Marrowbone Develop v. District 17, UMWA

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

MARROWBONE DEVELOPMENT

COMPANY,

Plaintiff-Appellant,

v.

No. 97-1642

DISTRICT 17, UNITED MINE

WORKERS OF AMERICA; LOCAL UNION

93, UNITED MINE WORKERS OF

AMERICA,

Defendants-Appellees.

Appeal from the United States District Court

for the Southern District of West Virginia, at Huntington.

Robert J. Staker, Senior District Judge.

(CA-95-243-3)

Argued: December 3, 1997

Decided: June 8, 1998

Before NIEMEYER and WILLIAMS, Circuit Judges, and

JONES, United States District Judge for the

Western District of Virginia, sitting by designation.

_________________________________________________________________

Reversed by published opinion. Judge Niemeyer wrote the majority

opinion, in which Judge Williams joined. Judge Jones wrote a dissent-

ing opinion.

_________________________________________________________________

COUNSEL

ARGUED: Ronald E. Meisburg, HEENAN, ALTHEN & ROLES,

Washington, D.C., for Appellant. Kevin F. Fagan, DISTRICT 17,

UMWA, Charleston, West Virginia, for Appellees. ON BRIEF: Wil-

liam I. Althen, HEENAN, ALTHEN & ROLES, Washington, D.C.;

Donna C. Kelly, HEENAN, ALTHEN & ROLES, Charleston, West

Virginia, for Appellant. Charles F. Donnelly, HOSTLER & DON-

NELLY, L.C., Charleston, West Virginia, for Appellees.

_________________________________________________________________

OPINION

NIEMEYER, Circuit Judge:

The issue presented in this case is whether a national collective-

bargaining agreement, which requires an employer to assign to

employees of a local union work previously done by contractors, vio-

lates § 8(e) of the National Labor Relations Act (prohibiting agree-

ments that require the employer to cease doing business with other

persons). We hold that, despite the fact that the national union's mem-

bers may have traditionally performed such work for other employers,

the employees in the local bargaining unit did not perform such work,

and application of the national agreement to the local unit would

aggrandize the work of the unit in violation of§ 8(e). We therefore

reverse the judgment of the district court.

I

Since 1976, Marrowbone Development Company has been operat-

ing a coal mining complex in Mingo County, West Virginia. The

complex consists of five separate mines and numerous support facili-

ties, including a preparation plant, a warehouse, a repair facility, and

other support units. To transport and deliver materials and supplies

among the various facilities at its mining complex, Marrowbone has

always engaged contractors or used its salaried employees.

In May 1993, pursuant to the organizing campaign of the United

Mine Workers of America ("UMW" or "the Union") to represent non-

supervisory employees at the mining complex for collective bargain-

ing purposes, the National Labor Relations Board ("NLRB")

conducted an election. The NLRB defined the potential bargaining

unit as:

2

All full-time and regular part-time production and mainte-

nance employees employed by the Employer at its mines

and preparation plant in Mingo County, West Virginia,

excluding all office clerical employees, warehouse employ-

ees, laboratory technicians and employees of contractors,

and all professional employees, guards and supervisors as

defined in the Act.

The Union won the election, and the NLRB certified Local 93, UMW,

as the exclusive bargaining representative of Marrowbone's classified

employees.

Pending the ratification of the National Bituminous Coal Wage

Agreement, which the parties anticipated would take place later in

1993, Marrowbone and the Union entered into an interim agreement

under which they agreed that all terms and conditions of employment

at Marrowbone's mining complex would remain the same until the

national agreement was ratified. The parties also agreed that, upon

ratification, the national agreement would bind them. The interim

agreement thus applied to Local 93 for the period from July 16, 1993

until December 16, 1993, at which time the national agreement was

ratified.

The national agreement provided for particularized assignments of

work. Article IA(a) of the agreement states that:

The production of coal, including removal of overburden

and coal waste, preparation, processing and cleaning of coal

and transportation of coal (except by waterway or rail not

owned by the Employer), repair and maintenance work nor-

mally performed at the mine site or at a central shop of the

Employer and maintenance of gob piles and mine roads, and

work of the type customarily related to all of the above shall

be performed by classified Employees of the Employer cov-

ered by and in accordance with this Agreement . . . .

Article IA(c) of the agreement states that:

Supervisory employees shall perform no classified work

covered by this Agreement except in emergencies and

3

except if such work is necessary for the purpose of training

or instructing classified Employees . . . the burden is on the

Employer to prove that classified work has not been per-

formed by supervisory personnel.

