Opinion
Case No. 99 C 2886
November 15, 2000
MEMORANDUM OPINION AND ORDER
Plaintiff Metropolitan Chicago, Inc. is in the business of providing moving and storage services; plaintiff Richard Santiago is an employee of Unified Management Corporation, the entity from which Metropolitan "leases" its employees. The events that gave rise to this action arose from a strike by Metropolitan employees that began on March 26, 1999, seeking Metropolitan's recognition of Teamsters Local Union 705 as the bargaining representative of the employees. Metropolitan claims that the Union, through its representative Richard DeVries, engaged in illegal secondary activity against companies doing business with Metropolitan. Metropolitan's claims are brought pursuant to section 303 of the Labor Management Relations Act, 29 U.S.C. § 187. Santiago has made a common law battery claim against DeVries and the Union in which he alleges that DeVries, acting on behalf of the Union, assaulted him in a bar in late March 1999.
Plaintiffs filed a seven count second amended complaint against both the Union and DeVries. On January 24, 2000, the Court dismissed Count 3 as to both defendants and dismissed Counts 2, 4, 5, and 6 as to DeVries. The Union has moved for summary judgment on Counts 2, 4, 5, 6, and 7. Under Federal Rule of Civil Procedure 56(c), summary judgment is appropriate only if there are no genuine issues of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is genuine if a reasonable trier of fact could find in favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In assessing whether summary judgment is appropriate, we are required to view the facts in the light most favorable to Metropolitan and Santiago, the non-moving parties, drawing reasonable inferences in their favor, Celotex, 477 U.S. at 322.
For the reasons stated below, the Court grants the Union's motion as to Counts 4 and 6 but denies the motion as to Counts 2, 5, and 7.
A. Count 2
Metropolitan operates out of a multi-building complex located at 2500 West Roosevelt Road in Chicago. The property, which is owned by a land trust and is leased to Metropolitan, includes the land and buildings on the west side of Campbell Street between Roosevelt Road and Fillmore Streets. Adjacent to the complex is the McCormick Building. Though Metropolitan does not lease the McCormick Building, it acts as the agent for the land trust that owns the property, and it leases the building to others. Shortly before the strike began, Metropolitan leased the McCormick Building to Top Five Productions, which planned to use the property in connection with production of the movie "High Fidelity." Within a few days after picketing started, Metropolitan posted two signs along Campbell Street on the north and south ends of its leased property. The sign on the north end stated that the Fillmore Street entrance was to be used by Top Five personnel only; the sign on the south end stated that the south gate was to be used by persons associated with Metropolitan. There is no indication that the north gate was used by anyone other than Top Five personnel and persons and companies doing business with Top Five. The Union, however, kept picketing the north gate. As a result, Metropolitan says, Top Five vacated the premises and breached its lease with Metropolitan. In Count 2, Metropolitan claims that the Union's actions constituted illegal secondary activity in violation of section 8(b)(4)(B) of the National Labor Relations Act, 29 U.S.C. § 158 (b)(4)(B).
Section 8(b)(4)(B) provides that it is an unfair labor practice for a union to engage in a strike if "an object thereof is . . . forcing or requiring any person . . . to cease doing business with any other person." 29 U.S.C. § 158 (b)(4)(B). The statute also provides, however, that it is not to be construed to prohibit otherwise lawful primary picketing. Id. Picketing at the facilities of the primary employer, in this case Metropolitan, is generally considered primary picketing and is therefore protected. See, e.g., Landgrebe Motor Transport, Inc. v. District 72, International Association of Machinists, 763 F.2d 241, 247 (7th Cir. 1985). The concept of a "reserved gate," which Metropolitan relies upon here, comes from so-called "common situs" cases in which primary and secondary employers work together at a site owned by a third party; in such cases, the secondary employer can be shielded from picketing directed at the primary employer by reserving a gate for use of the primary employer, requiring picketing to be limited to that gate. See, e.g., Mautz Oren, Inc. v. Teamsters Local 279, 882 F.2d 1117, 1122 (7th Cir. 1989). The present case, however, does not involve a common situs of this type. When, as in this case, picketing occurs at the primary employer's site, a gate can be "reserved" and picketing is required to be limited to that gate only if the gate is used solely for "business intercourse not connected with the ordinary operations of the [primary] employer." United Steelworkers of America v. NLRB, 376 U.S. 492, 501 (1964). Put another way, "`[t]here must be a separate gate marked and set apart from other gates; the work done by [those] who use the gate must be unrelated to the normal operations of the employer and the work must be of a kind that would not, if done when the plant were engaged in its regular operations, necessitate curtailing those operations.'" Local 761, International Union of Electrical, Radio Machine Workers v. NLRB, 366 U.S. 667, 680-81 (1961) (quoting United Steel Workers of America v. NLRB, 289 F.2d 591, 595 (2d Cir. 1961). See also Bedford-Nugent Corp. v. Chauffeurs, Teamsters Helpers, Local Union No. 215, 358 F.2d 21, 24 (7th Cir. 1966) (issue is whether those entering reserved gate "approach the situs with a mission `contributing to the operation' of the primary employer").
