Petition — National Labor Relations Board v. International Longshoremen's Ass'n

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K, JR., CLERR_

Iu the Supreme Court of the Huited States

OCTOBER TERM, 1979

NATIONAL LABOR RELATIONS BOARD, PETITIONER

Vv.

INTERNATIONAL LONGSHOREMEN’S ASSOCIATION,

AFL-CIO AND CouNCIL OF NorTH ATLANTIC

SHIPPING ASSOCIATIONS, ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

WADE H. MCCREE, JR.

Solicitor General

Department of Justice

Washington, D.C. 20530,

WILLIAM A. LUBBERS

General Counsel

JOHN E. HiGcIns, JR.

Deputy General Counsel

ROBERT E. ALLEN

Acting Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

LINDA SHER

Assistant General Counsel

National Labor Relations Board

Washington, D.C. 20570

A NERA Sa A pete lp ni ak fon .

Ao RRR eh eee DU INO Be Rie eR at repeumenemans

Page

EE eee 1

Se EE Yaa 2

ueeeen prevented 2

TE SSE ae 2

I 3

A. The Board’s findings of fact _........ 3

1. The Port of New York (the “Dol-

2. The Ports of Baltimore and

Hampton Roads (the “Associated

=eeees. CON) 8

B. The Board’s decisions and orders. 12

C. The decision of the court of appeals.. 14

Reasons for granting the writ 15

oe ETS ac NTT ee 23

EESTI Se la

EASES OC 84a

I eee ht 87a

STN 90a

a SEE SS 110a

CITATIONS

Cases:

Humphrey v. International Longshore-

men’s Association, 548 F.2d 494 .._ 15, 16

Cases—Continued Page

International Longshoremen’s Association

(Consolidated Express, Inc.), 221

N.L.R.B. 956, enf’d 587 F.2d 706, cert.

denied, 429 U.S. 1041 -........ 4, 5, 6, 7, 12-14, 15

International Longshoremen’s Association

Local 1575 v. NLRB, 560 F.2d 4389...... 15

Meat and Highway Drivers, Local 710 v.

yo <A. Se a iy || Eee 18

NLRB vy. Enterprise Association of Pipe-

fitters, 429 Ud. 607 .............. 17, 19, 21, 22

' National Woodwerk Manufacturers Asso-

ciation v. NLRB, 386 U.S. 612 ....... 17, 18, 19,

20, 22

Northeast Marine Terminal Co. v. Caputo,

RE | SARS ROGESEAE SY Detar Sep Ae See 21

P. C. Pfeiffer Co. v. Diverson Ford, No.

18-425 (Nov. 27, 1979) 000222 .. 21

Sheet Metal Workers, Local 223 v. NLRB,

i BE, GEESE TOE MMA 18, 20

Statutes:

Longshoremen’s and Harbor Workers’

Compensation Act, ch. 509, 44 Stat.

1424, 33 U.S.C. 901 et seg. 21

BO SSM DORLO) bib 21

National Labor Relations Act, 29 U.S.C.

151 et seq.:

Section 8(b) (4) (B), 29 U.S.C. 158

SOIR sie 2,12, 19

Section 8(e), 29 U.S.C. 158(e) ...... S.A Bae

19, 22

Section 10(/), 29 U.S.C. 160(1) _...... 16

Iu the Supreme Court of the United States

OCTOBER TERM, 1979

No.

NATIONAL LABOR RELATIONS BOARD, PETITIONER

Vv.

INTERNATIONAL LONGSHOREMEN’S ASSOCIATION,

AFL-CIO AND CoUNCIL OF NorTH ATLANTIC

SHIPPING ASSOCIATIONS, ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

The Solicitor General, on behalf of the National

Labor Relations Board, petitions for a writ of cer-

tiorari to review the judgment of the United States

Court of Appeals for the District of Columbia Circuit

in this case.

OPINIONS BELOW

The opinion of the court of appeals (App. A, infra,

la-83a) is not yet officially reported. The decisions

and orders of the National Labor Relations Board

(Apps. D and E, infra, 90a-109a, 110a-184a) are re-

ported at 231 N.L.R.B. 351 and 236 N.L.R.B. No. 42.

(1)

JURISDICTION

The judgment of the court of appeals (App. B,

infra, 84a-86a) was entered on September 25, 1979.

The Board’s petition for rehearing was denied on

December 13, 1979 (App. C, infra, 87a-88a). The

jurisdiction of this Court is invoked under 28 U.S.C.

1254(1).

QUESTION PRESENTED

Whether the National Labor Relations Board prop-

erly concluded that contractual provisions adopted by

the union and the employer-organizations to deal

with containerization in the shipping industry en-

larged, rather than preserved, work opportunities for

employees represented by the union, and that such

provisions therefore violated Section 8(e) of the Na-

tional Labor Relations Act and that union action to

enforce them violated Section 8(b) (4) (B) of the Act.

STATUTE INVOLVED

The relevant provisions of the National Labor Re-

lations Act (29 U.S.C. 151 et seg.) are as follows:

1. Section 8(b), 29 U.S.C. 158(b), provides in

pertinent part:

It shall be an unfair labor practice for a labor

organization or its agents—

4(ii) to threaten, coerce, or restrain any per-

son engaged in commerce or in an industry af-

fecting commerce, where * * * an object thereof

is:

* * * * *

(B) forcing or requiring any person to cease

using, selling, handling, transporting, or other-

wise dealing in the products of any other pro-

ducer, processor, or manufacturer, or to cease

doing business with any other person * * * Pro-

vided, That nothing contained in this clause (B)

shall be construed to make unlawful * * * any

primary strike, or primary picketing; * * *

2. Section 8(e), 29 U.S.C. 158(e), provides in

pertinent part:

It shall be an unfair labor practice for any

labor organization and any employer to enter

into any contract or agreement, express or im-

plied, whereby such employer ceases or re-

frains or agrees to cease or refrain from han-

dling, using, selling, transporting or otherwise

dealing in any of the products of any other em-

ployer, or to cease doing business with any other

person, and any contract or agreement entered

into heretofore or hereafter containing such an

agreement shall be to such extent unenforceable

and void * * *

STATEMENT

A. The Board’s Findings of Fact 1

1, The Port of New York (the “Dolphin” Case)

New York Shipping Association (NYSA) is an

association of employers, including steamship and

stevedoring companies, whose operations involve ocean

transportation of cargo and passengers into and out

1 Two separate Board proceedings, International Longshore-

men’s Association, et al. (Associated Transport, Inc.), 231

N.L.R.B. 351 (1977), and International Longshoremen’s

Association and New York Shipping Association, Inc. (Dolphin

Forwarding, Inc.), 2836 N.L.R.B. No. 42 (1978), were con-

solidated for argument and decision by the court of appeals.

Dolphin Forwarding involves the Port of New York; Associ-

ated Transport involves the Ports of Baltimore, Maryland, and

Hampton Roads, Virginia. The facts of each case are described

separately herein.

(OSES ene nonsense tren TN ae eee ee

of the Port of New York (App., infra, 92a). It con-

ducts collective-bargaining negotiations and enters in-

to agreements on behalf of its members with the In-

ternational Longshoremen’s Associaticn (ILA) (App.,

infra, 93a). Since 1970, the Council of North At-

lantic Shipping Associations (CONASA), a multi-

employer bargaining association representing con-

stituent shipping associations, including N YSA, has

bargained with ILA on a master-contract basis over

terms and conditiuns of employment for longshore-

men employed by NYSA members (App., infra,

138a). Warn

Before World, II most solid cargo moving over the

New York docks was handled on a piece-by-piece

basis by longshoremen represented by ILA. Truckers

delivered loose cargo to the pier and removed it from

their vehicles, and longshoremen then placed the cargo

on drafts or pallets, or into small boxes, before load-

ing it aboard ship. Cargo from incoming ships was

broken down by longshoremen and picked up at the

pier by truckers for delivery to the ultimate con-

signee. In the late 1940’s, the practice began of load-

ing (“stuffing”) loose cargo into large wooden boxes

and metal containers for shipment to and from Puerto

Rico. Incoming cargo was removed (“stripped”)

from these containers prior to delivery to the re-

cipient. See International Longshoremen’s Associa-

tion, AFL-CIO (Consolidated Express, Inc.), 221

N.L.R.B. 956, 967-968 (1975) (hereafter Conex).

Consolidators, employing laborers not represented

by ILA, traditionally had solicited, received and con-

solidated miscellaneous small shipments of goods for

their own customers and had transported that loose

cargo from their off-pier facilities to the docks. With

the advent of containerization, they began to stuff

such goods, known as less-than-container-load (LCL)

cargo,” into containers at their off-pier facilities for

their own customers and to transport the containers

to the docks for loading aboard ship by longshore-

men. The consolidators also began to pick up LCL

containers unopened at the docks on inbound ship-

ments and to strip them at their off-pier facilities

prior to delivery of the cargo to their customers.

(App., infra, 98a.)

