District Council No. 16 of the International Union of Painters & Allied Trades, Glaziers, Architectural Metal & Glass Workers, Local 1621 v. B & B Glass, Inc.
August 16, 2007, amended December 11, 2007
In the Ninth Circuit Court of Appeals
Cite as No. 05-16258

Texas Company cannot abide by California Union's CBA Terms

The B&B Glass, Inc., a Texas Corporation is referred to as B&B Texas is a Union Shop. On the other hand, though same owners have a 75% ownership in B&B Glass, Inc., an Arizona Company, it was a Non-Union Shop, and referred to as B&B Arizona.

B&B Texas and B&B Arizona do not compete for business. Moreover, they do not share any kind of business-related resources.

In March 2002, B&B Texas signed a Collective Bargaining Agreement with Painters and Glaziers Local Union No. 53, a Union based in Texas. In July 2002, District Council No. 16 of the International Union of Painters & Allied Trades, Glaziers, Architectural Metal & Glass Workers, Local 1621, Local 53's counterpart in California, signed a Collective Bargaining Agreement with Contractors in Santa Clara County.

Thereafter, the B&B Arizona started work in San Jose State University located in Santa Clara County, the Local 1621 claimed that the B&B Arizona's work in California violated the Texas Agreement. It argued that the agreement applied to B&B Arizona's California work through the Texas agreement sends B&B Texas three honors also on the majority of the shares in B&B Arizona.

The Out of Area clause in the Texas agreement requires B&B Texas, when engaged in work outside the area covered by the agreement to abide by the terms of agreement in effect in that particular area. The California agreement provides that "any dispute between the parties to be resolved through a grievance procedure with a final step being, arbitration."

The B&B Texas then moved for the dismissal of Local 1621's Petition to Compel Arbitration. The district court's judgment favored B&B Texas and granted the motion on the following grounds:

• It found that no personal jurisdiction existed over B&B Texas.


• The Work Preservation clause in the Texas agreement states that its purpose is to protect and preserve for the employees covered by the Texas agreement all work that they have performed.


• Under the National Labor Relations Act, Work Preservation clauses are lawful only if "the signatory company both possesses the right of control over the work in question and exercises that right to control." 321 NLRB 158, 158 (1996) Painters & Allied Trades Dist.

The Ninth Circuit Court of Appeals affirmed the district court's dismissal.

It disagreed that the Work Preservation clause in the Texas agreement bound B&B Arizona to such agreement's terms. Local 1621 did not present any evidence to show that the B&B Texas exercised actual management control over the work being done by the B&B Arizona. Meanwhile, there are material evidences of the separate management and operations of the B&B Texas and Arizona.