(CN) — The Eighth Circuit ruled against a Minnesota chapter of the International Brotherhood of Teamsters in a dispute over a strike against the world’s largest food distributor, finding a show of solidarity with another union branch was a breach of contract.
A panel of three Republican-appointed judges on Wednesday upheld a district court ruling that Teamsters Local 120 of Blaine, Minnesota, violated a collective bargaining agreement with Sysco Minnesota when its members honored a picket line set up by Teamsters Local 41 of Kansas City.
U.S. Circuit Judge L. Steven Grasz, a Donald Trump appointee, penned the Eighth Circuit’s unanimous opinion and wrote that the Teamsters had also waived their right to arbitration by participating in Sysco’s lawsuit against them.
The dispute stems from Local 41’s 2017 strike against Sysco Kansas City in Olathe, Kansas. After years of stalemate over a collective bargaining agreement for workers at the multinational’s Kansas City facility, Local 41 went on strike and sent members north to organize a picket line at the multinational food-service distributor’s Minnesota facility.
Local 120 parked its own tractor-trailer near the picket line, provided refreshments to strikers, and told its members that they could honor the picket line if they wished. Most did, with only four Local 120 members crossing the picket line to work.
The Minnesota union’s engagement with the strikers, Sysco held, violated a no-strike clause in Local 120’s collective bargaining agreement with the company. U.S. District Judge Paul Magnuson, a Ronald Reagan appointee, granted the company summary judgment against the Teamsters in October 2018, awarding $1.2 million in damages for lost profits.
Local 120 appealed to the St. Louis-based Eighth Circuit, and the parties presented oral arguments last December.
That hearing saw the union pushing hard on an argument that the proceedings violated an arbitration clause in the CBA, a point it raised earlier during the summary judgment process.
The Teamsters also held their ground on the contention that the picket line was permissible as a primary strike, rather than a contract-forbidden “sympathy strike.” The union argued that while the CBA forbade sympathy strikes, the picket line fell under a clause that allowed it to respect other unions’ picket lines for strikes against their employer.
The Eighth Circuit panel disagreed, finding that Sysco Corp.’s ownership of both Sysco Minnesota and Sysco Kansas City was not enough to transfer a primary strike from one subsidiary to the other.
“Sysco Minnesota and Sysco KC are distinct entities that separately bargain with Local 120 and Local 41 respectively. Local 41 struck Sysco KC and had no dispute with Sysco Minnesota; it only picketed Sysco Minnesota to gain leverage in bargaining with Sysco KC,” Grasz wrote. “The only fact Local 120 relies on to establish that Local 41’s picket line outside Sysco Minnesota was a primary picket line where it was on primary strike is that Sysco Minnesota and Sysco KC are commonly owned.”
The union’s arbitration argument fell flat with the court as well.
“Local 120 answered Sysco Minnesota’s initial and amended complaints, stipulated to some expedited discovery, participated in a pretrial scheduling conference, jointly filed a Rule 26(f) report, and then, after all discovery concluded, responded to Sysco Minnesota’s motion for summary judgment and cross-moved for summary judgment,” Grasz wrote.
The judge continued, “Local 120 never moved to compel arbitration or to otherwise dismiss or stay the case in favor of the CBA’s prescribed non-judicial grievance procedures. It first asked the district court to compel arbitration in its summary judgment briefing, nearly nine months after Sysco Minnesota filed its initial complaint. Given this procedural history, we have no trouble concluding Local 120 invoked the litigation machinery and failed to timely seek relief from the district court based on the CBA’s prescribed grievance procedures.”
Counsel for the Teamsters said the fight may not yet be over.
“It’s a disappointing ruling, and my client is looking at their options for a further rehearing or going to the Supreme Court,” said Fred Perillo, Local 120’s attorney at the Milwaukee-based Previant Law Firm. He declined to comment further while the union weighed those options.
Jeffrey Hirsch, a law professor at the University of North Carolina whose work focuses on labor and employment law, said he’d be surprised if a Supreme Court challenge happens.
In a case like this, he said he’d expect to see more evidence presented on the question of whether Sysco’s two subsidiaries could be considered the same company from a labor-relations perspective.
“There are various doctrines that talk about whether two separate entities are considered one for labor purposes. And it’s a very exacting process– you look at things like how much management is shared between the two entities, particularly with regard to labor relations,” Hirsch said.
In this case, he said, that process didn’t appear to be as much of a focus, which may have been the union’s undoing.
The nation’s highest court would be unlikely to take such a case on, he added.
“As far as I can see, there’s no difference among circuits about the legal standard for this,” Hirsch said. “From a 3,000-foot view, at the end of the day, this is a contract interpretation issue.”
Even if the Supreme Court took the case, it might not go well for the union.
“[The Teamsters] may feel like they need to do it, because it’s the only option they’ve got, but this court is not labor friendly,” Hirsch said.
Calls to Sysco Minnesota went unanswered, as did a call to its attorney, Bruce Douglas of national employment firm Ogletree Deakins’ Minneapolis office.
If the decision stands, the $1.2 million damages award could take a heavy toll on Local 120, which claims over 11,500 members across the upper Midwest.