Petition for Writ of Certiorari — Rupert v. United States
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Supreme Court, U.S.
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$94-53 Ju -7 19%
No, OFFICE OF THE CLERK
IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1993
ROAD SPRINKLER FITTERS LOCAL
UNION NO. 669, affiliated with the United
Association of Journeymen & Apprentices
of the Plumbing & Pipefitting Industry of
the United States and Canada, AFL-CIO,
Petitioner,
Vv.
INDEPENDENT SPRINKLER CORP.,
Respondent.
ON PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS FOR
_ ‘THE ELEVENTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
WILLIAM W. CSBORNE, Jr.
Counsel of Record
Jonathan G. Axelrod
Helene D. Lerner
BEINS, AXELROD, OSBORNE, MOONEY
& GREEN, P.C.
1341 G Street, N.W., Suite 700
Washington, D.C. 20005-3105
(202) 783-0010
Counsel for Petitioner
QUESTIONS PRESENTED
Under what circumstances may a successor
employer be required to arbitrate under its
predecessor’s agreement with the union?
Is Section 301(a) of the Labor Management
Relations Act of 1947 applicable only where
the parties to the "contract" enjoy a collective
bargaining relationship?
Is workforce continuity, the key element of
successorship status, determined by the same
Standard in NLRB and Section 301 cases or
by different standards?
PARTIES BELOW
The Plaintiff and Appellee in the proceedings below
was:
Road Sprinkler Fitters Local Union No. 669,
affiliated with the United Association of
Journeymen & Apprentices of the Plumbing
& Pipefitting Industry of the United States
and Canada, AFL-CIO.
The Defendant and Appellant in the proceedings
below was:
Independent Sprinkler Corp.
The following companies were Defendants in the
proceedings before the District Court and appealed from the
District Court Order, but withdrew their appeals and did not
participate in the proceedings in the Court of Appeals:
Moore Pipe & Sprinkler Co.
Independent Sprinkler and Fire Protection Co.
li
TABLE OF CONTENTS
QUESTIONS PRESENTED ........%....... i
1. Under what circumstances may a
successor employer be required to
arbitrate under its predecessor’s
agreement with the union? ......... i
3 Is Section 301(a) of the Labor
Management Relations Act of 1947
applicable only where the parties to
the "contract" enjoy a collective
bargaining relationship? .......... i
3. Is workforce continuity, the key
element of successorship _ status,
determined by the same standard in
NLRB and Section 301 cases or by
Be i
8 ER Ee eee es ee ii
pe es a a or iii
pe Pe Ps |: v
I ht a as i ag oe 2
i 2
OUD te ek. 2
STATEMENT OF THE CASE .............. 3
A. ss a. San «ow 6 wg 3
a 6
ili
REASONS FOR GRANTING THE WRIT....... 8
I. A Conflict in the Circuit Courts Exists
Regarding a Successor’s Duty to Arbitrate .. 8
II. The Eleventh Circuit’s Decision on the Scope
of Section 301 is Contrary to a Majority of
the Circuit Courts and Degrades Section 301
as a Forum For Resolving Labor Disputes... 14
Ill. The Decision Below is Contrary to the
Precedent of the Court and Recreates a
Conflict in the Circuit Courts Regarding the
Method for Determining Workforce
Continuity in Successorship Cases ....... 18
CO sw hv UE AK a we Se 21
APPR Pe PERE CS ISS 22
Dstrect Comet Teetee «we la
Court of Appeals Decision ............ 21a
Se ES fe 8 Rw 32a
ers A kb ba ees Wace A 33a
PE Or DU ERS ee 6A 35a
iV
TABLE OF AUTHORITIES
CASES
Adamszewski v. Machinists Local 1487, 496 F.2d 777 (7th
Cir.) cert. denied, 419 U.S. 997 (1974) ......... 14
Audit Services, Inc. v. Rolfson, 641 F.2d 757 (9th Cir.
Ree 86 SS PG er Chee Pe ee 20
Bakers Union Factory No. 326 v. ITT Continental Baking
Co., 749 F.246 350 Gth Cir. 1964) 2c en. 15
Bartenders Local 340 v. Howard Johnson Co., 535 F.2d
Sae rerea es 4 ea Se wk 10
Boeing Co. v. Machinists, 504 F.2d 307 (5th Cir.
1974), cert denied, 421 U.S. 913 (1975) ......... 20
Computer Sciences Corp v. NLRB, 677 F.2d 804 (ilth
CS a ses SS SEE Soe Cae ee 19
District 2, Marine Engineers Beneficial Association v. Grand
Bassa Tankers, Inc., 663 F.2d 392 (2d Cir. 1981) 16, 17
Evans Services, Inc. v. NLRB, 810 F.2d 1089 (1ith Cir.
SN Oe Fa ee ER Co ok ee eae ee 19
ROR SS CARON SES ERG HEA oe 8, 18-20
GOONER Ss £00 OU ae aS Se ae eee we 15
Gigliotti Corp. v. Building & Censtruction Trades
Council, 583 F. Supp. 396 (E.D. Pa. 1984) ....... 20
Golden State Bottling Co. v. NLRB, 414 U.S. 168
CFE be EE oe es COWS Fee eS oe EN 12
Graduate Plastics Co., Inc. v. Auto Workers, District
65, 991 F.2d 997 (2d Cir. 1993) ......... 9, 11, 20
Hotel Employees Local 2 v. Marriott Corp., 961 F.2d
ng re ee oe ra aA 14
Hotel Employees Local 217 v. J.P. Morgan Hotel, 996
Pat ee Gee Se Bee i ta ie 14, 17
Howard Johnson Co., Inc. v. Hotel and Restaurant
Employees, 417 U.S. 249 (1974) ........ 8, 9, 18, 19
Inter. Broth. of Eiectrical Workers v. C & M Electric, 734
F.Supp. 285 (N.D.Ohio 1990), aff’d. 922 F.2d 841 (6th Cir.
a es Ce ame hiner Se heir a SEA ss oll 16
Jim McNeff v. Todd, 461 U.S. 260 (1993) ........ 17
John Wiley & Sons, Inc. v. Livingston, Inc., 376 U.S. 543
Pp ie I Oe ore owes ete nS 9, 11, 12, 19
Jones v. General Motors Corp., 939 F.2d 380 (6th Cir.
FOPEP ie h we ONS oe Se LI Sa ree 9
Machinists Lodge 1266 v. Panoramic Corp. , 668 F.2d
Oe CPE CR ROSES 0 0k ERR He Ve 11
vi
Mail Handlers Local 305 v. United States Postal Service,
SoS Fae Few ere et TOTO) ©. oh Se AS. i5
Mine Workers (Lone Star Steel Co.), 231 NLRB 573
(1977), enforced in relevant part and remanded 639
F.2d 545 (10th Cir. 1980), cert. denied, 450 U.S.
Tae Cen ss eee.” De PR eS aes 8
NLRB v. Burns International Security Services, Inc.,
Gee ts: Ee BERS CS RRA SK 12, 18-20
Operating Engineers Local 150 v. Centor Contractors,
Inc. , 831 F.2d 1309 (7th Cir. 1987) .......... 9, 11
Paperworkers v. Misco, 484 U.S. 29 (1987) ....... 12
Retail Clerks Int’l Ass'n v. Lion Dry Goods, Inc. , 369
Ss eG or rigid abt ww we SO A ene ole 14
Retail Clerks Int’l Ass’n v. Lion Dry Goods, Inc. , 341 F.2d
715 (6th Cir.), cert. denied 382 U.S. 839 (1965) .... 15
Smegal v. Gateway Foods of Minneapolis, Inc. , 819
F.2d 191 (8th Cir.), cert. denied, 484 U.S. 928
Cee at tees FOk He, SS, a, ai vie 20
Smith v. Kerrville Bus Co.,
OB, | a 14, 15
Steelworkers v. Connors Steel Co. , 855 F.2d 1499 (11th Cir.
1988), cert. denied 489 U.S. 1096 (1989) ........ 10
Steelworkers v. Reliance Universal, Inc. , 335 F.2d
Sea ke oe en dh talks Own 12
Steelworkers v. United States Gypsum Co., 492 F.2d
713 (Sth Cir.), cert. denied, 419 U.S. 998 (1974) ... 9
Steelworkers v. Warrior & Gulf Navigation Co.,
S60 TE Seta Pils SS 6 SSMS Mewes 8 11
Teamsters Local 249 v. Bill’s Trucking, Inc., 493 F.2d
See es SE is es PAs 6 oe a oe ORS 10
Textile Workers Union v. Lincoln Mills, 353 U.S. 448
CE ie kis PRG a a aa De a eee 18
Textile Workers v. Cal Optics Corp. , 464 F.2d 577 (3d Cir.
SOUR es 4s is beds ss eae ee eee 12
Ae ee Oe eee ge 14
United Aircraft Corp., 192 NLRB 382 (1971), modified sub
nom Machinists v. United Aircraft Corp. , 534 F.2d 422 (2d
Cir. 1975), on remand 247 NLRB 1042 enf’d. 661 F.2d 910
Cs WED kb 6 ek ee ee ee ae ee 15
United Food & Commercial Workers Local 1529 v.
Chambers Big Star No. 52, Inc., 124 LRRM 2120 (W.D.
We See Naewe ch baeben Ceatcwee 10
Virginia Sprinkler Co., Inc. v. Plumbers Local 669, 868
Pe ee ee ee I ok tt en wade ere eee 16
STATUTES
Be Uw REED 0 i no we eb lets UR 2
ee a | ee. <r i See 2
A EE oss Fee ree 8s ESS 19
MP a OE re ka 2, 4, 7, 11, 14-17, 19-21
MISCELLANEOUS
Bureau of National Affairs, Basic Patterns in Union
I 8
Crystal and Brodecki, Are Successors and Assigns
Clauses Really Binding?, 38 Lab. L.J. 547 (1987) . . . 10
Note & Comment, The Efficacy of Successorship
Clauses in Collective Bargaining Agreements, 79 Geo.
Ree SO Ss Fee WOU OE rk kee enae 10
ix
IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1993
ROAD SPRINKLER FITTERS LOCAL
UNION NO. 669, affiliated with the United
Association of Journeymen & Apprentices of
the Plumbing & Pipefitting Industry of the
United States and Canada, AFL-CIO,
Petitioner,
v.
INDEPENDENT SPRINKLER CORP.,
Respondent.
ON PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS FOR
THE ELEVENTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
Road Sprinkler Fitters Local Union No. 669 ("Local
669") respectfully petitions for a Writ of Certiorari to review
the Judgment of the United States Court of Appeals for the
Eleventh Circuit reversing the District Court’s Order
directing Independent Sprinkler Corp. to arbitrate a dispute
with Local 669.
OPINIONS BELOW
The decision of the United States Court of Appeals
for the Eleventh Circuit is reported at 10 F.3d 1563 and is
reproduced at App. 21a. The decision denying the Petition
for Rehearing and Suggestion for Rehearing En Banc is not
reported and is reproduced at App. 32a. The Mandate is
reproduced at App. 33a.
The decision of the United States District Court for
the Middle District of Florida is reported at 136 LRRM 2693
and is reproduced at App. la.
JURISDICTION
The Court of Ap, 2als issued its decision on January
7, 1994. The court denied the Petition for Rehearing and
Suggestion for Rehearing En Banc on April 8, 1994. The
Court of Appeals’ Mandate became effective on May 2,
1994. This Petition is timely filed with this Court under
28 U.S.C. §2101(c). The jurisdiction of this Court is
invoked under 28 U.S.C. §1254(1).
STATUTE INVOLVED
29 U.S.C. §185(a):
(a) Venue, amount, and citizenship. Suits for violation
of contracts between an employer and a labor organization
representing employees in an industry affecting commerce as
defined in this Act, or between any such labor organizations,
may be brought in any district court of the United States
having jurisdiction of the parties, without respect to the
2
amount in controversy or without regard to the citizenship of
the parties.
STATEMENT OF THE CASE
A. The Facts’
Local 669 is a national labor organization
representing employees who install and maintain automatic
fire protection systems. [App. 35a]. Moore Pipe &
Sprinkler Co. ("Moore Pipe") has been a sprinkler contractor
with a long standing collective bargaining relationship with
Local 669. [App. 36a]. At all material times, Moore Pipe
has been owned by Williamson Feed Mills ("Williamson"),
a parent corporation which was in turn owned by the Evans
family including brothers Mack, Jerry and Randy. [App.
38a].
Williamson formed Independent Sprinkler & Fire
Protection Co. ("Independent I") in 1982 to perform
sprinkler installation work on a strictly nonunion basis.