During the same period, longshoremen represented

by ILA loaded containers holding LCL cargo into,

and unloaded them from, ships. They did so, how-

ever, only with respect to cargo sent directly to the

pier in loose or bulk form by the steamship lines’

customers, as opposed to cargo sent to the consolida-

tors or freight forwarders for transshipment. Conez,

supra, 221 N.L.R.B. at 959. |

' Dolphin Forwarding, Inc. (Dolphin) and San Juan

Freight Forwarders, Inc. (San Juan) are consolida-

tors with off-pier facilities within a 50-mile radius

of the Port of New York, who solicited business from

customers planning to ship LCL or LTL cargo be-

tween the Port of New York and Puerto Rico (App.,

infra, 93a). Customers doing business with these

companies transported their goods to off-pier facilities

*LCL cargo or LTL (less-than-trailer-load) cargo con-

sists of individual shipments to two or more consignees that

is transported in a single container. A full-shipper’s-load

(FSL), by contrast, is a single container of cargo sent from

one shipper to one beneficial owner consignee. (App., infra,

140a, 120a.)

I a

Ee Te eT ee

where the consolidators, using non-ILA labor, con-

Solidated the goods with those of other customers and

stuffed them into containers provided by NYSA-

member steamship companies. The off-pier consolida-

tors then transported the filled containers to the dock-

side facilities of the steamship companies. There,

employees of the steamship companies (longshoremen

represented by the ILA) loaded the containers onto

specialized or “containerized” vessels? for shipment

to Puerto Rico (App., infra, 98a).

In 1959, the ILA and NYSA negotiated a collective-

bargaining agreement that expressly recognized the

right of NYSA members to handle containers of any

size or kind without restriction on stripping and re-

stuffing by ILA labor at the pier. In turn, NYSA

agreed to contribute to a jointly-administered fund

certain royalty payments on consolidators’ containers

stuffed or stripped away from the pier by non-ILA

labor. Conex, supra, 221 N.L.R.B. at 960, 968-969.

In 1967, ILA demanded during collective-bargain-

ing negotiations with NYSA that longshoremen stuff

and strip all containers crossing the New York docks.

In February 1969, after a lengthy strike, detailed

provisions governing containerization—the “Rules on

Containers”—were agreed upon, and since then have

appeared, as modified, in every NYSA-ILA contract,

and later in every CONASA-ILA contract. The Rules

on Containers established a system under which ILA-

* These ships are designed to carry 20- and 40-foot metal

containers, holding all types of freight, which can be affixed

to a truck chassis and transported unopened from the dock to

their destination. Conex, supra, 221 N.L.R.B. at 968.

represented longshoremen were to strip and restuff

all LCL cargo in containers owned or leased by NYSA

members and originating within 50 miles of the

Port of New York—even if the containers already

had been stuffed off the pier by consolidators and thus

were ready for immediate loading aboard a con-

tainership. If the steamship line failed to have its

longshoremen perform such work, the line was re-

quired to pay liquidated damages into the Container

Royalty Fund (App., infra, 93a-94a.) In January

1973, ILA and CONASA executed the “Dublin Sup-

plement” to the Rules, which, among other things,

sought to prevent evasion of the Rules by forbidding

steamship lines to supply empty containers to con-

solidators who sought to conduct business as they had

in the past (App., infra, 94a), and see Conex, supra,

221 N.L.R.B. at 969-970.

Beginning on August 24, 1974, and continuing

through January 23, 1975, the NYSA-ILA Container

Committee assessed liquidated damages and fines to-

talling approximately $47,000 against NYSA mem-

bers Transamerican Trailer Transport, Inc. (TTT)

and Maritime Transportation Management, Ine.

(MTM). These fines were levied because the steam-

ship companies provided containers to Dolphin and

San Juan, whose consolidation and forwarding op-

erations failed to comply with the Rules. In conse-

quence, TTT and MTM informed the consolidators

that they would no longer furnish them containers

or space aboard their vessels, and thereafter TTT and

MTM ceased doing business with Dolphin and San

Juan (App., infra, 94a.)

2. The Ports of Baltimore and Hampton Roads

(the “Associated Transport” case)

Houff Transport, Inc. ( Houff) and Associated

Transport, Inc. (Associated ) transport cargo by truck

from the Baltimore and Hampton Roads ports. Houff,

a non-union business, has operated truck terminals

in Baltimore and Norfolk, Virginia, since 1946 and

1952, respectively. Associated, whose terminal em-

Ployees and truck drivers are represented by the

Teamsters Union, has operated a terminal in Virginia

Beach since at least the 1960’s (App., infra, 137a).

Prior to the advent of containerization, Houff and

Associated picked up loose import cargo at the piers

in Baltimore and Hampton Roads and hauled it in

their own trucks, at their customers’ direction, to the

ultimate consignee (App., infra, 140a). Fully con-

tainerized ships first appeared in those ports in 1965.

During the ensuing decade, a greatly increased

_ amount of import cargo passing over those docks

was shipped in containers (App., infra, 120a-121a).

Since the mid-1960’s, truckmen in Baltimore and

Hampton Roads, such as Associated and Houff, rou-

tinely picked up at the piers unopened containers

holding full shipper’s loads (FSL)—that is, cargo

destined to a single consignee who also is the bene-

ficial owner of the cargo, which has been transported

in a single container (App., infra, 121a).* After

* ILA-represented longshoremen stripped FSL containers at

the pier, but only when requested by the consignee (App.,

a oe

EM i Cb tse testi site ree astra la hE A tt Rc hes pn

hauling the sealed FSL containers to their off-pier

freight terminals, truckmen either left the FSL in-

tact for subsequent delivery to the consignee in the

original container, or their own employees stripped

the cargo from the container and stuffed it into one

of the carriers’ trucks, which then was driven to the

ultimate consignee (App., infra, 164a).°

The Rules on Containers were first incorporated

into the collective bargaining agreements between the

ILA and the Steamship Trade Association of Balti-

more, Inc. (STA) and the Hampton Roads Shipping

Association (HRSA) in 1968. The Rules, however,

applied only to LTL and similar cargo consisting of

infra, 121a). They also stripped LTL cargo and placed it

loose on the pier for pick up by truckmen (App., infra, 120a).

5 Associated and Houff, for a number of years, routinely

stripped FSL containers at their terminals with their own

employees and stuffed that cargo into their own vehicles

(App., infra, 164a). For example, if Associated had two 20-

foot containers destined for the same consignee, it would stuff

the contents of both containers into one of its 45-foot trucks

rather than haul the containers separately with two of its

tractors. This practice reduces the truckman’s direct labor

cost and such variable expenses as gasoline and oil. It also is

economical f r the truckman to strip the container and return

it promptly since he pays a daily rental fee to the steamship

line for the use of its container. In other instances the cargo

must be stripped and transported in the truckmen’s own vehi-

cle because the unstripped container is too heavy to meet state

highway and bridge weight restrictions. The cargo also may

be stripped at the truckman’s terminal if the container load is

improperly balanced or the terrain of the route to the con-

signee is too hazardous for the hauling of a container. (J.A.

126a-131a, 196a-198a) (“J.A.” references are to the joint

appendix in the Associated Transport case in the court of

appeals).

shipments destined for more than one shipper.’ There

were no provisions in the Rules requiring the strip-

ping of FSL cargo by ILA labor at the pier until

1974. (App., infra, 140a, 148a.)*

Since 1974, the Rules have provided that ILA labor

shall strip all FSL containers that otherwise would

be stripped “by other than [the consignee’s] own

employees” within 50 miles of the ports (App., infra,

148a). The new Rules also provided that all FSL

cargo consigned to the beneficial owner’s place of

business, or warehoused for at least 30 days within

the port area, need not ke stripped by ILA labor, but

that a royalty would be paid to the Container Royalty

Fund for each such container not handled by long-

shoremen (App., infra, 148a). The effect of these

new Rules, as clarified,* is that whenever a truckman

6Such cargo is sometimes referred to as CFCL

dated full consumer load) cargo. (consoli-

7 However, a practice had existed since 1969 in i

and Hampton Roads whereby longshoremen at aa eae

stripped FSL containers whose cargo was consigned to a

warehouse located within 50 miles of the ports. Prior to 1969

truckmen in those ports routinely had hauled unstripped

FSL containers to nearby warehouses, where warehouse em-

ployees stripped them and stored the cargo. (App., infra

145a). In January 1973, a Container Committee, composed

of ILA and CONASA representatives, issued an interpreta-

tion of the Rules—the so-called Dublin Supplement—which

permitted truckmen to resume hauling FSL cargo directly

to a port area warehouse for unstripping provided that the

ms was stored there at least 30 days (App., infra, 145a-

8In 1975, after a suspension of the Rules b

, : y the ILA, the

Rules were clarified to preclude storage of cargo in ware-

houses within 50 miles of the ports (App., infra, 158a-161a).

een as ee

strips an FSL container at an off-pier terminal, lo-

cated within 50 miles of the ports, with his own

employees prior to delivery of the FSL cargo to the

beneficial owner’s place of business—a practice called

“shortstopping”—the shipping line which owns that

container becomes liable for liquidated damages of

$1000 (App., infra, 148a).

