BEFORE THE ARBITRATOR
In the Matter of the Arbitration of a Dispute Between
THE INTERNATIONAL UNION OF OPERATING
LOCAL 139, AFL-CIO
KLUG & SMITH COMPANY
Mr. Thomas Scrivner, Michael, Best & Friedrich, Attorneys at
Law, Suite 3300, 100 East Wisconsin Avenue, Milwaukee, Wisconsin 53202-4108,
appeared on behalf of the Company.
Mr. Brian C. Hlavin, Baum, Sigman, Auerbach, Pierson,
Neuman & Katsaros, Ltd., 200 West Adams Street, Suite 2200, Chicago, Illinois 60606,
appeared on behalf of the Union.
On June 6, 2001, Local 139, of the International Union of Operating Engineers,
and Klug & Smith filed a request with the Wisconsin Employment Relations
the Commission appoint William C. Houlihan, a member of its staff, to hear and decide a
pending between the parties. There was no evidentiary hearing conducted in this dispute.
the parties submitted a narrative stipulation and joint exhibits received March 25, 2002.
briefs were submitted and exchanged by May 2, 2002.
This dispute concerns whether or not Klug & Smith is bound to a collective
agreement with Local 139 of the International Union of Operating Engineers, and if so,
not Klug & Smith violated the agreement by utilizing a non-signatory contractor to
bargaining unit work.
BACKGROUND AND FACTS
The parties submitted the following joint narrative stipulation:
Pending Grievances. Klug & Smith is a
general contractor based in Milwaukee, Wisconsin
at 4425 W. Mitchell Street.
Klug & Smith was the general
contractor on a Jones Island 2000-2001 project in Milwaukee.
Klug & Smith was responsible for designing and building a cement plant (the Project).
occasions, Fran Wewers observed that Klug & Smith subcontracted crane work on the
relating to the erection of two pre-engineered metal buildings to a non-signatory
The Union has filed two grievances against Klug &
relating to this construction project
on Jones Island in Milwaukee. The first grievance was filed on November 21, 2000 and the
grievance was filed on January 17, 2001. The grievances allege Klug & Smith violated
subcontracting obligations with respect to crane operations for the erection of two
metal buildings on the Project.
Local 139 Business Agent Fran Wewers
was aware of several other times on the project when
subcontracted crane work was performed by a non-signatory contractor. Mr. Wewers
Klug & Smith subcontracted crane work to non-signatory contractors on other occasions
the job site. Mr. Wewers learned that Klug & Smith claimed that it was no longer
bound to any
collective bargaining agreement. Accordingly, Local 139 did not file grievances every time
Klug & Smith violated the subcontracting clause. Local 139 decided to refrain from
grievances alleging essentially the same contract violation until it obtained a determination on
& Smith's contractual status.
The grievances allege violations of
Sections 4.1 of the 2000-2003 Area I Master Building
collective bargaining agreement. In addition to the Union, the parties to the collective
agreement are the Allied Construction Employers Association, Inc. (ACEA) and the
General Contractors of Greater Milwaukee, Inc. (AGC).
The ACEA and the AGC are also parties to multi-employer
contracts covering the Greater
Milwaukee Area and involving five (5) additional construction unions: (1) Laborers Local
113 and 392 ("Laborers"); (2) Carpenters Southern District Council ("Carpenters")(Pile
Floor Covering, Millwright and General Carpenters); (3) Bricklayers Local Union
("Bricklayers"); (4) Iron Workers Local Union No. 8; (5) Cement Finishers Local Union
The Issue: Klug & Smith does not believe
is bound by the 2000-2003 collective bargaining
agreement. Klug & Smith believes that all of the necessary notices to terminate the
collective bargaining were timely given and that the collective bargaining agreement is not
upon it on a multi-employer basis, on an independent signatory basis or on any other basis.
The Union believes Klug & Smith is
bound by the 2000-2003 collective bargaining agreement.
The Union bases this belief on: (1) Klug & Smith being admittedly bound through
bargaining to prior Area I Master Agreements with Local 139, including the 1996-1999
(2) Klug & Smith's voluntary recognition of the Union as a Section 9(a) exclusive
bargaining representative on or about November 1, 1989; and (3) the fact Klug & Smith
monthly fringe benefit contribution reports after the 1996-1999 collective bargaining
expired. No hours worked were reported and no contributions were made regarding the
& Smith submitted.
