Merryman Excavation, Inc. v. International Union of Operating Engineers, Local 150

In the
United States Court of Appeals
For the Seventh Circuit
No. 09-3271
MERRYMAN EXCAVATION, INC.,
Plaintiff-Appellant,
v.
INTERNATIONAL UNION OF OPERATING
ENGINEERS, LOCAL 150, et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 06 C 5160—Virginia M. Kendall, Judge.
ARGUED OCTOBER 21, 2010—DECIDED MARCH 21, 2011
Before EASTERBROOK, Chief Judge, and MANION and
HAMILTON, Circuit Judges.
MANION, Circuit Judge. The International Union of
Operating Engineers, Local 150, brought a series of griev-
ances against Merryman Excavation, Inc. for violations
of the parties’ collective bargaining agreement. Thirteen
grievances were argued before a joint grievance com-
mittee, as provided in that agreement. Local 150 prevailed

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2 No. 09-3271
on nine grievances, and was awarded a total of $96,364.72
by the joint committee. Merryman filed this action
seeking to vacate the joint committee’s awards under
§ 301 of the Labor Management Relations Act, 29
U.S.C. § 185; Local 150 counterclaimed to enforce the
nine awards. The district court granted summary judg-
ment to Local 150. Because the parties agreed that the
joint committee’s awards would be final and not subject
to review, and there is no evidence that Merryman was
not equally represented on the committee, we affirm.
I.
In 2000, Merryman signed a Memorandum of Agree-
ment, adopting the terms of the Heavy and Highway and
Underground Agreement, a collective bargaining agree-
ment between Local 150 of the International Union of
Operating Engineers and the Mid-America Regional
Bargaining Association (MARBA). Local 150 represents
members in the construction industry throughout
Illinois, Iowa, and Indiana; MARBA represents em-
ployers in the Chicago area for collective bargaining in
the construction industry—Merryman is not a member
of MARBA. The agreement contained typical provisions
requiring that work be assigned to Local 150 members,
when available, and setting the wages and working
conditions. It also required grievances—defined as “any
claim or dispute involving an interpretation or ap-
plication of the Agreement”—to exhaust an informal
dispute resolution procedure, culminating in a hearing
before a joint grievance committee. Such committees

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No. 09-3271 3
are comprised of an equal number of representatives
from the employers’ association and Local 150. A decision
by a majority vote of this joint committee is “final and
binding on all parties and individuals bound by [the]
agreement,” and no appeal is permitted. If the joint
committee deadlocks, the agreement then allows for
formal arbitration proceedings.
Beginning in April 2006, several Local 150 business
agents initiated grievances against Merryman for viola-
tions of various provisions of the collective bargaining
agreement. Ten of these grievances were brought before
the joint grievance committee for a hearing on August 2,
2006. There were three employer representatives at the
hearing, and a number of union members. Some of the
union members were there to present grievances they
had filed as business agents, others to represent the
union on the joint committee; a few played both roles
but did not vote on grievances they each presented.
Merryman was represented by its attorney, Scott Hanlon,
despite the agreement’s prohibition on attorneys
speaking at joint committee hearings. In response to an
objection by Steven Cisco, Local 150’s corresponding
secretary and a member of the joint committee, Hanlon
indicated that he was employed by Merryman as its
“business representative” and not functioning as its
attorney at the hearing. Hanlon objected to the presence
of Local 150 member Charles August, who was a
defendant in a previous lawsuit filed by Merryman, and
objected to his voting on any grievance. Hanlon also
objected to the committee’s jurisdiction over many of the

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4 No. 09-3271
particular grievances, arguing that they were untimely
filed under the terms of the agreement and that there
was no meaningful attempt to settle. After the committee
heard the first two grievances, one of the employer repre-
sentatives on the committee, Joseph Vignocchi, had to
leave; the committee unanimously agreed to proceed
with only two voting members on each side. Hanlon
objected, arguing that the procedural rules required at
least three voting members for each side, but was
informed that the decision was “between the commit-
tee.” The mood of the hearing only worsened from its
inimical beginning, and Cisco and Hanlon bickered
throughout: in response to Hanlon’s questions on the
rules of procedure, Cisco told him he had a copy and
asked, “Have you graduated from first grade? Can you
read, my friend?” and additional procedural objections
elicited “I ain’t going to sit here and listen to this . . .”
from Cisco. Cisco vociferously argued in favor of the
union’s positions throughout the hearing.
Six of the grievances were relatively minor claims that
Merryman had hired non-Local 150 members when there
were Local 150 members on the out-of-work list, and
Merryman put up very little defense at the hearing; the
parties settled two of these, the committee deadlocked
on one, and Merryman was ordered to pay a total of
$1725.44 to Local 150’s assistance fund for the re-
maining three. Two were claims that Merryman improp-
erly terminated Local 150 members without adequate
notice or cause—also relatively minor in terms of the
damages sought—and the committee deadlocked on one
of these claims and awarded $660.62 to the injured