And finally, Article XXVI(b) of the agreement states that:

This Agreement supersedes all existing and previous con-

tracts except as incorporated and carried forward herein by

reference; and all local agreements, rules, regulations and

customs heretofore established in conflict with this Agree-

ment are hereby abolished.

In April 1994, four months after the national agreement became

controlling, members of Local 93 filed grievances with Marrowbone,

contending that Marrowbone was using nonunion employees to trans-

port and deliver materials throughout the mining complex, in viola-

tion of the national agreement. One of these grievances addressed

work performed by contractors and the others addressed work per-

formed by salaried employees.

Because the parties were unable to resolve the grievances, they

submitted their dispute to arbitration, as required by the national

agreement. The arbitrator held that the agreement required Marrow-

bone to assign all transportation and delivery work to represented

employees and accordingly ordered Marrowbone to"cease from uti-

lizing exempt personnel or subcontractors from performing the dis-

puted work; when done, such work is to be assigned to a classified

employee."

Marrowbone thereafter filed this action in the district court to

vacate the arbitrator's award, arguing that the agreement, as applied

by the arbitrator, violated § 8(e) of the National Labor Relations Act

("NLRA"), 29 U.S.C. § 158(e), and therefore was unenforceable

against Marrowbone. On motions for summary judgment, the district

court ruled that, as applied by the arbitrator, the contract did not vio-

late § 8(e) because it operated to preserve work for the UMW and not

to acquire it. To reach this conclusion, the court determined that the

relative group of employees for comparison was other locals of the

UMW. Since other locals had typically performed transportation and

4

delivery work at other mine sites, the court concluded that the clause

as it operated in this case was a work-preservation clause and there-

fore did not violate § 8(e).

Marrowbone noticed this appeal, challenging only that part of the

district court's ruling which requires Marrowbone to cease its custom-

ary relations with contractors.

II

At the outset, we must address the Union's contention that the

courts are required to uphold the arbitrator's award in this case

because the award "draws its essence" from the collective-bargaining

agreement. See United Paperworkers Int'l Union v. Misco, Inc., 484

U.S. 29, 36-38 (1987); Upshur Coals Corp. v. United Mine Workers

of America, Dist. 31, 933 F.2d 225, 228-29 (4th Cir. 1991). While

Marrowbone does not challenge the deference due arbitrator's awards

and, indeed, does not challenge the arbitrator's interpretation of the

collective-bargaining agreement itself, it argues that when this inter-

pretation is applied against Marrowbone to reassign work, this appli-

cation renders the contract unenforceable under§ 8(e) of the NLRA.

The enforceability of contracts, it argues, is a legal question that goes

to the arbitrator's power to act and therefore is for the courts and not

the arbitrator to decide. Cf. Kaiser Steel Corp. v. Mullins, 455 U.S.

72, 83-84, 86 (1982). The district court agreed with Marrowbone that

the issue presented in this case is collateral to the arbitration challenge

because Marrowbone is not attacking the arbitrator's report but rather

the collective-bargaining agreement as applied. For the following rea-

sons, we affirm this conclusion.

We begin with § 301 of the Labor Management Relations Act,

which provides that suits for violation of collective-bargaining agree-

ments may be filed in federal courts. See 29 U.S.C. § 185(a). It is well

established that § 301 provides federal courts not only with jurisdic-

tion but also with the duty of developing a federal common law of

labor rights in connection with the enforcement of collective-

bargaining agreements. See Allis-Chalmers Corp. v. Lueck, 471 U.S.

202, 209 (1985); Textile Workers Union v. Lincoln Mills, 353 U.S.

448, 456 (1957).

5

It is also well established that the obligation to arbitrate is a crea-

ture of contract and that a party cannot be required to submit to arbi-

tration unless he has agreed to do so in a contract. See United

Steelworkers of America v. Warrior & Gulf Navig. Co. , 363 U.S. 574,

582 (1960). Accordingly, the court decides, as issues of contract law,

the threshold questions of whether a party is contractually bound to

arbitrate and whether, if so bound, the arbitration provision's scope

makes the issue in dispute arbitrable. See John Wiley & Sons, Inc. v.

Livingston, 376 U.S. 543, 546-47 (1964). Thus,"[i]t [is] for the court,

not the arbitrator, to decide in the first instance whether the dispute

was to be resolved through arbitration." AT&T Techs., Inc. v. Commu-

nications Workers of America, 475 U.S. 643, 651 (1986).