Moore Pipe and Independent I were commonly owned by
Williamson and the Bvans brothers until 1987. [App. 36a].
In 1985, Local 669 filed a grievance under Article 3
of its collective bargaining agreement claiming that Moore
Pipe and Independent I were being operated as "single or
joint" employers and that the economic terms of the Moore
Pipe agreement were contractually applicable to all sprinkler
'The District Court based its findings of fact upon stipulations which
are reprinted here at App. 37a.
installation work performed by Independent I in Local 669’s
territorial jurisdiction. [App. 36a]. When Moore Pipe
refused to submit the grievance to arbitration, Local 669
sued to compel arbitration of its grievance under Section
301(a) of the Labor Management Relations Act, 29 U.S.C.
§185(a). [App. 37a].
The 1985 suit was resolved on April 16, 1987,
together with the underlying grievance, by a written
settlement agreement executed by Jerry Evans on behalf of
Moore Pipe and by Randy Evans as President of Independent
I. Moore Pipe and Independent I agreed, inter alia, that
from April, 1987 until March, 1991, any sprinkler
installation work within Local 669’s territorial jurisdiction
would be performed by Moore Pipe’s bargaining unit
employees represented by Local 669. The Settlement
Agreement expressly bound Moore Pipe and Independent I
and "... the successors, assigns, heirs, trustees and
administrators of any party hereto" and, by its terms, was
enforceable by arbitration. [App. 37a (emphasis supplied)].”
In the summer of 1987, several months after
executing the settlement agreement, Williamson decided,
allegedly for economic reasons, to close Independent I. On
October 30, 1987, Independent I ceased operations. [App.
39a].
In August, 1987, simultaneous with the decision to
close Independent I, Randy Evans sold his stock in
The settlement agreement contained a footnote at the reference to
"successors" providing, essentially, that Independent I could be sold to
a bona fide purchaser without regard to the settlement. No one has
claimed that Independent II was a bona fide purchaser of Independent I.
4
Williamson back to the corporation and used the proceeds to
capitalize his new company, Independent Sprinkler Corp.
("Independent II"). [App. 37a-38a]. Independent II was
engaged in the same business as Independent I. During
Independent I’s phase out period, Independent I and
Independent II shared officers, directors,’ and management’
and occupied the same offices. [App. 39a-42a]. In addition,
Independent II purchased a number of items of office
equipment and supplies from Independent I and assumed the
leases of some but not all of Independent I’s vehicles. [App.
42a, 44a].
On Friday, October 30, 1987, the last day of its
active operations, Independent I laid off all of its employees.
On the next business day, Monday, November 2,
Independent II began operations. Of Independent II’s initial
workforce of thirty-five employees, thirty-two were "alumni"
of Independent I. [App. 39a]. Six months later,
Independent II still employed thirty-five employees, twenty-
five of whom were former Independent I employees. [App.
39a].
3Randy Evans and Robert Matthews were the largest shareholders in
Independent II. Evans was a director of both Independent I and
Independent II and served as President for both companies
simultaneously. Matthews was director of both Independent I and
Independent II and served as Vice President for both companies
simultaneously. [App. 39a-41a].
‘Matthews had the authority to hire, fire, promote, and layoff
employees at Independent I, and retained the same authority at
Independent II. William Taylor was the administrator for Independent
I and the comptroller for Independent II. Grace Cobb was the secretary
for both companies, and Danny Wilkerson, James Roberts and Dan
Thomas held supervisory positions at both companies. [App. 39a-41a].
5
On November 2, 1987, the first day of its active
operations, Independent [I signed a contract with
Independent I by which it obtained the right to complete
thirty-seven unfinished Independent I construction jobs in
return for the money still owed on the contracts, in excess of
$500,000. [App. 15a].
Independent II’s employees continued to work on
construction jobs in the field, in the same geographic
locations as did the employees of Independent I. These jobs
included many of the same projects formerly under contract
to Independent I. [App. 43a].
From November 2, 1987 until the expiration of the
Settlement Agreement in March of 1991, Independent II
performed substantial sprinkler work in Local 669’s
jurisdiction on substandard terms and conditions of
employment, and in direct contravention to the terms of the
settlement agreement.
B. The Litigation
On July 25, 1989, Local 669 alleged that the
settlement agreement had been violated through the post-
settlement formation of Independent II to perform work in
Local 669’s territorial jurisdiction in violation of the
settlement. After unsuccessfully attempting to resolve the
dispute informally, Local 669 demanded that Moore Pipe,
Independent I and Independent II submit its claim to binding
arbitration under the settlement agreement, which expressly
stated that
[t]he unresolved issues shall be promptly
referred to the Special Arbitrator pursuant to
Article 3 of the Local 669 NFSA agreement
for final and binding arbitration under Article
25 of the Agreement.
Moore Pipe, Independent I and Independent II all refused to
submit this dispute to arbitration and a second Section 301
suit to compel arbitration was filed on November 8, 1989.
On February 27, 1991, on the basis of stipulated
facts, the District Court granted Local 669’s motion for
summary judgment and issued an order compelling Moore
Pipe, Independent I and Independent II to submit the dispute
to arbitration.® The District Court concluded _ that
Independent II was the successor to Independent I under
federal labor law [App. 16a] and was obligated to arbitrate
the contractual dispute of alleged breach of settlement [App.
17a].
On January 7, 1994, the Eleventh Circuit reversed the
District Court and concluded that Independent II was not
obligated to arbitrate the dispute over compliance with the
settlement agreement. The Court of Appeals did not dispute
the factual basis for the District Court’s conclusion that
Independent II was the successor of Independent I. Rather,
the Eleventh Circuit held that, as a matter of law, the
successorship doctrine had "no application" to the case,
‘Motions for a stay of arbitration pending appeal were denied by the
district court on May 20, 1991 and by the Eleventh Circuit on July 3,
1991. On February 13, 1992 the Special Arbitrator rendered a decision
on the issue of liability in favor of Local 669 and against Moore Pipe,
Independent I and Independent II.
because Local 669 and Independent I had no collective
bargaining relationship and because Independent II did not
employ "all" of Independent I’s employees. [App. 28a].
REASONS FOR GRANTING THE WRIT
I. A Conflict in the Circuit
Courts Exists Regarding a
Successor’s Duty to Arbitrate
This Petition presents a recurring issue of
successorship law this Court considered but left unresolved
in Howard Johnson Co., Inc. v. Hotel and Restaurant
Employees, 417 U.S. 249 (1974), and which has since
generated a conflict in the circuits: under what
circumstances may a successor be bound to arbitrate a
grievance arising under its predecessor’s agreement with the
union. Given the significance of this issue and "the
importance of the successorship issue in labor law" Fall
River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 36
(1987)°, the time has come to resolve this conflict.
In Howard Johnson, the Court recognized that a
successor could be compelled to arbitrate under its
predecessor’s labor agreement where there is "‘substantial
°Successorship clauses are commonly found in collective bargaining
agreements, Bureau of National Affairs, Basic Patterns in Union
Contracts 8 (8th ed. 1975) (at least 22% of agreements sampled in
1975), and are a mandatory subject of bargaining under the National
Labor Relations Act. Mine Workers (Lone Star Steel Co.), 231 NLRB
573 (1977), enforced in relevant part and remanded 639 F.2d 545 (10th
Cir. 1980), cert. denied, 450 U.S. 911 (1981).
8
continuity of identity in the business enterprise’ before and
after a change in ownership." /d. at 258 n.3 and 263-64
quoting John Wiley & Sons, Inc. v. Livingston, Inc., 376
U.S. 543, 551 (1964).
In this case, the Eleventh Circuit read Howard
Johnson to limit Wiley to a situation in which the
predecessor was party to a collective bargaining agreement
or relationship with the Union and the successor has hired all
of the predecessor’s employees. [App. 28a]. The Eleventh
Circuit’s narrow reading of Wiley directly contradicts
previous decisions by the Second, Third, Fifth and Seventh
Circuits.’ Graduate Plastics Co., Inc. v. Auto Workers,
District 65, 991 F.2d 997 (2d Cir. 1993); Operating
Engineers Lecal 150 v. Centor Contractors, Inc. , 831 F.2d
1309 (7th Cir. 1987); Steelworkers v. United States Gypsum
Co., 492 F.2d 713, 725-27 (Sth Cir.), cert. denied, 419
"The Eleventh Circuit’s refusal to require arbitration pursuant to
Section 301 based upon the lack of a direct bargaining relationship
between Independent I and the Union "ignores the fact that the settlement
agreement itself is a creature wholly begotten by the CBA ... The
settlement agreement was the settlement of a grievance filed ... by the
Union pursuant to the dispute resolution procedures of the CBA." Jones
v. General Motors Corp., 939 F.2d 380, 383 (6th Cir. 1991).
Independent I was included in the settlement agreement, not because of
a direct bargaining relationship with the Union, but because its operations
directly undermined the relationship between the Union and Moore Pipe,
a commonly owned related company, allegedly in violation of the
collective bargaining agreement. [App. 2a-3a, 36a-37a].
9
U.S. 998 (1974); Teamsters Local 249 v. Bill’s Trucking,
Inc., 493 F.2d 956 (3d Cir. 1974).
On facts strikingly similar to those in this case, the
Seventh Circuit held that a partnership was the successor to
a corporation and was bound by an arbitration award
between the corporation and its union.” The Seventh Circuit
explained that the successorship and alter go
doctrines are usually applied to determine
whether one employer is required to bargain
with a union that represented a former
employer’s employees. However, we see no
reason the same principles should not be
applicable to enforcement of arbitration
*The Ninth Circuit has also suggested that a successor could be
compelled to arbitrate and that an arbitrator, but not the court, could
determine whether to impose the substantive terms of the agreement on
the successor. Bartenders Local 340 v. Howard Johnson Co. , 535 F.2d
1160, 1163 (9th Cir. 1976). See also United Food & Commercial
Workers Local 1529 v. Chambers Big Star No. 52, Inc., 124 LRRM
2120, 2125 (W.D. Tenn. 1986) (arbitration compelled). See generally
Note & Comment, The Efficacy of Successorship Clauses in Collective
Bargaining Agreements, 79 Geo. L.J. 1549, 1555-1556, 1558-1562
(1991); Crystal and Brodecki, Are Successors and Assigns Clauses Really
Binding ?, 38 Lab. L.J. 547, 548-550 (1987).
°*The court held that the partnership was alternatively liable as a
successor and as an alter ego of the corporation. See also Steelworkers
v. Connors Steel Co., 855 F.2d 1499, 1505-1508 (11th Cir. 1988), cert.
denied 489 U.S. 1096 (1989). Thus, the Eleventh Circuit’s implication
that the Union litigated on the wrong theory and should have pursued
Independent II as an alter ego rather than as a successor [App. 28a-30a]
was error.
10
awards that are "part and parcel of the
collective bargaining process itself."
Center Contractors, 831 F.2d at 1313, quoting Steelworkers
v. Warrior & Gulf Navigation Co., 363 U.S. 574, 578
(1960). See also Machinists Lodge 1266 v. Panoramic
Corp., 668 F.2d 276, 287 (7th Cir. 1981).
Similarly, in Graduate Plastics, the Second Circuit
found that "there was a sufficient basis to find that GPC was
Stotter’s successor and was obliged to arbitrate the Union’s
claims under the Contract, and accordingly, that the
arbitrator had jurisdiction to resolve the dispute." 991 F.2d
at 1002.
Also relying on Wiley, the Third Circuit, in Bill’s
Trucking, supra, explained the possible consequences of a
contrary view:
an employer dissatisfied with the terms of a
validly negotiated labor agreement might seek
to avoid them by a sale of his business to a
third party, in effect working a unilateral
termination of the employees’ contract rights.
This Court and other courts, aware of such
possibility, have consistently held, in breach
of contract cases under section 301, that a
finding of "substantial continuity" may
warrant the conclusion that a successor is
bound by the terms of a prior employer’s
labor contract.
11
493 F.2d at 960-52. See also Steelworkers v. Reliance
Universal, Inc., 335 ©.2d 891, 892-93, 895 (3d Cir.
1964).'°
The view of the Second, Third, Fifth and Seventh
Circuits, that a successor employer may be obligated to
arbitrate under its predecessor’s collective bargaining
agreement even if not otherwise obligated by that agreement,
is predicated upon the Court’s decision NLRB v. Burns
International Security Services, Inc., 406 U.S. 272 (1972).
