Local Union 48 Sheet Metal Workers v. S.L. Pappas & Co.

United States Court of Appeals,

Eleventh Circuit.

No. 96-6036.

LOCAL UNION 48 SHEET METAL WORKERS, Board of Trustees, Sheet
Metal Workers National Pension Fund, Board of Trustees, Sheet Metal
Workers National Cola Fund, Board of Trustees, National
Stabilization Agreement of Sheet Metal Industry Trust Fund, Board
of Trustees, National Training Fund for the Sheet Metal and Air
Conditioning Industry, Board of Trustees, National Energy
Management Institute Committee, Board of Trustees, Sheet Metal
Occupational Health Institute Trust Fund, Sheet Metal Workers Local
Union No. 48 Welfare Fund, JW Rollan, Abram Carpenter, Sam P.
Rollan, Jr., Ken Turner, Gene Dykes, David Shelby as Trustees of
Sheet Metal Workers Local Union No. 48 Welfare Fund, Plaintiffs-
Counter-Defendants, Appellants,

v.

S.L. PAPPAS & COMPANY, INC., Defendant-Counter-Claimant,
Appellee,

P & M Mechanical, Inc., Defendant-Appellee.

Feb. 28, 1997.

Appeal from the United States District Court for the Northern
District of Alabama. (No. CV-92-H-2036-S), James H. Hancock,
District Judge.

Before TJOFLAT and DUBINA, Circuit Judges, and STAGG*, Senior
District Judge.

STAGG, Senior District Judge:

Plaintiffs/Appellants, Sheet Metal Workers Local Union No. 48,

et al. ("the Union"), appeal the district court's decision granting

summary judgment in favor of Defendants/Appellees, S.L. Pappas &

Company, Inc., and P & M Mechanical, Inc. ("Pappas"). Based on

prior decisions of this circuit, we affirm the district court on

other grounds.

I. FACTS AND PROCEDURAL HISTORY

*
Honorable Tom Stagg, Senior U.S. District Judge for the
Western District of Louisiana, sitting by designation.
 The Union filed this action under section 301 of the Labor

Management Relations Act ("LMRA"), 29 U.S.C. § 185(a), against

Pappas, alleging that Pappas was bound by and had breached a

collective bargaining agreement effective from June 1, 1991,

through May 31, 1994. Pappas contended that the previous

collective bargaining agreement between the parties was a voidable

pre-hire agreement under section 8(f), 29 U.S.C. § 158(f), and that

Pappas had repudiated the agreement, in writing, prior to the

commencement of negotiations for a new or successor pre-hire

agreement.

The following facts are taken from the district court's

October 6, 1995 Memorandum of Decision. Plaintiff, the Union, is

a labor organization representing employees who perform roofing,

ventilating, and air conditioning contract services for the

construction industry. Plaintiff Trustees 1 are respective Boards

of Trustees for various welfare funds ("the Funds") which provide

benefits for qualified employees of the Union. Defendant Pappas

was a corporation performing services as a mechanical subcontractor

in Alabama. Pappas was a member of the Mechanical Contractors

Association of Birmingham, Alabama, Inc. ("MCA"), which is a

multi-employer bargaining unit representing various employers in

negotiating agreements with the Union. Since its incorporation,

through its membership in MCA, Pappas was a party to a series of

1
The Plaintiff/Trustees are Boards of Trustees for the
following funds: Sheet Metal Workers National Pension Fund,
Sheet Metal Workers National Cola Fund, National Stabilization
Agreement of Sheet Metal Industry Trust Fund, National Training
Fund for the Sheet Metal and Air Conditioning Industry, National
Energy Management Institute Committee, and Sheet Metal
Occupational Health Institute Trust Fund.
section 8(f) pre-hire agreements with the Union. On June 1, 1988,

Pappas signed a pre-hire agreement with the Union ("the 1988-1991

agreement") which obligated Pappas periodically to contribute

specified amounts to the Funds through May 31, 1991. By letter

dated January 22, 1991, before the commencement of negotiations for

a new pre-hire agreement, Pappas informed the Union that the

multi-employer bargaining unit was no longer a labor negotiating

agent for Pappas. Pappas's January 22 letter was not, however,

provided at least 150 days prior to the expiration of the 1988-1991

agreement as required by the terms of the agreement. On January

30, 1991, the Union provided Pappas with a 90-day notice of the

Union's intent to reopen certain aspects of the 1988-1991

agreement. Pappas did not take part in the negotiations between

the MCA and the Union in 1991. On June 1, 1991, the Union sent

Pappas a copy of an agreement negotiated between the MCA and the

Union covering a period from 1991-1994 ("1991-1994 agreement")

requesting that Pappas sign the agreement and return it to the

Union. Pappas discarded the agreement without signing it. Pappas

did, however, continue to use the union hiring hall, pay union

wages, and contribute to the plaintiff funds until Pappas ceased

operations the last week of May 1992.