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No. 09-3271 5
union member in the other. The final two union
grievances, which accounted for the vast majority
of damages sought, claimed that Merryman operated
machinery without the contractually required laborers;
the union won both of these and was awarded $77,426.96
for Merryman’s ongoing failure to have a night operator
for a generator that powered a pump 24 hours a day,
and $8,046.16 for its failure to employ a second union
member as an “oiler” on a large digging machine.
That October, the joint committee heard three more
grievances against Merryman. Hanlon again represented
Merryman as its “business representative,” over Cisco’s
objection, and the two picked up their hostility right
where they had left off. Hanlon again objected to the
jurisdiction of the committee to hear the grievances
because some of the members of the committee were
biased due to the pendency of this lawsuit, already filed
in challenge to the August awards. He also objected
to the individual grievances on procedural grounds,
arguing that the union had not satisfied the pre-
grievance steps by making a good-faith attempt to
resolve the disputes. The joint committee resolved all
three grievances in the union’s favor by majority vote.
For one instance of hiring non-Local 150 members, the
committee awarded $451.27; for a layoff over the phone
in violation of the agreement, $549.80 (part to be paid to
the injured Local 150 member and part to the union’s
fringe benefit fund); and for running a pump at night for
a week without an operator, $7,262.52.
Merryman filed its initial complaint in the district court
in September 2006, seeking, under section 301 of the

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6 No. 09-3271
Labor Management Relations Act, to vacate the six
awards the joint committee entered at the August 2
hearing. The complaint alleged violations of the collec-
tive bargaining agreement, including that the joint com-
mittee was not composed of an equal number of em-
ployer and union representatives and that the individual
grievances were marred by various failures to comply
with mandatory dispute resolution steps. In addition
to Local 150 and MARBA, and despite the fact that the
complaint sought only a declaration vacating the joint
committee awards, it named as defendants everyone
present at the August hearing. By June 2007, after several
pleading amendments, Merryman’s third and final
amended complaint also included a request to vacate
the October joint committee awards, and sought relief
against the individual defendants for allegedly con-
spiring to breach their fiduciary duties to Merryman
and for conspiring to defraud it in violation of the Rack-
eteer Influenced Corrupt Organizations Act (RICO).
Local 150 counterclaimed to enforce the awards.
The following February, the district court dismissed the
RICO charge with prejudice and Merryman has not
appealed this dismissal. The parties filed cross-motions
for summary judgment on the remaining counts. Six
months later, the district court granted Local 150’s
motion and denied Merryman’s. It held that many of
Merryman’s allegations had been waived due to its
failure to raise them before the joint committee, and that
the non-waived procedural arguments were without
merit. It considered Merryman’s allegations of bias—
raised only in Merryman’s response to Local 150’s

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No. 09-3271 7
motion for summary judgment—and, after its own scan
of the record for evidence of bias or partiality, it saw
no “direct evidence” of “evident partiality.” Finally,
it found the state law civil conspiracy and breach of
fiduciary duty claims preempted by section 301 be-
cause they required an interpretation of the collective
bargaining agreement. Merryman appeals.
II.
We review de novo a district court’s decision on cross-
motions for summary judgment. Prate Installations, Inc. v.
Chicago Regional Council of Carpenters, 607 F.3d 467, 470
(7th Cir. 2010). But our consideration of the joint commit-
tee’s underlying decision is another matter: as long as
the parties agreed that this method of dispute resolu-
tion would be binding, it is “not open to the courts to
reweigh the merits of the grievance.” General Drivers,
Warehousemen and Helpers, Local 89 v. Riss & Co., 372
U.S. 517, 519 (1963).
In their briefs, the parties to this appeal seem to have
treated the joint committee at times as if it were a genuine
arbitration panel. Their confusion on this point is under-
standable in view of some of our previous opinions. See
Chicago Cartage Co. v. Int’l Bhd. of Teamsters, Local 710, 659
F.2d 825, 827 (1981); Thomas v. United Parcel Serv., Inc., 890
F.2d 909, 921 (7th Cir. 1989). In any event, a federal
court “retains the independent power to identify and
apply the proper construction of governing law.” Kamen v.
Kemper Financial Services, Inc., 500 U.S. 90, 99 (1991);