A dispute committed by contract to arbitration is resolved essen-

tially by the arbitrator and not the court. An arbitrator's award that

"draws its essence" from the collective-bargaining agreement is

accorded great deference and must be upheld. See Upshur, 933 F.2d

at 228-29. But, while a court challenge to the merits of an arbitrable

award faces a formidable burden, a challenge to the arbitrator's power

to legally make the award presents a straightforward question of law

for the court to decide.

As a corollary to the principle that the court decides issues of

arbitrability, the court also decides questions about the legality of the

underlying contract because such questions go to the basis of the arbi-

trator's power. See Kaiser Steel, 455 U.S. at 83 ("It is also well estab-

lished, however, that a federal court has a duty to determine whether

a [collective-bargaining] contract violates federal law before enforc-

ing it."). As the Court noted in Kaiser Steel , a court, and not the

National Labor Relations Board (or in our case, an arbitrator), must

decide whether a collective-bargaining agreement violates § 8(e)

before it can be enforced, because § 8(e) renders certain contracts

"unenforcible [sic] and void." See 29 U.S.C. § 158(e). This is the type

of question that courts decide and review de novo. See Mountaineer

Gas Co. v. Oil, Chem. & Atomic Workers Int'l Union , 76 F.3d 606,

608 (4th Cir. 1996); Island Creek Coal Co. v. District 28, United

Mine Workers of America, 29 F.3d 126, 129 (4th Cir. 1994).

In this case, Marrowbone does not dispute that the collective-

bargaining agreement requires it to cease using exempt employees in

6

the transportation and delivery of materials and supplies at its Mingo

County complex. Rather, it argues that § 8(e) of the NLRA prohibits

the agreement from having legal force to require such a cessation.

Marrowbone's assertion thus goes to the authority of the arbitrator to

legally make its award and to the ability of the courts to enforce that

award under § 8(e). These are legal questions for the court that we

review de novo.

III

On its § 8(e) claim, Marrowbone argues that because its nonsuper-

visory employees at the Mingo County complex have never done

transportation and delivery work, to require them to do this work now

would be "work-acquisitive" rather than "work-preservative" and

would thereby constitute a "secondary" limitation, illegal under § 8(e)

of the NLRA. The Union responds in two ways. It argues first that the

relevant group of employees to consider, in determining by compari-

son whether the contract is work-acquisitive or work-preservative, is

similarly-situated employees in other locals of the UMW. The Union

argues that because these employees in other locals have long done

such work, the national agreement does not illegally expand the work

of the employees at the cost of third parties, but rather legally pre-

serves the traditional work of UMW employees. Second, the Union

argues that there is no evidence of illegal motive or secondary boy-

cotting, and that when all circumstances are taken into account, it

becomes clear that the work assignment clauses of the national agree-

ment are not the sort prohibited by § 8(e).

In order to evaluate these competing claims, we must review the

scope of § 8(e). Section 8(e) of the NLRA, which was added to the

Act in 1959 as part of the Landrum-Griffin amendments, provides

that:

It shall be an unfair labor practice for any labor organization

and any employer to enter into any contract or agreement,

express or implied, whereby such employer ceases or

refrains or agrees to cease or refrain from handling, using,

selling, transporting or otherwise dealing in any of the prod-

ucts of any other employer, or to cease doing business with

any other person, and any contract or agreement entered into

7

heretofore or hereafter containing such an agreement shall

be to such extent unenforcible [sic] and void . . . .

29 U.S.C. § 158(e). The language of § 8(e) is broad, and taken at face

value, it would appear to prohibit any agreement that forces an

employer to cut off business dealings with an outside party. At the

time of its passage, commentators wondered whether§ 8(e)'s broad

language would operate to outlaw all clauses that place limitations on

an employer's right to subcontract. See, e.g. , Benjamin Aaron, The

Labor-Management Reporting and Disclosure Act of 1959, 73 Harv.

L. Rev. 1086, 1118-19 (1960). The legislative history of § 8(e), how-

ever, makes clear that its purpose was not to prevent all subcontract-

ing clauses, but rather to prohibit only those clauses that had the

effect of creating secondary pressure on a bargaining situation. These

clauses are commonly known as "hot cargo clauses," because unions

initially used such clauses to limit the cargo that employees would

handle. See, e.g., S. Rep. No. 86-187 (1959), reprinted in 1959

U.S.C.C.A.N. 2318, 2382-84; H.R. Rep. No. 86-741 (1959), reprinted

in 1959 U.S.C.C.A.N. 2424, 2443-44, 2478-79, 2494-95; Conf. Rep.