In April of 1991, P & M Mechanical, Inc. ("P & M"), was

incorporated to perform mechanical work as a subcontractor in

Alabama, Georgia, and South Carolina. P & M and Pappas have the

same owners and P & M leases its building space from Pappas. The

district court, in its August 5, 1994 opinion, held that Pappas and

P & M were a "single employer" under the Act. Thus, P & M would be
bound by the same agreements to which Pappas was bound.

The 1988-1991 agreement bound Pappas to be a member of the

multi-employer bargaining unit, and thus, contribute to the Funds,

until Pappas gave written notice of withdrawal to the Union at

least 150 days prior to the then-current expiration date of the

agreement. If Pappas did not give such notice, the agreement

provided that Pappas would be bound by any successor agreement

entered into by the parties.

In its complaint, the Union alleged that Pappas was a party to

the 1991-1994 agreement and thus was required to contribute to the

various multi-employer funds pursuant to this agreement. The Union

sought specific performance of the section 8(f) agreement and

declaratory and injunctive relief, including requiring Pappas to

contribute to the Funds, to utilize the union hiring hall, and to

pay contractually established wages. The Union also sought

liquidated damages and attorney's fees.

The Union originally moved for partial judgment on the

pleadings, which the district court treated as a motion for partial

summary judgment. Pappas filed an opposition to the motion for

partial judgment on the pleadings, which the district court treated

as a cross-motion by Pappas for partial summary judgment. The

Union then filed a second motion for summary judgment requesting,

inter alia, that the district court find Pappas and P & M to be

single employers and that both be bound by the 1991-1994 pre-hire

agreement. The district court ruled in favor of the Union on both

issues. Pappas and P & M were found to be bound to the successor

agreement because Pappas did not provide notice of repudiation
within the 150 day period required by the 1988-1991 agreement.

Thus, they were obligated to make the requisite contributions to

the Funds covered by the pre-hire agreement. Pappas moved for

reconsideration, which was denied.

The Union, after completing discovery, moved for summary

judgment on the remaining issues not covered by the district court

in its August 5, 1994 ruling. On October 6, 1995, the district

court entered summary judgment in favor of Pappas. The district

court based its ruling on a newly released decision of the National

Labor Relations Board, James Luterbach Construction Co., Inc., 315

N.L.R.B. 976 (1994). Luterbach returned the status of NLRB law

regarding section 8(f) agreements to the position it previously

held in John Deklewa & Sons, 282 N.L.R.B. 1375 (1987), enf'd sub

nom. Int'l Assoc. of Bridge, Structural and Ornamental Iron

Workers, Local 3 v. NLRB, 843 F.2d 770 (3rd Cir.), cert. denied,

488 U.S. 889, 109 S.Ct. 222, 102 L.Ed.2d 213 (1988). The Union

filed a motion to reconsider, which was granted by the district

court. Ultimately, however, the district court determined that its

October 6 ruling was correct and reinstated that ruling in its

final judgment dated December 5, 1995. This appeal followed.

On appeal, the Union argues that Pappas is bound by the

successor agreement, that is, the 1991-1994 agreement, because

Pappas did not give notice of withdrawal within the 150 day notice

period provided in the 1988-1991 agreement. The Union claims that

Pappas must make the requisite contributions to the Funds because

Pappas is bound by the successor agreement for 1991-1994. Pappas

makes two arguments, only one of which is considered by this court.
First, Pappas argues that this court must affirm the decision of

the district court based on Eleventh Circuit precedent, which we

are required to follow under the prior panel decision rule.

Second, Pappas argues that if Luterbach and Deklewa apply in this

instance, we should affirm the district court for the reasons

provided in its October 6, 1995 ruling. Namely, Pappas argues that

upon the expiration of the 1988-1991 agreement, it was free to

withdraw from the successor agreement since it did not take

"distinct affirmative action" to bind itself to the successor

agreement. See Luterbach, 315 N.L.R.B. 976 (1994). We agree with

the former argument and affirm (on other grounds) the decision made

by the district court. Our decision is based on Eleventh Circuit

precedent and not on NLRB decisions not yet adopted by this

circuit.