After the new Rules became effective, Houff’s em-

ployees at its Baltimore area truck terminal, located

within 50 miles of the port, stripped containers picked

up from United States Lines (USL) and Lavino

Shipping Company (Lavino) and stuffed the contents

into Houff trucks for transport to its customers in

West Virginia.’ When ILA learned of this off-pier

stripping and stuffing, it brought charges against

USL and Lavino, claiming violations of the Rules on

Containers. (App., infra, 154a.) USL was assessed

liquidated damages of $2000, and Lavino was as-

sessed damages of $1000 (App., infra, 154a). USL

and Lavino paid their fines and demanded indemni-

fication from Houff; when Houff refused to reimburse

them, they cancelled their Equipment Interchange

Agreement * with Houff (App., infra, 154a-155a).

® Houff had determined that the containers were over-

loaded and unsafe, and that their rental was a needless ex-

pense (App., infra, 154a).

10 Where, as here, the shipping lines own the containers, a

motor carrier cannot obtain custody of containers to trans-

port its cargo unless an Equipment Interchange Agreement

is in effect between the carrier and the shipping line which

is responsible for the cargo’s ocean transportation. Such

agreements set forth the rights and obligations of the lessee-

ee mp OS

I EE

Since the cancellation of those agreements, USL and

Lavino have refused to release containers to Houff

and Houff has lost business because its cnsteinats

have had to reassign the hauling of their cargo to

motor carriers with USL and Lavino interchange

agreements (App., infra, 155a).

Fines were also levied against USL because of

Associated’s stripping and stuffing of containers un-

der sin.ilar circumstances. This led to the cancella-

tion of USL’s interchange agreement with Associated

and to a consequent loss of business for Associated.

(App., infra, 155a-157a.) |

B. The Board’s Decisions and Orders

Based on these facts, the Board found that tradi-

tionally the off-pier stuffing and stripping of con-

tainers was performed by consolidating companies and

truckmen, and not by longshoremen. Accordingly, the

Rules on Containers, insofar as they applied to saab

off-pier stuffing and stripping, had a secondary ob-

jective proscribed by Section 8(e) of the Act, and the

ILA’s eftests to enforce the Rules violated Section

8(b) (4)(B) of the Act. The Board followed its de-

cision in the Conex case," hich involved the appli-

cation of the Rules on Containers to similar work

(App., infra, 94a-95a, 115a-117a). In Conex, the

Board concluded that:

pate when he has custody of the lessor-shipping line’s

container and establish the per diem charge paid by the truck

man for use of the container. (App., infra, 149a-151a ) ;

11 International Longshoremen’s A ati.

7 ssociation (Consoli

Express, Inc.), 221 N.L.R.B. 956 (1975), enf’d 537 Sd bes

(2nd Cir. 1976), cert. denied, 429 U.S. 1041 (1977).

A tees Jn

™ wah «Ta

sas Fe aE Sd et

The traditional work of the longshoremen rep-

resented by ILA has been to load and unload

ships. When necessary to perform their loading

and unloading work, longshoremen have been re-

quired to stuff and strip containers on the piers.

Similarly, for many years, maritime cargo has

been sorted and consolidated off the docks by

companies employing teamsters and unrepre-

sented employees. With the advent of vessels de-

signed exclusively to carry the large containers

presently in use, these consolidating companies,

such as Consolidated and Twin, have continued to

consolidate shipments into containers prior to

their placement aboard the vessels. The consoli-

dators generate such work themselves, perform-

ing it not on behalf of the employer-members of

NYSA but for their own customers who have

goods to ship. Furthermore, they perform this

consolidation work at their own off-pier prem-

ises, with their own employees who are outside

the unit represented by ILA, and who fall within

the coverage of separate collective-bargaining

agreements, under which they are represented by

other labor organizations. It is clear, therefore,

that Consolidated and Twin have traditionally

been engaged in the work of stuffing and strip-

ping containers such as are here in controversy.

From the foregoing and the record as a whole,

it is clear that the on-pier stripping and stuffing

work performed by longshoremen as an incident

of loading and unloading ships does not embrace

the work traditionally performed by Consolidated

and Twin at their own off-pier premises. It does

not fall within ILA’s traditional role’ to engage

in make-work measures by insisting upon strip-

eendianianeimeiaenenaiameeeis une

ping and stuffing cargo merely because that

cargo was originally containerized by nonunit

personnel. Yet, ILA’s demands here could only

be met if the work traditionally performed off

the pier by employees outside the longshoremen

unit were taken over and performed at the pier

by longshoremen represented by ILA. [221

NLRB at 959-960; footnote omitted. ]

The Board, inter alia, ordered the ILA and the As-

sociations to cease giving effect to and enforcing the

Rules on Containers to the extent that they had been

found to be unlawful (App., infra, 98a, 99a-100a,

117a-118a).

C. The Decision of the Court of Appeals

A divided panel of the court of appeals refused to

sustain the Board’s conclusion that the Rules on Con-

tainers, and ILA action to enforce them, sought to

enlarge the work opportunities for ILA bargaining

units rather than merely to preserve work tradition-

ally performed by employees in those units. The

court held that “the Board erred as a matter of law by

ignoring traditional work patterns when defining the

work in controversy” (App., infra, 51a; footnote

omitted). The court explained that “[]]ongshoremen

have historically loaded and unloaded ocean-borne car-

go, which not only has meant loading the cargo into

and out of the hold of the ship, but also has meant

sorting the cargo and loading it on to equipment such

as pallets’; from “the longshoremen’s standpoint,

therefore, containerization merely represents a change

in equipment.” Moreover, “the very nature of con-

tainers belies any notion that they present work dis-

sr set saan, sesame

DRIGIS Salle Ra ay A Be oe! Wiminés ‘

tinctly different from and unrelated to traditional

longshoremen’s work.” (App., infra, 48a-49a; foot-

notes omitted. )

The full court, with four judges dissenting, denied

the Board’s petition for rehearing en banc (App.,

infra, 87a-88a).

REASONS FOR GRANTING THE WRIT

1. The decision of the court of appeals in these

cases is in direct conflict with the decision of the

Second Circuit in International Longshoremen’s As-

sociation v. NLRB, 537 F.2d 706 (1976), cert. denied,

429 U.S. 1041 (1977), enforcing the Board’s order in

Conex, supra. See also International Longshoremen’s

Association Local 1575 v. NLRB, 560 F.2d 439 (1st

Cir. 1977); Humphrey v. International Longshore-

men’s Association, 548 F.2d 494 (4th Cir. 1977). The

Conex case involved the application of the Rules on

Containers to the identical off-pier stuffing and strip-

ping of LCL cargo performed by consolidators in the

Port of New York involved in the Dolphin case here.

The Second Circuit, contrary to the view of the Dis-

trict of Columbia Circuit, agreed with the Board that

the traditional work of longshoremen does not include

such off-pier stuffing and stripping of cargo, and that,

because the Rules on Containers sought to acquire

such work for longshoremen, they had a secondary ob-

jective proscribed by Section 8(e) of the Act (537

F.2d at 711-712). Moreover, while Conex did not

pass on the off-pier shortstopping work performed by

truckers in the Baltimore and Hampton Roads ports,

which is involved in the Associated Transport case

here, the District of Columbia Circuit employed the

same legal principle used with respect to the off-pier

work in the Port of New York in rejecting the Board’s

finding that such shortstopping was not traditional

longshoremen’s work (App., infra, 45a-52a).2

It is important not only to the parties but also to

the nation that this conflict between the circuits be

promptly resolved by this Court. Insofar as the Port

of New York is concerned, the parties are confronted

with diametrically opposite decisions—the order en-

forced by the Second Circuit precludes the application

of the Rules on Containers to off-pier stripping and

stuffing work, whereas the decision of the District of

Columbia Circuit would permit their application to

to such work. Moreover, while the decision of the Dis-

trict of Columbia Circuit would permit the applica-

tion of the Rules on Containers to off-pier stripping

and stuffing work in the Baltimore and Hampton

Roads ports, there is reason to believe that the Fourth

Circuit would reach a different conclusion if a pro-

ceeding were brought in that circuit (see note 13,

supra). Negotiations for a new collective agreement

12In Humphrey v. International Longshoremen’s Associa-

tion, supra, the Fourth Circuit found that the Board’s Re-

gional Director had reasonable cause to believe that the

application of the Rules on Containers in the Hampton Roads

port was violative of the Act because the off-pier work of

stripping and stuffing containers was not traditional long-

shoremen’s work. It accordingly reversed the district court’s

refusal to issue a temporary injunction pursuant to Section

10(l) of the Act, 29 U.S.C. 160(1).

18 Indeed, a proceeding raising that question is now pend-

ing there. International Longshoremen’s Association, et al. V.

NLRB, No. 79-1672 (C.A. 4), petition to review 245 N.L.R.B.