The Union claims that even though Top Five was simply leasing space from Metropolitan for use in its own operations, leasing space at the facilities to film and television production companies is in fact one of the regular ongoing aspects of Metropolitan's business. Even if that is so, it is not dispositive of the issue before the Court. The test established by the Supreme Court and the Seventh Circuit involves whether those who use the reserved gate have something to do with the day to day operations of the primary employer's business. The fact that Metropolitan regularly leases parts of the complex to others does not (at least not as a matter of law) transform the lessees' employees into persons whose work contributes to the day-to-day operation of Metropolitan's business. In the words of the Supreme Court in the General Electric case, the work done by these employees is not of a type that would "necessitate curtailing [Metropolitan's] operations."
For these reasons, the Court denies the Union's motion for summary judgment as to Count 2.
B. Counts 4 6
In Counts 4 and 6, Metropolitan claims that the Union engaged in illegal secondary activity directed at two of Metropolitan's customers: the University of Illinois-Chicago (Count 4), and Southwest Office Furniture (Count 6). It is undisputed that Metropolitan's claims require it to prove, among other things, that it suffered an injury as a result of the challenged activity.
Prior to the alleged secondary activity directed at UIC, UIC rented storage space from Metropolitan, it periodically hired Metropolitan to move materials to and from the storage space or between UIC and other locations, and it sometimes used Metropolitan for packaging services. The undisputed evidence shows that the amount of space that UIC rented did not change as a result of anything that the Union did, and UIC's use of Metropolitan for packaging work was likewise unaffected. During the month or so after the Union's challenged activity, Eric Hart, UIC's primary contact with Metropolitan, had some concerns about whether the company would be able to perform moves. However, UIC had no moves that needed to be done during that time, and once that brief period ended, UIC resumed its normal pre-strike relationship with Metropolitan. In short, Metropolitan did not lose any business from UIC. The same is true with respect to Southwest; Metropolitan does not claim otherwise.
Metropolitan argues that it suffered damage to its goodwill. "Goodwill" consists of "that element of value which inheres in the fixed and favorable consideration of customers, arising from an established and well-known and well-conducted business." Des Moines Gas Co. v. Des Moines, 238 U.S. 153, 165 (1915), quoted in Newark Morning Ledger Co. v. United States, 507 U.S. 546, 555 (1993). UIC's Hart says that the Union's actions caused tension and required him to devote significant time and effort to the situation. The fact is, however, that there is no evidence that the Union's actions had any effect on the nature or amount of business that UIC, or for that matter any other customer, did or does with Metropolitan. The best Metropolitan can do is to suggest that its goodwill must have been hurt by what the Union did. But speculative damages are not recoverable in an action under section 303. E.g., Austin Co. v. International Brotherhood of Electrical Workers, Local 701, 665 F. Supp. 614, 617 (N.D. Ill. 1987); Abreen Corp. v. Laborers International Union, 709 F.2d 748, 761 (1st Cir. 1983). Metropolitan has offered no evidence from which a jury could conclude that it suffered an actual injury to its goodwill from the Union's activities concerning UIC or Southwest. The Union is therefore entitled to summary judgment as to Counts 4 and 6.
Metropolitan seems to suggest that when the Court said, in the context of a discovery motion, that the company could assert a claim for damage to goodwill of up to $1,000, this was the equivalent of a finding that the company was damaged. Pltf. Resp. to Mot. for Summ. Judgt. at 16. Not so. The Court permitted Metropolitan to advance a claim, but it was up to Metropolitan to come up with some evidence to support the claim. It has not done so.
The Court denies, however, the Union's motion for sanctions with respect to Count 4. Although Metropolitan has been unable to support its allegation of injury, the Court cannot say that the claim failed to satisfy the requirements of Federal Rule of Civil Procedure 11.