The fund reports are prepared for Klug
& Smith by a clerical employee who receives the
forms which the fund mails monthly to signatory employers. The Klug & Smith
the form monthly and sends the completed monthly forms to the funds. Klug & Smith
these reports were submitted without management review or approval. Klug & Smith
that the person who submitted the reports is not involved in labor relations maters for Klug
Local 139 had no knowledge that the reports allegedly were
approved or reviewed by
management. It was Local 139's understanding that Klug & Smith was filing the
reports in the
normal course of its business. There were no markings or other indications on the reports to
that the person submitting the reports was not performing a function on behalf of Klug
Klug & Smith did not notify Local 139 that only certain individuals had authority to
or that management review or approval was necessary.
Klug & Smith has not self-performed for several years
work with its employees in area
described as Area I by the Local 139 Master Building Agreement. Area I is defined as the
region of Wisconsin covering the following six counties: Kenosha, Milwaukee, Ozaukee,
Washington and Waukesha. Accordingly, Klug & Smith has had no Local 139
member working as
an Operating Engineer in Area I since 1998. The last time Klug & Smith reported
hours worked and
made fringe benefit contributions on behalf of a Local 139 member was on or about October
(for work performed in September 1998).
Because of their differences on this
threshold issue, the parties have agreed to a bifurcated
proceeding. The parties have agreed that the first issue for the Arbitrator to decide is
whether or not
Klug & Smith is bound by the 2000-2003 collective bargaining agreement.
The Project: Klug & Smith was the
bidder for the design/build of the cement plant
on the Project. The owner of the Project is Minergy. Klug & Smith began work on the
or about September, 2000. Klug & Smith's work on the project is substantially
completed in 2001.
In addition, Klug & Smith has union
relationships for work on the Project with the Laborers,
Carpenters (including Millwrights) and the Cement Finishers. Klug & Smith is
its employees approximately 50% of the direct construction labor work on the Project. In
to standard subcontracts (i.e. painting, electrical, etc.), Klug & Smith subcontracted the
work on the Project: the erection of two pre-engineered buildings. The subcontracted work
to $265,000 of the Klug & Smith's contract for work on the Project. This aspect of the
subcontracted to Precision Structures (Germantown, WI). Precision Structures performed the
subcontracted work which included crane rental, the crane operator and a crew of six or
erectors and highlift operator(s). Precision Structures is not signatory to a collective
agreement with Local 139.
Bargaining Historically. The ACEA and/or the AGC have
negotiated collective bargaining agreements with the Union on a multi-employer basis since
the 1960s. In each of these collective bargaining negotiations, the associations have received
authorizations from contractors and constituent contractor associations. The authorizations
the associations the collective bargaining representative for the affiliated contractors for the
upcoming negotiations and during the term of the collective bargaining agreement that is
Upon receipt of authorizations, the AGC and the ACEA
lists of contractors or
constituent contractor associations from which each has received a collective bargaining
authorization. The lists are then presented to the Union before collective bargaining
begin. The list given to the Union by the associations in 1999 did not include Klug &
A labor contract negotiated by the
associations and the Union is binding on the contractors
and constituent contractor associations whose bargaining authority the AGC and the ACEA
Regarding contract matters arising during the contract term, the ACEA is the contractor
representative for labor contract administration purposes.
This method for setting up the
multi-employer collective bargaining relationship for each labor
contract in the Greater Milwaukee area has been used for over 30 years. At least ten (10)
collective bargaining with the Union have been set up and conducted on this basis in the
Milwaukee Area. Collective bargaining negotiations structured in this way have also been
in by the AGC and/or ACEA with the Laborers, the Carpenters, the Cement Finishers, the
and the Iron Workers.
The contractors and constituent contractor associations whose
bargaining authority the ACEA
and the AGC hold sometimes change from one collective bargaining negotiations and labor
to another. New names are added to the list. Lists often have not included contractors for
associations previously held bargaining authority. The pending grievances are the first
which the Union has argued a contractor remains bound after bargaining authority was
denied to the
associations and a list was exchanged which omitted the name of the contractor in question.
Contractors. Contractors can agree to be bound by the multi-employer
collective bargaining agreement(s) that have been negotiated with the construction trades in
Greater Milwaukee Area. A contractor so bound is called an independent signatory
& Smith has never been an independent signatory to any of the Union's collective
agreements for the Greater Milwaukee area, including the collective bargaining agreement.
Klug & Smith's Relationship
With the Union. Klug & Smith has been bound by the Union's
multi-employer collective bargaining agreement for the Greater Milwaukee Area through a
of collective bargaining authorizations that it gave over the years. First Klug & Smith
bargaining authorizations to the ACEA.
Later, its bargaining authorizations were given to the
AGC, including in 1996. Prior to 1989, Klug & Smith had a Section 8(f) pre-hire
the Union. Following the voluntary recognition on November 1, 1989, the Union and Klug
have had a Section 9(a) collective bargaining relationship.
