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Inc. v. International Union of Operating Engineers Local No. 324

United States District Court, E.D. Michigan, Southern Division

December 8, 2017

DAN'S EXCAVATING, INC. et. al, Plaintiff/Counter-Defendant,
v.
INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL NO. 324, A, B, C, D, G, H, P, RA, S-ALF-CIO, Defendant/Counter-Plaintiff.

          OPINION AND ORDER GRANTING DEFENDANT/COUNTER-PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT [11], DENYING PLAINTIFF/COUNTER-DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [13], AND DISMISSING THIRD-PARTY DEFENDANT'S MOTION TO DISMISS [9] AS MOOT

          NANCY G. EDMUNDS UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the cross Motions for Summary Judgment filed by Plaintiff, Dan's Excavating Inc., and Defendant, International Union of Operating Engineers Local No. 324. They ask the Court to determine whether the issues contained in a grievance Local 324 filed against Dan's Excavating is arbitrable within the grievance-arbitration process under the collectively bargained agreement. The motions have been fully briefed, and the Court held a hearing on November 29, 2017. For the reasons explained below, the Defendant's motion will be GRANTED to the extent that the Court will compel arbitration and Plaintiff's motion is DISMISSED.

         I. Background

         International Union of Operating Engineers Local 324 ("Local 324") and Michigan Infrastructure and Transportation Association ("MITA") signed a collectively bargained agreement ("Agreement" or "CBA") which became effective on March 19, 2013. Local 324 is a union which represents employees that operate heavy road construction equipment throughout Michigan. MITA is a construction trade association that represents employers in the road construction industry in Michigan. Some of those employers ("Contractors") authorized MITA to act as the collective bargaining agent in negotiations with Local 324. One such Contractor is Plaintiff, Dan Excavating, Inc. ("Plaintiff") which is a signatory under the Agreement.

         Article X of the CBA contains a multi-step grievance-arbitration procedure which provides a process for Contractors, Local 324, and MITA to resolve disputes and reach a "final and binding" decision within the terms of the agreement. (Dkt. 1-2, p.20-21; PgID 27-28.) Article X also describes certain disagreements that are expressly excluded from the grievance-arbitration procedure and would require resolution outside the CBA.

         On May 31, 2017, Local 324 filed Grievance No. 1362 under the CBA's Article X grievance-arbitration procedure related to the Michigan Department of Transportation's U.S.23 "Flex Route" project ("the Project")[1]. Plaintiff is the general contractor of the Project, and subcontracted a portion of the pavement cutting work to American Pavement Sawing, LLC ("American Pavement") which is not a signatory to the CBA. Local 324's grievance states in its entirety:

[Plaintiff] is in violation of Article IX of the [CBA], "Subcontracting". Remedy Sought: immediately cease and desist subcontracting in violation of Article IX. Request the Union be made whole including all damages as a result of the breach of contract and failure to apply contractual terms.

         Grievance No. 1362. (Dkt. 1-4, at 2; PgID 35.) Article IX of the CBA which this grievance references states in its entirety:

Article IX - Subcontracting: The Contractor expressly agrees that in the event he subcontracts any work covered by this Agreement, to be performed on the job site, he will not so subcontract with any subcontractor unless the subcontractor agrees that in the performance of the work he will comply with all the rates, terms and conditions of this Agreement, except Article III.

CBA Article IX of the CBA. (Dkt. 1-2, at 20; PgID 27.)

         Local 324 alleges Plaintiff failed to subcontract with American Pavement as required under Article IX. Plaintiff's subcontract did not ensure compliance "with all the rates, terms and conditions of [the CBA]" (CBA Article IX - Subcontracting, Dkt. 1-2, p.20; PgID 27) and as a result American Pavement did not pay their employees at rates and under terms consistent with the CBA. Plaintiff, through MITA, answered Grievance No. 1362 using the CBA's grievance-arbitration procedure. When the parties failed to reach a resolution, Local 324 submitted a request to the American Arbitration Association for appointment of a single impartial arbitrator[2] and MITA, on behalf of Plaintiff, participated in the arbitrator selection process. Thereafter progress within the CBA's grievance-arbitration procedure ceased.

         On August 9, 2017, Plaintiff filed the present complaint against Local 324 seeking a declaratory judgment that Grievance No. 1362 is not arbitrable within the CBA. (Dkt. 1.) Local 324 responded and filed a counterclaim against Plaintiff for declaratory and injunctive relief to force Plaintiff to return to the grievance-arbitration procedure. (Dkt. 3.) Local 324 also filed a Third-Party Complaint against MITA. Plaintiff and Local 324, have now filed cross summary judgment complaints.

         II. Summary Judgment

         A. ...


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