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Eichleay Corp. v. International Ass'n of Bridge

filed: July 1, 1991; As Amended September 4, 1991.

EICHLEAY CORPORATION
v.
INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL AND ORNAMENTAL IRON WORKERS; UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA; LABORERS INTERNATIONAL UNION OF NORTH AMERICA; OPERATIVE PLASTERERS AND CEMENT MASONS INTERNATIONAL ASSOCIATION OF THE UNITED STATES AND CANADA; INTERNATIONAL UNION OF OPERATING ENGINEERS; AND INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS. EICHLEAY CORPORATION V. INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL AND ORNAMENTAL IRON WORKERS; UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA; LABORERS INTERNATIONAL UNION OF NORTH AMERICA; OPERATIVE PLASTERERS AND CEMENT MASONS INTERNATIONAL ASSOCIATION OF THE UNITED STATES AND CANADA; INTERNATIONAL UNION OF OPERATING ENGINEERS; AND INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS. CARPENTERS HEALTH AND WELFARE TRUST FUND FOR CALIFORNIA; CARPENTERS PENSION TRUST FUND FOR NORTHERN CALIFORNIA; CARPENTERS VACATION AND HOLIDAY TRUST FUND FOR NORTHERN CALIFORNIA; CARPENTERS APPRENTICESHIP AND TRAINING TRUST FUND FOR NORTHERN CALIFORNIA; AND CARPENTERS ANNUITY TRUST FUND FOR NORTHERN CALIFORNIA V. EICHLEAY CORPORATION, ECI, INC., D/B/A EICHLEAY CONSTRUCTORS, INC.; EICHLEAY HOLDINGS, INC.; AMK INTERNATIONAL. CALIFORNIA IRON WORKERS FIELD WELFARE PLAN; CALIFORNIA IRON WORKERS FIELD PENSION TRUST FUND; CALIFORNIA FIELD IRON WORKERS VACATION TRUST FUND; CALIFORNIA FIELD IRON WORKERS APPRENTICESHIP TRAINING AND JOURNEYMAN RETRAINING TRUST FUND; CALIFORNIA AND VICINITY FIELD IRON WORKERS ANNUITY TRUST FUND; CALIFORNIA FIELD IRON WORKERS ADMINISTRATIVE TRUST FUND V. EICHLEAY CORPORATION, ECI, INC., D/B/A EICHLEAY CONSTRUCTORS, INC.; EICHLEAY HOLDINGS, INC.; AMK INTERNATIONAL. OPERATING ENGINEERS HEALTH AND WELFARE TRUST FUND; PENSION TRUST FUND FOR OPERATING ENGINEERS; PENSIONED OPERATING ENGINEERS HEALTH AND WELFARE FUND; OPERATING ENGINEERS & PARTICIPATING EMPLOYERS PRE-APPRENTICESHIP; APPRENTICE & JOURNEYMAN AFFIRMATIVE ACTION TRAINING FUND; OPERATING ENGINEERS VACATION & HOLIDAY PLAN; OPERATING ENGINEERS CONTRACT ADMINISTRATION TRUST FUND; OPERATING ENGINEERS MARKET PRESERVATION TRUST FUND; OPERATING ENGINEERS INDUSTRY STABILIZATION TRUST FUND V. EICHLEAY CORPORATION, ECI, INC., D/B/A EICHLEAY CONSTRUCTORS, INC.; EICHLEAY HOLDINGS, INC.; AMK INTERNATIONAL. CEMENT MASONS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA; CEMENT MASONS PENSION TRUST FUND FOR NORTHERN CALIFORNIA; CEMENT MASONS VACATION TRUST FUND FOR NORTHERN CALIFORNIA; CEMENT MASONS APPRENTICESHIP AND TRAINING TRUST FUND FOR NORTHERN CALIFORNIA V. EICHLEAY CORPORATION, ECI, INC., D/B/A EICHLEAY CONSTRUCTORS, INC.; EICHLEAY HOLDINGS, INC.; AMK INTERNATIONAL. LABORERS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA; LABORERS VACATION-HOLIDAY TRUST FUND FOR NORTHERN CALIFORNIA; LABORERS PENSION TRUST FUND FOR NORTHERN CALIFORNIA; LABORERS TRAINING AND RETRAINING TRUST FUND FOR NORTHERN