NLRB Advice Memoranda, Gary Merlino Construction, National Labor Relations Board, (Dec 18, 2025)

The Region resubmitted this case for reconsideration of whether an unsuccessful grievance filed by the Employer, and lawsuit to compel arbitration over that grievance, are unlawful. This email supersedes the earlier Advice case closing email, dated September 27, 2024. [1] We conclude that the grievance was not “objectively baseless” within the meaning of BE & K Construction Co. v. NLRB, 536 U.S. 516, 526 (2002), and that the related lawsuit, therefore, did not have an illegal objective. Accordingly, the Region should dismiss the charge, absent withdrawal.

Briefly, the Union and Employer are bound by a Community Workforce Agreement (CWA), a project labor agreement that covers, among other things, work on the Alaskan Way Project in Seattle, for which the Employer is the general contractor. That agreement, which was effective at all pertinent times, contains a no-strike clause that also banned sympathy strikes at covered project sites. Between mid-November and April 2022, employees of various sand and gravel companies in the greater Seattle area, who are also represented by the Union, struck and picketed their employers' facilities, including Stoneway Concrete, Inc., a subsidiary of the Employer that supplied ready-mix concrete to construction sites where the Employer was the general contractor. At the time of the strike, the Stoneway collective-bargaining agreement had expired. On February 11, 2022, the Employer sent drivers with dump trucks to Stoneway to pick up concrete bound for the Waterfront Seattle Alaskan Way project, but the Employer's drivers did not cross the picket line at Stoneway. The Employer filed a grievance seeking damages against the Union for violating the no-strike clause in the CWA in connection with the Stoneway strike. The Union refused to arbitrate the grievance, and the Employer filed a lawsuit in federal district court to compel the Union to arbitrate, which the judge granted. Subsequently, an arbitrator denied the grievance, concluding that the CWA only applied to onsite construction work at the Alaskan Way Project.

We conclude that the grievance was reasonably based within the meaning of BE & K, which applies to grievances in addition to lawsuits. See, e.g., Longshoremen ILWU Local 7 (Georgia Pacific), 291 NLRB 89, 93 (1988), review denied, 892 F.2d 130 (D.C. Cir. 1989). The arbitrator noted that a “collective bargaining agreement cannot be written with such precision that it anticipates all events that may take place in the employment relationship” and that the grievance concerned just such an unanticipated situation. Given the arbitrator's admonishment that the CWA did not set forth clear rules in this kind of situation, the denial of the grievance was not a foregone conclusion. Thus, the grievance cannot be said to be objectively baseless. See BE & K Construction Co., 351 NLRB 451, 457 (2007) (lawsuit lacks a reasonable basis if a reasonable litigant could not realistically expect success on the merits). Likewise, the Employer's actions to compel arbitration served the lawful purpose of having its reasonably-based grievance heard and, therefore, its lawsuit did not have an illegal objective within the meaning of footnote 5 of Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731, 737 n.5 (1983).

Accordingly, the Region should dismiss the charge, absent withdrawal. Please contact us with any questions or concerns.

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