C. Count 5
In Count 5, Metropolitan seeks damages for the Union's allegedly unlawful secondary activity aimed at Aon, a customer of Metropolitan, to induce it to stop doing business with Metropolitan. The Union argues that Metropolitan cannot establish proximate cause, which the parties agree is a necessary element of Metropolitan's claim, because once Aon learned that Metropolitan was not a union company, it would have stopped doing business with the company irrespective of any alleged threats of illegal activity by the Union.
Aon is a financial service company with offices at a building in downtown Chicago. It periodically used Metropolitan's services for deliveries, evidently dating back to a time when the company had a union contract. In early April 1999, Aon's facilities manager Herbert Ehlers was notified by building security personnel that a picket line seemed to have been set up at street level. Ehlers ended up speaking with DeVries. DeVries told Ehlers that Aon was using the services of Metropolitan, which was a non-union company, and that if Aon continued to do so, the Union would begin picketing and would stop deliveries to the building. He said that it would be in Aon's best interest to stop using Metropolitan. Ehlers believed that if deliveries were stopped it would impair Aon in carrying out its day to day business, and he told DeVries that Aon would stop using Metropolitan as a vendor. Ehlers made the decision that day to change vendors.
Ehlers also testified that Aon's practice in Chicago has always been to use union contractors. Prior to his conversation with DeVries, Ehlers had been unaware that Metropolitan was a non-union company. He stated that in the future, Aon will allow Metropolitan to bid for work if and only if it has a union contract. Based upon this evidence, the Union argues that irrespective of any threats that DeVries may have made to Ehlers, Aon would have stopped doing business with Metropolitan once it learned the company was non-union, and thus any losses Metropolitan suffered were not proximately caused by any illegal secondary activity. The Union, however, cites no testimony by Ehlers in which he says this directly. Indeed, when Ehlers was asked the question more or less directly at his deposition, his answer was equivocal:
Q: If you had been informed that Metropolitan no longer had a union contract, would that have resulted in your taking any action or changing any arrangements with Metropolitan?
. . .
A: I don't know that.
Ehlers Dep. 6/11/99, p. 78. The Union's contention is a proper inference to be drawn from the evidence — indeed it is the most likely inference — but at the present time we cannot say there is no genuine issue of fact on the point. Rather, there is evidence from which a jury could conclude that Aon terminated Metropolitan's services as a direct result of DeVries' threat to picket Aon. Ehlers' testimony about using only union contractors does not foreclose the possibility that the company somehow might have been able to negotiate an ongoing arrangement with Aon absent DeVries' allegedly illegal threat of secondary picketing. The Court therefore denies the Union's motion as to Count 5.
D. Count 7
In Count 7, plaintiff Richard Santiago has made a common law battery claim against DeVries and the Union regarding an incident that took place in a bar during the early days of the Union's strike against Metropolitan. He alleges that DeVries shoved his head against a counter in the bar, causing him injury. DeVries pled guilty to a misdemeanor battery charge resulting from this incident.
DeVries is a business representative employed by the Union; his duties include representing employees in collective bargaining negotiations and in connection with grievances against employers, and organizing employees to form new bargaining units to be represented by the Union. The incident between him and Santiago took place at a bar called Curren's Lounge at 35th Street and Western Avenue in Chicago. According to DeVries, he went there because he had gotten a call from a security officer at a building at Lake and LaSalle Streets who told him that Santiago "was going around with some kind of union cards saying that there was no strike at Metropolitan, everything was fine and he was back there to work." DeVries Dep., p. 206. DeVries advised others of what he had learned, possibly including John McCormick, president of the Union. Id. He went to Curren's Lounge in the late afternoon after conducting picketing at an unidentified location, and he approached Santiago, who he says was sitting at the bar, "faced down on the bar passed out." Id., pp. 207, 209. DeVries says that he shouted Santiago's name "in his face," and Santiago lifted his head. Id., pp. 209-10. According to DeVries, he yelled at Santiago, "I hear you've been fuckin' around taking the union card around downtown again saying everybody's back to work," and said "Charlie, I want that union card." Id., pp. 211-12. According to DeVries, he felt he was authorized to take Santiago's union card because he was "engaged in a fraudulent practice . . . of deceiving the public that he is a union member in good standing and representing this to employers." Id., p. 217. According to DeVries, a fight ensued.
Santiago's version of the incident differs from that of DeVries, but the differences are not material to the present issue.
