E-Mail Didn't Start Clock for Grievance Appeal

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By Lawrence E. Dubé

June 29 — An Illinois highway contractor didn't miss the deadline to appeal a joint grievance committee's decision that the company owed more than $1 million in back pay and fringe benefit contributions to Teamster-represented employees and union benefit funds, the U.S. Court of Appeals for the Seventh Circuit held ( William Charles Constr. Co. v. Teamsters Local Union 627, 2016 BL 208058, 7th Cir., No. 15-1613, 6/29/16 ).

The decision illustrates the importance of identifying state laws that apply to grievance and arbitration procedures and understanding exactly how the state provisions operate.

William Charles Construction Co. didn't file a court challenge until nearly five months after it received an e-mail advising it of the grievance committee action, but Judge Daniel A. Manion wrote for the court June 29 that the e-mail reflected only a proposed decision, not a final award.

Finding the company didn't waive its right to pursue an appeal, the Seventh Circuit said the dispute wasn't arbitrable and the award was void.

Dispute Arose on Road Project

According to the decision, Charles obtained a state contract to expand a section of a highway near Biggsville, Ill., from two to four lanes.

The Illinois Department of Transportation required contractors and unions involved in the project to sign a project labor agreement, which required signatories to honor collective bargaining agreements between the various contractors and unions, provided they did not conflict with the PLA.

“However, and importantly,” the court said, “the PLA specifically excluded jurisdictional labor disputes from this provision.”

Driving Work Claimed by Two Unions

Charles used large “articulated-end” dump trucks on the Biggsville project. Manion said the vehicles “bend in the middle like semi-trucks” and they are driven in the U.S. by members of the International Brotherhood of Teamsters as well as members of the International Union of Operating Engineers.

When Charles assigned the driving work to IUOE members, Teamsters Local 627 filed a grievance under the project labor agreement against the IUOE local involved, which the unions resolved.

However, Local 627 later filed a grievance against the company, proceeding under a collective bargaining agreement between the Associated General Contractors of Illinois and the Illinois Conference of Teamsters.

Grievance Decision Went Against Employer

Charles was not a signatory to the collective bargaining agreement, but a joint grievance committee determined the company should have assigned the articulated-end truck driving to the Teamsters. An AGCI official sent Charles an e-mail in April 2014 with the text of the committee's “written decision” pasted into the electronic message.

The committee decision described in the e-mail directed the company to “cease and desist” from contract violations, but it was not until 104 days later that Charles was informed by a Teamsters attorney the local was demanding $1.4 million in back pay and benefits under the grievance decision.

Charles filed a lawsuit in the U.S. District Court for the Central District of Illinois under Section 301 of the Labor-Management Relations Act for a declaratory judgment that it was not bound by the grievance committee award. Local 627 argued the lawsuit was untimely because it was filed more than 90 days after the union's e-mail to the employer. The district court dismissed Charles's action as untimely, and the company appealed.

Court Finds Challenge Was Timely

Manion said in an LMRA action, the court looks to a comparable state law to provide a statute of limitations.

Under the Illinois Arbitration Act, the time limit for challenging an arbitration award is 90 days, but the court said Local 627's message “did not start the clock” on Charles.

Under the Illinois statute, the court said, the deadline for a challenge is measured from “delivery of a copy of the award.” Local 627's e-mail didn't meet the test, and the company's court challenge was timely, the court said.

Grievance Award Held Void

The Seventh Circuit also agreed with Charles that the employer was not bound by the grievance committee award.

Both the employer and the union agreed that the PLA provided the exclusive remedy for jurisdictional grievances. Local 627 argued the dump truck dispute was a contractual issue under the multiemployer agreement that Charles agreed to follow when it signed the PLA, and the lower court agreed, but the Seventh Circuit was not persuaded.

Manion wrote that the contract language the Teamster local cited required an assignment to “the proper craft jurisdiction” and the union's grievance against Charles was “for all intents and purposes” the same grievance it earlier pursued against an Operating Engineers local.

Finding the dump truck grievance was not properly before the joint grievance committee, the appeals court concluded the award was void.

Judges Ilana Diamond Rovner and John Robert Blakey joined in the opinion.

Joshua G. Vincent of Hinshaw & Culbertson LLP in Chicago argued the appeal for William Charles Construction. Nathan D. Eisenberg of Previant Law Firm in Milwaukee argued for Local 627.

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

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