No. 172 (1979).

covering east and gulf coast ports are scheduled to

take place in the spring of 1980. Unless the uncer-

tainty as to the validity of the Rules on Containers

created by the conflicting courts of appeals decisions

is speedily resolved, there is great danger that these

negotiations will, as they have in the past, result in

industrial strife over the containerization question."

2. The Board submits that under proper applica-

tion of the principles enunciated by this Court in Na-

tional Woodwork Manufacturers Association v.

NLEB, 386 U.S. 612 (1967), and NLRB v. Enter-

prise Association of Pipefitters, 429 U.S. 507 (1977),

the court below should have enforced the Board’s

orders in the present cases.

a. In National Woodwork, the Court held that

whether an agreement restricting business relations

between two persons violates Section 8(e) of the Act

depends upon “whether, under all the surrounding cir-

cumstances, the Union’s objective was preservation of

work for [the unit] employees, or whether the agree-

ments * * * were tactically calculated to satisfy union

objectives elsewhere” (386 U.S. at 644; footnote

4 See the Reply Memorandum filed in this Court by the

petitioners in International Longshoremen’s Association vV.

Consolidated Express, Inc., Nos. 78-1902, etc., p. 5. That

case involves an antitrust suit based on the application of

the Rules on Containers to consolidators in the Port of New

York. The United States, as amicus curiae, has filed a memo-

randum urging that the petition be denied because the anti-

trust issues would be affected by the validity of the Board’s

position on whether the Rules violate Section 8(e) of the

NLRA, a question that could be resolved by the Court in the

present cases if certiorari is granted.

omitted). If the agreement has the former objective,

it is primary and lawful; if it has the latter objective,

it is secondary and unlawful. Unions and employers

lawfully may agree that work normally performed

or “fairly claimable” by employees in the bargaining

unit will be performed only by unit members; such

provisions have the valid, primary purpose of pro-

tecting the jobs of the employees in that unit. Meat

and Highway Drivers, Local 710 v. NLRB, 335 F.2d

709, 713 (D.C. Cir. 1964). On the other hand, they

may not agree to acquire for the employees of the

primary employer work that is “ ‘neither unit work

nor fairly claimable as unit work’.” Sheet Metal

Workers, Local 223 v. NLRB, 498 F.2d 687, 696

(D.C. Cir. 1974). Such agreements are unlawful be-

cause they reach beyond the primary bargaining unit

to acquire work historically performed by employees

of another employer in another bargaining unit.”

The question whether an agreement merely pre-

serves “traditional” or “fairly claimable’ work for

employees in the bargaining unit, or seeks to acquire

work historically performed by employees of another

employer in another bargaining unit, is to be deter-

mined by the Board in the first instance. The Board

may consider such factors as “the remoteness of the

threat of displacement by the banned product or serv-

15 See National Woodwork, supra, 386 U.S. at 648 (Harlan,

J., concurring): “[this is] not a case of a union seeking to

restrict by contract or boycott an employer with respect to

the products he uses, for the purpose of acquiring for its

members work that had not previously been theirs.”

ices, the history of labor relations between the union

and the employers who would be boycotted, * * * the

economic personality of the industry” (National

Woodwork, supra, 386 U.S. at 644 n.88), and

whether the union seeks “to obtain work that the

employer has no power to assign.” Pipefitters, supra,

429 U.S. at 521.

b. Based on the facts set forth above, the Board

concluded that the traditional on-pier work of long-

shoremen has not included the work performed by em-

ployees of truckers and consolidators—that is, FSL

cargo shortstopping and LCL cargo stuffing and strip-

ping for the customers of truckers and consolidators.

Rather, longshoremen traditionally performed stuf-

fing and stripping work only for customers of the

steamship companies who sent their cargo in loose

form directly to the docks. Therefore, insofar as the

Rules on Containers were designed to obtain for long-

shoremen work that had traditionally been performed

by the consolidators and truckers, the Rules and their

enforcement by ILA had a secondary objective pro-

scribed by Section 8(e) and Section 8(b) (4) (B) of

the Act.

The court below held that “the Board erred as a

matter of law by ignoring traditional work patterns

when defining the work in controversy” (App., infra,

51a; footncte omitted) .** However, in so concluding, the

16 The Court added that it “has no dispute with the Board’s

factual findings. Rather, our conflict with the NLRB is exclu-

sively focused on the Board’s misinterpretation and misappli-

cation of the prevailing law—the doctrine of work preserva-

tion” (App., infra, 59a).

il aie ee

are cannareney

court, not the Board, ignored the teaching of National

Woodwork and failed to consider “all the surround-

ing circumstances,” including “the economic person-

ality of the industry” (386 U.S. at 644 & n.38).

Thus, the court focused primarily upon the skills in-

volved in cargo handling (App., infra, 48a-50a). The

Board, on the other hand, found that, notwithstanding

the similarity of skills involved, there were two dis-

tinct stuffing and stripping markets: one for the con-

venience of steamship companies that must consolidate

loose cargo sent to them by shippers, and one for the

convenience of shippers who consolidate their cargo

in other ways.

The Board could reasonably conclude that, since

ILA workers traditionally have performed the stuffing

and stripping required for the convenience of cus-

tomers of shipping lines but have not traditionally

performed the stuffing and stripping performed by

truckers and consolidators for their own shipper-

customers, enforcement of the Rules on Containers

with respect to the latter was intended to acquire

“ ‘neither unit work nor fairly claimable * * * unit

work.’ ” Sheet Metal Workers Local 223 v. NLRB,

supra, 498 F.2d at 696. Plainly, “the Board may as-

sign to the presence [of the two distinct markets]

much more weight then would the Court of Appeals,

but this far from demonstrates a departure from the

totality-of-the-circumstances test recognized in Na-

<p Dias So 2

OE BEA OS eR Ls on sates

tional Woodwork.” Pipefitters, supra, 429 U.S. at

524; footnote omitted.”

c. The court of appeals’ conclusion that the Board’s

“posture in the cases * * * is not supported by ra-

tional application of the right to control test’’ because

the steamship lines—the longshoremen’s employers—

“controlled the disposition of all the containers at is-

sue” (App., infra, 56a), is also too narrow in its

17 Nor is the foregoing analysis inconsistent with North-

east Marine Terminal Co. v. Caputo, 482 U.S. 249 (1977),

or any other case under the Longshoremen’s and Harbor

Workers’ Compensation Act, ch. 509, 44 Stat. 1424, 33

U.S.C. 901 et seg. Northeast Marine holds that stuffing

and stripping operations, at least when conducted by long-

shoremen who spend part of their time loading and unloading

vessels, are of such a maritime character that they satisfy

the “status” test for compensation established by 33 U.S.C.

902(3). But, as we have indicated above, the fact that long-

shoremen traditionally have performed some stuffing and

stripping does not mean that they traditionally have performed

all stuffing and stripping. Respondents cannot prevail in this

case unless they can establish that they have a claim to all such

operations, whereas the claimants in the compensation cases

prevailed on a showing that some stuffing and stripping opera-

tions are so related to maritime commerce that the Longshore-

men’s Act applies. See also P. C. Pfeiffer Co. v. Diverson Ford,

No. 78-425 (Nov. 27, 1979) (employees engaged in fastening

vehicles onto railroad flat cars near the pier and in unloading

cotton from a dray wagon into a pier warehouse are engaged

in “maritime employment” within the meaning of 33 U.S.C.

902(3)). Moreover, the issue under the Longshoremen’s Act

—relationship to maritime commerce—has no similarity to

the question presented in this case, which is whether one

employee unit rather than another has a traditional claim

to perform particular work. It would make no difference

under the Longshoremen’s Act whether the ILA-represented

unit or some other unit traditionally performed the stuffing

and stripping work in question.

focus. The steamship companies could not designate

the shippers whom the cargo owners might chose to

transport their goods to the docks, and could not con-

trol how those truckers or consolidators brought their

customers’ goods to the docks or whether the truckers

or consolidators used their own employees to rehandle

the cargo. Refusal to supply containers was only

a means chosen by the parties to the Rules on Con-

tainers to enforce them and, as such, was an inherent

element in the secondary boycott itself; it did not

evidence “control” over the work in controversy.

Finally, the fact that the Rules on Containers may

“represent a reasoned response to the difficult problem

of technological innovation” (App., infra, 60a) is

irrelevant, if, as we submit, the Board correctly found

that the Rules and their enforcement violate the

secondary boycott provisions of the Act. The parties

by agreement cannot immunize conduct that is pro-

scribed by statute. Indeed, Section 8(e) was added

to the Act in 1959 to close a “loophole” in the Act

whereby voluntary execution and enforcement of con-

tractual provisions requiring participation in second-

ary boycotts had been permitted. National Woodwork,

supra, 386 U.S. at 634; see also Pipefitters, supra,

429 U.S. at 517.

ob RW eR RO ete os.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfuly submitted.

WADE H. MCCREE, JR.

Solicitor General

WILLIAM A. LUBBERS

General Counsel

JOHN E. HIGGINS, JR.