CALIFORNIA V. EICHLEAY CORPORATION, ECI, INC., D/B/A EICHLEAY CONSTRUCTORS, INC.; EICHLEAY HOLDINGS, INC.; AMK INTERNATIONAL. INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL AND ORNAMENTAL IRON WORKERS; UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA; LABORERS' INTERNATIONAL UNION OF NORTH AMERICA; OPERATIVE PLASTERS' AND CEMENT MASONS' INTERNATIONAL ASSOCIATION OF THE UNITED STATES AND CANADA; INTERNATIONAL UNION OF OPERATING ENGINEERS; INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITH, FORGERS AND HELPERS; CARPENTERS HEALTH AND WELFARE TRUST FUND FOR CALIFORNIA; CARPENTERS PENSION TRUST FUND FOR NORTHERN CALIFORNIA; CARPENTERS VACATION AND HOLIDAY TRUST FUND FOR NORTHERN CALIFORNIA; CARPENTERS APPRENTICESHIP AND TRAINING TRUST FUND FOR NORTHERN CALIFORNIA; CARPENTERS ANNUITY TRUST FUND FOR NORTHERN CALIFORNIA; CALIFORNIA IRON WORKERS FIELD WELFARE PLAN; CALIFORNIA IRON WORKERS FIELD PENSION TRUST FUND; CALIFORNIA FIELD IRON WORKERS VACATION TRUST FUND; CALIFORNIA FIELD IRON WORKERS APPRENTICESHIP TRAINING AND JOURNEYMAN RETRAINING TRUST FUND; CALIFORNIA AND VICINITY FIELD IRON WORKERS ANNUITY TRUST FUND; CALIFORNIA FIELD IRON WORKERS ADMINISTRATIVE TRUST FUND; OPERATING ENGINEERS HEALTH WELFARE TRUST FUND; PENSION TRUST FOR OPERATING ENGINEERS; PENSIONED OPERATING ENGINEERS HEALTH AND WELFARE FUND; OPERATING ENGINEERS & PARTICIPATING EMPLOYERS PRE-APPRENTICESHIP, APPRENTICE & JOURNEYMAN AFFIRMATIVE ACTION TRAINING FUND; OPERATING ENGINEERS VACATION & HOLIDAY PLAN; OPERATING ENGINEERS CONTRACT ADMINISTRATION TRUST FUND; OPERATING ENGINEERS MARKET PRESERVATION TRUST FUND; OPERATING ENGINEERS INDUSTRY STABILIZATION TRUST FUND; CEMENT MASONS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA; CEMENT MASONS PENSION TRUST FUND FOR NORTHERN CALIFORNIA; CEMENT MASONS VACATION TRUST FUND FOR NORTHERN CALIFORNIA; CEMENT MASONS APPRENTICESHIP AND TRAINING TRUST FUND FOR NORTHERN CALIFORNIA; LABORERS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA; LABORERS VACATION-HOLIDAY TRUST FUND FOR NORTHERN CALIFORNIA; LABORERS PENSION TRUST FUND FOR NORTHERN CALIFORNIA; LABORERS TRAINING AND RETRAINING TRUST FUND FOR NORTHERN CALIFORNIA, APPELLANTS. EICHLEAY CORPORATION V. SHEET METAL WORKERS INTERNATIONAL ASSOCIATION; SHEET METAL WORKERS INTERNATIONAL ASSOCIATION; AND LOCAL 104 OF THE SHEET METAL WORKERS' INTERNATIONAL ASSOCIATION, APPELLANTS. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO; LOCAL 302 OF THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO; UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND PIPE FITTING INDUSTRY OF THE UNITED STATES AND CANADA, AFL-CIO; STEAMFITTERS LOCAL 342 OF THE UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND PIPE FITTING INDUSTRY OF THE UNITED STATES AND CANADA, AFL-CIO, APPELLANTS, V. EICHLEAY CORPORATION, A/K/A EICHLEAY CONSTRUCTORS, INC., AND/OR ECI, AND/OR AMK INTERNATIONAL



Appeal from the United States District Court for the Western District of Pennsylvania; D.C. Civil Action Nos. 87-1519, 87-1819, 87-2309, 87-2310, 87-2311, 87-2312, 87-2313, 88-1032, 88-653.

