International Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers Union Local 7 v. Associated General Contractors of Massachusetts, Inc.

United States Court of Appeals
For the First Circuit

No. 06-2393

INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL,
ORNAMENTAL AND REINFORCING IRON WORKERS UNION LOCAL #7,

Plaintiff, Appellant,

v.

ASSOCIATED GENERAL CONTRACTORS OF MASSACHUSETTS, INC.;
NORTHEAST ERECTORS ASSOCIATION; and BUILDING TRADES
EMPLOYERS' ASSOCIATION OF BOSTON AND EASTERN MASSACHUSETTS,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Morris E. Lasker,* Senior U.S. District Judge]

Before
Boudin, Chief Judge,
Cyr, Senior Circuit Judge,
and Howard, Circuit Judge.

Gabriel O. Dumont, Jr. with whom Dumont, Morris and Burke,
P.C. was on brief for appellant.
James F. Grosso with whom O'Reilly, Grosso & Gross, P.C. was
on brief for appellees.

June 7, 2007

*
Of the Southern District of New York, sitting by designation.
 BOUDIN, Chief Judge. Local 7--a labor union--is a party

to a multi-employer collective bargaining agreement ("CBA") with

various steel-erection contractors and subcontractors, some of whom

are members of three employer associations.1 Under the terms of an

agreement effective in September 2004, signatory contractors must

contribute to the Iron Workers District Council of New England

Pension Fund, Health and Welfare Fund, Pension Supplemental Fund

and Annuity Fund.

The agreement required pay-as-you-go employer

contributions (by means of prepaid stamps) and the bonding of new

and delinquent employers to protect the funds against nonpayment.

In June 2005, the associations requested that Local 7 enforce the

payment and bond provisions; the bonding requirements had been

ignored and, the associations said, their members were bidding for

jobs in a competitive market against other employers who were

delinquent in making fund payments.

In response, the trustees of the funds (there are union

and management trustees in each fund) adopted procedures for

delinquency collection and auditing, but they declined to impose

the bonding requirements set forth in the CBA. The associations

1
Local 7 is a local in the International Association of
Bridge, Structural, Ornamental, and Reinforcing Iron Workers Union.
The employer associations are the Associated General Contractors of
Massachusetts, Inc., the Building Trades Employers' Association of
Boston and Eastern Massachusetts, and the Northeast Erectors
Association.

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then sought arbitration against Local 7 as specified in the CBA,

which contains a broadly phrased arbitration clause.

Following a hearing, the arbitrator found the dispute to

be arbitrable, ruled that the local had not been enforcing the

payment or bonding requirements, and directed that the union do

both--with one qualification: that bonding not be required for all

new employers but only for employers, new or old, who had been

"habitually delinquent in their [fund] payment[s]." The arbitrator

directed the parties to meet regularly with each other and the fund

trustees in order to design methods for the necessary audits.

Local 7 moved in the district court to vacate the award

and the associations counterclaimed to enforce the arbitrator's

decision. See 9 U.S.C. § 10 (2000); 29 U.S.C. § 185. The district

court sided with the associations. Local 7 now seeks review in

this court, arguing that the grievance was not arbitrable under the

CBA, that the arbitrator erred on the merits and that the decision

violates public policy on several different grounds. We address

the issues, which are primarily legal, in this order.

Local 7 first says the dispute is not arbitrable under

the CBA. The CBA contains the payment and bonding requirements

already described and also provides for arbitration under the CBA

as to "all questions involving the interpretation and application

of any section of this Agreement." On the face of the matter,

Local 7's failure to enforce payment and bonding requirements

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provided for in the CBA itself looks like a violation of the CBA

for which arbitration under the CBA is a proper remedy.

Local 7 counters that the agreements establishing the

trust funds provide for arbitration of disagreements among the

trustees and prohibit arbitration under the CBA of "any matter

arising in connection with the administration of" the funds. The

trust agreements also provide for the trustees to make rules and

regulations "for the collection and administration of employer

contributions" to the funds. Collection and bonding, says Local 7,

are matters of administration under the trust agreements and not

the CBA.

Ordinarily, whether a dispute falls within an arbitration

agreement is a matter of law for the court. Howsam v. Dean Witter

Reynolds, 537 U.S. 79, 84 (2002). The term "administration,"

pertinently used in the Taft-Hartley Act, has been read broadly by

some courts and narrowly by others.2 But the question before us is

not one of abstractly defining a single term but of making workable

sense of the CBA which provides for funding the trusts, the closely

2
The Taft-Hartley Act, 29 U.S.C. § 186(c)(5) (2000), requires
that such trust agreements contain a clause for arbitration of
matters pertaining to the administration of such funds. For cases
construing "administration," compare Mahoney v. Fisher, 277 F.2d 5,
5 (2d Cir. 1960), and Gold v. Pennachio, 757 F. Supp. 13, 16
(S.D.N.Y. 1991), with Jackson v. Smith, 927 F.2d 544, 548-49 (11th
Cir.), cert. denied, 502 U.S. 909 (1991), and Ader v. Hughes, 570
F.2d 303, 307 (10th Cir. 1978). See generally Hawkins v. Bennett,
704 F.2d 1157, 1160-61 (9th Cir. 1983).

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related trust agreements and the respective arbitration clauses

which purport to be exclusive of one another.