Deputy General Counsel

ROBERT E. ALLEN

Acting Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

LINDA SHER

Assistant General Counsel

National Labor Relations Board

JANUARY 1980

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 77-1735

INTERNATIONAL LONGSHOREMEN’S ASSOCIATION,

AFL-CIO AND COUNCIL OF NORTH ATLANTIC

SHIPPING ASSOCIATIONS, PETITIONERS

| v.

NATIONAL LABOR RELATIONS BOARD, RESPONDENT

No. 77-1758

INTERNATIONAL LONGSHOREMEN’S ASSOCIATION,

AFL-CIO AND COUNCIL OF NORTH ATLANTIC

SHIPPING ASSOCIATIONS, PETITIONERS

Vv.

NATIONAL LABOR RELATIONS BOARD, RESPONDENT

HouFF TRANSFER, INC., INTERVENOR

No. 78-1510

INTERNATIONAL LONGSHOREMEN’S ASSOCIATION,

AFL-CIO AND NEW YORK SHIPPING

ASSOCIATION, INC., PETITIONERS

NATIONAL LABOR RELATIONS BOARD, RESPONDENT

Petitions to Review and Cross-Applications

to Enforce Orders of the

National Labor Relations Board

Argued January 18, 1979

Decided September 25, 1979

Before WRIGHT, Chief Judge, and ROBINSON and

Ross, Circuit Judges.

Opinion for the court filed by Chief Judge WRIGHT.

Dissenting opinion filed by Circuit Judge Ross.

WRIGHT, Chief Judge: The National Labor Rela-

tions Board (NLRB) decided in these cases—one

arising in the Port of New York,' and other in the

Ports of Baltimore and Hampton Roads *—that pe-

titioners Council of North Atlantic Shipping Associa-

tions (CONASA), New York Shipping Association

(NYSA), and International Longshoremen’s Asso-

ciation (ILA) violated the congressional proscription

of secondary boycotts.* Petitioners challenge the

1No. 78-1510, reviewing International Longshoremen’s

Ass’n, 98 L.R.R.M. 1276 (1978).

2 Nos. 77-1735 and 77-1758, reviewing International Long-

shoremen’s Ass’n, 231 N.L.R.B. 351 (1977).

* The two cases, though strikingly similar and capable of

being treated in a single opinion, have presented the court

with independent sets of documents: briefs, joint appendices,

etc. Because reference to these documents may cause some

confusion, this opinion where necessary will identify the

document within the appropriate case by provision of a paren-

thetical abbreviation of the relevant port or ports. For ex-

ample, the Joint Appendix (JA) for Nos. 77-1735 and 77-1758,

Board’s rulings as inconsistent with the Supreme

Court’s work preservation doctrine, and the Board

cross-applies for enforcement of its orders.*

The work preservation doctrine provides generally

that efforts to preserve work for employees displaced

by technological innovation are not unlawful second-

ary activities and that union-management contracts

with the same purpose are not proscribed “hot cargo”

agreements. Activities and agreements, however, that

seek not to preserve the traditional work of displaced

workers but to acquire work of other employees are

unlawful under the congressional proscription. The

question before us is whether certain rules agreed to

by shipping companies and the ILA are an effort by

the ILA to acquire work or merely an attempt to

preserve its members’ traditional responsibilities in

the era of containerized shipping.

The NLRB held that petitioners were engaged in

work acquisition rather than work preservation. Be-

cause we believe this judgment rests on erroneous

interpretations of the Supreme Court’s decisions in

National Woodwork Manufacturers Ass’n v. NLRB®

and NLRB v. Enterprise Ass’n of Steam, etc. Pipe-

fitters,° we grant the petitions for review and set

arising in Baltimore and Hampton Roads, will be cited as

JA(B-HR) ; that for No. 78-1510, arising in New York, will

be cited as JA(NY).

429 U.S.C. §§ 160(e), (f) (1976).

5 386 U.S. 612 (1967).

6 429 U.S. 507 (1977).

aside the Board’s orders. We also deny the Board’s

cross-applications for enforcement.

I. BACKGROUND

The factual antecedents of the instant disputes

revolve around a specific technological innovation—

containerization—that has had a momentous impact

on the loading and unloading of ocean-borne cargo.”

Containers are large metal receptacles that can ac-

commodate upwards of 30,000 pounds of cargo and

that can be moved to and from a ship as a single

unit." Historically, longshoremen transported such

cargo piece by piece from the hold of a ship to the

pier for inbound cargo and vice versa for outbound

cargo.” Subsequent to the acvent of containerization,

however, the role of longshoremen in handling cargo

has been greatly reduced. It is now the case that

containers can be.transported to and from ships with-

out longshoremen handling any of the boxes, crates,

and packages enclosed in each container.

7See Ross, Waterfront Labor Response to Technological

Change: A Tale of Two Unions, 21 LaB. L. J. 397, 398-400

(1970). The impact of containerization has been felt in ports

around the world. See, e.g., Davies, In Search of Jobs and

Defendants, 36 Mop. L. REv. 78 (1973) (detailing contro-

versies caused by containerization in British ports of Liver-

pool, Hull, and London).

8 See, e.g., JA(B-HR) 1056a (specifying allowable weight

of one container as 33,000 pounds).

®*See JA (B-HR) 337a-339a, 1087a-1089a (describing tra-

ditional work patterns of ILA labor on the docks); Ross,

supra note 7, at 398-399 (same).

Containerization obviously engendered huge in-

creases in dockside productivity. According to one

estimate, the traditional method of handling cargo

translated into a productivity factor of 1.4 tons per

man-hour; containerization has made it possible for

this figure to rise to 30 tons per man-hour.” This

greater efficiency was only achieved, however, by

transforming what was once a labor intensive chore

into a largely mechanical one. Hence workers’ ex-

pectations of job security have come into conflict with

management’s desire to increase productivity.

Congress has not enacted a statutory scheme whose

specific purpose is either to prevent or to resolve dis-

putes between management and labor over how best

to accommodate technological innovations in the

workplace. As with most other aspects of American

industrial relations, the problem of technological in-

novation has been left to the system of private order-

ing we know as collective bargaining.” A complete

understanding of the controversies before us, there-

10 JA(B-HR) 1090a-1091a (before containerization, “an

employer * * * thought he was doing good with 30 ton per

gang of 22 men. We can now with the container handling

method. with a crane, one crane, and a 20-man gang load as

high as 600 tons per hour * * *.”) ; see Ross, supra note 7, at

400 (one major shipper reports twentyfold increase in pro-

ductivity).

11 Other nations have made different choices. See, e.g., Re-

dundancy Payments Act 1965, recodified in Employment Pro-

tection Consolidation Act 1978 (British legislation that com-

pensates workers who have been made “redundant” due to

managerial initiative or technological innovation). For a

critique of this Act, see Fryer, The Myths of the Redundancy

Payments Act, 2 INDUS. L. J. 1 (1973).

fore, requires not only a knowledge of the specific

incidents that precipitated the disputes, but also an

appreciation for the adjustments to containerized

shipping that have been made through the collective

bargaining process in the three port cities involved

in these cases.

A. Containerization in the Ports of Baltimore

and Hampton Roads

CONASA represents constituent shipping associa-

tions, including the Hampton Roads Shipping Asso-

ciation (HRSA) and the Steamship Trade Associa-

tion of Baltimore (STAB), in ports from Massa-

chusetts to Virginia.”* Since its formation in 1970

CONASA has bargained on behalf of its members

with the ILA over certain key issues, including con-

tainerization, on a master-contract basis.“ Prior to

the formation of CONASA, North Atlantic ports gen-

erally adopted the master terms of the labor agree-

ment for the Port of New York.

Due in large measure to the controversy surround-

ing containerization, the negotiation in New York

of the 1968 collective bargaining agreement was a

bitter affair that occasioned a strike of nearly two

months’ duration by members of the ILA.” The im-

12 231 N.L.R.B. at 358.

18 Jd. at 360.

14 JA(B-HR) 1092a-1093a.

15 JA(NY) 95a (rejected affidavit of John M. Haynes, Ex-

ecutive Vice President of NYSA). The strike lasted over 100

days in other ports on the Atlantic and Gulf coasts. Id.

[Footnote continued on page 7a]

plications of this dispute for the national economy

were sufficiently far-reaching to involve mediators ap-

pointed by the President of the United States in the

dispute’s resolution.** Part of the agreement that

finally emerged in 1968 was a set of rules, known

as the Rules on Containers, which represented the

compromise reached between management and labor

on the containerization issue. The 1968 New York

agreement, whose master terms were adopted that

year by other ports on the North Atlantic coast,

marks the first time that the Rules on Containers

were included in the labor contracts in Hampton

Roads and Baltimore.”

15 [Continued]

Because the Administrative Law Judge (ALJ) in No. 78-

1510 (NY) believed that the case before him was controlled

by International Longshoremen’s Ass’n Vv. NLRB, 537 F.2d

706 (2d Cir. 1976), cert. denied, 429 U.S. 1041 (1977), he

refused to permit the petitioners here to adduce and develop

virtually any facts in their defense. See ALJ’s Order Strik-

ing All Affirmative Defenses, JA(NY) 47a-51a; ALJ’s Order

Rejecting Evidence and Closing Hearing, JA(NY) 52a-53a.