II. STANDARD OF REVIEW

This court reviews the grant of summary judgment "de novo "

and "must determine whether there is any genuine issue of material

fact and whether the moving party is entitled to judgment as a

matter of law. All evidence and reasonable factual inferences

drawn therefrom are reviewed in the light most favorable to the

party opposed to the motion." Batey v. Stone, 24 F.3d 1330, 1333

(11th Cir.1994) (citations omitted).

III. DISCUSSION

A. The Law Regarding Section 8(f) Agreements

"A section 8(f) agreement is a labor contract negotiated

between a construction employer and a union [that] does not

represent a majority [of the employees] at the time of contract
execution." Plumbers and Pipefitters Local Union 72 v. John Payne

Co., Inc., 850 F.2d 1535, 1538 (11th Cir.1988), quoting

Construction Erectors, Inc. v. NLRB, 661 F.2d 801, 804 (9th

Cir.1981). If a union does not achieve majority representative

status among a company's employees, the employer/union agreement

can only be viewed as a pre-hire agreement, as contemplated by

section 8(f) of the LMRA and not as a fully enforceable collective

bargaining agreement. See John Payne, 850 F.2d at 1538.

In U.S. Mosaic Tile Co., Inc. v. NLRB, 935 F.2d 1249 (11th

Cir.1991), cert. denied, 502 U.S. 1031, 112 S.Ct. 871, 116 L.Ed.2d

776 (1992), we provided a thorough explanation of the difference

between section 8(f) and section 9(a) agreements and the bargaining

protections that flow from each type of agreement.

Section 8(f) of the Act provides an exception to other
bargaining provisions of the Act for the construction
industry. Generally, a collective bargaining representative
(union) outside the construction industry must be designated
or selected by a majority of the employees in a given unit
before that representative can have the exclusive right to
represent the employees in bargaining with the employer. Once
a representative achieves this status under § 9(a), it
receives various bargaining protections provided by § 8(a) and
(b) of the Act. The union also receives a presumption of
majority status for a reasonable time, including during the
period immediately after the end of a prior agreement when the
parties are bargaining for a new contract.... Congress,
recognizing the uniquely fluctuant nature of the construction
industry, enacted § 8(f), which enables a representative of
employees in the construction industry to enter a collective
bargaining agreement with an employer without first having
achieved majority status. The agreements are known as
pre-hire agreements.... Prior to Deklewa the Board
interpreted § 8(f) to permit either party to terminate the
bargaining agreement at will, so long as the union had not
achieved majority status. R.J. Smith Construction, 191
N.L.R.B. 693, enf. denied sub nom. Operating Engineers Local
150 v. NLRB, 480 F.2d 1186 (D.C.Cir.1973). The Board also
determined, however, that if the union achieved majority
status during the period of the agreement, it would receive
the same protections as a § 9(a) union, including the
presumption of majority status upon the expiration of the
 bargaining agreement.... The Board, realizing the confusion
and difficulty created by its own interpretation, decided to
overhaul its view of § 8(f) agreements. Thus, in Deklewa, the
Board decided that pre-hire agreements were no longer
terminable at will, but were valid for the entire term.
Additionally, the Board stated that the union would no longer
receive the presumption of majority status upon expiration of
the agreement, and thus would not retain the right to
exclusive bargaining at that point. The union could, however,
achieve majority status through the traditional methods for
becoming a § 9(a) representative: Board certified election or
voluntary recognition by the employer. 843 F.2d at 778....
Several circuits have now approved of Deklewa, often relying
on the reasoning used by the Third Circuit when it enforced
Deklewa in International Assoc. of Iron Workers v. NLRB....

Mosaic Tile, 935 F.2d at 1253 n. 2 (citations omitted). In Mosaic

Tile, we refrained from speaking to the viability of Deklewa in

this circuit because the employer's attempt to argue Deklewa was

untimely. Id. at 1253.

We again decline to speak to the viability of Deklewa because

we must strictly follow the prior panel rule. See United States v.

Woodard, 938 F.2d 1255, 1258 (11th Cir.1991), cert. denied, 502

U.S. 1109, 112 S.Ct. 1210, 117 L.Ed.2d 449 (1992) (holding that

"[t]he law in this circuit is emphatic that "only a decision by

this court sitting en banc or the United States Supreme Court can

overrule a prior panel decision,' " quoting U.S. v. Machado, 804

F.2d 1537, 1543 (11th Cir.1986)). The prior panel decision rule is

applied in this circuit to such an extent that where there is a

conflict between panel decisions within this circuit, the earlier

decision is binding until the court decides the issue en banc.