In Burns, the Court said that Wiley
held only that the agreement to arbitrate ...
survived the merger and left to the arbitrator,
subject to judicial review, the ultimate
question of the extent to which, if any, the
surviving company was bound by the other
provisions of the contract.
By contrast, the Eleventh Circuit disallowed an arbitral
determination of the merits of the Union’s claim against
Independent II under the settlement contrary to the consistent
policy of the Court favoring arbitration. E.g., Paperworkers
v. Misco, 484 U.S. 29, 35 (1987).
'°A corollary principle, that an "innocent" successor which has not
itself committed any unfair labor practices may be required to remedy the
statutory violations of its predecessor, was reaffirmed in Golden State
Bottling Co. v. NLRB, 414 U.S. 168, 176 (1973). The Golden State
principle has also been applied to impose an arbitration remedy upon a
successor. Textile Workers v. Cal Optics Corp., 464 F.2d 577, 578 (3d
Cir. 1972).
12
In this context, the District Court’s detailed findings
and conclusions regarding the interrelationship between
Independent I and Independent II [App. 15a-16a], which
were not disturbed by the Eleventh Circuit, are worthy of
reiteration:
the Court finds that there was substantial
continuity between the two enterprises. There
is no disagreement that the business of the
two enterprises is _ identical. While
Independent II did not hire the majority of
Independent I’s workforce, the overwhelming
majority of Independent II’s workforce was
previously employed by Independent I.
Independent II began active operations the
next business day after Independent I ceased
active operations. Independent II, as
subcontractor, was authorized to complete
thirty-seven of Independent I’s construction
contracts. Former Independent I employees
working on those thirty-seven projects, as
well as other projects obtained by Independent
il, could understandably view their job
situation as essentially unaltered. Based on
the totality of the circumstances, the Court
finds that Independent II is a successor
corporation to Independent I.
Applying the Second, Third, Fifth and Seventh
Circuit standards to these undisputed facts, Independent II
would be required to arbitrate. The Court should grant
review to resolve the conflicting circuit decisions on the
issue of when a successor may be bound to arbitrate under
the predecessor’s contract.
13
Il. The Eleventh Circuit’s Decision on
the Scope of Section 301 is Contrary
to a Majority of the Circuit Courts
and Degrades Section 301 as a
Forum For’ Resolving Labor
Disputes
Federal labor policy, as expressed in Section 301(a)
of the Labor Management Relations Act of 1947, 29 U.S.C.
§185(a), strongly favors judicial enforcement of agreements
between unions and employers that resolve labor disputes
and which are therefore "significant to the maintenance of
labor peace." Retail Clerks Int’l Ass’n v. Lion Dry Good,
Inc., 369 U.S. 17, 27 (1962). The decision below is in
conflict with a majority of the appellate courts which have
interpreted Lion Dry Goods to mandate a liberal construction
of the term "contracts" in Section 301 to include agreements
other than traditional collective bargaining agreements.
Hotel Emp!oyees Local 217 v. J.P. Morgan Hotel, 996 F.2d
561, 566 (2d. Cir. 1993); Hotel Employees Local 2 v.
Marriott Corp., 961 F.2d 1464, 1466 n. 3 (9th Cir. 1992);
Textile Workers v. Facetglas, Inc. , 845 F.2d 1250, 1253 (4th
Cir. 1988); Smith v. Kerrville Bus Co., 709 F.2d 914, 920
(Sth Cir. 1983); Adamszewski v. Machinists Local 1487, 496
F.2d 777, 786 (7th Cir.) cert. denied, 419 U.S. 997 (1974)
14
The majority view is that
Section 301 must be broadly construed to
encompass any agreement, written or
unwritten, formal or informal, which
functions to preserve harmonious
relations between labor and management.
Smith v. Kerrville Bus Co., supra, 709 F.2d at 920.
Under this rule, grievance and strike settlements have
long been recognized as enforceable "contracts" under
Section 301. E.g., Bakers Union Factory No. 326 v. ITT
Continental Baking Co., 749 F.2d 350, 354-355 (6th
Cir. 1984) (grievance settlement); Mail Handlers Local 305
v. United States Postal Service, 594 F.2d 988, 992 (4th Cir.
1979) (same); Frech v. Pensacola Steamship Ass’n., 903
F.2d 1471, 1474-75 (11th Cir. 1990) (strike settlement);
Retail Clerks Int’l Ass’n v. Lion Dry Goods, Inc. , 341 F.2d
715, 718 (6th Cir.), cert. denied 382 U.S. 839 (1965)
(same). See also, United Aircraft Corp., 192 NLRB 382,
387 (1971), modified sub nom Machinists v. United Aircraft
Corp. , 534 F.2d 422 (2d Cir.1975), on remand 247 NLRB
1042 enf'd. 661 F.2d 910 (2d Cir. 1981).
Local 669’s attempt to enforce its grievance
settlement agreement against the three employers below,
pursuant to the arbitration and "successors" clauses in the
agreement, was rebuffed by the Eleventh Circuit, solely with
respect to the claim against Independent II, on the theory
that:
[t]here has been no collective bargaining
relationship between the union and
15
Independent I to be "passed on" to
Independent II as successor to Independent
I.... The successorship doctrine may not be
utilized to force an alleged successor
employer ... into a collective bargaining
relationship in which its alleged predecessor
was not a participant.
[App. 26a-27a (emphasis is the original)]."'
By interjecting the precondition of a "collective
bargaining relationship" between the parties upon
enforcement of a grievance settlement agreement under
Section 301, the Eleventh Circuit mirrored a decision of the
Sixth Circuit. Electrical Workers v. C & M Electric, 734
F.Supp. 285 (N.D.Ohio 1990), aff'd. 922 F.2d 841 (6th Cir.
1991)."* In C & M Electric, the agreement, between a
picketing union and a construction contractor, was deemed
unenforceable under Section 301 because it had not been
"Contrary to the Eleventi: Circuit opinion, however, Local 669’s
grievance did not seek to impose union representation or membership or
the substantive terms of its collective bargaining agreement upon
Independent I, much less Independent II. See Virginia Sprinkler Co.,
Inc. v. Plumbers Local 669, 868 F.2d 116, 119-20 (4th Cir. 1989).
"An earlier decision of the Second Circuit would impose a similar
implied restriction upon the enforcement of a Section 301 "contract," that
it control the terms and conditions of the employer’s relationship with its
employees. District 2, Marine Engineers Beneficial Association v. Grand
Bassa Tankers, Inc., 663 F.2d 392, 397 (2d Cir. 1981).
16
entered into between a union and a company employing
members of the union. 734 F.Supp. at 289.”
The Eleventh and Sixth Circuits’ emphasis upon the
underlying bargaining relationship between the union and the
employer misapprehends the
critical distinction between an employer’s
obligation under the [National Labor Relations
Act] to bargain with the representative of a
majority of its employees and its duty to
satisfy lawful, contractual obligations. ...
Jim McNeff v. Todd, 461, U.S. 260, 267 and n.7
(1993)(holding Section 301 contracts enforceable in suit by
minority union).
The minority view among the federal courts of
appeals, exemplified by the decision below, is thus in
conflict with the Court’s rulings, and substantially diminishes
the applicability and utility of Section 301.
"In this regard, the Eleventh and Sixth Circuits have read a
requirement of privity into Section 301(a) which, in their view, should
be read as follows:
Suits for violation of contracts between an employer
and a labor organization representing [the employer’s]
employees in an industry affecting commerce....
See also Grand Bassa Steamship, supra. This construction adds a
substantive element to the "plain language” of the statute, and is contrary
to existing appellate caselaw. Hotel Employees Local 217 v. J.P.
Morgan Hotel, supra, 996 F.2d at 564-65.
17
{[Fjederal courts should enforce these
agreements on behalf of or against labor
organizations... Industrial peace can be best
obtained only in that way.
Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 455
(1957). The Court should grant review to establish
uniformity of decisions on this important labor law issue.
Ill. The Decision Below is
Contrary to the Precedent of
the Court and Recreates a
Conflict in the Circuit Courts
Regarding the Method for
Determining Workforce
Continuity In Successorship
Cases
Workforce continuity is the "triggering" fact in
successorship cases. Fall River, supra, 482 U.S. at 46.
Confusion over the appropriate standard for measuring
workforce continuity for successorship purposes was caused
by inconsistent language in Burns and Howard Johnson. 482
U.S. at 46, n.12. The quandary was ultimately resolved by
consensus among the NLRB and the circuit courts in favor
of the Burns formulation: whether "a majority of the
employees hired by the new employer" were former
employees of the predecessor.
In concluding that Independent II was a "successor"
and bound to arbitration under the settlement, the District
Court expressly found that [App. 16a]:
18
[w]hile Independent II did not hire the
majority of Independent I’s workforce, the
overwhelming majority of Independent II’s
workforce was previously employed by
Independent I.
The Eleventh Circuit did not contest these findings,
but held that a successor’s duty to arbitrate under Wiley
arises only where "the original employer has disappeared and
the new employer has hired all of the old employer’s
workers ....". [App. 28a (emphasis supplied)]. The
Eleventh Circuit declined to order Independent II to
arbitrate, reasoning that "Independent II has hired some but
not all of Independent I’s employees" [App. 28a].
The Eleventh Circuit thus requires a separate and
substantially higher standard of workforce continuity in cases
seeking a successor’s arbitration under Section 301 than it
requires in other successorship contexts under the National
Labor Relations Act. Computer Sciences Corp v. NLRB,
677 F.2d 804, 806 (11th Cir. 1982); Evans Services, Inc. v.
NLRB, 810 F.2d 1089, 1092 (11th Cir. 1987) (Burns method
of determining workforce continuity applicable in NLRB
successorship cases).
No precedent of the Court supports the application of
a different method for determining workforce continuity
dependent upon the forum or legal context in which the
successorship issue arises. Fall River strongly militates
against any such distinction. The issue was framed by the
Court to be a single question, whether workforce continuity
for successorship purposes should be resolved under Howard
Johnson, a Section 301 arbitration case, or under Burns, a
Section 8(a)(5) case. In describing the issue as having been
19
resolved, once and for all, in favor of the Burns standard,
the Court never suggested that Section 301 and NLRA
successorship issues might involve different standards of
workforce continuity. 482 U.S. at 46, n. 12.
The Eleventh Circuit’s distinction has not been
acknowledged by other courts in Section 301 cases." In
Smegal v. Gateway Foods of Minneapolis, Inc., 819 F.2d
191, 193-95 (8th Cir.), cert. denied, 484 U.S. 928 (1987),
the Eighth Circuit rejected the notion of a different standard
for Section 301 cases and applied the Burns/Fall River
standard. The Second, Seventh and Ninth Circuits in
Graduate Plastics, Centor Contractors and Audit Services,
Inc. v. Rolfson, 641 F.2d 757, 762-63 (9th Cir. 1981),
respectively, held a successor bound to arbitrate, or bound
to the substantive terms of the predecessor’s contract,
without identifying the specific standard of workforce
continuity applied.
“The Eleventh Circuit decision finds some support in pre-Fall River
Fifth Circuit dicta:
As a matter of principle, since the duty to arbitrate
arises from an application of the contract between the
predecessor employer and his organized employees, the
entity whose identity is to be the reference point for
judging continuity ought to be the predecessor
enterprise.
The court refused to compel arbitration where only 35 percent of the
predecessor’s employees were hired by the successor and no tangible
assets were transferred. Boeing Co. v. Machinists, 504 F.2d 307, 319
(Sth Cir. 1974), cert denied, 421 U.S. 913 (1975). However, Boeing did
not even satisfy the Fail River standard of successorship.
20
The decision below recreates "confusion" in the
circuit courts regarding the critical and recurring issue of the
method by which workforce continuity is measured for
successorship purposes under Section 301. Review is
independently warranted on this basis.
CONCLUSION
For the foregoing reasons, the Petition for a Writ of
Certiorari should be granted.
Respectfully submitted,
WILLIAM W. OSBORNE, Jr.
Counsel of Record
Jonathan G. Axelrod
Helene D. Lerner
BEINS, AXELROD, OSBORNE, MOONEY
& GREEN, P.C.
1341 G Street, N.W., Suite 700
Washington, D.C. 20005-3105
(202) 783-0010
Counsel for Petitioner
Date: July 7, 1994
21
APPENDIX
District Court Decision
UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
ROAD SPRINKLER FITTERS LOCAL
UNION NO, 669, affiliated with the
UNITED ASSOCIATION OF
JOURNEYMEN AND APPRENTICES OF
THE PLUMBING AND PIPEFITTING
INDUSTRY OF THE UNITED STATES
AND CANADA, AFL-CIO, Plaintiff, v.