Becker and Nygaard, Circuit Judges and Clifford Scott Green, District Judge.*fn*

Author: Nygaard

Opinion OF THE COURT

NYGAARD, Circuit Judge

In these consolidated appeals, we again address the great deference due arbitrators' decisions in labor disputes. The appellant Unions*fn1 contest the district court's order vacating a series of arbitration awards favorable to them. We will affirm in part and reverse in part.

I.

This acrimonious dispute between Eichleay Corporation ("Eichleay") and the plaintiff Unions (collectively the "Unions") arose in 1985. Eichleay, a union shop construction company, and the Unions were parties to collective bargaining agreements known as the National Maintenance Agreements ("NMA"). Early in July 1985, Eichleay reorganized its operations. A subsidiary known as Eichleay Constructors, Inc. ("ECI") was formed to engage in open shop construction nationwide. Eichleay Holdings, Inc. was formed in August of 1985 to hold the stock of Eichleay and ECI, as well as the stock of Eichleay Engineers of Pennsylvania and Eichleay Engineers of Illinois, two former subsidiaries of Eichleay.

During the latter part of that year, Geoff Eichleay, President and CEO of Eichleay, a union shop contractor, learned that USS Posco, a joint venture of US Steel and Pohang Iron and Steel, a Korean company, planned to modernize a steel mill in Pittsburg, California. This Pitcal project involved renovating the finishing plant portion of the mill, installing a pickle line tandem cold mill and a continuous annealing line. Eichleay became interested in bidding on all or part of the construction work connected with the Pitcal Project.

When USS Posco first solicited bids for the Pitcal project, Geoff Eichleay directed an Eichleay sales staff member to learn the specifics of the job and identify potential competitors. Eichleay representatives then met with USS Posco officials to get preapproved for the short bid list, qualifying Eichleay to submit a final bid on the project.

Eichleay did not make the short bid list, apparently because USS Posco feared that Eichleay was not a large enough company to handle the job. USS Posco suggested that Eichleay form a joint venture with one of the six companies on the short bid list and continue bidding on the project. Eichleay then entered into an agreement with Morrison-Knudsen ("Morrison") to bid on the project as a joint venture, on the condition that concessions be obtained from the building trades unions.

In order to get these concessions, Morrison and Eichleay approached the National Maintenance Agreement Policy Committee ("NMAPC") in July, 1986. The NMAPC is a jointly administered labor-management committee consisting of 14 representatives from craft unions and 14 representatives from unionized contractors. It provides a forum to interpret the NMAs. The NMAs, where extended to a particular site, set minimum pay levels, report times and bind the contractor to union hiring practices. Eichleay signed NMAs with all the craft unions in this case except for the IBEW.

At the meeting with the NMAPC, Eichleay and Morrison requested the NMAs be extended to the Pitcal project and that the Unions grant concessions. Specifically, the contractors requested that the wage and benefit package of the craft employees be modified to 80% of the total package, that 40% of the workforce be comprised of apprentices, and that the apprentices work at 70% of the 80% modified package. The outcome of this meeting is in dispute.

The Unions contend that the NMAs were extended to the project and the requested concessions were granted at the meeting. Eichleay asserts that the NMAPC merely stated that the NMAs could cover the type of work involved in the Pitcal project and that concessions would have to be negotiated with the local unions in California. The minutes of the meeting indicate that the NMAs were extended to the Pitcal project, but not that the concessions were approved.

