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Rady Children's Hospital v. Service Employees International Union

November 26, 2007

RADY CHILDREN'S HOSPITAL, SAN DIEGO, PLAINTIFF,
v.
SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 2028; SERVICE EMPLOYEES INTERNATIONAL UNION, UNITED HEALTHCARE WORKERS -- WEST; AND DOES 1-10, DEFENDANTS.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING MOTION TO DISMISS

Defendants Service Employees International Union, Local 2028 ("Local 2028") and SEIU, United Healthcare Workers -- West ("UHW") have filed a motion to dismiss Plaintiff's Complaint. For the reasons discussed below, Defendants' motion is GRANTED.

I. BACKGROUND

On July 15, 2004, after a secret ballot election, the NLRB certified Local 2028 as the exclusive bargaining representative for approximately 700 service and maintenance employees at Plaintiff's hospital. (Compl. ¶ 9.) After the NLRB certified Local 2028 as the exclusive bargaining representative, Local 2028 and Plaintiff began negotiating an initial collective bargaining agreement ("CBA"). (Compl. ¶ 10.) Throughout these negotiations, UHW negotiated on behalf of Local 2028. (Id.) UHW represented to Plaintiff that it was acting as an agent for Local 2028. (Id.)

On April 19, 2007, Local 2028 and Plaintiff entered into their first CBA. (Compl. ¶ 11.) Among other things, the CBA provides:

Section 1.05. Successor Union: The employer agrees to recognize Service Employees International Union, United Healthcare Workers-West ("SEIUUHW") as the successor to Service Employees International Union Local 2028 upon certification either by the National Labor Relations Board ("NLRB') or a neutral arbitrator mutually selected by the parties to conduct such election, that SEIU-UHW has established its majority status through a secret ballot election that complies with the requirements of the National Labor Relations Act. Such election must include adequate notice to all bargaining unit employees to vote.

In the event that the election is conducted by the NLRB, majority status shall be proven if SEIU-UHW receives a majority of the valid ballots cast. In the event that the election is conducted by a neutral arbitrator, majority status shall be proven if SEIU-UHW receives the votes of a majority of those eligible to vote. If such election occurs during the term of this Agreement, recognition also shall be contingent upon SEIU Local 2028 disclaiming interest in the bargaining unit and SEIU-UHW agreeing to assume the terms of this Agreement. Both SEIU Local 2028 and SEIU-UHW shall indemnify the Employer against any suits, claims, demands or other liabilities, including the Employer's reasonable attorneys' fees, that may arise by reason of the Employer's recognition of SEIU-UHW pursuant to this Article.

Plaintiff alleges that since the ratification of the CBA, UHW has acted as though it is the party with whom Plaintiff contracted. According to Plaintiff, Local 2028 has not "participated in any aspect of the administration of the collective bargaining agreement," and, by all appearances, has "disclaimed its interest in the agreement and effectively ceded all authority to SEIU-UHW." (Compl. ¶ 13.)

Plaintiff also alleges upon information and belief that Local 2028 no longer exists: "As part of a statewide SEIU restructuring plan, SEIU merged Local 2028 into another local of SEIU, Local 221. Local 221 has since inhabited Local 2028's former offices and employed a number of Local 2028's former officers and employees." Plaintiff states that it has been unable to uncover any evidence that Local 2028 has its own assets, directors, officers, employees, payroll, or bank accounts. (Compl. ¶ 14.)

Plaintiff asserts two causes of action. In the first cause of action, Plaintiff seeks declaratory relief that Local 2028 has ceased to exist and that the collective bargaining agreement is therefore null and void. (Compl. ¶ 21.) Plaintiff also seeks a declaration that Local 2028 attempted to assign all of its rights and obligations under the collective bargaining agreement without satisfying the requirements of Section 1.05 of the CBA, that the attempted assignment of rights was therefore ineffective, and that the Hospital has no contractual obligations toward UHW based on the CBA between Local 2028 and Plaintiff. (Compl. ¶ 22.)

Plaintiff's second cause of action is for breach of contract. Plaintiff alleges that Local 2028 has effectively disclaimed its interest in the bargaining unit and the CBA and has unilaterally attempted to transfer its contract rights to UHW without complying with Section 1.05 of the CBA. (Compl. ¶¶ 26-27.) As a result of Local 2028's alleged breach of contract, Plaintiff seeks labor costs it has incurred "in administering and complying with a legally void contract." (Compl. ¶ 28.)

II. DISCUSSION

Defendants argue, inter alia, that this case should be dismissed because Plaintiff's claims involve representational issues that fall within the primary jurisdiction of the NLRB. As discussed below, the Court agrees that Plaintiff's claims raise substantial questions that must be decided in the first instance by the NLRB.

The NLRB has primary jurisdiction in two areas of labor-management relations: (1) the designation of an exclusive bargaining agent, and (2) identification of an appropriate collective bargaining unit under Section 9 of the Labor Management Relations Act. Int'l Woodworkers v. Ketchikan Pulp Co., 611 F.2d 1295, 1299 (9th Cir. 1980). Section 301 of the LMRA confers concurrent jurisdiction upon the NLRB and federal courts to resolve labor disputes that focus on the interpretation of the terms of the collective bargaining agreement. United Ass'n of Journeymen v. Valley Engineers, 975 F.2d 611, 614 (9th Cir. 1992). However, district courts "must tread lightly" in areas of the NLRB's primary jurisdiction and must defer to the NLRB "when on close examination, section 301 cases fall within the NLRB's primary jurisdiction." Id. at 613-14. "End run[s] around the [National ...


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