MOORE PIPE & SPRINKLER CO.,
INDEPENDENT SPRINKLER & FIRE
PROTECTION CO. a/k/a INDEPENDENT
PIPE & SPRINKLER CO., and
INDEPENDENT SPRINKLER CORP.,
Defendants
Case No. 89-906-Civ-J-14
February 27, 1991, Decided
February 28, 1991, Filed
JUDGES: Susan H. Black, United States District Judge.
This case is before the Court on Defendant
Independent Sprinkler Corporation’s Motion for Partial
Summary Judgment, filed on July 6, 1990; Motion for
Summary Judgment of Defendants Moore Pipe & Sprinkler
Co.[,] and Independent Sprinkler & Fire Protection Co.,
filed on September 20, 1990; and Plaintiff’s Motion for
Summary Judgment Against Defendants Moore Pipe &
Sprinkler Co., Independent Sprinkler & Fire Protection
Co.[,] and Independent Sprinkler Corp., filed on September
la
20, 1990. The parties filed responses in opposition to each
of the motions.
On December 6, 1990, the Court heard oral argument
on the motions. At that time, the Court ordered the parties
to jointly submit a stipulated statement of facts, and to
separately file their conclusions of law based upon the
stipulated statement of facts. The parties have complied with
that order.
The undisputed facts of the case are as follows. Road
Sprinkler Fitters Local Union No. 669 [hereinafter "Local
669"] is a national labor organization representing emnployees
engaged in the installation and maintenance of automatic fire
protection systems in forty-eight states. Moore Pipe &
Sprinkler Co. [hereinafter "Moore Pipe"] is engaged in the
business of installing and maintaining fire protection systems
in various states. Moore Pipe was incorporated in 1926, and
has been a union contractor for many years. Independent
Sprinkler & Fire Protection Co. [hereinafter "Independent
I"], prior to October 30, 1987, was engaged in the business
of installing and maintaining fire protection systems.
Independent I was incorporated in 1982, and operated during
its existence on a non-union basis.' Independent Sprinkler
'Up until October 30, 1987, Moore Pipe and Independent I were
operated as wholly owned subsidiaries of their parent company,
Williamson Feed Mills, Inc. [hereinafter "Williamson"]. Prior to
October 30, 1987, the stock in Williamson was owned by the Evans
family. Brothers Mack, Jerry and Randy Evans owned twenty-five
percent each, and the Evans family trust owned the remaining twenty-five
percent. On October 30, 1987, Randy Evans sold all of his stock in
Williamson back to the company for $258,814.97. Since that time the
Williamson stock has been owned equally by Mack Evans, Jerry Evans
and the Evans family trust. Randy Evans has not reacquired any interest
in Williamson.
2a
Corp. [hereinafter "Independent II"] was incorporated on
August 28, 1987, and has operated on a non-union basis.
In August, 1985, Local 669 filed a grievance under
Article 3 of its collective bargaining agreement with Moore
Pipe, alleging that Moore Pipe and Independent I were single
or joint employers within the meaning of Article 3, and that
the economic terms of the agreement were applicable to the
work performed by Independent I within Local 669’s
territorial jurisdiction. Local 669 ultimately brought an
action in federal court to compel arbitration of its grievance.
On April 16, 1987, a settlement encompassing both the
pending suit and the underlying grievance was reached. The
settlement agreement was signed by Moore Pipe and
Independent I, and bound Moore Pipe to the national
collective bargaining agreement in effect between the
National Fire Sprinklers Association Inc., and Local 669, for
the period April 1, 1988 through March 31, 1991.
During the summer of 1987, Mack Evans Jr., in his
capacity as Chairman of the Board of Williamson, made the
decision to close down the operation of Independent I,
allegedly for economic reasons. Independent I ceased
business operations on October 30, 1987, and has not
actively engaged in business since then. All of its employees
were laid off on October 30, 1987.
Independent II began operations on the following
business day, November 2, 1987. On that date, it hired
thirty-five employees, thirty-two of whom had previously
been employed by Independent I. As of May, 1/988, six
months later, Independent II still employed thirty-five
persons, twenty-five of whom had been employed by
Independent I. Independent II is engaged in the same type
of business as Independent I had been engaged in.
3a
Based on this, as well as other factors, Local 669
alleges that Independent II is the successor corporation of
Independent I. Local 669 further alleges that the 1987
Settlement Agreement has been breached by Moore Pipe,
Independent I and Independent II. Local 669 has demanded
that the parties proceed to arbitration over the dispute.
Independent II has refused to arbitrate, arguing that it is
neither a signatory to the 1987 Settlement Agreement, nor a
successor corporation of Independent I. Independent I and
Moore Pipe assert that the dispute is not arbitrable as to
them, and that they should not be parties to any arbitration.
I. STANDARD OF REVIEW FOR MOTION
FOR SUMMARY JUDGMENT
A district court’s review of a case on a motion for
summary judgment is governed by Fed. R. Civ. P. 56. A
moving party discharges its burden on a motion for summary
judgment by "showing" or "pointing out" to the district court
that there is an absence of evidence to support the
nonmoving party’s case. See Celotex Corp. v. Catrett, 477
U.S. 317, 325 (1986). Rule 56 permits the moving party to
discharge its burden with or without supporting affidavits
and to move for summary judgment on the case as a whole
or on any claim. /d. When a moving party has so
discharged its burden, the nonmoving party must then "go
beyond the pleadings and by her own affidavits, or by the
‘depositions, answers to interrogatories, and admissions of
file,’ designate ‘specific facts showing that there is a genuine
issue for trial.’" Jd. at 324.
The district court must enter summary judgment
"after adequate time for discovery and upon motion, against
a party who fails to make a showing sufficient to establish
the existence of an element essential to that party’s case, and
on which that party will bear the burden of proof at trial."
4a
Id. at 322; Fed. R. Civ. P. 56(c). See also Reflectone, Inc.
v. Farrand Optical Co., Inc., 862 F.2d 841, 843-44 (11th
Cir. 1989). Whether or not the moving party has met its
burden of establishing that there is no genuine issue as to
any material fact and that he is entitled 1o judgment as a
matter of law, requires the court to draw inferences from the
evidence as viewed in the light most favorable to the
nonmoving party, and to resolve all reasonable doubts in that
party’s favor. See Spence v. Zimmerman, 873 F.2d 256
(11th Cir. 1989). The Eleventh Circuit Court of Appeals
explained the reasonableness standard in WSB-TV v. Lee:
In deciding whether an inference is
reasonable, the court must "cull the universe
of possible inferences from the facts
established by weighing each against the
abstract standard of reasonableness."
Southway Theatres, Inc. v. Georgia Theatre
Co., 672 F.2d 485, 493 (Sth Cir. Unit B
1982).
The opposing party’s inferences need
not be more probable than those inferences in
favor of the movant to create a factual
dispute, so long as they reasonably may be
drawn from the facts. When more than one
inference) reasonably can be drawn, it is for
the trier of fact to determine the proper one.
WSB-TV v. Lee, 842 F.2d 1266, 1270 (11th Cir. 1988).
Rule 56(c) requires the district court to deny a motion
for summary judgment if the court finds that there exists a
genuine issue for trial. What constitutes a "genuine issue for
trial" was addressed by the Supreme Court in Anderson v.
Liberty Lobby, Inc., 477 U.S. 242 (1986). In Anderson, the
Court stated that "summary judgment will not lie if the
Sa
dispute about a material fact is ‘genuine,’ that is, if the
evidence is such that a reasonable jury could return a verdict
for the nonmoving party." Anderson v. Liberty Lobby, Inc. ,
477 U.S. 242, 248 (1986). The court further stated that the
inquiry is "whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is
so one-sided that one party must prevail as a matter of law."
Id. at 251-52.
II. THE INSTANT MOTIONS FOR
SUMMARY JUDGMENT
A. The Parties’ Contentions
In the Plaintiff's Conclusions of Law, filed on
January 11, 1991, it alleges that there is a pending labor
dispute between the parties, and that despite the terms of the
1987 Settlement Agreement, Moore Pipe and Independent I
have refused to arbitrate the dispute. Local 669 also alleges
that Independent II is a successor corporation to Independent
I, and that Moore Pipe and Independent I surreptitiously
aided and abetted its formation as such. According to
Local 669, Independent II has been performing work within
Local 669’s territorial jurisdiction in violation of the
settlement agreement and the collective bargaining agreement
between Local 669 and Moore Pipe. Local 669 seeks to
have the Court order Moore Pipe and Independent I to
arbitrate the labor dispute as provided for in the 1987
Settlement Agreement, and also order Independent II to
Although the Complaint alleges that Independent II is either the alter
ego of and/or the successor to Independent I, the issue of alter ego status
is not raised by the plaintiff in either its motion for summary judgment, |
or its subsequent conclusions of law. Therefore, although the defendants
briefed the issue of alter ego status, the Court will not address it in this |
Order.
6a
| i
arbitrate the dispute based on its status as a successor
corporation of Independent I, as defined by federal labor
common law.’
Moore Pipe and Independent I, in their conclusions
of law, filed on January 11, 1991, argue that Independent II
is not a successor to Independent I, and therefore should not
be compelled to arbitrate with Local 669. Based on that
premise, they argue that there is no basis to order either of
them to arbitrate with Local 669.
If the Court finds that Independent II is a successor
corporation of Independent I, Moore Pipe and Independent
I contend that Independent I should not be compelled to
arbitrate because it is the predecessor of, rather than the
successor to, Independent II. Federal labor policy, they
argue, does not support compelling the predecessor, as well
as the successor, to arbitrate. Furthermore, they argue,
Independent I has not been in business since October, 1987,
has no assets and no employees whom Local 669 purports to
represent who might benefit from arbitration.
As for Moore Pipe’s obligation to arbitrate, they
point out there is no allegation that it is a successor to
Independent I. Likewise, Local 669 does not seek to assert
any rights of Moore Pipe employees. Moore Pipe contends
that in order for it to be subject to arbitration, there must be
a finding by the Court that the particular dispute in question
*Local 669 also seeks to have Independent II’s Counterclaim for
abuse of process dismissed either because it fails to state a claim for
which relief can be granted, or lacks any factual support in the record,
entitling the plaintiff to summary judgment on this issue. The Court will
address Independent II’s Counterclaim for abuse of process in Subsection
E.
7a
is arbitrable as to Moore Pipe. Moore Pipe argues it is, at
best, a peripheral defendant in the action.‘
Independent II, in its conclusions of law, filed on
January 14, 1991, argues that it is not a successor to either
Independent I or Moore Pipe.
The Court must decide if the Settlement Agreement
obligates Moore Pipe and Independent I to arbitrate the
instant dispute, as the Local 669 contends. The Court must
then decide if Independent II is the successor to Independent
I, and as such, is also obligated to arbitrate the dispute.
B. Moore Pipe and Independent I’s Duty to Arbitrate
The Labor Management Relations Act of 1947,
provides that "[f]inal adjustment by a method agreed upon by
the parties is declared to be the desirable method for
settlement of grievance disputes arising over the application
or interpretation of an existing collective-bargaining
agreement." 29 U.S.C. §173(d) (1988). "[W]here the
contract provides grievance and arbitration procedures, those
‘The Court is surprised by Moore Pipe’s desire not to participate in
any Court ordered arbitration. The Settlement Agreement provides that:
the remedy for a violation by any employer party
hereto shall include, but not be limited to, double the
full amount of settlement referred to in para. 3 above
becoming immediately due and owing to Local 669,
interest, any actual damages which can be proven by
Local 669 as arising from either the August 7, 1985
grievance or the breach of this settlement, or both.
Stipulation of Facts, Exhibit A at 3, para. 7, filed on December 18,
1990. Unless Moore Pipe participates in any Court ordered arbitration,
it would not be in a position to advocate its position or defend itself.
8a
procedures must first be exhausted and courts must order
resort to the private settlement mechanisms without dealing
with the merits of the dispute." United Paperworkers Int’l
Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 37 (1987).
"The Congress ... has by §301 of the Labor
Management Relations Act, assigned the courts the duty of
determining whether the reluctant party has breached his
promise to arbitrate."°, © United Steelworkers of America
v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582
(1960). "(T]he judicial inquiry under §301 must be strictly
confined to the question whether the reluctant party did agree
to arbitrate the grievance." Jd. “An order to arbitrate the
particular grievance should not be denied unless it may be
said with assurance that the arbitration clause is not
susceptible of an interpretation that covers the asserted
dispute. Doubts should be resolved in favor of coverage."