Accordingly, proffered affidavits that. were rejected by the

ALJ, such as the one cited in this footnote, will be noted as

such.

16 See Intercontinental Container Transport Corp. v. New

York Shipping Ass’n, 426 F.2d 884, 888 (2d Cir. 1970) (“In

the course of the controversy preceding the execution of the

[1968-71 collective bargaining agreement], a Taft-Hartley

80-day injunction was granted and the Board of Inquiry

set up in connection with that injunction stated in its report

to the President that containerization was the ‘most urgent

item’ of difference between the parties.”’).

17 The Rules on Containers as included in the 1968 Hampton

Roads agreement are reproduced at JA(B-HR) 529a-531a.

The Rules as included in the 1968 Baltimore agreement are

Containerized shipping was first introduced in

Baltimore and Hampton Roads in 1965 and 1966,”

but did not have a substantial impact on work pat-

terns in these ports until the late 1960s and early

1970s, by which time the Rules were adopted. For

example, the first crane used to move containers to

and from ships was erected in Hampton Roads in

1968 or 1969. And, as a further example, one major

shipper, United States Lines, moved only “a hand-

ful” ® of containers through the Port of Baltimore

in 1965, about 4,000 containers in 1969, and 25,000

just a few years later in 1973.2 Thus, although the

1968 Rules on Containers were the parties’ collec-

tively bargained response to containerization—and, as

such, postdated rather than antedated the advent of

containerization—there was in fact no significant

time lag between the technological development and

the parties’ collectively bargained response to it.

To understand the scope of the Rules on Contain-

ers, we must first appreciate the different ways in

which container loads of cargo are classified. A “con-

solidated full container load” (CFCL) consists of

reproduced at JA(B-HR) 558a-bbba. The Rules as included

in the 1968 New York master contract are discussed in re-

spondent’s brief (NY) at 6. Any differences among the three

versions are, for present purposes, insignificant. The 1968

Rules for Hampton Roads are reprinted in Appendix A to this

opinion.

18 See 231 N.L.R.B. at 359; JA(B-HR) 78a, 462a-463a,

10238a, 1091a.

19 JA (B-HR) 1112a.

20 981 N.L.R.B. at 354 n.8 (Fanning, Chairman, dissenting).

21 Td. at 362.

shipments consolidated into a single container whose

cargo belongs to more than one consignee. A “less

than trailer load” (LTL) or a “less than container

load” (LCL) also refers to a container whose cargo

belongs to more than one consignee. A “full shippers’

load” (FSL) or “shippers’ load,” in contrast, is a

container of cargo from one shipper to a single bene-

ficial owner consignee.” The controversy in Balti-

more and Hampton Roads centered on the stripping

and stuffing—packing and unpacking—of FSL con-

tainers.

It appears that in the Ports of Hampton Roads and

Baltimore, in the few years between introduction of

containerized shipping and adoption of the Rules on

Containers, ILA labor stripped consolidated contain-

er loads at the pier.* Unless ILA stripping was re-

quested by the consignee’s agent or by the stevedore,

however, shippers’ loads were placed by ILA labor

on the pier, where truckmen would then pick up the

F'SL container intact either to deliver it to the bene-

ficial owner or to store the cargo.* The 1968 Rules

were to an extent a formalization of these work prac-

tices. The Rules provided that ILA labor at the pier

2231 N.L.R.B. at 359; JA(B-HR) 68a-69a. This opinion

uses the terms “FSL” and “shippers’ load” interchangeably

and will often refer to LTL, LCL, and CFCL cargo by the

generic term “consolidated container loads.” Also, the term

shipper” is used to refer to a shipping company that is a

member of a CONASA shipping association.

43 231 N.L.R.B. at 359.

24 Id. at 359-360.

10a

was to strip and stuff consolidated container loads

that came from or were destined for any person who

was not the beneficial owner of the cargo and who

was located within 50 miles of the port.” The Rules

further provided that a shipping company had to pay

liquidated damages for each of its containers not

handled in accordance with the Rules.”* And for each

container, including FSL containers, that passed over

the docks without stripping or stuffing by longshore-

men, the shipper was required to pay a royalty into

an ILA fund.”

The 1968 Rules on Containers expired with the

rest of the collective bargaining agreement in 1971,

at which time further labor-management conflict over

the containerization issue ensued.** By this time

CONASA was bargaining on behalf of HRSA and

STAB. The ultimate compromise reached by

CONASA and the ILA on containerization, after an-

other long strike, was to retain the same rules for

handling containers and for paying royalties as were

embodied in the 1968 agreement, except that the 1971

25 See Title I (introductory title to 1968 Rules on Containers

entitled “Constainerization”), reprinted in Appendix A infra.

26 See Rule C.5 (liquidated damages clause in 1968 Hampton

Roads Rules on Containers providing for damages of $150 per

container), reprinted in Appendix A infra. Liquidated dam-

ages were $250 per container both in Baltimore, JA(B-HR)

555a, and in New York, respondent’s brief (NY) at 6.

27 See 231 N.L.R.B. at 360; JA(B-HR) 94a-95a, 146a-147a,

302a, 555a.

28 JA(NY) 101a (rejected affidavit of John M. Haynes).

lla

agreement provided for an increase in liquidated dam-

ages for rule infractions.”

As can be seen, the Rules in existence from 1968 to

1974 did not in terms require that ILA labor handle

FSL cargo at the pier. But the Administrative Law

Judge (ALJ) found that, “[bJeginning in 1969, fol-

lowing the execution of the 1968 agreement, ILA

longshoremen stripped full shippers’ loads which were

to be delivered to a warehouse for storage within a

50-mile radius of the center of the port. ILA freight

handlers loaded the freight onto trucks for delivery

to the warehouse.” *® Yet FSL containers whose car-

go was not to be warehoused were frequently stripped

by truckers at their terminals within the port area

before delivery of the cargo ts its beneficial owner—

a practice known as “shortstopping.”* Although

there is some indication that labor-management Con-

tainer Committees, established to administer the

Rules,*? considered this practice a violation of the

Rules by the shipper that turned over the container,”

2° Liquidated damages were increased to $1,000 per con-

tainer in both parts. The Rules on Containers as included in

the 1971-1974 Hampton Roads and Baltimore agreements are

reproduced at JA(B-HR) 534a-536a and JA(B-HR) 556a-

559a, respectively.

$0 231 N.L.R.B. at 360.

31 Jd. at 362 (‘The motor carrier’s decision to strip the full

shipper’s load may rest upon consideration of economy, safety,

or state’s highway and bridge regulations.”’).

32 See Rule C.7, reprinted in Appendix A infra.

33 231 N.L.R.B. at 362; JA(B-HR) 150a, 318a, 354a, 475a,

998a, 1032a, 1035a-1036a, 1108a-1109a, 1140a-1143a. The

12a

it is clear that most shortstopping was not detected

by the Committees.™

In January 1973 a labor-management committee

issued an interpretation of the Rules (the “Dublin

Supplement’) that brought shortstopped shippers’

loads within the scope of the Rules.” Under the Sup-

plement truckmen were permitted to haul FSL con-

tainers of import cargo directly to a warehouse in the

port area for stripping only when the freight would

be stored there for at least 30 days.*

Committees apparently believed that FSL containers were not

expressly covered by the Rules because these containers are

consigned directly to their beneficial owners and thus, unlike

CFCL, LTL, and LCL containers, inherently involve no strip-

ping prior to delivery of the cargo to its beneficial owner.

Where this is not the case because shortstopping occurs, it

would follow that FSL containers come within the scope of

the Rules. See 231 N.L.R.B. at 355 (Fanning, Chairman, dis-

senting) (“The traditional exemption for shippers’ loads was

premised on the understanding that such loads are ‘through’

containers, much larger in size but properly analogous to a

single item of bulk cargo. When taken to a trucker’s ware-

house to be stripped and repacked, they lose that identity.”).

%4 231 N.L.R.B. at 362.

85 The Dublin Supplement is reproduced at JA(B-HR) 549a.

36 231 N.L.R.B. at 360; JA(B-HR) 260a-261la, 549a-551a,

1027a-1028a, 1034a. In dissent Chairman Fanning contended

that the Dublin Supplement carved out an exception to the

stuffing and stripping rights of the ILA with respect to all

FSL containers stuffed and stripped within 50 miles of port by

other than the employees of the cargo’s beneficial owner. 231

N.L.R.B. at 355 n.11 (Fanning, Chairman, dissenting). Chair-

man Fanning’s collegaues in the majority, however, flatly dis-

agreed with his characterization. Jd. at 352. The proper

characterization of the Dublin Supplement, whatever it may

be, is not germane to our decision.