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8 No. 09-3271
ISI Int’l, Inc. v. Borden Ladner Gervais LLP, 256 F.3d 548,
551 (7th Cir. 2001) (“Federal courts are entitled to apply
the right body of law, whether the parties name it or not.”).
This case crystallizes the problem much more sharply
than our previous cases have. We wish to make clear
that a joint committee is not a genuine arbitration
subject to the Federal Arbitration Act (FAA) and the full
requirements of impartiality that apply to genuine ar-
bitration. A failure to comply with a joint committee
award is a breach of a federal labor contract subject to
section 301 jurisdiction—not an FAA action. See Riss &
Co., 372 U.S. at 519. The basic issue we must decide is
whether any circumstances justify Merryman’s refusal to
comply with the joint committee awards in these griev-
ances. If not, then Merryman has breached the relevant
labor contract by refusing to comply.
Merryman’s arguments on appeal that the joint com-
mittee award should not be enforced can be grouped
into three basic contentions: first, that the joint com-
mittee hearing and the dispute resolution process as a
whole were marred by numerous procedural errors;
second, that the joint committee exceeded its authority
under the contract by ordering that awards be paid to
the union assistance fund, rather than individual
union members; and, third, that on top of its other
failings, the joint committee was biased against
Merryman and partial toward Local 150. But as we
have noted, all disputes involving the application or
interpretation of the agreement are subject to the
binding dispute resolution procedures contained in the

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No. 09-3271 9
The district court held that Merryman waived judicial review 1
of many of its specific contentions when it failed to present
its arguments before the joint committee, as would be the case
if this were a review of an arbitration award. But as we
have already noted, the joint committee dispute resolution
is fundamentally different from arbitration. And just as
“permitting parties to keep silent during arbitration and
raise arguments in enforcement proceedings would under-
mine the purpose of arbitration, which is to provide a fast
(continued...)
agreement. The only argument that Merryman may
properly make in this litigation is that it did not
receive the procedures to which it agreed, and so we
consider its arguments in this light.
A. Grievance Procedures
Merryman contends that the joint committee hearing
was fatally flawed procedurally because Local 150
did not follow the multistage grievance resolution pro-
cedure outlined in the agreement. This process involves
informal non-binding settlement negotiations as well as
an informal binding joint grievance committee hearing
for unsettled disputes. Finally, if the joint committee
cannot reach a binding decision by majority vote,
formal arbitration begins.
Merryman first complains that the committee should not
have heard many of the grievances because the union
failed to follow the required steps before bringing the
grievances to the joint committee. A challenge to the pre-1

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10 No. 09-3271
(...continued) 1
and inexpensive resolution of labor disputes,” National Wrecking
Co. v. Int’l Bhd. of Teamsters, Local 710, 990 F.2d 957, 960-61
(7th Cir. 1993), so too would applying a strict waiver under-
mine the purpose of joint committee awards. Procedural
niceties are the very sort of formalities that the parties seek to
avoid when they contract to substitute informal mechanisms
for formal arbitration or judicial review. Here, no one in-
volved has any training or expertise in legal proceedings—
lawyers for the parties are not even allowed to speak.
Merryman argues that we should follow M.J. Electric, Inc. v. 2
Int’l Union of Op. Eng’rs, Local 150, 2003 WL 21640474, at *5
(N.D. Ill., July 10, 2003), wherein the court reasoned that the
mere presence of a greater number of union representatives
at a joint committee hearing violated the plain language of an
(continued...)
grievance procedures approved by the joint committee,
however, is a “claim or dispute involving an interpreta-
tion or application of the Agreement” and therefore
subject to binding resolution by the joint committee.
Riss & Co., 372 U.S. at 519. Considered in this light,
Merryman’s first argument is readily disposed: as long
as the joint committee was properly composed, it had the
authority to resolve the dispute over whether Local 150
followed the proper pre-grievance procedures.
Merryman raises two other procedural claims that at
least superficially attack the composition of the joint
committee itself. First, it argues that there were more
union representatives than employer representatives
present at the joint committee hearing. But it has no2

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No. 09-3271 11
(...continued) 2
identical agreement requiring equal representation. We
disagree: M.J. Electric overreached by reviewing the merits of
the joint committee’s interpretation of the equal representa-
tion provision in the agreement. To reiterate: it does not
matter whether the joint committee’s interpretation is
correct, only that the parties agreed that the joint committee’s
interpretation would be binding. Moreover, Merryman has
abandoned the argument it made below that Local 150, as a
party to M.J. Electric, was precluded from relitigating the
equal representation issue. Long v. Teachers’ Retirement System
of Illinois, 585 F.3d 344, 349 (7th Cir. 2009) (“[U]nsupported
and underdeveloped arguments are waived.”).
At oral argument, Merryman’s attorney could not point us 3
to any evidence that it had even attempted to uncover in
discovery the breakdown of the joint committee vote on
each grievance, which would surely be a prerequisite to uncov-
ering bias on the part of the majority of panel members
who voted in Local 150’s favor.
evidence that Local 150 had more voting representatives,
or even that there were an unequal number of representa-
tives present during the executive session in which the
committee members cast their votes. So it cannot argue3
that it was underrepresented in the ultimate vote,
merely that it disagrees with the manner in which the
joint committee handled its proceedings. A collective
bargaining agreement could lay out detailed procedural
rules for joint committee hearings, but this agreement
does not. Merryman received the process to which it
agreed.