Santiago's claim against the Union is premised on his contention that the Union is vicariously liable for DeVries' actions. Such claims are governed by section 6 of the Norris-LaGuardia Act, which provides in pertinent part that
[n]o officer or member of any [labor union], and no [labor union] participating or interested in a labor dispute, shall be held responsible or liable in any court of the United States for the unlawful acts of individual officers, member, or agents, except upon clear proof of actual participation in, or actual authorization of, such acts, or of ratification of such acts after actual knowledge thereof.29 U.S.C. § 106. "Clear proof' means "proof which is clear, unequivocal, and convincing." Fry v. Airline Pilots International Association, 88 F.3d 831, 841 (10th Cir. 1996); see Ramsey v. United Mine Workers, 401 U.S. 302, 311 (1981); United Mine Workers v. Gibbs, 383 U.S. 715, 737 (1966).
"The driving force behind § 6 . . . was the fear that unions might be destroyed if they could be held liable for damages done by acts beyond their practical control." Gibbs, 383 U.S. at 736-37. Thus, section 6 "establish[es] a congressionally mandated restrictive test of union responsibility for unlawful acts." Fry, 88 F.3d at 842. In Fry, the court held that union liability for a tortious act "cannot be established by an inference drawn solely from the fact that union members are committing unlawful acts," nor "solely from the fact that the union fails to take affirmative measures to stop such acts. . . ." Id. On the other hand, there is no requirement that the union by shown to have given explicit authority or antecedent approval to an officer or agent to violate the law. See United Brotherhood of Carpenters, 330 U.S. at 409; Riverside Coal Co. v. United Mine Workers, 410 F.2d 267, 270 (6th Cir. 1969). Knowing tolerance of unlawful acts may suffice, see Yellow Bus Lines, Inc. v. Local Union 639, 883 F.2d 132, 136-37 (D.C. Cir. 1989), as may evidence of "custom or traditional practice," United Brotherhood of Carpenters, 330 U.S. at 409-10.
Santiago cites several cases in which unions were held responsible under section 6 for individual members' violent acts, but in most of those cases there was evidence of a pattern of violence that the union seemed to have implicitly condoned prior to the acts that gave rise to the lawsuit. See Curreri v. International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers, Local 251, 722 F.2d 6, 8 (1st Cir. 1983); Harlem River Consumers Cooperative, Inc. v. Associated Grocers of Harlem, Inc., 450 E.2d 271, 274 (2d Cir. 1971). In Gibbs, the Supreme Court stated that "[t]he relevant question . . . is whether [union] representatives were clearly shown to have endorsed violence or threats of violence as a means of settling the dispute." Gibbs, 383 U.S. at 741. Here, the Union emphasizes, there is no evidence that DeVries was ever authorized, expressly or implicitly, to commit acts of violence.
In Gibbs, however, no union business representative (as distinguished from rank-and-file members) participated in the alleged violence; indeed, the evidence showed that the violence had erupted from union members as a result of unexpected events that took place after a union officer had left the site. Id. at 738. DeVries, by contrast is not a mere rank-and-file Union member claimed to have done something violent at a picket line; rather, he is an employee of the Union who had the authority to deal with recalcitrant members — exactly what he claims to have been doing with Santiago at the time of the alleged battery. The distinction between this case and Gibbs may be significant: in Riverside Coal Co. v. United Mine Workers, 410 F.2d 267 (6th Cir. 1969), the court held that the requirements of section 6 had been met where the Union's own business agents had participated in threats of violence. Id. at 271-72.
In United Brotherhood of Carpenters, the Supreme Court held that the fact that a union representative had express authority to negotiate contracts with employer might well be sufficient to impose liability upon the union for the representative's negotiation of an illegal contract. 330 U.S. at 409-10. Thus the fact that DeVries may have carried out his delegated authority in an illegal manner is not enough to absolve the Union from liability, at least not as a matter of law.
The dividing line between situations in which a union can be held vicariously liable and those in which it cannot is fuzzy enough to require the issue to be submitted to a jury. For these reasons, the Court denies the Union's motion as to Count 7.
CONCLUSION
For the reasons stated above, defendant's motion for summary judgment [Item 71-1] is granted as to Counts 4 and 6 and denied as to Counts 2, 5, and 7. Defendant's motion for sanctions [Item 71-2] is denied. The case is set for a status hearing on November 17, 2000 at 9:30 a.m.