Id. at 582-83. "In the absence of any express provision
excluding a particular grievance from arbitration ... only the
‘Section 301(a) of the Labor Management Relations Act, 1947, 61
Stat. 156, 29 U.S.C. §185(a) states:
Suits for violation of contracts between an employer
and a labor organization representing employees in an
industry affecting commerce as defined in this chapter
... May be brought in any district court of the United
States having jurisdiction of the parties, without respect
to the amount in controversy or without regard to the
citizenship of the parties.
29 U.S.C. §185(a) (1988).
‘Settlement agreements are considered contracts within the meaning
of §301. Retail Clerks Int’l Ass’n v. Lion Dry Goods, 369 U.S. 17, 27
(1962).
9a
ut alae
most forceful evidence of a purpose to exclude the claim
from arbitration can prevail." Id. at 584-85.
In the instant case, Local 669 brought suit pursuant
to Section 301 of the Labor Management Relations Act of
1947, as amended, 29 U.S.C. §185. Complaint at 2, 41,
filed November 8, 1989. Local 669 alleges that jobs are
being performed in its territory in contradiction to the terms
and conditions of the Local 669 collective bargaining
agreement and/or the 1987 Settlement Agreement.’ It
alleges in Count II that Moore Pipe, Independent I and
Independent II violated and continue to violate paragraph
seven of the Settlement Agreement and articles three and
twenty-five of the collective bargaining agreement "which
are mandatory and which require Local 669 and defendants
to refer all issues in dispute for final and binding
arbitration." Jd. at 8-9, 422.
Paragraph seven of the Settlement Agreement
provides for informal and amicable attempts to resolve
disputes. If that approach proves unsuccessful, the Settlement
Agreement goes on to provide "[t]he unresolved issues shall
be promptly referred to the Special Arbitrator pursuant to
Article 3 of the Local 669/N.F.S.A. Agreement, for final
and binding arbitration under Article 25 of the Agreement.”
Id. Exhibit A at 3, 47.
There was correspondence between the parties as
early as March, 1989, concerning the instant dispute. Local
In Count I, Local 669 seeks an award of monetary damages for the
alleged violation of the Settlement Agreement. The parties stipulated that
the issue of monetary damages, if any, is an issue to be resolved by the
arbitrator rather than the Court should the Court find that arbitration is
appropriate in this case. Therefore, the Court will not address Count I
of the Complaint.
10a
669, in a letter to Jerry Evans of Moore Pipe, sought
information regarding alleged jobs being performed in its
territory not in accordance with the terms and conditions of
the Local 669 collective bargaining agreement and/or the
1987 Settlement Agreement. A similar, though more explicit
request for information was made by Local 669 in April,
1989, in a letter addressed to both Jerry Evans, as President
of Moore Pipe, and Randy Evans, as representative of
Independent I and Independent II. At Local 669’s request,
the parties met in October, 1989, and attempted to resolve
this dispute by informal discussions. That effort proved
unsuccessful.
Arbitration was the vehicle identified by the parties
as the preferred method of dispute resolution, should
informal discussions prove unsuccessful. Therefore, the
Court is obligated to determine whether the instant dispute
is arbitrable under the parties’ agreement.
Local 669 contends that Independent II has been
performing work within Local 669’s territorial and trade
jurisdiction in violation of the Settlement Agreement and the
collective bargaining agreement between Local 669 and
Moore Pipe. It further alleges that Moore Pipe and
Independent I violated the terms of the collective bargaining
agreement and the Settlement Agreement, by surreptitiously
aiding and abetting the formation of Independent II. These
allegations go to the heart of the Settlement Agreement.®
The Court finds that the instant dispute is appropriate for
*The Settlement Agreement was executed to resolve earlier
allegations by Local 669, that Moore Pipe and Independent I were single
or joint employers within the meaning of Article Three of the collective
bargaining agreement with Moore Pipe, and as such, the economic terms
of the agreement were applicable to work performed by Independent I
within Local 669’s territorial jurisdiction.
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arbitration, based on the provisions of the Settlement
Agreement. The Court further finds that there is no genuine
issue of material fact, and that Local 669 is entitled to
judgment, on the issue of Moore Pipe and Independent I’s
obligation to arbitrate, as a matter of law.
The extent of Independent II’s violation of the
Settlement Agreement, if any, and the extent, if any, of
Moore Pipe and Independent I’s assistance in the formation
of Independent II, goes to the merits of Local 669’s claim.
The Court will not reach the merits of Local 669’s claim.
That decision is reserved for the arbitrator. The Court will
Order Independent I and Moore Pipe, as parties to the
Settlement Agreement, to arbitrate the instant dispute.
C. Is Independent II a successor to Independent I?
The determination whether a new company is a
successor to the old company is "primarily factual in nature
and is based upon the totality of the circumstances of a given
situation." Fall River Dyeing & Finishing Co. v. National
Labor Relations Bd., 482 U.S. 27, 43 (1987). The focus is
"on whether the new company has ‘acquired substantial
assets of its predecessor and continued, without interruption
or substantial change, the predecessor’s business
operations.’" Jd., (quoting Golden State Bottling Co. v.
National Labor Relations Board, 414 U.S. 168, 184 (1973).
"The focus is on whether there is ‘substantial
continuity’ between the two enterprises." Jd. The factors to
be considered include: (1) whether the business of both
employers is essentially the same; (2) whether the employees
of the new company are doing the same jobs in the same
working conditions under the same supervisors; and (3)
whether the new entity has the same production process,
produces the same products, and basically has the same body
12a
of customers. Jd. In conducting this analysis, it is
important to consider "whether ‘those employees who have
been retained will understandably view their job situation as
essentially unaltered.’" Jd. (quoting Golden State Bottling
Co., 414 U.S. at 184.)
In the instant case, it has been stipulated that
Independent II is engaged in the same type of business as
Independent I. The names of the two enterprises are
practically identical -- Independent Sprinkler & Fire
Protection Co., and Independent Sprinkler Corporation.
They existed at the same business address during
Independent I’s phase-out period.’ When incorporated in
August, 1987, Independent II’s address was 5262 Longleaf
Street, Jacksonville, Florida. That is the same address as
Independent I.'° When Independent II began active
operations in November, 1987, it was located at 5863 West
Beaver Street, Jacksonville, Florida.
From at least April 16, 1987, until October 29, 1987,
Randy Evans was a Director, as well as the President and
Treasurer of Independent I. During the same time period,
Robert Matthews was a Director and the Vice President of
Independent I. They resigned their respective positions on
*In mid-summer 1987, Mack Evans, Jr., in his capacity as Chairman
of the Board of Williamson, decided to close down the operations of
Independent I. This decision was made several months after Independent
I and Moore Pipe entered into the Settlement Agreement with Local 669.
The decision to close down Independent I was allegedly based on
economic reasons. Independent I ceased active business operations on
October 30, 1987.
"From April, 1987, until October, 1988, Moore Pipe conducted its
business from offices located ai 5262 Longleaf Street, Jacksonville,
Florida. In October, 1988, Moore Pipe moved to its present location at
4517-2 Appleton Avenue, Jacksonville, Florida.
13a
October 30, 1987, at 12:01 a.m. Since its incorporation in
August, 1987, Randy Evans has served as a Director and
President of Independent II. Likewise, Robert Matthews has
served as a Director and the Vice President of Independent
II. For several months, both men served Independent I and
Independent II in the same capacity. The other six directors
of Independent II were not formerly directors of Independent
I.
On Friday, October 30, 1987, Independent I ceased
its active business operations. All of Independent I’s
employees were laid off at the 7nd of that day. Independent
II began its active business operations on Monday,
November 2, 1987, the next business day. Of the thirty-five
individuals initially employed by Independent II, thirty-two
had previously been employed by Independent I. As of
May, 1988, six months after active operations began,
Independent II still employed thirty-five individuals,
twenty-five of whom were previously employed by
Independent I.'’ In 1987, Independent I employed a total
of 142 persons.
Subsequent to the formation of Independent II, Robert
Matthews negotiated with Independent I for the purchase of
various items of office equipment and supplies. The sale of
those item was consummated. On or about October 5, 1987,
Independent II assumed the commercial leases on some, but
not all, of the vehicles which had previously been leased by
Independent I. Additionally, during the phase-out period of
Independent I, Independent II negotiated with Independent I
for the right to complete certain construction jobs originally
contracted to Independent I. On November 2, 1987,
Independent I entered into an agreement with Independent II,
''Twenty-five of the thirty-five individuals employed by Independent
II are field employees.
l4a
hearer
under which it subcontracted to Independent II the right to
complete thirty-seven jobs. Independent II agreed to
complete the jobs for the remaining amount of earnings on
each job, the total of which equalled $553,896.53.”
While it is true that Independent II did not acquire the
plant or real property of Independent I, as had been the case
in Fall River Dyeing, the instant companies are not
manufacturers of goods, but rather perform a service for
their customers. This service is performed, at least in part,
at the customer’s site. Of the thirty-five individuals
employed by Independent II, more than two-thirds of them
are field employees, indicating that a good portion of the
activities of the enterprise do not occur at a fixed plant.
Independent II has not at any time owned jointly or
in common any bank accounts, notes, bonds and/or other
types of securities with Independent I. Additionally, the two
enterprises have had different ownership. Independent I was
the wholly owned subsidiary of Williamson. Williamson,
prior to October 30, 1987, was owned in equal shares by
Mack, Randy and Jerry Evans, and the Evans family trust.
On October 30, 1987, Randy Evans sold all his interest in
Williamson back to the company. The stock of Independent
II, since its formation until the present, has been owned by
fifteen different individuals, one of whom is Randy Evans.
He owns the largest block of stock, approximately nineteen
percent. Robert Matthews owns approximately eighteen
percent.
After considering the factual circumstances of the
instant case, the Court finds that there was substantial
"Moore Pipe entered into a similar agreement with Independent I,
whereby it subcontracted to complete forty construction jobs, for the total
remaining unpaid contract price of $ 1,025,044.75.
15a
continuity between the two enterprises. There is no
disagreement that the business of the two enterprises is
identical. While Independent II did not hire the majority of
Independent I’s workforce, the overwhelming majority of
Independent [i’s workforce was previously employed by
Independent I. Independent II began active operations the
next business day after Independent I ceased active
operations. Independent II, as subcontractor, was authorized
to complete thirty-seven of Independent I’s construction
contracts. Former Independent I employees working on
those thirty-seven projects, as well as other projects obtained
by Independent II, could understandably view their job
situation as essentially unaltered. Based on the totality of the
circumstances, the Court finds that Independent II is a
successor corporation to Independent I.
D. Duty of Independent II to Arbitrate
In determining national labor policy, the interests of
employers must be weighed against the interests of their
employees. "The objectives of national labor policy,
reflected in established principles of federal law, require that
the rightful prerogative of owners independently to rearrange
their businesses and even eliminate themselves as employers
be balanced by some protection to the employees from a
sudden change in the employment relationship." Wiley &
Sons, Inc. v. Livingston, 376 U.S. 543, 549 (1964).
In Wiley, the United States Supreme Court used the
successorship doctrine to impose upon an employer an
obligation to arbitrate disputes under an arbitration clause in
an agreement entered into between a predecessor employer
and the bargaining representative of the latter’s employees.
"While the principles of law governing ordinary contracts
would not bind to a contract an uncontesting successor to a
16a
contracting party, a collective bargaining agreement is not an
ordinary contract." Jd. at 550.
Although the duty to arbitrate must be founded on a
contract, the policy considerations favoring arbitration are
not wholly overborne by the fact that the successor
corporation did not sign the contract being construed. Id.
"The transition from one corporate organization to another
will in most cases be eased and industrial strife avoided if
employees’ claims continue to be resolved by arbitration
rather than by ‘the relative strength ... of the contending
forces.”" Id. at 549 (quoting Warrior & Gulf, 363 U.S. at
580). However, "[t]here may be cases in which the lack of
any substantial continuity of identity in the business
enterprise before and after a change would make a duty to
arbitrate something imposed from without, not reasonably to
be founded in the particular bargaining agreement and the
acts of the parties involved." Jd. at 551.
In the instant case, Independent II is not a signatory
to the 1987 Settlement Agreement. Moore Pipe and
Independent I are signatories. The terms of the Settlement
Agreement bind the signatories "and the successors, assigns,
heirs, trustees and administrators of any party hereto."
Stipulation of Facts, Exhibit A at 1, 41, filed on December
18, 1990.