The district court expressed doubt whether the trust

arbitration provision had any relevance where, as here, there is no

reported disagreement among the trustees. In all events, the

obligations that the associations here seek to enforce for

collection and bonding are explicitly set forth in the CBA; the

arbitrator's decision is enforcing obligations against the union as

a party to the CBA; and the powers of the trustees to manage the

trust are not being curtailed or frustrated.

This brings us to Local 7's "merits" claim which is

easily resolved. Our review, although de novo as to the district

court, is highly deferential as to the arbitrator. Salem Hosp. v.

Mass. Nurses Ass'n, 449 F.3d 234, 237-38 (1st Cir. 2006). "[A]s

long as the arbitrator is even arguably construing or applying the

contract," a court's view that the arbitrator has erred is not

enough to overturn the arbitrator's decision. United Paperworkers

Int'l Union v. Misco, Inc., 484 U.S. 29, 38 (1987).

The union argues that even if the dispute is arbitrable

under the CBA, the arbitrator erred in finding that the union was

violating the bonding requirement. Although bonding requirements

are explicitly set forth in the CBA, the union points to language

in the CBA stating that "[d]etails of said bond are set forth" in

the incorporated trust agreements. Because no such details have

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been set forth, the union suggests that there are no requirements

that it needed to enforce.

But this case concerns a disregard of the bonding

requirement itself--which is plainly included in the CBA--and not

a dispute about details. Nor, contrary to the union's claim, has

the arbitrator ordered the trustees to adopt specific details; if

the trustees do, these details may govern what needs to be included

in the bond but, if they do not, the union and the associations

will presumably work out a means of complying.

The union also says that imposing the bonding requirement

on, and only on, delinquent employers does not carry out the CBA

which required initial bonding, dropped the obligation for those

whose records proved good, and finally provided for reinstatement

of bonding for those who became delinquent after canceling the

bond. Given the history of non-enforcement, the arbitrator's

simplified application was within his informed discretion. Cf.

Gen. Tel. Co. of Ohio v. Commc'ns Workers of Am., 648 F.2d 452, 457

(6th Cir. 1981).

Lastly, the union says that enforcement of the

arbitrator's decision would violate public policy in several

respects. The first and second of the public policy arguments--and

possibly the third--were not presented to the arbitrator and have

arguably been waived. Although the union says that public policy

issues are for the court and not the arbitrator, issues should

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normally be presented to an arbitrator even though a court may have

the last word.3 In any event, the public policy arguments have no

support in the present record.

First, the union says that the decision violates the

antitrust laws because the associations are suppressing competition

from new and smaller companies who will be burdened by the bonding

requirement. Post-arbitration affidavits from union officials

conjecture that this was the purpose of the associations in

pursuing the grievance. In fact, the CBA imposes contribution

requirements on all employers who choose to sign, and the bonding

requirement, as implemented by the arbitrator, applies to all

repeat delinquents, whether they are new or established employers.

Collective bargaining agreements are in substantial

measure shielded from antitrust attack, see Brown v. Pro Football,

Inc., 518 U.S. 231, 235-37 (1996), but with limited exceptions

where the agreements are misused to suppress competition. See

United Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965).

This case provides no occasion to explore the subtleties of

3
Some courts have found public policy claims not raised before
an arbitrator to have been waived; one circuit disagrees. Compare
District 17, United Mine Workers of Am. v. Island Creek Coal Co.,
179 F.3d 133, 140 (4th Cir. 1999), and Chem. Overseas Holdings,
Inc. v. Republica Oriental del Uru., 371 F. Supp. 2d 400, 401
(S.D.N.Y. 2005), aff'd, No. 05-4068-CV, 2006 WL 1049081 (2d Cir.
Apr. 14, 2006), with Gulf Coast Indus. Workers Union v. Exxon Co.,
991 F.2d 244, 248 n.5 (5th Cir.), cert. denied, 510 U.S. 965
(1993). The matter may turn on the nature of the public policy and
whether it makes sense for the arbitrator to consider the objection
in the first instance.

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pertinent doctrine. Nothing in the union's post-arbitration

affidavits, even assuming they are properly considered, comes close

to demonstrating that enforcement of the CBA obligations will

significantly impair competition in any relevant market.

The union's next public policy claim is that the

arbitrator's decision will compel it to file grievances against

delinquent employers even where the union concludes that this would

not serve the interests of its members. The union's prerogative

has generally been invoked where the union finds no merit to a

union member's proposed grievance. E.g., Emmanuel v. Int'l Bhd. of

Teamsters, 426 F.3d 416, 418-19 (1st Cir. 2005), cert. denied, 126

S. Ct. 1659 (2006). This case is not of that character;

presumptively, enforcement of contribution requirements serves the

union membership as a whole.

In any event, the arbitrator ordered that Local 7 enforce

the prepayment and bonding requirements of the contract and said

nothing about method. If the union thought that enforcement

obligations might impair its prerogatives in grievance matters, it

should have explained this to the arbitrator so he could assess the

matter and, if necessary, tailor his remedies. If the argument had

any merit--which is far from clear--this kind of public policy

argument had to be developed before the arbitrator.

Finally, Local 7 says that the arbitrator's decision told

the union and associations to meet with the trustees and that this

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directive improperly interferes with the trustees' independent

functioning. The order is directed at the parties to the

arbitration (the union and the associations), not the trustees, who

are not required to do anything. The order does not threaten the

trustees' independence.

We have considered several other arguments made by Local

7, including one raised for the first time in the reply brief, but

consider that no further discussion is necessary. The judgment is

affirmed.

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