covering

its employees at Ghent.

Therefore, if the Court evaluates Resco’s engagement in building and construction work

on a company-wide basis, as Resco urges, the Court cannot conclude that it is “engaged primarily

in the building and construction industry” under Section 8(f). As explained, supra, the vast

majority of Resco’s revenue stems from sales of its refractory products, while its service work

accounts for a very small portion (less than 5%) of its revenue. (Resco SMF, ¶ 20; McDonough

Dec., ¶ 20). See Frick, 141 NLRB at 1204 (in which the employer’s services accounted for less

than 1% of its overall revenue). Likewise, since 2015, Resco’s vessel-relining and ceramic-

welding work has never exceeded 4.9% of its annual man hours. (Resco’s SMF, ¶ 21; McDonough

Dec., ¶ 21). Additionally, Resco never provides vessel-relining services alone; rather, it only

performs such services for customers who make it a “significant supplier” of their refractory

products. (Resco’s SMF, ¶¶ 15-17; McDonough Dec., ¶¶ 15-17). Thus, none of Resco’s

customers purchase its vessel-relining services without also purchasing its refractory products, and

only an extremely small number of its customers purchase such services at all. (Resco’s SMF,

¶ 16; McDonough Dec., ¶ 16; McDonough Supp. Dec., ¶¶ 6, 7). Compare Indio, 156 NLRB at

951 (in which 93% of the employer’s sales included installation services). As explained, supra,

in 2019 only five of Resco’s 1,368 customers (0.37%) purchased vessel-relining or ceramic-

welding services, while in 2018 the same five of Resco’s then 809 customers (0.62%) purchased

such services. (McDonough Supp. Dec., ¶¶ 6, 7). In light of these facts, the Court cannot find that

Resco owes obligations to the Union or to any other party under the NRA as it pertains to the

Ghent employees because Resco is not “engaged primarily in the building and construction

industry” in accordance with Section 8(f).

Even if the Court were to focus its evaluation of Resco’s operations on its Ghent facility

specifically and without regard to its company-wide operations, as the Union seemingly suggests,

the Court still could not find that Resco is an employer “engaged primarily in the building and

construction industry.” As discussed, supra, Resco and NAS entered into an agreement to provide

refractory materials and vessel-relining services at the Ghent facility in 2014, and that work has

continued until the present time. (Resco’s SMF, ¶¶ 34, 36; McDonough Dec., ¶¶ 25, 28). There

are currently 22 Resco employees performing vessel-relining services at Ghent, 6 of whom have

been there for longer than six years and 18 of whom have been there longer than two years.

(Resco’s SMF, ¶ 38; McDonough Dec., ¶ 29). Such work does not, therefore, appear to be

transitory construction work. Compare Zidell, 175 NLRB at 889. Resco’s vessel-relining work

at Ghent is also not an entirely separate enterprise from the company’s usual operations of

manufacturing refractory, nor does Resco commonly engage in the type of construction activities

that the employer did in Zidell. See id.; A.L. Adams, 733 F.2d at 857. Additionally, while Resco

only provides vessel-relining services for a tiny percentage of its customers (0.37% in 2019), even

where it did provide such services in Ghent, the revenue stemming from those services still

amounts to only a small percentage of the total revenue Resco receives from that facility (11% in

2019). (McDonough Supp. Dec., ¶¶ 6, 7, 9). Compare Indio, 156 NLRB at 951 (in which 93% of

the employer’s sales included installation services and 62% of its sales were to general contractors

in the construction industry).