The 1996 Bargaining Authorization. In 1996,
& Smith authorized the AGC to act on
its behalf to negotiate the successor contract to the 1993-1996 collective bargaining
the Union. The 1993-1996 collective bargaining agreement was to expire as of May 31,
negotiations were conducted to roll that agreement over with certain agreed upon economic
The AGC and the ACEA received contractor authorizations prior to beginning the 1996
With regard to the Union, Klug & Smith gave its bargaining authority to the AGC in
Therefore, Klug & Smith was governed by the multi-employer collective bargaining
was negotiated in 1996.
The 1999 Contract Termination
Notices. The 1996-1999 collective bargaining agreement
between the associations and the Union had an expiration date of May 31, 1999. That
bargaining agreement contained a notice of termination provision at Section 3.1 which
of at least ninety (90) days prior to contract expiration in order for the collective bargaining
agreement to terminate rather than be renewed automatically at expiration.
The Union gave the following notice
timely to the ACEA and the ACEA on or about February
Re: Reopener Notice Master
Building Agreement Area I
Dear Mr. Hayden:
This will advise you the International Union
of Operating Engineers, Local No. 139 is reopening
the above-referenced collective bargaining agreement with your Association on its
May 31, 1999.
The representatives of Local No. 139 would
like to meet prior to the anniversary date for the
purpose of negotiating a successor agreement.
Please advise us of a date and place that will likely be convenient
and mutually agreeable to meet.
The notice the Union gave was to the
associations for the contractors and constituent contractor
associations the ACEA and the AGC had represented in connection with the 1996-1999
The ACEA and the AGC gave the
following notice to the Union on February 22, 1999:
Re: Notice Regarding the 1996-1999 Area
I Building Collective Bargaining Agreement
Dear Mr. Miller:
This notice is being given on behalf of the
Allied Construction Employers Association, Inc. and
the Associated General Contractors of Greater Milwaukee, Inc. (collectively the
notice is being given by the Associations and on behalf of contractors or constituent groups
bargaining authority the Associations held for the term of the 1996-1999 CBA.
Notice is hereby given by the Associations
of the intention for the CBA to terminate or be
amended when it expires on May 31, 1999. This notice is given pursuant to the provisions
Section 3.1 of the CBA. Concurrent with this notice, the Associations are also giving
statutory notice to the Federal Mediation and Conciliation Service and the Wisconsin
We look forward to successful bargaining
negotiations this spring. We will be in contact with
you in the next few weeks to develop a schedule of meetings to begin the collective
Very truly yours,
Allied Construction Employers Association
No Bargaining Authorization in 1999. Klug
Smith was asked by the associations whether
or not it would give its bargaining authorization to either of the associations for the 1999
bargaining negotiations with the Union. On January 20, 1999, Klug & Smith declined
to give either
association its bargaining authority for the 1999 collective bargaining negotiations with the
Klug & Smith has never independently given Local 139 notice of its intent to withdraw
bargaining associations. Before collective bargaining negotiations began in 1999 Dick Platt,
the bargaining committee for the contractors, sent a letter to the Unions identifying the
who had given bargaining authority to the associations.
The 1999 Multi-Employer Collective
Bargaining Negotiations. The multi-employer
negotiations with the Union did not produce a successor labor agreement in 1999. The
a strike on or about around June 23, 1999; the strike lasted a couple of weeks and ended in
The collective bargaining negotiations were concluded around June or July of 2000. The
collective bargaining agreement has the term of June 1, 2000 through May 31, 2003.
At no time during the 1999-2000
multi-employer collective bargaining negotiations was the
status of Klug & Smith discussed by the associations or the Union. The Union asked no
of contractor representatives about the status of Klug & Smith. During negotiations,
confirmed the Union's receipt of the contractor list. The associations reiterated at the
bargaining table that they were representing the contractors and constituent contractor
named in Mr. Platt's letter.
Interim Agreements. In
connection with the strike in June, 1999, the Union approached
contractors who were currently performing work in Area I and asked them to sign Interim
Agreements. The Union used two types of Interim Agreements in that time frame. One was
association-represented contractors. The other was for independent signatory contractors.
Smith did not sign an Interim Agreement in 1999 and has not done so since that time. Klug
never requested that Local 139 bargain a successor contract with Klug & Smith.
Similarly, Local 139
has never requested that Klug & Smith bargain a successor contract with Local 139.