The Court finds that Independent II, as the successor
to Independent I, is obligated to arbitrate the instant dispute,
based on the express provisions of the Settlement
Agreement. It is for the arbitrator to determine whether
Independent II is liable as a successor corporation pursuant
to the Settlement Agreement, as well as to determine the
merits of Local 669’s contentions. The Court finds that
there are no genuine issues of material fact, and that Local
17a
669 is entitled to judgment on the issue of Independent II’s
obligation to arbitrate, as a matter of law.
E. Abuse of Process
In Count I of its Counterclaim, Independent II seeks
a declaratory judgment regarding its rights, liabilities and
duties as they pertain to the settlement agreement.”
Answer at 5, filed on November 20, 1989. In Count II,
Independent II alleges that Local 669 "maliciously caused
process to be issued against [Independent II] for a purpose
and to obtain a result not lawfully warranted or properly
obtainable under the circumstances." Jd. at 8. In support of
its contention, Independent II quotes a letter it sent to Local
669 advising that it was not a successor corporation and its
reasons for that conclusion. Jd. at 7-8.
In its conclusions of law, the plaintiff alleges that the
Counterclaim for abuse of process is baseless and must be
dismissed. The plaintiff argues the "Defendant has adduced
no articulable basis for its claim, there are no stipulated facts
in support of its claim, and Defendant has failed to
sufficiently state its cause of action." Plaintiff’s Conclusions
of Law at 16, filed on January 11, 1991. Local 669 argues
that it is entitled to summary judgment on the counterclaim.
In its response to plaintiff's motion for summary
judgment, Independent II contends that Local 669 failed to
investigate the truthfulness of its assertion that Independent
II was a successor to Independent I. In support of that
position, Independent II refers to the deposition testimony of
a Local 669 representative, in which he admits that Local
This Order addresses the obligations of Independent II regarding the
Settlement Agreement. Therefore, the Court will not enter a separate
declaratory judgment. Count I of the Counterclaim will be dismissed.
18a
669 did not investigate the corporate relationship between
Independent I and Independent II prior to filing the instant
suit. Independent II also challenges the independent
knowledge, regarding the successorship issue, of two of
Local 669’s potential witnesses.
"’In order to sustain an action for abuse of process
two elements are essential, (1) the existence of an ulterior
motive; and (2) an act in the use of process other than such
as would be proper in the regular prosecution of the
charge.’" Dykes v. A.J. Hosemann, 776 F.2d 942, 950
(11th Cir. 1985) (Tjoflat, J. concurring in part and
dissenting in part) (quoting McMurray v. U-Haul Co. , 425
So. 2d 1209, 1209 n.1 (Fla. 4th DCA 1983) (quoting
Farmers Gin Co. v. Ward, 389 P.2d 9, 11 (1964))). "There
is no abuse of process where it is confined to its regular and
legitimate function in relation to the cause of action stated in
the complaint." Jd.
The Court finds that Independent II failed to sustain
its burden. There has been no showing of an ulterior motive
nor any evidence of acts that would be considered improper
in the regular prosecution of the charge. It is true that Local
669 has pursued its Complaint with vigor, but that is the
nature of litigation and the judicial process at its best. The
Court finds that there is no genuine issue of material fact,
and that Local 669 is entitled to judgment on the
counterclaim, as a matter of law.
IV. CONCLUSION
Having found that all three defendants are obligated
to arbitrate the claims of Local 669, as outlined in its
Complaint, and having found that Independent II failed to
meet its burden on the Counterclaim for abuse of process,
the Court will grant Plaintiff's Motion for Summary
19a
a
OT ge A ee CE Se, ae ape kee ee ee a pees
Pi a ya ont
Judgment Against Defendants Moore Pipe & Sprinkler Co..,
Independent Sprinkler & Fire Protection Co. and
Independent Sprinkler Corp., filed on September 20, 1990.
The Court will deny Defendant Independent Sprinkler
Corporation’s Motion for Partial Summary Judgment, filed
on July 6, 1990, and the Motion for Summary Judgment of
Defendants Moore Pipe & Sprinkler Co.[,] and Independent
Sprinkler & Fire Protection Co., both filed on September 20,
1990.
Accordingly, it is
ORDERED:
l That the Plaintiff's Motion for Summary
Judgment Against Defendants Moore Pipe & Sprinkler Co.,
Independent Sprinkler & Fire Protection Co.[,] and
Independent Sprinkler Corp., filed on September 20, 1990,
is granted; the parties shall proceed to final and binding
arbitration.
be That Defendant Independent Sprinkler
Corporation’s Motion for Partial Summary Judgment, filed
on July 6, 1990, is denied.
3. That the Motion for Summary Judgment of
Defendants Moore Pipe & Sprinkler Co.[,] and Independent
Sprinkler & Fire Protection Co., filed on September 20,
1990, is denied.
4. That the Clerk of the Court is directed, in
accordance with this opinion, to dismiss the Complaint for
Breach of Contract and for Final and Binding Arbitration,
filed on November 8, 1989; and to dismiss Independent II’s
Counterclaim, filed on November 20, 1989, and the parties
shall proceed to final and binding arbitration.
20a
Court of Appeals Decision
UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
ROAD SPRINKLER FITTERS LOCAL
UNION NO. 669 affiliated with the United
Association of Journeymen & Apprentices of
the Plumbing & Pipefitting Industry of the
United States and Canada, AFL-CIO,
Plaintiff-Counter-Claim Defendant-Appellee,
v.
INDEPENDENT SPRINKLER CORP.,
Defendant-Counterclaim Plaintiff-Appellant.
No. 91-3271
January 7, 1994, Decided
Before KRAVITCH, Circuit Judge, GODBOLD and
OAKES, Senior Circuit Judges. (Honorable James L. Oakes,
Senior U.S. Circuit Judge for the Second Circuit, sitting by
designation. )
GODBOLD, Senior Circuit Judge:
This case concerns the successorship doctrine of labor
law. Pursuant to that doctrine an employer found to be a
"successor" to a predecessor employer may be bound to
collectively bargain with the union that previously had a
collective bargaining relationship with the predecessor, and
in some circumstances the successor may even be bound by
specific provisions of a collective bargaining agreement
preexisting between the predecessor and the union.
21a
On stipulated facts the district court granted the union’s
motion for summary judgment against an employer,
Independent II, and denied Independent II’s motion for
summary judgment.’ It applied the successorship doctrine,
found Independent II to be a successor to employer
Independent I, and ordered Independent II to arbitrate a
dispute with the union. Because the successorship doctrine
does not apply under the facts and circumstances of this case
we reverse and direct that the district court enter judgment
in favor of Independent II.
The union, Road Sprinkler Fitters Local No. 669,
represented the employees of Moore Pipe & Sprinkler Co..,
a union contractor with which the union had a collective
bargaining agreement. A grievance arose over whether
Moore Pipe was improperly diverting work to Independent
Sprinkler & Fire Protection Co. (Independent I), a non-union
contractor. The union filed a §301 suit? against Moore Pipe
to compel it to arbitrate the grievance as provided in the
collective bargaining agreement. A settlement was reached,
signed by representatives of the union, Moore Pipe, and
'Independent’s II’s motion sought judgment in its favor with respect
to all claims against it. Other defendants filed a separate motion for
summary judgment. All motions of defendants were denied at the same
time.
Section 301(a) of the Labor Management Relations Act, 29 U.S.C.
§185(a). There is §301 jurisdiction because the case concerns a
contract--a settlement agreement between an employer and a union.
United Paperworkers Int’l Union v. Int’l Paper Co., 920 F.2d 852, 859
(11th Cir.1991); Retail Clerks Int’l Assn. v. Lion Dry Goods, 369 U.S.
17, 27, 82 S. Ct. 541, 547, 7 L. Ed. 2d 503 (1962). This court has
jurisdiction of the appeal pursuant to 28 U.S.C. §1291, because the
summary judgment ordering the parties to arbitrate is an appealable final
order. Thomson McKinnon Securities, Inc. v. Salter, 873 F.2d 1397,
1399 (11th Cir. 1989).
22a
Independent I (though it was not a party to the suit). Its
Stated purpose was "to protect and preserve for the
employees covered by this Agreement all work historically
and traditionally performed by them." It provided that all
work in the union’s territory would be performed by Moore
Pipe employees represented by the union. The agreement
stated that it was binding on Moore Pipe, Independent I, and
"the successors, assigns, trustees and administrators of any
party hereto." It provided that any unresolved issue arising
out of the settlement agreement would be referred to
arbitration.
Independent Sprinkler Corporation (Independent II)
was subsequently organized and operated as a non-union
shop, performing the same type of work as Independent I.
Allegedly it was awarded contracts for work within the
union’s territory. The union objected and demanded that
Moore Pipe, Independent I, and Independent II submit to
arbitration pursuant to the arbitration provision of the
settlement agreement. All three companies declined, and the
union filed this suit to require arbitration, alleging that
Independent II was "an alter ego and/or a successor" of
Independent I. It also claimed breach of contract damages
for alleged breach of the settlement agreement and asked
specific performance of the agreement as well. The district
court dismissed the contract claims and granted summary
judgment in favor of the union requiring all three companies
to arbitrate. Whether the settlement agreement had been
breached was described by the court as an issue left to the
arbitrator. All three defendants appealed. Moore Pipe and
Independent I have since participated in arbitration, which
has been completed, and they have withdrawn their appeals.
Left in question is whether the district court correctly held
that the successorship doctrine requires Independent II to
arbitrate pursuant to the provisions of the settlement
agreement. We hold that the successorship doctrine has no
23a
application to this case and reverse the grant of summary
judgment in favor of the union and against Independent II.
The district court’s decision was not based on a
theory that Independent II is a "successor" to Independent I
under contract law principles and is therefore bound by the
provision of the settkement agreement which said that the
agreement is binding on Moore Pipe and Independent I and
"the successors, assigns, trustees and administrators" of any
party. Rather the court based its decision on the
successorship doctrine of labor law which, as a matter of law
and without regard to contract law principles, imposes the
status of successor on an employer and places certain
obligations upon it as such successor.’
*This case has been obfuscated by imprecise use of the term
"successor." Pleadings, motions and briefs of the parties in the district
court shifted at will from discussion, without clear identification, of
successorship created by contract and successorship created by operation
of labor law principles without regard to contract (and sometimes as
though both types of status were the same). The district court dismissed
the union’s breach of contract claim (i.e., breach of the settlement
agreement) and left that issue for the arbitrator. The union has not raised
as an issue on appeal the dismissal of its contract claim. The district
court only relied upon successorship as created by labor law principles.
The union acknowledges that the issue before us concerns successorship
under established federal labor law principles and that the district court’s
decision was based on those principles (Brief pp. 8 and 9).
24a
I. THE UNDERPINNINGS OF THE
SUCCESSORSHIP DOCTRINE.
A successor relationship created by labor law
principles arises by operation of law and is not dependent
upon agreement by the successor that it should have
successor status. This labor-law based relationship protects
the collective bargaining interests of employees of a
predecessor employer who have been employed by a
successor employer that has substantial and sufficient
continuity with the predecessor. The doctrine is an
extension of the presumption in labor law that during the
term of a collective bargaining agreement and one year
thereafter the certified union is the proper bargaining agent.
NLRB v. Burns International Security Services, Inc., 406
U.S. 272, 278-79, 92 S. Ct. 1571, 1577, 32 L. Ed. 2d 61
(1972); Fall River Dyeing & Finishing Corp. v. NLRB, 482
U.S. 27, 36-39, 107 S. Ct. 2225, 2232-2234, 96 L. Ed. 2d
22 (1987). The successor is, therefore, required to engage
in collective bargaining with the union. This continuation of
the obligation to bargain tends to stabilize industrial relations
by protecting the employees of the predecessor who have
joined the work force of the successor at a peculiarly
vulnerable time during which labor relations might be
disturbed by actions or policies of the successor employer or
of the employees themselves. Fall River, 482 U.S. at 38-39,
107 S. Ct. at 2233.
Ordinarily the successor is not bound by substantive
provisions of a preexisting collective bargaining agreement
between the union and the predecessor. /d. at 40, 107 S.
Ct. at 2234. For example, it is not obligated to hire the
employees of the predecessor (subject to the requirement that
it may not discriminate against union-member employees in
hiring); it is free to set initial terms on which it will hire
employees of the predecessor; and it is not bound to pay the
25a
same wages. Jd. The "rightful prerogative of owners
independently to rearrange their businesses" is preserved.
Id.
