Eighth Circuit Takes Up Case of Union Solidarity

ST. PAUL, Minn. (CN) – The world’s largest food distributor squared off against one of America’s largest labor unions in an Eighth Circuit courtroom Wednesday over Minnesota members refusing to cross a picket line set up by an out-of-state union branch.

An attorney for Teamsters Local 120 of Blaine, Minnesota, argued to the panel of Republican-appointed judges that the union’s dispute with Sysco Minnesota over its members’ refusal to cross another local’s picket line should have gone to arbitration proceedings two years ago.

The case stems from a November 2017 strike by another Teamsters branch, Local 41 of Kansas City, Missouri. Local 120 members refused to cross a picket line established by four members of Local 41 at the multinational food service distributor’s Minnesota distribution center in Mounds View, just north of St. Paul.

Local 41 was striking following the collapse of initial contract negotiations with Sysco Kansas City Inc., after which members alleged that management made threats of reprisals for union activity.

Sysco sued Local 120 in Minnesota federal court for breaching a clause in the union’s collective-bargaining agreement forbidding strikes.

U.S. District Judge Paul Magnuson, a Ronald Reagan appointee, granted summary judgment to Sysco in October 2018 and awarded the distributor $1.2 million in damages. Local 120 appealed to the Eighth Circuit.

Teamsters attorney Fred Perillo, of the Milwaukee-based Previant Law Firm, said during Wednesday’s hearing that Sysco should have resolved its beef with the local trucker’s union over lost profits through a grievance procedure outlined in the parties’ contract that involves arbitration.

But Sysco sees it differently, especially in light of the $1.2 million judgment awarded to the company by the lower court.

Its attorney Bruce Douglas, with the Minneapolis office of employment law firm Ogletree Deakins, pointed out that when Sysco moved for summary judgment, the Teamsters did the same and never formally brought up arbitration.

“What the union did, in our view, was make a strategic decision,” Douglas told the court. “It asked the court for a decision on the merits, and the fallback decision was to push for arbitration.”

Perillo rejected that argument. He said that while the Teamsters never forced the issue of arbitration, they brought up Sysco’s failure to exhaust that option in their own motion for summary judgment.

“It’s not as if we were waiting and seeing and riding the fence, and then trying to come up with a new angle,” he said.

The panel was comprised of Chief U.S. Circuit Judge Lavenski Smith, a George W. Bush appointee, and U.S. Circuit Judges Steven Grasz and David Stras, both appointed by President Donald Trump.

The judges kept up a slow but steady stream of prodding questions for each side. Stras especially took issue with the Teamsters’ assertion that the grievance procedure was meant to be applied to employer complaints against the union rather than the other way around.

“How does step one work under your theory?” he asked, referring to a clause that requires employees with grievances to first discuss them with their immediate supervisor. “That’s a pretty rough fit to the language.”

Arbitration was not the only issue at hand. Local 120 maintained that it had the right to respect the Local 41 picket line under a collective-bargaining agreement clause that allows them to do so when another union is on a primary strike.

Stras took Sysco to task on that issue.

“It appears that Article 24 authorizes what the union did in plain language,” the judge said, seeking rebuttal from Douglas.

This led to a debate over whether Local 41’s picket could be considered primary even though the Kansas City local was so far from home. Sysco argued that Sysco Kansas City should be considered a separate employer from Sysco Minnesota, as the companies have different management despite both being under the umbrella of parent company Sysco Holdings LLC.

Local 41’s strike, Douglas warned, could be a dangerous precedent for Sysco.

“To accept the union’s argument would provide it a workaround, a back door, to eviscerate the no-strike clause,” he said.

Perillo cast doubt on the idea that the various Sysco branches are distinct, and pointed to the two parties’ history together to push back on Douglas’ concern for rampant picketing. Over 30 years of working for Sysco, Teamsters have extended picket lines to its facilities only twice, he said.

“It’s a ghost story that unions are going to randomly send picketers for no reason,” Perillo said.

The panel closed the proceedings with no strong indication of how the judges would rule.

Perillo made no prediction, but said after the hearing he was satisfied the judges were taking each side seriously.

While not every point of argument that he had expected to discuss came up, he said, “There’s only 15 minutes, so there’s only so much we can do.”

Douglas declined to comment after the hearing.

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