The Union has not approached Klug
& Smith as an independent signatory seeking to bargain
a labor contract with it in 1999, 2000 or 2001. After the multi-employer collective
agreement was signed in the summer of 2000, the Union began contacting many independent
contractors. The purpose of these contacts
was to obtain the agreement of the independent
signatory to be bound by the terms of the multi-employer collective bargaining agreement.
contact was made with Klug & Smith. Local 139 was not aware of any work
being performed by
Klug & Smith in Area I at that time.
Local 139 maintains a book in the regular
course of its business that lists all the signatory
contractors that work in Area I. The book is updated frequently and used by Local 139 staff
business representatives to determine if a particular contractor is signatory with the Union.
report from September 15, 2000 lists Klug & Smith as a signatory contractor that
performs work in
The Union's Website Contractor
Listing. After the issue the first grievance addresses
surfaced, the Executive Vice President of the ACEA went onto the Union's website to check
contractor listing contained there. This was done on November 2, 2000. . . .Klug &
Smith does not
appear in the alphabetical listing of contractors.
Cecil Argue, President of International
Union of Operating Engineers, Local 139, maintains
the website. According to Mr. Argue, the Union developed and maintains the site for three
First, the website is intended to educate individuals and contractors about the benefits of
unionism. Second, the website is intended to identify work opportunities, for members and
contractors, throughout the state of Wisconsin. Finally, the website lists the names and
information of signatory contractors who wish to be included on the website. The Union
list the names and contact information of interested signatory contractors, in part, as a
for the contractors. Union members benefit when signatory contractors are awarded jobs;
offers signatory contractors an opportunity to be listed on the website as a means of helping
contractors secure more work.
The Union developed the web site in late
1999. The Union built its database of signatory
contractors by sending out a four-page data form to all signatory contractors who had
remittance forms since 1991. Contractors who wanted to be listed on the "Contractor
instructed to complete the form and return it to the Union. The Union then inputted the
provided by the contractors onto the "Contractor database." The Union only inputted
provided by the contractor; the Union did not input any other information.
The Union mailed the first batch of data
forms to contractors on or about October 19, 1999.
The Union sent a data form to Klug & Smith. Klug & Smith did not return its data
form to the Union
after the first mailing. On or about January 6, 2001, the Union did a second mailing and
form to all contractors who did not respond to the first mailing. Since Klug & Smith
did not respond
to the first mailing, the Union sent Klug & Smith another form card in its second
mailing. Klug &
Smith did not respond to the second mailing. The Union did not list a contractor on its
the contractor submitted a completed form card evidencing its desire to be listed on the web
Klug & Smith was not listed on the website because it never submitted a completed data
A majority of the signatory contractors in the state of
are not listed on the website.
There are roughly 1,800 contractors signatory to contracts with Local 139. There are
approximately 300 contractors listed on the "Contractor database." Some of these larger
contractors not included on the "Contractor data base" include: Arby Construction,
Hoffman Construction, Millestone Materials, Vulcan Materials, and Dawes Crane.
RELEVANT PROVISIONS OF THE
Article I Master Building Agreement
This Master Agreement, made and entered
into this 1st day of June, 2000, by and between the
Allied Construction Employers Association, Inc. and the Associated General Contractors of
Milwaukee, Inc., hereinafter called the "Associations", for and on behalf of those persons,
corporations, who have authorized the Associations to negotiate and conclude a labor
their behalf, herein called the "Contractor", and International Union of Operating Engineers,
No. 139, hereinafter called the "Union".
. . .
Article III Period of Agreement
Section 3.1. Period of Agreement: This
Agreement shall continue in full force and effect until
May 31, 2003, and thereafter, and shall be subject to amendment or termination only if
notifies the other party in writing of its desire to amend or terminate the same, not more than
twenty (120) days, but not less than ninety
(90) days prior to May 31, 2003, or of the expiration
date of any subsequent Agreement.
Article IV Subcontracting
Section 4.1. Union Subcontractor: The
contractor agrees that, when subletting or contracting
out work covered by this Agreement which is to be performed within the geographical
this Agreement, at the site of the construction, alteration, painting, or repair of a highway,
structure or other work, they will sublet or contract out such work only to a subcontractor
signed to this Master Agreement.
. . .
RELEVANT PROVISIONS OF THE
MASTER BUILDING AGREEMENT
THIS MASTER AGREEMENT, made and entered into this
1st day of June, 1996, by and
between the Allied Construction Employers Associatoin, Inc., and the Associated General
Contractors of Greater Milwaukee, Inc., hereinafter called the "Associations" for and on
those persons, firms or corporations who have authorized the Associations to negotiate and
a Labor Agreement on their behalf, herein called the "Contractor", and International Union
Operating Engineers, Local No. 139, hereinafter called the "Union."