Despite the stark differences between the facts of this case and the facts of the various cases

cited by the parties, the Union summarized its position during oral argument, contending that, as

the employer in A.L. Adams “had a substantial interest in an enterprise that was a building and

construction-related enterprise,” therefore “all that need be done under 8(f) [is] that there is

something substantial that clearly falls within work done by the building trades, and that would

apply here in the vessel relining.” (Tr. at 30). However, as discussed at length, supra, upon

consideration of the cases that the Union cited to support its position both in briefing and during

oral argument, as well as the cases cited by Resco in support of its position, the Court finds that

there is simply no support for a finding that the vessel-relining services Resco’s employees

performed at Ghent – or Resco’s performance of services company-wide – are substantial enough

to show that it is an employer engaged primarily in the building and conducting industry under

Section 8(f). Compare A.L. Adams, 733 F.2d at 853 (in which the employer, although engaged

primarily in non-construction activities elsewhere, was noted to be able to take advantage of

Section 8(f) at one location where it operated as a general contractor for major construction work

and hired numerous employees); Zidell, 175 NLRB at 887 (in which the employer, although

primarily involved in non-construction activities, had also clearly engaged in major construction

work elsewhere including the construction of various buildings).

Therefore, upon consideration of the record evidence of this case in light of the plain

language of Section 8(f), and the cases that the parties have cited, the Court finds that Resco is not

engaged primarily in the building and construction industry and therefore owes no obligations to

the Union or to any other party under the NRA as it pertains to Resco’s employees at Ghent. The

Court will therefore not compel Resco to arbitrate the Union’s grievance relating to Resco’s Ghent

employees. The Court further finds that Resco’s failure to comply with the grievance and

arbitration procedure set forth in the NRA does not constitute a breach of that agreement because

the NRA cannot apply to Resco’s Ghent employees as a matter of law.

Accordingly, summary judgment will be granted in favor of Resco as to Count I of the

Complaint and as to the Union’s Counterclaim. The Court will declare that Resco owes no

obligations to the Union or any other party under the National Agreement for Refractory

Construction as it pertains to Resco’s employees at North American Stainless in Ghent, Kentucky.

(See Resco’s Proposed Order, Docket No. 32).

3. Count II of the Complaint (Section 303 of the LMRA)

Resco alleges in Count II of the Complaint that the Union’s actions constitute violations of

Sections 8(b)(1), 8(b)(4)(ii)(A), 8(d), 8(e) and 9(a) of the NLRA, and that the Union has thereby

engaged in conduct defined as unfair labor practices under Section 303(a) of the LMRA, 29 U.S.C.

§ 187(a). Resco therefore seeks damages in accordance with Section 303(b) of the LMRA, 29

U.S.C. § 187(b). Although Resco asks that the Court grant summary judgment in its favor on all

claims in this matter, Count II of the Complaint is not addressed in Resco’s motion or in its

proposed order, nor did the parties discuss it in their briefing or during oral argument. Therefore,

Resco’s motion for summary judgment in its favor as to Count II must be denied.

Nevertheless, based on the parties’ filings in this matter, the Court’s ruling today on Count

I of the Complaint and the Union’s Counterclaim – including the Court’s adoption of the language

of Resco’s Proposed Order – appears to resolve this case. Therefore, the Court will provide the

parties with an opportunity to advise the Court as to whether anything remains to be resolved in

this matter. Accordingly, the Court will order counsel for Resco and the Union to meet and confer

in order to discuss whether the case has been resolved. The parties shall then file a joint statement

indicating either that this matter has been resolved, in which case the Court will enter a Rule 58

Judgment; or, alternatively, the parties shall file a joint statement indicating that this matter has

not been resolved, in which case the Court will schedule a status conference to discuss how this

case may best, and most efficiently and cost-effectively, proceed to final resolution.

V. Conclusion

Based on the foregoing, Resco’s Motion for Summary Judgment is granted in part and

denied in part. Summary judgment is granted in favor of Resco as to Count I of the Complaint

and as to the Union’s Counterclaim, and the Court will enter an Order declaring that Resco owes

no obligations to the Union or to any other party under the NRA as it pertains to Resco’s Ghent

employees, as set forth in detail in the accompanying Order. As to Count II of the Complaint,

Resco’s motion for summary judgment is denied, and the Court will order counsel for the parties

to meet and confer and file a joint statement advising the Court as to whether the Court’s ruling

today resolves this case, as set forth in detail in the accompanying Order.

An Order consistent with this Memorandum Opinion follows.

Dated: March 30, 2021 s/ W. Scott Hardy_____________

W. Scott Hardy

United States District Judge

cc/ecf: All counsel of record