The Seventh Circuit has outlined some of the criteria
useful in determining whether one employer is the successor
of another:
[a] there has been a substantial continuity of
the same business operations; [b] the new
employer uses the same plant; [c] the same or
substantially the same work force is
employed; [d] the same jobs exist under the
same working conditions; [e] the same
supervisors are employed; [f] the same
machinery, equipment, and methods of
production are used; and [g] the same product
is manufactured or the same service [is]
offered.
Int’l Union of Operating Engineers v. Centor Contractors,
831 F.2d 1309, 1312 (7th Cir. 1987) (footnote omitted).
We do not need to analyze in detail the relations
between Independent I and Independent II that might be
relevant to the /nt’l Union criteria. Even if some of those
criteria are present between these two entities, the
successorship doctrine has no application to this case. There
has been no collective bargaining relationship between the
union and Independent I to be "passed on" to Independent II
as successor to Independent I. Independent I does not have,
and never had, a collective bargaining relationship with the
union. The only preexisting collective bargaining
relationship was between Moore Pipe and the union, and the
union does not contend that Moore Pipe is the predecessor
of Independent II. The successorship doctrine may not be
26a
utilized to force an alleged successor employer, Independent
II, into a collective bargaining relationship in which its
alleged predecessor, Independent I, was not a participant.
The union asserts that it is "protecting
union-represented Moore Pipe employees from diversion of
bargaining unit work to Independent I or its ‘successor’
[Independent II] during the life of the settlement agreement."
The successorship doctrine protects the interests of members
of the work force who have transferred from the predecessor
employer to the successor employer. Here, in a dispute over
allocation of work between employees of a union shop
(Moore Pipe) and employees of a non-union shop
(Independent II), the doctrine is asserted against the interests
of transferred employees (who transferred to Independent II
from Independent I, which had no bargaining relationship
with the union) and for the benefit of the work force of
Moore Pipe (whose employees have not transferred at all).
This stands successorship on its head.
Moreover, the duty that the district court imposed on
Independent II as a matter of law is a duty to arbitrate, a
duty that arises out of contract. A duty to arbitrate does not
arise because a court thinks it is a good thing to require in
the circumstances or because national labor policy favors it.
A party cannot be required to submit to arbitration a dispute
that it has not agreed to arbitrate. Steelworkers v. Warrior
& Gulf Co., 363 U.S. 574, 582, 80 S. Ct. 1347, 1352, 4 L.
Ed. 2d 1409 (1960).
As we have pointed out, in most respects a successor
is only bound to collectively bargain and is not bound to any
extent by an existing contract between the union and the
predecessor. In some narrow circumstances, however, there
may be an exception to the rule that the successor inherits
only a duty to bargain and does not inherit a preexisting
27a
Eas ar gt ee eee
Tat aL a
collective bargaining contract. If the status of successor
arises out of a merger in which the original employer has
disappeared and the new employer has hired all of the old
employer’s werkers, the successor may be required to honor
an arbitration provision of the preexisting collective
bargaining agreement. John Wiley & Sons, Inc., v.
Livingston, 376 U.S. 543, 548, 84 S. Ct. 909, 913, 11 L.
Ed. 2d 898 (1964); see also Esmark, Inc. v. NLRB, 887
F.2d 739, 750-51 (7th Cir.1989). In contrast, if there is a
mere sale of assets and the predecessor employer remains in
business as a viable entity, the successor may not be required
to honor the preexisting agreement to arbitrate. Howard
Johnson Co. v. Detroit Local Joint Executive Board, 417
U.S. 249, 257, 94 S. Ct. 2236, 2240, 41 L. Ed. 2d 46
(1974). This is not a Wiley case. There has been no
merger. Independent II has hired some but not all of
Independent I’s employees. Independent I had no collective
bargaining agreement or relationship with the union. It has
hired none of Moore Pipe’s employees. The union is not
incapable of obtaining arbitration on the issue of alleged
diversion of work from Moore Pipe. Its collective
bargaining agreement with Moore Pipe contained an
arbitration Clause, and the federal court ordered Moore Pipe
(and Independent I) to arbitrate, and they have done so.
The district court erred in granting summary
judgment in favor of the vrion and against independent II
based upon the success..ship issue and in denying
Independent II’s motion for summary judgment based upon
that issue.
Il. ALTER EGO.
The union alleged in its complaint that Independent
II was required to arbitrate because it was formed as "an
alter ego of and/or a successor corporation" to Independent
28a
I ... and is bound by the terms and conditions of the
[settlement] agreements ... entered into by Independent I.‘
Independent II, by counterclaim and later in its motion for
summary judgment, alleged that it was neither alter ego of
nor successor to Independent I. Despite having alleged alter
ego status, the union did not raise that issue in its motion for
summary judgment or in its proposed conclusions of law
submitted in support of its motion. It did not assert alter ego
in opposition to Independent II’s motion for summary
judgment, which alleged that Independent II was not the alter
“The Seventh Circuit has described the distinct differences between
alter ego and successorship.
We begin by noting that the alter ego and
successorship inquiries are distinct. Whether one
employer is a successor of another depends on a
number of factors, some of which were recently
enunciated by this court, including whether:
{reciting the factors set out above in text at
slip opinion p. 867.]
*_* ee * *
By contrast, the alter ego doctrine focuses on
“the existence of a disguised continuance of a former
business entity or an attempt to avoid the obligations of
a collective bargaining agreement, such as through a
sham transfer of assets." Penntech Papers, Inc. v.
NLRB, 706 F.2d 18, 24 (ist Cir.1983). In sum "
“unlawful motive or intent are critical inquiries in an
alter ego analysis....’" Jowa Express Distribution, Inc.
v. NLRB, 739 F.2d 1305, 1311 (8th Cir. 1984) (quoting
Penntech Papers, 706 F.2d at 24) (comparing alter ego
and single employer doctrines).
Int’l Union of Operating Engineers v. Centor Contractors, supra.
29a
ego of Independent I. The district court therefore declined
to address the alter ego status as an issue.
Although the Complaint alleges that
Independent II is either the alter ego of and/or
the successor to Independent I, the issue of
alter ego status is not raised by the plaintiff in
either its motion for summary judgment, or
its subsequent [proposed] conclusions of law.
Therefore, although the defendants briefed the
issue of alter ego status, the Court will not
address it in this Order.
Opinion and Order, p. 6, n. 2, 1991 WL 64044. The court
was correct in its ruling. It could properly treat as
abandoned a claim alleged in the complaint but not even
raised as a ground for summary judgment. Cj., Lazzara v.
Howard A. Esser, Inc. , 802 F.2d 260, 269 (7th Cir. 1986) (a
ground not pressed in the district court in opposition to a
motion for summary judgment is to be treated by the district
court as abandoned). Moreover, on appeal the union has not
raised as an issue the refusal of the district court to consider
the alter ego claim. The district court’s refusal could not,
therefore, be considered as an issue on appeal. FSLIC v.
Haralson, 813 F.2d 370, 373 (11th Cir. 1987); Self-directed
Placement Corp. v. Control Data Corp. , 908 F.2d 462, 466
(9th Cir.1990); Cavic v. Pioneer Astro Indus., 825 F.2d
1421, 1425 (10th Cir.1987). Alter ego is simply no longer
an issue in this case.
For reasons we have set out, Independent II was
entitled to summary judgment in its favor on the
successorship issue, the only issue remaining in the case.
Ill. CONCLUSION.
30a
The decision of the district court is REVERSED.
The case is REMANDED to the district court with directions
to enter a final judgment in favor of Independent Sprinkler
Corporation (Independent II).
3la
Denial of Rehearing
UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
ROAD SPRINKLER FITTERS LOCAL
UNION NO. 669 affiliated with the United
Association of Journeymen & Apprentices of
the Plumbing & Pipefitting Industry of the
United States and Canada, AFL-CIO,
Plaintiff-Counter-Claim Defendant-Appellee,
v.
INDEPENDENT SPRINKLER CORP.,
Defendant-Counterclaim Plaintiff-Appellant.
No. 91-3271
April 8, 1994
Before KRAVITCH, Circuit Judge, GODBOLD and
OAKES, Senior Circuit Judges. (Honorable James L. Oakes,
Senior U.S. Circuit Judge for the Second Circuit, sitting by
designation. )
PER CURIAM:
The Petition(s) for Rehearing are DENIED and no
member of this panel nor other Judge in regular active
service on the Court having requested that the Court be
polled on rehearing en banc (Rule 35, Federal Rules of
Appellate Procedure; Eleventh Circuit Rule 35-5), the
Suggestion(s) of Rehearing En Banc are DENIED.
ENTERED FOR THE COURT
324
Mandate
UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
ROAD SPRINKLER FITTERS LOCAL
UNION NO. 669 affiliated with the United
Asscciation of Journeymen & Apprentices of
the Plumbing & Pipefitting Industry of the
United States and Canada, AFL-CIO,
Plaintiff-Counter-Claim Defendant-Appellee,
v.
INDEPENDENT SPRINKLER CORP.,
Defendant-Counterclaim Plaintiff-Appellant.
No. 91-3271
Before KRAVITCH, Circuit Judge, GODBOLD and
OAKES, Senior Circuit Judges. (Honorable James L. Oakes,
Senior U.S. Circuit Judge for the Second Circuit, sitting by
designation. )
JUDGMENT
This cause came to be heard on the transcript of the
record from the United States District Court for the Middle
District of Florida, and was argued by counsel;
UPON CONSIDERATION WHEREOF, it is now
hereby ordered and adjudged by this Court that the order of
the said District Court appealed from in this cause be and the
same is hereby REVERSED; and that this cause be and the
same is hereby REMANDED to said District Court for
further proceedings in accordance with the opinion of this
Court;
It is further ordered that plaintiff-appellee pay
defendant appellant the costs on appeal to be taxed by the
Clerk of this Court.
Entered: January 7, 1994
Issued as Mandate: May 2, 1994
Stipulation of Facts
STIPULATION OF FACTS
Plaintiff Road Sprinkler Fitters Local Union No. 669
and Defendants, Moore Pipe & Sprinkler Co., Independent
Sprinkler & Fire Protection Co., and Independent Sprinkler
Corp., by and through their undersigned attorneys, for
purposes of the above-captioned action only, hereby stipulate
to the following facts:
1. This action is brought by the Plaintiff Road
Sprinkler Fitters Local Union No. 669 (hereinafter "Local
669") against Defendants Moore Pipe & Sprinkler Co.
(hereinafter "Moore Pipe"), Independent Sprinkler & Fire
Protection Co. (hereinafter "Independent I"), and
Independent Sprinkler Corp., (hereinafter "Independent II")
pursuant to Section 301 of the Labor Management Relations
Act of 1947, 29 U.S.C. Section 185, seeking to compel the
Defendants to submit to final and binding arbitration the
alleged violation of a Settlement Agreement previously
entered by Moore Pipe and Independent I in resolution of
prior litigation.
2. Local 669 is a national labor organization
representing employees engaged in the installation and
maintenance of automatic fire protection systems. Its
territorial jurisdiction encompasses 48 states, the District of
Columbia and Puerto Rico, and includes the states of
Georgia and South Carolina but does not include Florida.
‘In an alternative count, Local 669 seeks an award of monetary
damages for the alleged violation of the Settlement Agreement.
However, the parties stipulate and agree that the issue of monetary
damages, if any, is an issue to be resolved by the arbitrator rather than
the Court should the Court find in the first instance that arbitration is
appropriate in this case.
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3. Moore Pipe, a Florida corporation, at all times
material herein, has been engaged in the business of
installing and maintaining fire protection systems in various
states including Florida, Georgia, and South Carolina.
Moore Pipe was incorporated on June 26, 1926, and has
been a union contractor for many years.
4. Independent I, also a Florida corporation,
prior to October 30, 1987, was engaged in the business of
installing and maintaining fire protection systems in Florida,
Georgia and South Carolina. Independent I was incorporated
on April 30, 1982, and operated during its existence on a
non-union basis.
a At all times material herein, and at least since
approximately 1980, the stock of both Moore Pipe and
Independent I has been owned by a parent company,
Williamson Feed Mills, Inc. (hereinafter "Williamson"), and
Moore Pipe and Independent I both operated as subsidiaries
of Williamson. Prior to October 30, 1987, the stock in
Williamson was owned by the following members of the
Evans family of Jacksonville, Florida in the percentages
indicated: H. M. (Mack) Evans, Jr. (25%), Jerry B. Evans
(25%), Randolph T. (Randy) Evans (25%), and the Evans
family trust (25%).