That the parties hereto, for and in consideration of the mutual
promises and obligations herein
contained, agree to and with each other as follows:
. . .
Article III. Period of Agreement.
Section 3.1. Period of
Agreement: This Agreement shall continue in full force and effect until
May 31, 1999, and thereafter, and shall be subject to amendment or termination only if
notifies the other party in writing
of its desire to amend or terminate the same
not more than one hundred and twenty (120) days,
but not less than ninety (90) days prior to May 31, 1999, or of the expiration date of any
POSITIONS OF THE PARTIES
The Union contends that it is axiomatic that when clear and specific language in a
agreement is at issue, the federal courts and arbitrators uniformly adhere to the strict
of such language. The Union contends that Klug & Smith is bound to the parties'
collective bargaining agreement. On November 1, 1989, Local 139 and Klug & Smith
Section 9(a) recognition agreements, or what is commonly referred to as "short-form
agreements". That agreement extended recognition to the Union. By signing the recognition
agreements, the Union contends that Klug & Smith acknowledged that Local 139 was
9(a) representative of bargaining unit employees and further agreed to comply with the terms
139's Area I Master Building Agreement. The Union contends that Klug & Smith did
its contractual relationship with Local 139 in the manner specified in the parties' collective
agreement, therefore the parties' 1996-1999 collective bargaining agreement "rolled over" by
of the so-called "evergreen clause". Second, regardless of whether Klug & Smith
relationship with Local 150, Klug & Smith adopted the 2000-2003 collective bargaining
through its subsequent conduct.
The Union contends that Klug & Smith failed to properly terminate its
with Local 139. The 1996-1999 Area I Master Agreement contained a so-called "evergreen
An automatic renewal or "evergreen clause" typically provides that if the parties to a
bargaining contract fail to give written notice of their intent to terminate or renegotiate said
to each other by a deadline, the contract will renew itself without change. Such clauses are
strictly construed. Thus, a contract may only be terminated in the manner specified within
The termination/evergreen clause in the parties' 1996-1999 agreement provided:
"This Agreement shall continue in full force and effect until May
31, 1999, and thereafter, and
shall be subject to amendment or termination only if either party notifies the other party in
its desire to amend or terminate the same not more than one hundred and twenty (120) days,
less than ninety (90) days prior to May 31, 1999, or of the expiration date of any subsequent
Here, the Area I Master Agreement sets forth simple, clear language for termination
Area I Master Agreement, i.e., send written notice to the other party not more than one
hundred and twenty (120) days but not less than ninety (90) days prior to the expiration
terminate the 1996-1999 Area I Master Agreement. However, it is undisputed that at no
the Company do so.
There is no evidence in the record to suggest that Klug & Smith gave Local 139
written notice of its intent to terminate the collective bargaining agreement. Absent timely
notice to Local 139, Section 3.1 of the parties' collective agreement provided that the
would remain in full force and effect beyond May 31, 1999.
In this case, Klug & Smith signed the recognition agreement in its individual
capacity, without the aid of any multi-employer bargaining association, and never terminated
agreement in the manner specified by the Area I agreement. Thus, Klug & Smith's
ACEA has no bearing on issues of contract formation and termination in this case. In other
Klug & Smith could not have terminated the parties' collective bargaining agreement by
withdrawing from ACEA.
Moreover, ACEA's timely notice of termination of the Area I agreement is void with
to Klug & Smith because Klug & Smith withdrew from ACEA prior to the date on
which the multi-employer association provided Local 139 with timely notice of termination.
On January 20, 1999,
Klug & Smith withdrew from the multi-employer association. One month after Klug
withdrawal, on February 22, 1999, the ACEA gave its notice of termination to the Union.
because Klug & Smith no longer belonged to ACEA as of February 22, 1999, ACEA's
termination did not act to terminate Klug & Smith's contract with Local 139. In short,
the 1996-1999 Area I Master Agreement remains in full force and effect because Klug
& Smith did not
terminate the agreement in a proper fashion.
The Union contends that Klug & Smith adopted the 2000-2003 Area I Master
its subsequent conduct. On October 7, 1999, ten months after it withdrew from the
J. Fuibs, Chief Financial Officer of Klug & Smith, signed and submitted a monthly
which incorporated by reference the Area I Master Agreement. Thus, assuming it terminated
contract in January of 1999, Klug & Smith readopted the contract in October of 1999,
when its Chief
Financial Officer signed a monthly remittance report. The continuous submission of
reports to Local 139 through June of 2001, constituted acceptance of the Area I Agreement.