Clark v. Housing Authority of City of Alma, 971 F.2d 723, 726 n. 4

(11th Cir.1992). The law of this circuit regarding the ability to

repudiate section 8(f) agreements is found in Plumbers and

Pipefitters Local Union 72 v. John Payne Co., Inc., and Local 92,
Int'l Assoc. of Bridge, Structural and Ornamental Ironworkers v. B

& B Steel Erectors, Inc., 850 F.2d 1551 (11th Cir.1988).2
In John Payne, a post-Deklewa decision, this circuit cited

with approval Jim McNeff, Inc. v. Todd, 461 U.S. 260, 271-72, 103

S.Ct. 1753, 1759, 75 L.Ed.2d 830 (1983), which held that under

section 301 actions to recover money allegedly owed to a union

fund, a section 8(f) pre-hire agreement is subject to repudiation

until the union establishes majority status in a section 9(a)

election. John Payne, 850 F.2d at 1540. In John Payne, the union

did not claim to have ever achieved majority representative status

among the company's employees. Id. at 1538. Thus, the pre-hire

agreement was not a fully enforceable collective bargaining

agreement. Id. This circuit followed McNeff regarding section

8(f) agreements and then proceeded to determine whether the

employer had made an effective repudiation. Id. at 1540.

In Local 92, also a post-Deklewa decision, we stated, "[i]t is

well settled law that "a pre-hire agreement is voidable by the

employer and that such an agreement does not become a collective

bargaining contract unless the union actually represents a majority

of the employees in the relevant unit and is recognized by the

employer.' " Local 92, 850 F.2d at 1554, quoting Painters Local

Union No. 164 v. Epley, 764 F.2d 1509, 1514 (11th Cir.1985), cert.

denied, 475 U.S. 1120, 106 S.Ct. 1636, 90 L.Ed.2d 182 (1986). The

panel agreed with the district court which held that because a

section 8(f) pre-hire agreement is voidable by repudiation until

2
John Payne was decided on August 3, 1988. Local 92 was
decided the next day, by a different panel, on August 4, 1988.
the union establishes majority support and because it was

undisputed that the union had never achieved majority status in B

& B's work force, the district court concluded that B & B had the

right to repudiate the pre-hire agreement. Local 92, 850 F.2d at

1554.

In the case sub judice, it is undisputed that the Union did

not establish majority support of the workforce at Pappas or at P

& M. Under John Payne and Local 92, Pappas could repudiate the

1988-1991 section 8(f) agreement at any time prior to the Union

establishing majority support of the work force. If Pappas made an

effective repudiation, Pappas would be bound by neither the 1988-

1991 agreement nor by the successor agreement, the 1991-1994

agreement. Following the prior panel decision rule and controlling

Eleventh Circuit precedent, we affirm the decision of the district

court. We decline to reach the issue of whether Luterbach and

Deklewa are viable in this circuit.

B. Effective Repudiation By Pappas

Next, we must determine whether Pappas effectively made the

repudiation that is authorized under John Payne and Local 92. In

order to repudiate a pre-hire agreement, an employer must give

notice to the union sufficient to make manifest his intent to

terminate the agreement. Local 92, 850 F.2d at 1556, citing

Trustees of the Atlanta Iron Workers Local 387 Pension Fund v.

Southern Stress Wire Corp., 509 F.Supp. 1097, 1105 (N.D.Ga.1981),

rev'd on other grounds, 724 F.2d 1458 (11th Cir.1983).

There is no doubt that Pappas made an effective repudiation

of the 1988-1991 agreement by way of its letter dated January 22,
1991. The letter stated in clear terms that MCA was no longer the

labor negotiating agent for Pappas. Pappas's conduct also made

manifest that it had repudiated the agreement. Pappas did not

participate in the negotiations for the successor contract.

Ultimately, when Pappas received the 1991-1994 agreement from the

Union for Pappas's signature, it did not sign the agreement, but

rather discarded it. Thus, Pappas made an effective repudiation of

the pre-hire agreement and was not bound by the successor agreement

for 1991-1994.

Because the Union's claims are dismissed, its appeal of the

district court's decision to strike the Union's jury demand is

rendered moot.

The order of the district court granting judgment for Pappas

is affirmed.

AFFIRMED ON OTHER GROUNDS.