No. 86-1147 (1959), reprinted in 1959 U.S.C.C.A.N. 2503, 2510-12.

Traditionally understood, the problem with such secondary pres-

sure is twofold. First, "the use of secondary pressure tends to enlarge

the primary labor dispute between the union and the`unfair' employer

by involving neutral employers in the controversy, thereby magnify-

ing the disruptive effects of the altercation on the economy." David

M. Ebel, Comment, Subcontracting Clauses and Section 8(e) of the

National Labor Relations Act, 62 Mich. L. Rev. 1176, 1177 (1964)

(footnote omitted); see also Brown v. Local No. 17, Amalgamated

Lithographers of America, 180 F. Supp. 294, 297 (N.D. Cal. 1960).

And second, it is generally perceived as inequitable for a union to be

able to force a neutral party to exit a profitable relationship for rea-

sons extrinsic to the employer's relationship with that party. See

National Woodwork Mfrs. Ass'n v. NLRB, 386 U.S. 612, 624-627

(1967); S. Rep. No. 86-187 (1959), reprinted in 1959 U.S.C.C.A.N.

2318, 2382-84.

Because hot cargo clauses traditionally required an employer to

cease doing business with another employer when a certain set of cir-

cumstances were met, they became a useful method of applying sec-

8

ondary pressure on employers. Before § 8(e) was passed, § 8(b) of the

NLRA, 29 U.S.C. § 158(b), prohibited secondary boycotts of employ-

ers, but unions could effect the same results as a secondary boycott

by forcing employers to include hot cargo clauses in their contracts

with unions. Congress enacted § 8(e) to close this loophole in the law,

and thereby eliminate secondary pressure in whatever form it might

take. See H.R. Rep. No. 86-741 (1959), reprinted in 1959

U.S.C.C.A.N. 2424, 2478-79; National Woodwork , 386 U.S. at 634.

Understanding that the purpose of § 8(e) was to eliminate second-

ary pressure tactics, even when disguised as subcontracting clauses,

the Supreme Court has crafted a test that helps to identify when a

clause has secondary effects and when it is merely primary in nature.

In National Woodwork, the Court held that where a union's objective

in contracting for a subcontracting clause is to preserve the work of

its members, and not to satisfy other union goals, such as to acquire

new work, the clause does not violate § 8(e). 386 U.S. at 644-46.

"The touchstone," the Court explained, "is whether the agreement or

its maintenance is addressed to the labor relations of the contracting

employer vis-a-vis his own employees." Id. at 645. Although the

National Woodwork Court explicitly failed to decide "the questions

which might arise where the workers carry on a boycott to reach out

to monopolize jobs or acquire new job tasks when their own jobs are

not threatened . . .," id. at 630-31, later Court decisions have indicated

that where a union seeks to aggrandize its position through a subcon-

tracting clause, the clause violates § 8(e). In NLRB v. International

Longshoremen's Ass'n ("Longshoremen I"), 447 U.S. 490, 504

(1980), the Court explained that "[a]mong the primary purposes pro-

tected by the Act is `the purpose of preserving for the contracting

employees themselves work traditionally done by them.'" It therefore

noted that "a lawful work preservation agreement must pass two tests:

First, it must have as its objective the preservation of work tradition-

ally performed by employees represented by the union. Second, the

contracting employer must have the power to give the employees the

work in question . . . ." Id. In making such an analysis, the Supreme

Court has counseled that courts "must focus on the work of the bar-

gaining unit employees, not on the work of other employees who may

be doing the same or similar work." Id. at 507.

Thus, where a subcontracting clause is merely preservative of the

work traditionally done by bargaining unit employees, it does not vio-

9

late § 8(e). But where a subcontracting clause acquires work not tradi-

tionally done by those employees, it amounts to an unlawful

secondary boycott clause. See NLRB v. International Longshoremen's

Ass'n ("Longshoremen II"), 473 U.S. 61, 79-80 n.19 (1985);

Humphrey v. International Longshoremen's Ass'n, 548 F.2d 494, 497

(4th Cir. 1977).

With these principles in hand, we turn to the agreement before us

to determine whether the application of the UMW's national agree-

ment to Marrowbone's employees at the Mingo County complex is

work-preservative or work-acquisitive. If it is work preservative, then

we must uphold the arbitrator's award. If it is work acquisitive, then

we must refuse to enforce it as violative of § 8(e).