Union cites authority for the proposition that it is "elementary contract law that incorporation
reference of clauses which are in existence and properly identified has precisely the same
as if the clauses were set forth explicitly in the body of the contract." In this case, the
form incorporated by reference the Area I Master Agreement. Specifically, the clause
"I (we) agree to be bound by all of the provisions (including
making payments) relating to
pension, health, vacation, and educational funds, as contained in the
respective areas labor agreements covering
employees in the trade for which this report is made,
for our (my) employees in such trade, for the duration of such labor agreements, and,
to be bound by the applicable trust agreements."
The Union contends that by repeatedly signing and resubmitting forms containing the
clause Klug & Smith adopted by reference the Area I Agreement. The Union contends
that the two
individuals who signed the monthly remittance reports, operating under principles of
had authority to bind Klug & Smith.
The Union contends that Klug & Smith adopted the Area I Agreement by merely
the monthly remittance reports. The Union contends that the NLRB has held that by paying
benefit contributions per the terms of the collective bargaining agreement, the Employer is
the agreement in its entirety. In order to comply with its obligations under the collective
agreement and applicable trust agreements, Klug & Smith was required under those
submit monthly remittance reports through June 5, 2001, and indicate "inactive" on each
The Union contends that it has not waived its right to enforce the agreement with
Smith. To establish that a union has waived its statutory right to have a collective bargaining
agreement's terms fully honored, "there must be a conscious relinquishment by the Union
intended and expressed to give up the rights." The Union cites authority for the proposition
waiver must be clear and unmistakable. The Union contends that waiver does not apply in
case because the Union had no knowledge of any employer's alleged violation. The evidence
demonstrates that Local 139 at no time was aware of any alleged violations of the contract by
& Smith prior to the instant grievance. The Employer presented no evidence that it
ever made Local
139 aware that the Employer claimed to no longer be bound to its agreement with Local 139,
alone that Local 139 "consciously relinquished" its right to enforce its contract with Local
Rather, once Local 139 became aware of the violation, it immediately filed a grievance to
It is undisputed that Local 139 never requested that the Employer execute the
member interim agreement. Further, it is also clear that Local 139 was not aware of any
performed by Klug & Smith in Area I at that time. Accordingly, the interim agreement
has no effect
on Local 139's relationship with this employer. Further, the Union had consistently kept
Smith as an active contractor in its various internal records.
The Union's contact with Klug & Smith in October, 1999, again in January,
Klug & Smith's permission to place them on their website is significant in that the
to treat them as a signatory contractor from 1999 to the present.
It is the position of the Company that the grievances are not arbitrable. It could not
clear that the 2000-2003 collective bargaining agreement contains no provision which
formation, continuation, or disillusion of the Area I multi-employer bargaining group. No
of the collective bargaining agreement says anything about the rules governing how and when
contractors may join or leave the Area I multi-employer bargaining group. This complete
silence means the issue before the Arbitrator is not a substantively arbitrable dispute.
The Company argues that the Union ignores the contract termination notices that
by the Union and the associations to each other. In addition, the Union's argument ignores
the long-standing practice in Area I that a new multi-employer bargaining group is created
for each round of
collective bargaining with each of the six Area I construction unions. Each new
bargaining group consists only of those contractors whose names were given to a particular
by the associations as collective bargaining began.
The contract explicitly defines the specific type of disputes which the parties have
contractual grievance procedure should resolve. Contractually-covered matters do not
questions concerning multi-employer bargaining group formation, or contractor withdrawal.
In the view of the Company, where the grievance/arbitration language is limiting, the
Arbitrator does not have substantive jurisdiction over issues not specifically committed to
by the collective bargaining agreement. The complete silence in the contract as to Klug
participation in the Area I multi-employer relationship coupled with the narrow language in
collective bargaining agreement defining a grievance require the arbitrator to deny the
The language in this collective bargaining agreement specifically limits the arbitrator's
interpreting or applying "provisions of the Agreement."
The Employer contends that Klug & Smith withdrew from the new
group. The Union erroneously argues that a contractor must itself withdraw from the
bargaining unit by giving written notice to the Union. Notwithstanding that a 40-year plus
completely contradicts this contention, the contention also fails because established NLRB
is to the contrary.
The Employer contends that the normal NLRB rule concerning the formation of a
multi-employer bargaining unit is that a new bargaining unit would only include the
names were given to the Union before negotiations began. The pre-negotiations exchange of
contractor names is viewed as defining which contractors intend to be a part of the new
multi-employer bargaining group. When a contractor list is given to a union before
begun, it names only the contractors who are to be included in the new multi-employer
group (Retail Associates, 120 NLRB 388 (1958)).