13a

The Rules on Containers included in the agreement

negotiated in 1974 sought to formalize practice with

respect to FSL cargo along the lines of the 1968 and

1971 agreements and the Dublin accord.” As the

ALJ found, “Under the 1974-77 container rules, ILA

labor is entitled to strip full shippers’ loads, when-

ever such work is to be done within a 50-mile radius

of the center of the port by other than the consignee’s

employees.” ** But FSL cargo consigned to the bene-

ficial owner’s place of business or warehoused for at

least 30 days within the port area was not to be strip-

ped by the ILA; instead, the ILA would continue

to receive a royalty for each container not handled

by longshoremen.

Thus under the 1974 Rules, assuming that the

Dublin Supplement’s warehousing exception was not

applicable, when employees of a trucking company

before delivering FSL cargo to its beneficial owner

stripped an FSL container at the company’s off-pier

terminal and that terminal was located within 50

miles of port, the shipping line that turned over its

FSL container to the truckmen became liable for

liquidated damages of $1,000 per container.

37 The Rules on Containers as adopted in the 1974 Baltimore

and Hampton Roads agreements are reproduced at JA(B-HR)

561a-563a and JA(B-HR) 537a-548a, respectively. Because

they differ in some significant respects from the 1968 and

1971 Rules, the 1974 Rules are reproduced in Appendix B to

this opinion.

38 231 N.L.R.B. at 361. See Rule 1(a), reprinted in Appen-

dix B infra.

39 See Rule 2, reprinted in Appendix B infra.

l4a

B. Containerized Shipping in ihe Port of New

York

Containerized transport was first introduced in the

Port of New York during the 1950s.” In New York,

as in Baltimore and Hampton Roads, the general

practice prior to containerization was for ILA labor

to handle targo piece by piece.*' The longshoremen

would load export cargo on pallets *® and would un-

load and sort import cargo in preparation for de-

livery.” These work practices began to change in the

late 1950s with the introduction of containerization.

And with the challenge to existing work practices

came increased labor-management conflict. Predict-

ably, management wished to secure the efficiency

gains represented by containerized shipping as soon

as possible; equally predictably, the ILA wished to

fulfill its members’ expectations of job security.“

The ILA-NYSA collective bargaining agreement

negotiated in 1959 was the first to contain a provision

dealing with containerized shipping. At that point

containerization had not yet become widespread in

New York. Indeed, by one report the first fully con-

tainerized vessel was not introduced into the busy

41 Td.

42 A pallet is a portable platform designed for handling by

forklift truck or crane and used for movement of goods.

8 JA(NY) 83a-85a (rejected affidavit of John M. Haynes).

“* JA(NY) 88a-90a (rejected affidavit of John M. Haynes).

15a

North Atlantic trade route until 1967. It was nev-

ertheless thought necessary by the parties in 1959

to achieve some level of agreement on how container-

ized shipping would be handled.

The 1959 collective bargaining agreement express-

ly recognized the right of shippers belonging to the

NYSA to use containers of any kind or size without

ILA restrictions that would cause the containers to

be stripped and restuffed at the pier.** There were,

however, two caveats. First, the NYSA agreed to

make royalty payments to a jointly administered

fund for each shippers’ load container that was

stuffed or stripped away from the pier by non-ILA

labor.” Second, the agreement also stipulated that

[a]ny work performed in connection with the

loading and discharging of containers for em-

ployer members of the NYSA which is performed

in the Port of Greater New York whether on

piers or terminals controlled by them, or whether

through direct contracting out, shall be per-

formed by ILA labor at longshore rates. '**!

Applying these terms to actual dockside disputes

provide to be an arduous process fraught with dif-

ficulties. In particular, the language of the second

caveat was sufficiently imprecise to require a clarifi-

** JA(NY) 95a (rejected affidavit of John M. Haynes). See

International Longshoremen’s Ass’n, 221 N.L.R.B. 956, 957

(1975).

46 JA(NY) 90a-91a (rejected affidavit of John M. Haynes).

“7 JA(NY) 91a (rejected affidavit of John M. Haynes).

48 Id.

16a

cation which, according to the NYSA, was issued by

that shippers’ association on February 28, 1962:

Where an employer member of NYSA supplies

a container which is the property of such mem-

ber, to a consolidator for loading or discharging

of cargo in the Port of Greater New York, it

will be stipulated that such container must be

loaded or unloaded by ILA at longshore rates.'**!

As the 1960s passed, containerized shipping in the

Port of New York became more widespread and ILA

hostility to the innovation more pronounced. With

the 1968 negotiations looming, the ILA, at its 1967

convention, asumed a hard-line position on container-

ization: All containers were to be stuffed and strip-

ped by ILA labor at longshore rates,” or there was

to be trouble. And trouble there was. The prolonged

strike, mentioned above in the context of the situ-

ations in Baltimore and Hampton Roads, ensued and

was terminated only after the appointment of a

Presidential Board of Inquiry pursuant to the na-

tional emergency provisions of the Taft-Hartley Act.”

The compromise ultimately struck between the parties

was the same Rules on Containers that were adopted

49 JA(NY) 92a (rejected affidavit of John M. Haynes).

According to the ALJ in International Longshoremen’s Ass’n,

221 N.L.R.B. 956 (1975), “[t]here is substantial conflict” over

whether this clause and its predecessor aimed to secure LTL,

LCL, and CFCL stripping and stuffing for ILA labor. Id. at

968. The Board itself in that case apparently believed that the

provisions did not go that far. Jd. at 960.

50 JA(NY) 95a (rejected affidavit of John M. Haynes).

51 29 U.S.C. § 171 et seq. (1976).

17a

as master terms in Baltimore and Hampton Roads.

Shippers’ loads and other containers that came from

or went to points 50 or more miles from the Port of

New York were not subject to ILA stuffing or strip-

ping requirements.” CFCL, LTL, and LCL contain-

ers to be stuffed or stripped within 50 miles or port

—the containers at issue in this New York case—

were, however, to be stuffed or stripped by ILA

labor.”

The seemingly chronic dockside labor problems at-

tributable to containerization continued to flare up.

The 1971 collective bargaining agreement left intact

the Rules adopted in 1968, but this compromise was

agreed upon only after another long strike.* Further

discord ensued, and the ILA and CONASA, which by

this time had begun bargaining for the NYSA on

matters pertaining to containerization, issued their

Dublin Supplement in 1973 dealing with FSL con-

52 [T]he employers won the right to continue to move most

containers, namely non-consolidated full shipper loads,

without stuffing or stripping by union members. Thus,

manufacturers’ loads or full shippers’ loads, as well as

all containers coming from or going to points fifty or

more miles from a port, constituting 80% of the con-

tainers moving in the Port of Greater New York, were

excluded from the stuffing and stripping requirements.

x * +

JA(NY) 97a (rejected affidavit of John H. Haynes).

58 See Title I (introductory title to 1968 Rules on Containers

entitled “Containerization”), reprinted in Appendix A infra.

% JA(NY) 101la (rejected affidavit of John M. Haynes).

18a

tainers and warehousing in the port area.” The col-

lective bargaining agreement adopted in 1974 also

included Rules on Containers, the final version of

which manifested an intention to carry on the agree-

ment reached in 1968 along with the Dublin accord.”

C. The Role of Truckers and Consolidators Be-

fore and After the Advent of Containerized

Shipping

The charging parties before the NLRB were the

following common carriers: Houff Transfer, Inc.

(Houff) and Associated Transfer, Inc. (Associated)

in the case originating in Baltimore and Hampton

Roads, and Dolphin Forwarding, Inc. (Dolphin) and

San Juan Freight Forwarders, Inc. (San Juan) in

the cese originating in New York.” Because these

55 See text at notes and notes 35-36 supra; JA(NY) 19a

(NLRB Order Consolidating Cases, etc.).

56 The relevant provisions of the 1974 Rules in New York

are reproduced at JA(NY) 16a-234 and are substantially

identical to the Rules adopted in Baltimore and Hampton

Roads. See Appendix B infra.

Subsequent to adoption of the 1974 collective bargaining

agreement, but before its termination, conflict arose between

the ILA and the shippers over whether the shippers had been

abiding by the Rules. The ILA announced its intention to

reopen the Rules, see Rule 8, reprinted at Appendix B infra,

and later unilaterally suspended the Rules and began to strip

all containers with the exception of shippers’ loads bound for

destinations outside the port area. Later, the parties resolved

their differences and reinstituted the Rules in clarified form.

See JA(NY) 108a (rejected affidavit of John M. Haynes).

57 Houff and Associated are interstate common carriers

licensed by the Interstate Commerce Commission (ICC) ;

Dolphin and San Juan possess no such license.

19a

charging parties alleged that secondary activities of

the ILA and of CONASA and its members, including

the NYSA, threatened to deprive them of part of

their traditional work, we must briefly review what

their traditional role has been with respect to the

eargo at issue.

1. Baltimore and Hampton Roads

Houff and Associated are ICC-licensed interstate

common carriers whose work includes transporting

cargo by truck to and from the Ports of Baltimore

and Hampton Roads. Both carriers have terminals

within 50 miles of the Port of Hampton Roads, and

Houff has a terminal in Baltimore.” Prior to contain-

erization, Houff Associated, and other trucking com-

panies made trips to the piers in Baltimore and

Hampton Roads to pick up loose cargo which had been

unloaded and sorted by ILA labor.” The cargo would

then be transported by the trucking companies to

their trucking stations, to their warehouses, or direct-

ly to the consignee.