To determine whether the agreement before us preserves or

acquires work for the bargaining unit -- that is, whether the work at

issue was traditionally done by the employees before the agreement

-- we must determine which group of employees is the relevant

group for comparison. Stated otherwise, in deciding whether a con-

tract aims to acquire "new jobs," we need to know which employees

to look at in determining what the "old jobs" are. Specifically, in the

case of a newly formed local union, we must decide whether to com-

pare the contract's work jurisdiction with the jobs historically done by

the employees who are now members of the local, or with the jobs

generally done by the union's other employees throughout all of its

locals. If the employees of the newly-formed local are the group on

which to focus, then the agreement acquires for them work which

they traditionally have not performed, i.e., transportation and delivery

of materials and supplies at the Marrowbone mining complex in

Mingo County.

For the reasons that follow, we hold that the appropriate group for

comparison is the group of employees constituting Local 93, and not

the members of the UMW's other locals. Our conclusion best accords

with general labor law principles and with the premises of § 8(e).

First, § 8(e) has as its basic premise that the goal of labor relations

is to keep labor disputes within the bounds of the employer-employee

relationship. Because a primary reason for preventing secondary boy-

cotts is to keep individual labor disputes from spilling over into other

10

areas of the economy, § 8(e)'s prohibition on hot cargo clauses may

in one sense be understood as expressing a congressional preference

that only those employers and employees directly affected by the dis-

pute should be involved in the bargaining process. To include the

interests of persons beyond the dispute in the calculation of a dis-

pute's terms would run contrary to Congress' desire to keep labor dis-

putes confined to bargaining between particular employers and

employees. Therefore, § 8(e) evinces a preference for comparing only

the jobs of the particular employer's employees directly affected by

the dispute, and not all job descriptions represented in all of a union's

various locals.

Second, the local union's employees, not the national union's

employees, are the beneficiaries of whatever work jurisdiction clauses

they have arranged with their employer. The work conditions of

employees in other UMW locals are by and large incidental to the

negotiations and work situation at Marrowbone's complex. To

include the job descriptions of non-Marrowbone employees in a

determination of whether a clause is work-preservative or work-

acquisitive would import into the analysis a range of work situations

and job descriptions that have no relevance to the situation of Mar-

rowbone employees or to the way the Marrowbone mines are oper-

ated. Thus, the employees at Marrowbone are the most appropriate

actors in determining whether a contract with Marrowbone has altered

employees' work jurisdiction at that complex.

And third, pragmatically, the union's suggestion that we consider

all of the job descriptions represented by the national union would be

an unmanageable task. National unions are composed of numerous

locals, each with its own history of job relations and its own capacity

to negotiate its work jurisdiction. If we were to consider other locals

in our determination of what work is typically performed, we would

be faced with the intractable questions of "what other locals?" and

"what other work?" A national union could represent, for example,

mine-workers, haberdashers, and truckers. Different local unions

could negotiate different terms of employment with their respective

employers. Using a national union's employees in other locals would

require courts to choose which locals to compare and which terms to

compare without any meaningful legal grounds on which to base that

choice. We decline to undertake such a task.

11

Supreme Court dicta fortify our conclusions. In National

Woodwork, the Court explained that § 8(e) does not prohibit agree-

ments that are designed to require an employer to preserve for its

employees the work "traditionally done by them." 386 U.S. at 635

(emphasis added). "The touchstone is whether the agreement or its

maintenance is addressed to the labor relations of the contracting

employer vis-a-vis his own employees." Id. at 645 (emphasis added).

Thus, regardless of whether the agreement is national in scope, in

determining whether it preserves or acquires work, the analysis must

focus on the work of the local employees and not those elsewhere. As

the Supreme Court instructed in Longshoremen I :

[T]he inquiry must be carefully focused: to determine

whether an agreement seeks no more than to preserve the

work of bargaining-unit members, the Board must focus on

the work of the bargaining unit employees, not on the work

of other employees who may be doing the same or similar

work, and examine the relationship between the work as it

existed before the innovation and as the agreement proposes

to preserve it.

447 U.S. at 507 (emphasis added) (footnote omitted); see also

Longshoremen II, 473 U.S. at 77-78.