The omission of the name of a Section 9(a) contractor from the list exchanged with
is dispositive under additional NLRB caselaw. When the union is notified prior to the
of negotiations, as it undisputedly was here, the unnamed 9(a) contractor is considered
the new multi-employer bargaining group. The omission of the name of the contractor is
a timely and complete written withdrawal of that contractor from the multi-employer
(Plumbers Local Union No. 699, 318 NLRB 347 (1995)). Mr. Platt's list of named
placed the Union on notice that the associations only represented the named contractors and
unnamed contractors were not to be a part of the new multi-employer group.
The Company contends that Area I past practice precludes what the Union seeks
grievances. Why Area I rules for multi-employer group bargaining should be changed
now is not
answered by the Union. Klug & Smith withdrew from this bargaining group in the
same way that
many other contractors have withdrawn from relationships with this and other Area I
unions for over 40 years. This method for group bargaining formation and contractor
been used in Area I by the associations, with the Union going back to the 1960's. This
involves at least 10 rounds of Area I collective bargaining with the Union, and thus 10
different multi-employer bargaining groups. The Union knew from past experience and the
information received in
1999 that unnamed contractors were not part of the new multi-employer group.
The Company argues that submitting fringe benefit reports does not bind Klug &
Smith to the
2000-2003 collective bargaining agreement. The Employer contends that the wording in the
benefit reports contains no agreement for a contributing contractor to be bound by any
collective bargaining agreement. The Employer contends that the language printed on the
benefit reports contains only a limited agreement to be a party to "all of the provisions of the
collective bargaining agreement. . .relating to pension, health, vacation and education funds.
. ." By
its terms, this is not a contractor commitment to be bound to the collective bargaining
a whole or for purposes other than fringe benefit contributions.
The Employer contends that Klug & Smith has never expressed any intention to
through group bargaining to the area labor contract that was negotiated with the Union in
The Employer describes the submission of the reports as a benign act. A clerical
representative of Klug & Smith who did not participate in labor policy matters submitted
The person who completed the reports neither knew about, nor participated in ongoing labor
matters. The person simply received the forms from the funds, and returned the signed and
forms to the funds.
The filing of fringe benefits reports began when Klug & Smith had
employees actually working for it. The last report which contained actual hours worked and
contribution payments, was filed in October, 1998. This was before the 1996-1999 contract
expired. In filing subsequent reports, Klug & Smith simply continued to do what it had
previously contractually obligated to do each month.
The content of the "inactive" reports makes it clear that Klug & Smith was
nothing regarding employment terms and conditions. At first, the reports contained the work
contribution information associated with active employment. However, the reports on which
Union relies those filed after September, 1998 contain no information about
any active or ongoing
relationship or any contractually-covered work having been performed.
As a contractor in a Section 9(a) relationship with the Union, it could be argued that
Smith had to file fringe benefit fund reports even after the 1996-1999 collective bargaining
expired. Such filings would simply be the fulfillment of an obligation relating to a
of bargaining which continued after contract expiration. Since there was no bargaining with
Union in 1999, 2000 or 2001, Klug & Smith might very well have violated its
bargaining duties by
not filing the contribution reports since there was no impasse in the collective bargaining
with the Union.
The Company contends that reports that were filed before expiration of the
collective bargaining agreement obviously show no intention to be bound by a subsequent
labor contract. Similarly, the reports that were filed between mid-1999 and mid-2000 when
no contractual agreement cannot show an intention to be bound by a non-existent and later
The Employer contends that the 2000-2003 collective bargaining agreement is void as
& Smith. The Employer notes that Klug & Smith has had no ongoing relationship
with the Union
since at least September, 1998. That is when the last Union-represented employee actually
for Klug & Smith. Under established NLRB case law, a labor contract, otherwise
considered void if the bargaining unit has had no employees or only one employee for a
period of time.
The Union contends that Klug & Smith is bound to the 2000-2003 collective
agreement. The Union argues that on November 1, 1989, Klug & Smith executed two
recognition agreements. The effect of that recognition was to acknowledge Local 139 as the
9(a) representative of those employees and to commit the company to comply with the Local
Area I Master Agreement. Among the contractual obligations was to be bound by successor
The Union goes on to argue that Klug & Smith failed to properly terminate its
relationship with Local 139. The Union argues that the 1996-1999 collective bargaining
has an evergreen clause which automatically renews the terms of that contract absent proper
The Union then points to Section 3.1 of the Agreement which provides, ". . .shall be subject
amendment or termination only if either party notifies the other party in writing of its desire
or terminate the same. . ." The Union contends that Klug & Smith never provided
and so the 1996-1999 collective bargaining agreement rolls over.
