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International Union of Operating Engineers, Local v. Allied Erecting & Dismantling Co.

March 26, 2013


The opinion of the court was delivered by: Schiller, J.


The International Union of Operating Engineers, Local Union No. 542 ("Union") requests that the Court issue a declaratory judgment that the collective bargaining agreements it entered into with Allied Erecting & Dismantling Co., Inc. ("Allied") are terminable. Allied's counterclaim seeks a declaratory judgment that the agreements continue to bind the Union. For the reasons set forth below, the Court finds that the agreements are terminable with reasonable notice by either party.


The relevant facts in this case are undisputed. In 1992, the parties entered into two collective bargaining agreements that outlined the wages and working conditions for certain employees at a facility in Fairless Hills, Pennsylvania, where the Union was dismantling a closed steel plant. (See Pl.'s Br. in Supp. of Req. for Declaratory J. [Pl.'s Br.] at 2; Def.'s Br. on Issues [Def.'s Br.] at 1.) Both agreements state that they will terminate upon Allied's completion of the Fairless Hills project or any other project to which Allied extends the agreements. (See Answer Ex. A [Operator Agreement] at 17 ("This Agreement . . . shall terminate upon the AED's completion of the Project.

As to any jobsite to which this Agreement is extended . . . the Agreement . . . shall terminate upon the completion of AED's work at such jobsite."); id. Ex. B [Helper Agreement] at 16 (same).) Over twenty years later, the project continues, and is anticipated to continue for at least another five years. (Pl.'s Br. at 3; see also Def.'s Br. at 2.)

In August 2011, the Union sent Allied a notice of its intent to terminate the collective bargaining agreements and requested negotiations for successor agreements. (See Def.'s Br. at 2; Pl.'s Br. at 3.) Thereafter, Allied filed a complaint with the National Labor Relations Board ("NLRB") alleging that the Union's notice of its intention to terminate the agreements violated the National Labor Relations Act ("NLRA"). (See Def.'s Br. at 2; Pl.'s Br. at 4.) The NLRB Regional Director dismissed the charge and Allied filed an appeal. (Def.'s Br. at 2; Pl.'s Br. at 4.) The Office of Appeals is holding consideration of Allied's appeal in abeyance during the pendency of this matter before the Court. (Def.'s Br. at 2; Pl.'s Br. at 4.)

On November 23, 2012, the Union filed its Complaint, stating that the agreements were voidable because they did not contain a definite term of duration. (See Compl. ¶¶ 18, 20, 26, 30.) The Union requests that the Court declare the agreements voidable, rescind the agreements, reform the agreements to allow for an expiration date, or grant other and further relief that the Court may deem just and proper. (See id. ¶ 7.) On January 28, 2013, Allied filed an answer and counterclaim against the Union, seeking to have the Court declare that the agreements are valid. (See Answer ¶ 3.)

The Court has jurisdiction over this dispute under Section 301 of the Labor Management Relations Act of 1974 ("LMRA"), 29 U.S.C. § 185. See Textron Lycoming Reciprocating Engine Div., AVCO Corp. v. UAW, 523 U.S. 653, 658 (1998) ("[A] declaratory judgment plaintiff accused of violating a collective-bargaining agreement may ask a court to declare the agreement invalid.");

Mack Trucks, Inc. v. UAW, 856 F.2d 579, 587 (3d Cir. 1988) ("Congress made clear that [under § 185(a)] . . . proceedings could, for example, be brought . . . under the Declaratory Judgments Act in order to secure declarations from the Court of legal rights under the contract.").


A. Declaratory Judgment Act

Both parties seek declaratory judgments from the Court pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201. The Declaratory Judgment Act provides that, "[i]n a case of actual controversy within its jurisdiction . . . any court of the United States . . . may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." Id. The Third Circuit provided the following factors as guidance for when a declaratory judgment is appropriate: (1) the absence of a state court proceeding involving the same issues and parties; (2) the likelihood that the declaration will resolve the uncertainty of the obligation which gave rise to the controversy; (3) the convenience of the parties; (4) the public interest in a settlement of the uncertainty of obligation; and (5) the availability and relative convenience of other remedies. See Nat'l R.R. Passenger Corp. v. Penn. Public Util. Comm'n, 342 F.3d 242, 258 (3d Cir. 2003). The Declaratory Judgment Act provides the federal courts with "unique and substantial discretion in deciding whether to declare the rights of litigants." Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995).

The Court finds that declaratory judgment is appropriate in this case. First, the Court is not aware of any state court proceeding that has determined, or will determine, the avoidability of the parties' agreements. Second, the Court's finding on whether a party may void the agreements would resolve the parties' uncertainty. Without the Court's determination, the parties are paralyzed by this lack of clarity, and negotiations between Allied and the Union have stalled.Third, the Court's determination would convenience both parties. As it currently stands, the Union has provided notice of its intent to terminate, but risks a lawsuit for breach of the agreements if it terminates its performance. On the other hand, Allied is inconvenienced by the uncertainty that the Union may terminate the agreements at any time, halting operations on the project. Fourth, the Court's decision would guide the interpretation and drafting of collective bargaining agreements to the benefit of the general public.Lastly, although there is an appeal pending before the NLRB, the NLRB is holding the appeal in abeyance pending the Court's decision. (Pl.'s Br. at 4.) Although the NLRB may interpret collective bargaining agreements, "the Board is neither the sole ...

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