The Union argues, however, that if only Local 93 employees are

used as the basis for comparison, then new locals would never be able

to form because any new local would need, by definition, to expand

its work jurisdiction. The determination of § 8(e) claims, however, is

a fact-bound endeavor. See National Woodwork, 386 U.S. at 644. In

the case at hand, we are not faced with a new local formed at a work-

site lacking employee history. Rather, the pool of employees out of

which the local bargaining unit was formed has an individual work

history, distinct from that of the newly-formed local and distinct from

that of Marrowbone's contractors. Furthermore, the NLRB clearly

defined the employees represented by the local in its direction of elec-

tion. In such a circumstance, the baseline job descriptions of the local

have a clear reference point. Moreover, Local 93 was formed in July

1993, and from July until December, its members did not perform

transportation and delivery work. Only with the ratification of the

12

national agreement in December was Marrowbone required to assign

that work to classified employees.

Thus, we find that, in the case at hand, Local 93 employees are the

appropriate group to consult in comparing the new work with the old.

Using the previous work of the members of the local bargaining unit,

as well as the work of bargaining unit employees from July until

December 1993, as the basis for comparison, we conclude that when

the arbitrator applied the national agreement to force Marrowbone to

cease its relationship with its contractors for transportation and deliv-

ery work, it applied the agreement in a work-acquisitive manner. The

bargaining unit employees never engaged in delivery and transporta-

tion work before the enforcement date of the national agreement. The

clauses in the national agreement that forced Marrowbone to turn over

this work to union employees would therefore be an aggrandizement

of the local employees' work. And because, in turning over such work

to employees, Marrowbone was required to cease its business rela-

tions with other parties, the clauses are secondary in nature. The arbi-

trator's application of the national agreement is therefore contrary to

the dictates of § 8(e).

Despite this fact, the Union argues that the national agreement, by

its terms, supersedes any customs that may already exist at Marrow-

bone. Article XXVI(b) of the national agreement, it argues, explicitly

states that the agreement abolishes all prior customs and rules. Sec-

tion 8(e), however, applies not just to the parts of the national agree-

ment that require the cessation of contractor work, but to the entire

agreement as applied. Thus, even if Article XXVI(b) would operate

to abolish the prior work situation at Marrowbone, because that aboli-

tion would be contrary to the dictates of § 8(e), we cannot give it legal

force.

The Union further maintains that because Marrowbone has pres-

ented no evidence of any improper Union motive, the national agree-

ment should not be interpreted to be work-acquisitive or secondary.

Marrowbone, however, need not demonstrate that the Union had an

illegal motive. Rather, it need only show that, under "all the surround-

ing circumstances," the agreement is work-acquisitive in nature.

National Woodwork, 386 U.S. at 644. In a situation like the case

before us, where a subcontracting clause forces an employer to cease

13

business relations with a contractor in a way that aggrandizes the

local's work jurisdiction, that circumstance alone is sufficient to find

that the agreement is secondary in effect and thus violative of § 8(e).

For the reasons given, we reverse the judgment of the district court

insofar as it requires that Marrowbone cease using contractors for the

transportation and delivery work traditionally performed for it by con-

tractors.

REVERSED

JONES, District Judge, dissenting:

The collective bargaining agreement ("CBA") between Marrow-

bone and the Union contains a "work preservation" provision, which,

as reasonably construed by an arbitrator, provides that Marrowbone

will use only bargaining unit employees to transport and deliver mate-

rials and supplies within its Mingo County complex. The primary

issue on appeal is whether the CBA, which indirectly prohibits Mar-

rowbone from using the outside contractors it previously employed to

do such work, is unenforceable under § 8(e) of the National Labor

Relations Act. The majority holds that because the CBA's effect is to

grant the local bargaining unit work it did not previously perform, the

relevant clause does not "preserve" work for the Union, but is rather

"work-acquisitive" and thus violative of § 8(e). However, just as

clauses that preserve work the local bargaining unit has long per-

formed are not necessarily lawful under § 8(e),1 I do not believe that

work acquisition clauses automatically violate § 8(e). In attempting to

determine whether a contract provision violates§ 8(e), we should not

rely solely on the distinction between work acquisition and work pres-

ervation, but should instead look at the totality of the circumstances

_________________________________________________________________

1 "[A]n agreement that reserves work for union members may also have

an unlawful secondary objective. The preservation/acquisition dichotomy

. . . can serve the useful purpose of aiding the inquiry regarding unlawful

secondary objectives when an agreement attempts to secure work but

`jobs are not threatened.'" NLRB v. Int'l Longshoremen's Ass'n., 473

U.S. 61, 79 n.19 (1985) (emphasis added) ("ILA II"). However, "[i]t

must not be forgotten that the relevant inquiry . . . is whether a union's

activity is primary or secondary." Id. at 81.

