Parkland Environmental Group, Inc. v. Laborers' International Union
Opinion of the Court
ORDER
Parkland Environmental Group is a small, family-owned asbestos abatement company in Springfield, Illinois. In March or April of 2004, it signed a “project only” agreement with Laborers’ Local 477, a local chapter of the Laborers’ International Union of North America. That single-page agreement was limited to Parkland’s project at the White Oaks Mall. Around the same time, Parkland and the Union signed another, much longer, collective bargaining agreement covering all work done by Parkland in the Local 477 territory from May 1, 2003 to April 30, 2009. Two years later, the Union filed a grievance against Parkland for performing work in the Local 477 territory without adhering to the agreement. The grievance was submitted to arbitration with a grievance committee, as provided in the agreement.
Parkland was surprised by the grievance. It does not dispute that its vice president, David Stowers, signed the agreement in question. But it claims that Stowers did not read the agreement and that the Union led him to believe that this agreement was a “project only” agreement covering just a project at Washington Street, similar to the White Oaks Mall agreement. Parkland attended the arbitration and there argued that it was not bound either by the contract generally, or the arbitration clause specifically, because the agreement was for one project only and did not apply to the project in dispute. The grievance committee ruled against Parkland and directed it to pay the Union $21,016.
Parkland sued in federal court to vacate the award under Section 301 of the Labor Management and Relations Act and the Federal Arbitration Act, 9 U.S.C. § 1 et seq. The Union counter-sued for enforcement. Both sides moved for summary judgment, and the district court granted the Union’s motion. It held that the dispute was within the scope of the arbitration clause, that Parkland’s only defense— a challenge to the validity of the entire agreement — was a matter subject to arbitration, and that the arbitration award drew its essence from the contract. Parkland appeals.
Whether Parkland and the Union “agreed to arbitrate [this] dispute is a question for the courts to decide,” but “if the parties have in fact agreed to arbitrate their dispute, they have bargained for the arbitrator’s interpretation of their contract, not ours.” United Steel Workers Int’l Union v. TriMas Corp., 531 F.3d 531, 535-36 (7th Cir. 2008). It is clear (and Parkland no longer really contests) that the dispute was within the scope of the arbitration clause in the agreement and
Not so. The scope of an agreement is a term of the agreement and it too is subject to arbitration. Id. at 537. Moreover, “a challenge to. the validity of the contract as a whole, and not specifically to the arbitration clause, must go to the arbitrator.” Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 449, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006). This includes a claim of fraud in the inducement of the contract generally, which is similar to what Parkland argues, as opposed to a claim of fraud in the inducement of just the arbitration provisions. Id. at 444-45, 126 S.Ct. 1204 (citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967)). Parkland claims that it is specifically challenging the arbitration clause, but its argument is not particularized to the arbitration clause: the challenge to the arbitration clause stands or falls with the contract at a whole, and so it was subject to, and resolved by, arbitration. Thus, the district court correctly limited its review to the scope of the arbitration clause and whether the decision drew its essence from the contract.
Parkland also argues that because the Union brought its grievance more than six months after Parkland had allegedly repudiated the agreement, it is barred by the statute of limitations. But Parkland did not raise a statute of limitations defense below, so it has waived this non-jurisdictional issue on appeal. McKinney Restoration, Co. v. Illinois Dist. Council No. 1 of Int'l Union of Bricklayers & Allied Craftworkers, 392 F.3d 867, 873 (7th Cir. 2004). The judgment of the district court is therefore AFFIRMED.
. Parkland also seems to argue that the agreement was invalid because the Union did not obtain the support of a majority of Parkland employees necessary for the Union to be recognized as the exclusive bargaining entity for Parkland employees under Section 9(a) of the National Labor Relations Act. We see no legal reason why the fact that the agreement had never been converted into a Section 9(a) agreement would prevent it from being a valid Section 8(f) pre-hire construction agreement. See Sheehy Enterprizes, Inc. v. N.L.R.B., 602 F.3d 839, 843 (7th Cir. 2010) ("[I]n § 8(f), Congress has carved out an exception to this general rule for employers in the construction industry. Under that provision, construction employers can lawfully enter into so-called ‘pre-hire agreements' with unions that do not have majority support.''). But even if there were merit to Parkland’s argument regarding the status of the agreement under Section 9(a), this argument goes to the validity of the agreement, not its formation. See Granite Rock Co. v. Teamsters, 561 U.S. -, 130 S.Ct. 2847, 2855-56, 177 L.Ed.2d 567 (2010) ("[Wjhere the dispute at issue concerns contract formation, the dispute is generally for the courts to decide.’’). This argument, like the claim of fraud in the inducement, is subject to arbitration under the arbitration clause in this case.
Reference
- Full Case Name
- PARKLAND ENVIRONMENTAL GROUP, INC. v. LABORERS' INTERNATIONAL UNION OF NORTH AMERICA, Laborers' Local 477
- Cited By
- 1 case
- Status
- Published