International Union of Operating Engineers, Local 18 v. Laborers' International Union

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 14a0699n.06

Case No. 13-4248
FILED
UNITED STATES COURT OF APPEALS Sep 08, 2014
FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk

INTERNATIONAL UNION OF )
OPERATING ENGINEERS, LOCAL 18, )
)
Plaintiff-Appellant, ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR
v. ) THE NORTHERN DISTRICT OF
) OHIO
LABORERS’ INTERNATIONAL UNION )
OF NORTH AMERICA, et al., )
)
Defendants-Appellees. )

BEFORE: ROGERS and COOK, Circuit Judges; MURPHY, District Judge*

PER CURIAM. This case involves a contract dispute between two unions concerning the

right to do particular jobs at construction sites. The International Union of Operating Engineers,

Local 18 (the “Engineers”)—a local chapter of the International Union of Operating Engineers

(“IUOE”)—alleges that members of the Laborers’ International Union of North America

(“LIUNA”) and its local affiliates (collectively, the “Laborers”) performed work that the

controlling agreement between the two unions—the “Memorandum of Understanding”—

allocates to the Engineers, breaching the terms of that agreement. We reverse the district court’s

*
The Honorable Stephen J. Murphy, III, United States District Judge for the Eastern
District of Michigan, sitting by designation.
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Int’l Union of Operating Eng’rs., Local 18 v. Laborers’ Int’l Union of N. Am., et al.

12(b)(6) dismissal, concluding that the district court erred in finding that the agreement did not

meet the criteria necessary to allege an enforceable contract.

As a threshold matter, we reject the Laborers’ contention that the National Labor

Relations Board (“NLRB”) has exclusive jurisdiction over this case. Section 301 of the Labor

Management Relations Act (“LMRA”) grants district courts the power to entertain “[s]uits for

violation of contracts between . . . labor organizations,” 29 U.S.C. § 185(a), covering any

agreement that is “significant to the maintenance of labor peace between” such unions. Retail

Clerks Int’l Ass’n, Local Unions Nos. 128 & 633 v. Lion Dry Goods, Inc., 369 U.S. 17, 28

(1962); see also Equitable Res., Inc. v. United Steel, Paper & Forestry, Rubber, Mfg., Energy,

Allied Indus. & Serv. Workers Int’l Union, 621 F.3d 538, 550 (6th Cir. 2010) (“[M]atters

primarily of contract interpretation . . . remain within the federal courts’ § 301 jurisdiction.”

(internal quotation marks and citation omitted)). But when a dispute involves “primarily

representational” matters under Sections 7 or 8 of the LMRA—which “regulate the vital,

economic instruments of the strike and the picket line”—the NLRB has exclusive jurisdiction.

San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 241 (1959).

This case presents primarily contractual issues and thus belongs in federal court. The

Engineers press only their rights under the Memorandum. The complaint, “seeking damages for

breach of an agreement between labor organizations,” makes no reference to sections 7 or 8 of

the LMRA, “unlike a traditional Garmon preemption claim.” Int’l Bhd. of Elec. Workers v.

Trafftech, 461 F.3d 690, 694 (6th Cir. 2006). Rather, this case resembles those involving

primarily contractual issues. See, e.g., Int’l Bhd. of Boilermakers, Iron Ship Builders,

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Int’l Union of Operating Eng’rs., Local 18 v. Laborers’ Int’l Union of N. Am., et al.

Blacksmiths, Forgers & Helpers v. Olympic Plating Indus., 870 F.2d 1085, 1089 (6th Cir. 1989)

(federal jurisdiction proper when claims interpreted a union’s constitution).

Turning to the merits, the district court dismissed the complaint because, in its view, the

Memorandum did not include the typical indicia of an enforceable contract under Ohio law. We

review de novo the district court’s dismissal, Miller v. Currie, 50 F.3d 373, 377 (6th Cir. 1995),

asking whether the complaint “contain[s] sufficient factual matter, accepted as true, to state a

claim to relief that is plausible on its face,” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal

quotation marks omitted).

A claim arising under Section 301 is “essentially a breach of contract allegation,”

Schreiber v. Philips Display Components Co., 580 F.3d 355, 363 (6th Cir. 2009), and we apply

“traditional rules for contractual interpretation . . . as long as their application is consistent with

federal labor policies.” UAW v. Yard-Man, Inc., 716 F.2d 1476, 1479 (6th Cir. 1983). The

parties here dispute two key contractual elements: (1) manifestation of mutual assent; and

(2) consideration. The Engineers’ complaint alleges both elements.

Regarding mutual assent, the Memorandum unambiguously provides that members of the

respective unions “will” or “shall” perform certain types of work. See 1 Williston on Contracts

§ 1:2 (4th ed.) (“A promise is a manifestation of intention to act or refrain from acting in a

specified way, so made as to justify a promise in understanding that a commitment has been

made.”).

The Laborers contend that the Memorandum cannot constitute an enforceable agreement

because it omits many “traditional” contract elements such as the words “agreement” or

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Int’l Union of Operating Eng’rs., Local 18 v. Laborers’ Int’l Union of N. Am., et al.

“contract,” various standard provisions (such as a choice of law provision), and language

“bind[ing] local unions, district councils, employers, or project owners.” But “[n]o form of

words is necessary to create a promise or covenant; all that is essential is that on a fair

interpretation, it appears that the purported promisor has agreed to do the act in question.”

13 Williston on Contracts § 38:14.

The Laborers’ also maintain that the Memorandum is not enforceable against the local

affiliates. Yet the complaint plausibly alleges that LIUNA acted as an agent of the Laborers in

negotiating the Memorandum. Citing LIUNA’s constitution, the complaint alleges that LIUNA

“is authorized to establish, declare, decide and enforce all matters of policy for and on behalf

of . . . its subordinate bodies and members.” Moreover, the Memorandum’s division of duties

among the “members” of the two international unions suggests that LIUNA in fact exercised this

authority. The allegation that “the International Unions intended that their local affiliates would

benefit from, and be bound by,” the Memorandum is thus plausible, and the Memorandum may

plausibly be interpreted to grant the respective international chapters the authority to settle

jurisdictional disputes on the local affiliates’ behalf.

The Laborers also challenge the Memorandum’s enforceability for want of consideration,

noting that it contains no language “agree[ing] to forego [sic] certain work.” Yet we can infer

that each union intended to agree to forgo performing work that the Memorandum allocates to

the other—the bargained for benefits of the jurisdictional agreement—because the

Memorandum’s division of labor would be meaningless otherwise. See Perlmuter Printing Co.

v. Strome, Inc., 436 F. Supp. 409, 414 (N.D. Ohio 1976); Kostelnik v. Helper, 770 N.E.2d 58, 61

(Ohio 2002).

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Last, the Laborers ask us to affirm on the alternate ground that the Engineers lack

standing as a “third-party beneficiary” to initiate this action. As already explained, however, the

Engineers allege that their international chapter intended to enter the Memorandum on their

behalf, conferring rights (as well as obligations) on the Engineers. Because any “principal can

enforce a contract made by the agent,” 12 Williston on Contracts § 35:46, the Engineers may

bring this action.

We REVERSE and REMAND for proceedings consistent with this opinion.

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