14

to determine if the provision in question was motivated by primary or

secondary intent.2 Accordingly, I dissent.

Admittedly, the language of § 8(e) is broad, and taken at face

value, would appear to prohibit any agreement that requires an

employer to cut off business dealings with an outside party. However,

§ 8(e) was intended to prohibit only those clauses that have the effect

of creating secondary pressure on a bargaining situation. In its semi-

nal opinion on the subject, the Supreme Court noted that "Congress

meant §§ 8(e) and 8(b)(4)(B) to prohibit only`secondary' objectives."

National Woodwork, 386 U.S. at 620. The Court has since further

explained that "[t]he `touchstone' and`central theme' of § 8(e) is the

protection of neutral employers . . . which are caught in the middle

of a union's dispute with a third party." Kaiser Steel Corp. v. Mullins,

455 U.S. 72, 84 (1982). Although little case law analyzes the limits

of § 8(e), the Supreme Court opinions on point make clear that § 8(e)

was enacted because Congress did not want a dispute between a sin-

gle business and its employees to draw neutral outside parties into its

ambit.

_________________________________________________________________

2 The NLRB's standard for determining if a contract clause violates

§ 8(e) is that "[c]ontract provisions are secondary and unlawful if they

are to have as their principal objective the regulation of the labor policies

of other employers and not the protection of the unit." General Truck

Drivers, Local Union 957, 298 N.L.R.B. 395, 399 (1990) (quoting Retail

Clerks Int'l Ass'n, Local Union 1288, 163 N.L.R.B. 817, 819 (1967)).

See also National Woodwork Mfrs. Ass'n v. NLRB, 386 U.S. 612, 635-

636 (1967) ("Although the language of § 8(e) is sweeping, . . . the legis-

lative history . . . consistently defined the evil to be prevented in terms

of agreements which obligated neutral employers not to do business with

other employers involved in labor disputes with the union.").

The Third Circuit put it well when it explained that"[i]f the purpose

is to benefit the employees of the bargaining unit, the agreement is `pri-

mary' and does not run afoul of § 8(e). If, however, the aim is to put

pressure on an outside employer to submit to union objectives, the provi-

sion is secondary and prohibited. . . . So long as the union has no forbid-

den secondary purpose to affect the employment relations of an outside

employer, the agreement is valid even though it adversely affects the

employment opportunities of non-represented workers." In Re Bitumi-

nous Coal Wage Agreements, 756 F.2d 284, 289 (3d Cir. 1984).

15

The Supreme Court has set forth general formulations to aid courts

in determining when a clause has secondary effects and when it is pri-

mary in nature. In National Woodwork, the Court held that because

the union's goal in that case was to preserve work traditionally per-

formed by union laborers, the clause at issue was primary in nature

and did not violate § 8(e). 386 U.S. at 644-46. More than a decade

later, in NLRB v. International Longshoremen's Ass'n, 447 U.S. 490,

504 (1980) ("ILA I"), the Court held that courts must not only seek

to determine whether the agreement's effect is to preserve work, but

also whether its intent or objective is to preserve work.3

Where a clause meets the ILA I test and is found to have the pri-

mary objective of seeking to preserve work traditionally done by the

union, the clause generally does not violate § 8(e). However, the

Supreme Court has never held that a clause seeking to acquire new

work for union employees necessarily violates § 8(e).4 Rather, the

Court has stated that "[t]he touchstone is whether the agreement or its

maintenance is addressed to the labor relations of the contracting

employer vis-a-vis his own employees." National Woodwork, 386

U.S. at 645.

The majority holds that this case turns on whether the CBA's

clause was work-preservative or work-acquisitive. 5 Further, the

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3 The Third Circuit has held that to find a contract clause invalid under

§ 8(e), a court must find that it has both a secondary purpose and a sec-

ondary effect. In Re Bituminous Coal, 756 F.2d at 290. The Supreme

Court's holdings are consistent with this view. For example, the Court

has held that a work preservation clause is not valid per se, but rather

fails to provide a union with an adequate defense to an § 8(e) charge --

even if the work "preserved" was traditionally performed by the union --

if one of the union's objectives is really to influence the employer by

exerting pressure on a third party, such as a subcontractor. See NLRB v.