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12 No. 09-3271
Second, Merryman argues that there was an insuf-
ficient number of representatives to establish a quorum.
But the grievance provisions do not require a minimum
number of representatives, only equal representation,
and an equally composed joint committee decided that
it would proceed with only two representatives from
each side. Merryman argues that this decision was incon-
sistent with the committee’s own procedural rules, but
those separate procedural rules do not form a part of
the agreement.
B. Awards to Funds Benefitting Union Members
Merryman also challenges the decision by the joint
committee to designate the awards to funds maintained
by the union rather than to specific union members
themselves. It argues that this is a violation of Article I,
Section 11 of the collective bargaining agreement, in
which the employer “[a]grees to compensate the bargain-
ing unit member who would have worked but for
the Employer’s violation of [the Assignment of Work]
Section . . . for all hours the bargaining unit member
would have worked but for the Employer’s violation.”
Once again, because this question involves an inter-
pretation or application of the collective bar-
gaining agreement, it is entrusted to the joint commit-
tee’s binding final decision and not subject to our re-
view. The parties agreed that the joint committee
would have plenary power to resolve disputes arising
under the collective bargaining agreement. The agree-
ment does not limit the committee’s authority to settle
the dispute in any manner that it finds appropriate.

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No. 09-3271 13
Citing Thomas, 890 F.2d at 921, Merryman argues that we 4
have endorsed, and should now enforce, a duty of impartiality
for joint committee members similar to that of an arbitrator
or judge. But Thomas held only that while the union’s duty of
fair representation does not require the union representatives
to vote in a union member’s favor, the union representative
could not be partial against the union member. Whatever the
Thomas court meant in its obiter dictum that the union’s role
on a joint committee “is essentially that of an arbitrator,” it
surely did not mean to suggest that we apply a judicial or
arbitral standard of impartiality to joint committee members.
Such a standard would be patently unsuitable for joint com-
mittee members, who are “representatives” specifically chosen
because they are ostensibly partisans of one side to a collec-
tive bargaining agreement.
C. Bias
Finally, Merryman argues that the district court should
have vacated the joint committee awards because the
committee was biased against it. It is true that “evident
partiality” is one of the few bases on which a court
may invalidate the decision of a supposedly neutral
arbitrator. 9 U.S.C. § 10(a)(2). But we reiterate that
joint committees are not genuine arbitration and that
provisions of the FAA do not apply to these awards.
Merryman agreed that disputes would be resolved in
the first instance not by a neutral arbitrator but by a
committee composed of an equal number of employer
and union representatives. The agreement does not
require the representatives on the joint committee to act
like detached magistrates or neutral arbitrators. Rather,4
we rely on the balanced voting membership of the joint

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14 No. 09-3271
We express no view on the question of whether bias against 5
an employer by the employer’s representatives, due to collusion
or some other factor, would invalidate a joint committee award.
committee to provide fairness to the interested parties.
Absent evidence that Merryman was not equally repre-
sented among the voting members of the joint com-
mittee, it is bound by the committee’s decision.5
In Chicago Cartage Co., 659 F.2d at 828, one of the few
cases from this circuit reviewing a claim of bias against
an employer by a joint committee, we considered
similar, if not worse, conduct by union representatives
on a joint committee and upheld the decision. Chicago
Cartage followed the parties’ lead and assumed, without
holding, that the joint committee award should be re-
viewed as an arbitration award and was subject to chal-
lenge on grounds of evident partiality or bias. Today
we hold that, contrary to our assumption in Chicago Cart-
age, joint committee awards should not be treated
as arbitration subject to the standards of the FAA. But
Chicago Cartage rested its decision on the fact that at
least one of the employer representatives must have
voted against the employer and that therefore any bias
against the employer by union representatives did not
affect the joint committee’s decision. This is entirely
consistent with our holding today: absent evidence that
Merryman was not equally represented on the joint
committee, the joint committee’s decision is binding and
not subject to appeal.

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No. 09-3271 15
III.
In sum, because the collective bargaining agreement
establishes that any resolution of a grievance by
majority vote of the joint committee is “final and
binding on all parties and individuals bound by” the
agreement and not subject to appeal, we are not
permitted to review the merits of the procedure or sub-
stance of the joint committee’s decisions. Absent any
evidence that Merryman did not receive the dispute
resolution procedure to which it agreed, i.e., an equal
number of voting representatives on the joint committee,
the district court correctly granted summary judgment
to Local 150. Accordingly, the decision below is AFFIRMED.
3-21-11

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