On July 10, 1986, Eichleay and Morrison met in California with the Subcommittee of the NMAPC and representatives of the local unions to discuss concessions. The contractors told the local unions that they needed to know if the concessions would be granted in order to continue in the bidding. The contractors requested that the unions decide on the concessions by July 21, 1986.

On July 21, Eichleay was informed that, although the vote was unofficial, the unions had refused to grant the concessions. Eichleay determined that, without union concessions, it could no longer participate in a joint venture on the Pitcal project and dropped out of the bidding process.

Immediately after Eichleay dropped out of the bidding, Geoff Eichleay directed officers of ECI to explore the possibility of forming a joint venture to bid on the Pitcal project. Subsequently, a joint venture was formed between ECI, BE & K, and Daelim America, Inc. ("Daelim"). Both BE & K and Daelim are open shop contractors. BE & K was already on the short bid list for the Pitcal project.

In December 1986, USS Posco announced that BE & K had been awarded the contract for the Pitcal construction project. On December 30, 1986, BE & K, Daelim and ECI formally entered into a joint venture known as AMK International. Forty percent of AMK was owned by BE & K, forty percent by ECI, and twenty percent by Daelim. By the joint venture agreement's terms, BE & K was designated as the lead contractor on the project. USS Posco agreed to allow the joint venture to perform the work, so long as BE & K remained fully responsible for the construction contract.

BE & K chose the project manager for AMK and supplied most of AMK's salaried employees. ECI supplied about half as many salaried employees to AMK as BE & K. BE & K also recruited all craft employees and set wage levels and employment policies. BE & K established the hiring, personnel and accounting procedures for AMK. All personnel at the site involved in labor relations were BE &K employees.

In June 1987, six unions, who are now parties in the Ironworkers appeal, filed identical grievances against Eichleay with NMAPC. The grievances alleged that Eichleay, through its alter ego ECI, was performing work covered by the NMAs on the Pitcal site, that the NMAs had been extended to the Pitcal site, and that consequently Eichleay was in violation of each and every provision of the NMAs.

In July 1987, Eichleay requested a temporary restraining order in the Western District of Pennsylvania to enjoin the arbitration proceeding. The request was denied and the arbitration took place. Eichleay appeared at the arbitration hearing solely to object to NMAPC's jurisdiction over the dispute. The six unions then presented their case. The NMAPC sustained the unions' grievance and later issued findings of fact. The NMAPC found that the six unions had extended the NMAs to the Pitcal project by a ballot vote of the Unions.*fn2

The NMAPC then considered the issue of whether Eichleay was the employer on Pitcal. The finding on this issue stated merely that "Eichleay Corporation is present at the project." The NMAPC then issued awards requiring Eichleay to make wage payments and trust fund contributions on behalf of the workers currently employed on the Pitcal site, and to make similar payments "on behalf of all those workers who would have been dispatched to the work in question to the contractor . . . had the agreement been complied with."

Two more unions then filed identical grievances against Eichleay with the NMAPC. These unions are parties to the IBEW appeal. The NMAPC sustained these grievances for the same reasons given in the Ironworkers grievance.*fn3 Sheet Metal Workers' International Association then filed an identical grievance. It was also sustained for the reasons given in the Ironworkers case. This union is now party to the Sheet Metal Workers appeal.

Eichleay filed a timely petition in the Western District of Pennsylvania to vacate the arbitration awards in the Ironworkers case. The Unions cross-petitioned to confirm the awards. Eichleay received the IBEW award on February 15, 1988. The IBEW filed a petition with the district court to confirm the awards on March 17, 1988. Eichleay answered the petition in IBEW and cross-petitioned to vacate the award. Eichleay timely filed a petition to vacate the award in the Sheet Metal Workers case on May 6, 1988. The Sheet Metal Workers Union cross-petitioned to confirm the award.

Cross-motions for summary judgment were filed in the Ironworkers case. The district court determined first that the alter ego issue was excluded from arbitration by Article VI(2) of the NMA.*fn4 The district court then concluded that it would hold its decision on the issue of whether AMK, ECI and Eichleay were alter egos in abeyance ...


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