Enterprise Ass'n of Steam Pipefitters, 429 U.S. 507 (1977).

4 The Supreme Court specifically reserved that question, noting that

while work preservation was a protected primary motivation, it might be

different if a union sought to "monopolize jobs or acquire new job tasks

when their own jobs [were] not threatened." National Woodwork, 386

U.S. at 630-31; NLRB v. Enterprise Ass'n of Steam Pipefitters, 429 U.S.

at 528 n.16 (majority) and 537 n.2 (dissent).

5 Because the parties have focused on the question of whether the

Union is preserving or acquiring work, a primary issue has been whether

16

majority concludes that "Marrowbone . . . need not demonstrate that

the Union had an illegal motive. Rather, it need only show that, under

`all the surrounding circumstances,' the agreement is work-acquisitive

in nature." In my opinion, this analysis incorrectly replaces the

Supreme Court's primary query in National Woodwork, whether a

clause is primary or secondary, with a derivative inquiry, whether a

clause is work preservative or work acquisitive.

As the Supreme Court has recognized, "[t]he various linguistic for-

mulae and evidentiary mechanisms we have employed to describe the

primary/secondary distinction are not talismanic nor can they substi-

tute for analysis." ILA II, 473 U.S. at 81. Rather, cases require an

inferential, fact-intensive inquiry. Id. While the fact that a clause is

work acquisitive is a relevant factor to consider when analyzing

whether the clause is primary or secondary, the preserva-

tion/acquisition distinction is only one of several factors to consider.

The party who challenges a contract provision has the burden of

proving that the provision in question was motivated by unlawful,

secondary intent and thus violates § 8(e). Looking at the case at hand,

I find that Marrowbone has failed to show that the clause at issue had

any secondary purpose. Again, "[c]ontract provisions are secondary

and unlawful if they . . . have as their principal objective the regula-

tion of the labor policies of other employers and not the protection of

the unit." General Truck Drivers, 298 N.L.R.B. at 399 (quoting Retail

Clerks, 163 N.L.R.B. at 819). Even if a contract provision increases

the number of union jobs, "[a]bsent some additional showing of an

attempt `to reach out to monopolize jobs,' such an agreement is law-

ful." ILA II, 473 U.S. at 79 (quoting National Woodwork, 386 U.S.

at 630).

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we should consider the work that was previously done by the specific

local bargaining unit, or the work traditionally done by similar units

across the nation in order to decide if work is being preserved or

acquired. Although the district court held that it should consider the past

work practices of other local bargaining units, I find the majority's analy-

sis of this issue more persuasive. Nonetheless, I do not believe that this

determination ends our inquiry.

17

There is no evidence in this case that suggests the Union negotiated

this provision to target neutral employers or coerce customers. Rather,

the totality of the circumstances that can be gleaned from the record6

indicates that a newly-formed local bargaining unit had only its own

members' interests at heart when it negotiated a provision that would

reserve transport jobs for Marrowbone employees.

Determining § 8(e) claims is a fact-bound endeavor, and the totality

of surrounding circumstances must be examined to determine whether

a union's objective was primary in nature, or whether an agreement

was "tactically calculated to satisfy union objectives elsewhere."

National Woodwork, 386 U.S. at 644; ILA I , 447 U.S. at 504 (court

must look at "all the surrounding circumstances" to decide if Union's

objective is primary or secondary). The totality of circumstances to

consider in determining whether a union had primary or secondary

motivation includes the "history of labor relations between the union

and the employers . . . and the economic personality of the industry."

National Woodwork, 386 U.S. at 645 n.38. It seems also relevant to

consider the history and strength of a particular union when attempt-

ing to distinguish between the union which seeks only to advance its

members' economic interests and the union which seeks to aggran-

dize power with which to coerce neutral third parties.

The district court considered the history between the parties, as

well as the parties' actions and motivations, and after reviewing the

totality of circumstances, held that this case contained no indicia of

improper secondary Union motivations. Instead, it found that the pro-

vision was negotiated by a fledgling local bargaining unit solely to

advance its own workers' interests and that the provision was "ad-

dressed to the labor relations of the contracting employer vis-a-vis

[its] own employees." ILA I, 447 U.S. at 504. Marrowbone has not

identified any evidence contradicting these findings and has failed to

demonstrate that the provision at issue was the result of any improper

secondary motivations.

For these reasons, I respectfully dissent.

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6 The case was decided by the district court on a joint stipulation of

undisputed material facts.

18