Section 3.1 requires notification by a "party". Implicit in the Union's argument is
& Smith is a "party" as that term is used under Section 3.1 of the collective
My reading of the contract is to the contrary. The signatories to this contract are the Allied
Construction Employers Association, the Associated General Contractors of Greater
the International Union of Operating Engineers, Local No. 139. The preamble to the
to these entities as "the parties". The essence of this multi-employer associational bargain is
various contractors have authorized the Contractors Associations to bargain on their behalf.
notice provision in the contract is a bargaining obligation. Here, the Association did give
did the Union. There is no indication that any individual contractors provided parallel
The Union treats the notice provided by the Association as effective to all 1996-1999
other than Klug & Smith.
I believe that the Contractor Associations (Allied Construction Employers
and Associated General Contractors of Greater Milwaukee, Inc.) are the "parties" referenced
Section 3.1 of the Agreement.
The Union contends that Klug & Smith originally signed an individual agreement
139. The Union goes on to argue that that agreement was never terminated. According to
Union, Klug & Smith's withdrawal from the Area I agreement cannot satisfy its 9(a)
argument ignores the fact that Klug & Smith joined the Employer Association and
bargaining rights to that association. The Area I Master Building Agreement succeeded the
agreement between the parties. While the Company's recognition of the Union survived the
transition, the contractual relationship and obligations became those provided under the Area
Klug & Smith's withdrawal from the Association raises two questions. (1), its
of Local 139, and (2), what if any collective bargaining obligations it owed. There was no
sign Klug & Smith to a successor 9(a) agreement. The Union does not argue, and there
is no record
basis to find, that Klug & Smith was somehow bound to a 9(a) agreement that preceded
the Area I
agreement. Under the applicable NLRB law, Klug & Smith's withdrawal from the
effective. Following withdrawal, it was not a
member of the Association and not bound by the successor agreement negotiated by the
Even if the recognition survived withdrawal, there was no collective bargaining
in place following the expiration of the 1996-1999 Area I Agreement.
The Union contends that since Klug & Smith withdrew from the ACEA prior to
termination notice to the Union, that the termination notice was not effective as to Klug
I disagree. Klug & Smith declined to provide the associations with bargaining authority
successor agreement to the 1996-1999 collective bargaining agreement. Klug & Smith
by the terms of the 1996-1999 agreement through its expiration. The notice explicitly
it is submitted "on behalf of contractors or constituent groups whose bargaining authority the
associations held for the term of the 1996-1999 CBA." That group included Klug &
The Union contends that Klug & Smith adopted the 2000-2003 Area Agreement
subsequent actions. Local 139 provides a monthly remittance report form for pension and
benefit contributions to signatory employers. The employer is required to fill out the form
the names, hours worked and contributions of employees covered by the various funds. The
contends that by signing and subsequently submitting on a monthly basis these forms the
incorporated the Area standards agreement by reference. The printed form contains the
provision just above the signature line:
"I (we) agree to be bound by all of the provisions (including
making payments) relating to
pension, health, vacation and education funds as contained in the respective Area's labor
covering employees in the trade for which this report is made, for our (my) employees in
for the duration of such labor agreements and, further, agree to be bound by the applicable
The last remittance report which actually included the name
an employee, hours worked,
and wages subject to benefit contributions, is dated October 12, 1998. Subsequent reports
employee listed, no hours worked, no contribution made, and a box marked "inactive".
were submitted on a monthly basis.
I do not believe that the submission of the remittance forms operates to incorporate
collective bargaining agreement by reference. The background of the Union's claim is that
Smith withdrew from the multi-employer bargaining association. Klug & Smith did not
enter into a
subsequent 9(a) agreement with the Union, nor did it employ bargaining unit members for a
of years following the expiration of the 1996-1999 collective bargaining agreement. The
contends that by signing the remittance report, the Company intended
to sign on to the Area I Agreement, which it had previously rejected. I find more
Company contention that the submission of the inactive reports was a clerical task, carried on
labor relations oversight.
I am reluctant to conclude that by signing a pre-printed form the Company entered
comprehensive collective bargaining arrangement with Local 139. I do not believe the
contained on the form to compel such a result. That language does not, read literally,
the collective bargaining agreement as a whole. The language makes reference to specific
health, vacation and education funds". From October of 1999 and thereafter, there are no
on whose behalf contributions were made. I am unwilling to imply the existence of a
collective bargaining relationship from the execution of these monthly remittance reports.
It is my conclusion that Local 139 and Klug & Smith were not signatories to any
bargaining agreement during the relevant period of the grievances.
The grievance is denied.
Dated at Madison, Wisconsin, this 21st day of January, 2003.