6. On or about August 25, 1985, Local 669 filed
a grievance under Article 3 of its collective bargaining
agreement with Moore Pipe alleging that Moore Pipe and
Independent I were single or joint employers within the
meaning of Article 3 of the Agreement, and that the
economic terms of the Agreement were applicable to work
performed by Independent I within Local 669’s territorial
jurisdiction.
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7. Local 669 ultimately brought an action to
compel arbitration of its grievance, in an action styled Road
Sprinkler Fitters Local Union No. 669 v. Moore Pipe &
Sprinkler Co., Civil Action No. 85-936-CIV-J-12 (U.S.D.C.
M.D. Fla.).
8. On April 16, 1987, a settlement encompassing
both the above pending suit to compel arbitration and the
underlying grievance was reached. Jerry Evans signed the
Settlement Agreement on behalf of Moore Pipe and Randy
Evans signed the Settlement Agreement on behalf of
Independent I. Williamson was not a party to the suit or to
the agreement. A copy of the Settlement Agreement is
attached hereto as Exhibit A and incorporated herein.
9. One aspect of the Settlement Agreement, as
provided in paragraph 4 thereof, was that Moore Pipe agreed
to be bound by the national collective bargaining agreement
in effect between the National Fire Sprinkler Association,
Inc. and Local 669, for the period April 1, 1988 through
March 31, 1991, a copy of which is attached as Exhibit B to
Plaintiff's Complaint and incorporated herein.
10. In mid-summer of 1987, the decision was
made to close down the operations of Independent I. This
decision was made by H. M. (Mack) Evans, Jr., in his
capacity as Chairman of the Board of Williamson, for
assertedly economic reasons.
11. Shortly after this decision was made, Randy
Evans decided to sell his interest in Williamson. These
negotiations continued over a period of several months, and
culminated in an agreement signed on October 30, 1987, in
which Randy Evans sold all of his stock in Williamson back
to the Company for $258,814.97. A copy of this Agreement
is attached hereto as Exhibit B and incorporated herein.
37a
12. Since October 30, 1987, the stock of
Williamson has been owned equally by H. M. Evans, Jr.,
Jerry B. Evans, and the Evans family trust. Since October
30, 1987, Randy Evans has had no ownership interest in
Williamson, Moore Pipe, or Independent I.
13. On August 27, 1987, Randy Evans formed a
new Florida corporation named Independent Sprinkler
Corporation (hereinafter "Independent II"). A copy of the
initial Articles of Incorporation of Independent Sprinkler
Corporation, filed with the Secretary of State on August 28,
1987, is attached hereto as Exhibit C and incorporated
herein. The Articles of Incorporation listed Independent II’s
Board of Directors’ address as:
5262 Longleaf Street
Jacksonville, Florida
14. After a "phase out" period of several months,
Independent I ceased its active business operations on
Friday, October 30, 1987, and has not engaged in active
business operations since that date. All of Independent I’s
employees were laid off at the end of the work day on
October 30, 1987. A listing of the employees employed by
Independent I during 1987 is attached hereto as Exhibit D
and incorporated herein.
15. Independent II began its active business
operations on Monday, November 2, 1987 from the
following business address and telephone number:
5863 West Beaver Street
Jacksonville, Florida 32205
(904) 781-8227
38a
When Independent II began operations, it employed 35
employees. Thirty-two of these employees previously had
been employed by Independent I. A listing of Independent
II’s employees as of November 6, 1987 is attached hereto as
Exhibit E and incorporated herein. As of May 6, 1988,
Independent II still employed 35 employees, 25 of whom
previously had been employed by Independent I. A listing
of Independent II’s employees as of May 6, 1988 is attached
hereto as Exhibit F and incorporated herein.
Independent I employed 142 personnel during the
year 1987. During its existence, Independent II has hired 32
of the personnel who were in the employ of Independent I
during the year 1987.
16. On April 16, 1987, the Officers and Directors
of Independent I were as follows:
Directors Officers
Randolph T. (Randy) Evans Randolph T. (Randy) Evans
President and Treasurer
H. M. Evans, Ill Robert Matthews
Vice-President
Robert Matthews H. M. Evans, III
_ Secretary
On or about October 23, 1987, Randy Evans and Robert
Matthews submitted written letters of resignation from their
positions with Independent I, to be effective as of October
30, 1987 at 12:01 a.m.
17. Since October 30, 1987, although Independent
I has not engaged in any active business operations, it has
39a
remained as a dormant Florida corporation. Since October
30, 1987, the Officers and Directors of Independent I have
been as follows:
Directors Officers
Bradford B. Evans Bradford B. Evans President
H. M. Evans, Ill H. M. Evans, Iii Secretary &
Treasurer
James W. Carr
18. From its formation until the present, the
Officers and Directors of Independent II have been as
follows:
Directors Officers
Randolph T. (Randy) Evans Randolph T. (Randy) Evans
President
Robert Matthews Robert Matthews
Vice-President
R. Tucker Evans, Jr. R. Tucker Evans, Jr.
Vice-President
Danny Wilkinson
David Overman
Jimmy Grey
Bill Taylor
Norman LaRochelle
19. From April 16, 1987 until the present, the
Officers and Directors of Moore Pipe have been as follows:
Directors Officers '
Jerry M. Evans Jerry B. Evans President
Jerry B. Evans H. M. Evans, Jr. Vice-President,
Secretary,
Treasurer
H. M. Evans, Jr. William H. Steedley Vice-President
20. From its formation until the present, the stock
of Independent II has been owned by the following
individuals: Randy Evans (approximately 19%), Robert
Matthews (approximately 18%), R. Tucker Evans, Jr.
(approximately 8% to 9%), and the following employees or
former employees of Independent II (each of whom owns or
owned stock ranging from approximately 5% to 10%):
Dannie Wilkinson, Jimmy Roberts, Robert Bollo, Don
Thomas, Norman LaRochelle, David Overman, John
Swanson, Jimmy Grey, Bill Taylor, Albert Turner, Louis
Sweat and James D. Sweat.
21. From April 16, 1987 until approximately
October of 1988, Moore Pipe conducted its business from its
offices located at the following address:
5262 Longleaf Street
Post Office Box 40589
Jacksonville, Florida 32203
(904) 768-2556
4la
In approximately October of 1988, Moore Pipe
moved to its present business location at the following
address:
4517-2 Appleton Avenue
Post Office Box 7419
Jacksonville, Florida 32238-0419
(904) 384-6500
22. | From April 16, 1987 until it ceased operations
on October 30, 1987, Independent I conducted its business
from its offices located at the following address:
5262 Longleaf Street
Post Office Box 2781
Jacksonville, Florida 32203
(904) 765-3572
23. Subsequent to the formation of Independent II,
Robert Matthews, Vice-President of Independent II,
negotiated with Independent I for the purchase of some, but
not all, of Independent I’s office equipment and supplies.
Pursuant to such negotiations, an agreement was entered into
whereby Independent II agreed to purchase from Independent
I various items of office equipment and supplies for prices
agreed upon by the parties. A copy of the items purchased
and the prices agreed upon is attached hereto as Exhibit G
and made a part hereof.
24. Subsequent to the formation of Independent II,
and as Independent I was phasing out its operation,
representatives of Independent II negotiated for the
completion of 37 construction jobs originally contracted to
Independent I. Following such negotiations, Independent I
entered into an agreement dated November 2, 1987, under
which it subcontracted various contracts to Independent II.
42a
A copy of such agreement is attached hereto as Exhibit H
and made a part hereof. The terms of such agreement were
similar to other subcontract agreements which Independent
I had drafted with other subcontractors. Independent II
completed each of the contracts listed on Exhibit H for the
amounts as set forth for each job on the percentage of
completion schedule attached to Exhibit H. There were no
jobs included in Exhibit H located in Georgia or South
Carolina that were not also listed in the jobs included in
Attachment A to the Settlement Agreement herein (Exhibit
A).
25. A similar agreement as that attached as
Exhibit H was entered into between Independent I and
Moore Pipe, with respect to the remainder of Independent I’s
pending jobs. A listing of these jobs, which were
subcontracted for completion to Moore Pipe and which were
completed by Moore Pipe (and which were all located in
South Florida) is attached hereto as Exhibit I and made a
part hereof.
26. Subsequent to November 2, 1987, Independent
II submitted various orders for the fabrication of materials to
the Moore Pipe shop. Pursuant to such orders, Moore Pipe
fabricated such materials and Independent II paid the normal
retail price for such fabricated materials. Moore Pipe
fabricated and sold such materials to Independent II on a
"collect on delivery" basis.
27. In early 1988, Robert Matthews, Vice-
President of Independent II, entered into further discussions
with Moore Pipe concerning the purchase of various items
of fabrication equipment. Following such discussions,
Moore Pipe sold various items of fabrication equipment to
Independent II for prices negotiated between Moore Pipe and
Independent II and requiring the payment of cash.
43a
Independent II declined to purchase other items of fabrication
equipment being offered for sale by Moore Pipe.
28. Subsequent to the formation of Independent II,
and on or about October 5, 1987, Independent II assumed
the commercial leases on some, but not all, of the vehicles
which previously had been leased by independent I. Copies
of these leases are attached hereto as Exhibit J and
incorporated herein.
29. Subsequent to November 2, 1987, Moore Pipe
and Independent II have bid upon various construction
projects, inside and outside of Florida, on a competitive
basis. In various instances, Moore Pipe was not awarded a
contract of construction on certain projects in which
Independent II was the successful bidder, and in other
instances, the reverse has been true. Moore Pipe has not at
any time submitted a joint bid for the performance of a
contract of construction with Independent II.
30. Since November 2, 1987, Independent II has
bid upon and been awarded various construction contracts in
Florida, Georgia and South Carolina. Such contracts have
been performed on a non-union basis, at wages and benefits
set by Independent II.
31. Independent II is engaged in the same type of
business as Independent I was.
32. Independent II has not at any time owned
jointly or in common any bank accounts, notes, bonds and/or
other types of securities with Moore Pipe or Independent I.
33. | The dispute giving rise to the current litigation
was begun by a letter dated March 21, 1989, from H. V.
Simpson, Business Manager for Local 669, to Jerry Evans
44a
of Moore Pipe, requesting certain information as to alleged
jobs being performed within Local 669’s territory not in
accordance with the terms and conditions of the Local 669
collective bargaining agreement. A copy of said letter is
attached hereto as Exhibit K and incorporated herein. In
response, Jerry Evans submitted a letter dated March 28,
1989 to H. V. Simpson, a copy of which is attached hereto
as Exhibit L and incorporated herein. H. V. Simpson then
submitted an additional letter to both Jerry Evans and Randy
Evans, dated April 7, 1989, a copy of which is attached
hereto as Exhibit M and incorporated herein.
34. Local 669 next responded through its
attorneys, by letter dated July 25, 1989 trom William W.
Osborne, Jr., Esquire to Jerry Evans and to Randy Evans,
a copy of which is attached hereto as Exhibit N and
incorporated herein, and alleged that the Settlement
Agreement had been breached by Moore Pipe, Independent
I and Independent II. In response, Jerry Evans submitted a
letter to William W. Osborne, Jr., Esquire, dated August 4,
1989, a copy of which attached hereto as Exhibit O and
incorporated herein. The parties met in an effort to resolve
Local 669’s allegations in Jacksonville, Florida in October,
1989, but were unable to do so. Moore Pipe, Independent
I and Independent II disputed Local 669s allegations,
asserting that there was no corporate relationship between
Independent I and Independent II.
35. | From August 16, 1987 until the time that
Independent I ceased operations on October 30, 1987,
Independent I did not bid upon any jobs within Local 669’s
territorial jurisdiction, and did not perform work on any jobs
within Local 669’s territorial jurisdiction with the exception
of those jobs listed as Attachment A to the Settlement
Agreement herein (Exhibit A).
45a
36. From October 16, 1987 until the present, and
for the purposes of this litigation, all jobs performed by
Moore Pipe within Local 669’s territorial jurisdiction have
been performed with bargaining unit employees represented
by Local 669 and in accordance with the wages, terms and
conditions of the National Local 669/N.F.S.A. Agreement
(attached as Exhibit B to the Complaint).
37. Local 669 has demanded that the parties
proceed to arbitration over the dispute herein. Independent
II has refused to proceed to arbitration on the asserted basis
that it is not the successor to nor alter ego of Independent I
and is therefore not bound to the terms of the Settlement
Agreement. Independent I and Moore Pipe have asserted
that, assuming arguendo arbitration is appropriate in this
proceeding at all, the dispute herein is not arbitrable as to
them and that they should not be parties to any arbitration.
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