Since the advent of containerization in these ports,

about 1965, truckmen regularly have transported

FSL container loads to beneficial owner consignees

both within and beyond 50 miles of the Ports of

Baltimore and Hampton Roads.“ Prior to adoption

58 231 N.L.R.B. at 358, 361 et seq.

59 Jd. at 358.

6 Td. at 359.

61 Jd. at 361; JA(B-HR) 191a-192a.

20a

of the 1968 collective bargaining agreement, which

was the first in Baltimore and Hampton Roads to

speak to the containerization issue, truckmen also

picked up FSL containers at the pier, unstripped by

ILA labor, and transported them to a nearby ware-

house for stripping and storing.” Subsequent to the

Rules’ adoption in 1968, FSL containers whose cargo

was to be stripped and warehoused in the port area

were stripped by ILA labor,® but truckmen fre-

quently picked up FSL containers and stripped them

at their terminals when the cargo was not to be ware-

housed.* The record indicates that at least some

personnel within the trucking industry were aware

that this shortstopping of FSL containers within 50

miles of the port was regarded as a violation of the

Rules on Containers committed by the shippers.®

2. New York

In the New York case Dolphin and San Juan em-

ployed subcontracted labor to consolidate various cus-

62 231 N.L.R.B. at 360.

Id.

* Id. at 8362 (“The motor carrier’s decision to strip the full

shipper’s load may rest upon consideration of economy, safety,

or state highway and bridge regulations.”). See JA(B-HR)

154a-155a, 180a-182a, 231la, 267a-268a. See also text at note

31 supra.

65 231 N.L.R.B. at 352 (“These [trucking industry] officials

testified only that [CONASA and the ILA] and certain ship-

ping personnel deemed these actions to be violations, not that

they actually were violations, or that the trucking industry

acknowledged them to be such.”) ; see id. at 356 n.22 (Fan-

ning, Chairman, dissenting).

eT Re

2la

tomers’ goods by placing them into containers in

preparation for shipment by sea.“ Both companies

had inland facilities within a 50-mile radius of the

Port of New York.” The work done by Dolphin and

San Juan that caused NYSA shippers to violate the

Rules on Containers in the view of the Container

Committee was consolidation of cargo belonging to

two or more individuals into containers owned or

leased by the shippers. FSL cargo is not at issue in

this New York case.

Dolphin’s operations antedated the adoption of the

Rules on Containers by several years, although the

ILA and the NYSA, as we have seen, had been nego-

tiating over containerization since the late 1950s."

NYSA shippers contend that they did business with

Dolphin only because Dolphin listed Massachusetts

as the point of origin for the containers it filled in-

stead of the actual point within the port area.” San

66 98 L.R.R.M. at 1277.

67 Jd.

68 See text at notes 46-49 supra.

6° Petitioners’ brief (NY) at 17-18; see JA(NY) 120a-121la

(rejected affidavit of William O. Gohlke, former officer of

Sea-Land Services, Inc. and Seatrain Lines, Inc.) :

It was quite apparent to me that though the bills of lad-

ing and other documentation suggested that the Dolphin

cargo was podked as having an originating point in

Massachusetts, this was not the case. The recordings of

the turnaround of containers and related equipment issued

on Dolphin bookings clearly showed that insufficient time

elapsed between the issuance and return of the equipment

to permit the containers to be transported to Massachu-

22a

Juan was established in 1972, several years after

the Rules on Containers were first adopted.” The

containers shipped by San Juan apparently indicated

Chicago as the point of origin of the containers, al-

though they in fact were consolidated in the New

York area.”

D. The Incidents Precipitating the

Present Disputes

1. Hampton Roads

On September 24, 1974 Associated picked up eight

FSL containers from United States Lines at a Nor-

folk pier and hauled them to its Virginia Beach

terminal, where it stripped them.” Representatives

setts and back. This left the unmistakable impression

that the loading of the containers had to have taken place

in the New York-New Jersey proximity of the Seatrain

operation. It was not Seatrain’s concern or my concern

as an official of Seatrain to inquire into this practice. Sea-

train’s and my objective was to obtain business and

transporting containers to and from Puerto Rico. * * *

7 JA(NY) 164a.

71 JA(NY) 156a-174a.

72931 N.L.R.B. at 363; JA(B-HR) 195a-196a. Apparently

the documentation presented to United States Lines by Asso-

ciated did not indicate that the containers would be stripped

at Associated’s terminal by Associated’s employees. There is

no mention in the correspondence subsequent to the incident

that the documentation presented to United States Lines

served to notify the shipper of Associated’s intention to strip

the container, JA(B-HR) 655a-661a, and the ALJ merely

noted that the consignees, whose names and locations would

have been found on the delivery orders and bills of lading,

ee ees

23a

of United States Lines and the ILA, upon inspection

of Associated’s terminal, determined that, because of

Associated’s shortstopping of the containers, United

States Lines was in violation of the Rules on Con-

tainers.” The HRSA-ILA Container Committee later

ratified their determination.“ Liquidated damages

of $1,000 per container were imposed on United

States Lines, which demanded reimbursement from

Associated.” Upon the refusal of Associated to com-

ply with the demand, United States Lines severed

business relations with Assariated.”

2. Baltimore

On September 24, i974 Houff picked up in the

Port of Baltimore two FSL containers from United

States Lines and one from Lavino Shipping Company

and transported them to its terminal in the Baltimore

area for stripping before delivery of the cargo to the

respective owners.” Once it was determined that this

were located in Tennessee and North Carolina, 231 N.L.R.B.

at 363. See id. at 356 n.18 (Fanning, Chairman, dissenting)

(“‘[W]hen a container is released to a motor carrier, the de-

livery order specifies that the cargo is to be transported to

the consignee. Intent to shortstop is thereby difficult to as-

certain * * *.”’).

73 231 N.L.R.B. at 363.

74 Id. The ruling was based on Rules 1(a) (3) and 2B.(2),

reprinted in Appendix B infra.

75 231 N.L.R.B. at 363.

76 Id.

77 Id. at 862. Apparently the documentation presented to

United States Lines and to Lavino did not indicate that the

24a

shortstopping tock place, United States Lines and

Lavino were assessed $1,000 per container by the

STAB-ILA Container Committee, as stipulated by

the Rules on Containers, and sought indemnification

from Houff.”* When the trucking company did not

indemnify the two shippers, they ceased doing busi-

ness with Houff.”

3. New York

Dolphin and San Juan engaged in consolidation of

CFCL, LCL, and LTL cargo into containers within

50 miles of the Port of New York.” When this prac-

tice was discovered, the NYSA shippers that had

been supplying Dolphin with containers—Maritime

Transportation Management, Inc. (MTM) and Trans-

america Trailer Transport, Inc. (TTT) —were fined

$4,000 and $43,000, respectively, in liquidated dam-

ages." As a result of the imposition of these dam-

i tripped at Houff’s terminal by Houftf’s

pene oane aan order and bill of lading issued

to Houff for the U.S. Lines containers showed the cargo —

destined to Union Carbide Corporation, Alloy, bagel i

ginia.”’) ; 3A (B-AR) 1052a.. Compare 281 N.L.R.B. a

n.18 (Fanning, Chairman, dissenting) .

78931 N.L.R.B. at 362. The ruling was based on Rules

1(a) (3) and 2B. (2), reprinted in Appendix B infra.

79 231 N.L.R.B. at 362-363.

80 98 L.R.R.M. at 1277.

lidating Cases,

81 Jd.; JA(NY) 25a (NLRB Order Conso

etc : The ruling was based on Rule 1(a) (1), reprinted in

Appendix B infra.

25a

ages, MTM and TTT refused to furnish the con-

solidators with any additional containers.”

II. SECONDARY Boycotts, WoRK PRESERVATION,

AND THE RULES ON CONTAINERS

The common carriers, charging parties before the

NLRB, argued successfully there that certain of the

Rules on Containers and efforts by the ILA to en-

force those Rules violated the congressional proscrip-

tion of secondary boycotts.“ Petitioners here con-

tend that the Rules and action supporting the Rules

had a legal primary purpose—work preservation—

and that the NLRB committed an error of law in

holding otherwise. To respond to these contentions

we must peruse the law of secondary boycotts, in-

cluding the work preservation doctine, and deter-

mine whether the Board applied a proper under-

standing of the law to the cases before us.

A. The Proscription of Secondary Boycotts

The NLRA’s proscription of secondary boycotts is

premised on the distinction between primary and sec-

ondary union activity.“ As fundamentally important

as this distinction is, however, “it does not present

82 98 L.R.R.M. at 1277.

88 The precise Rules challenged were those that were held

applicable to the respective charging parties’ activities. See

1.xtes 74, 78, & 81 supra.

% See generally Lesnick, Job Security and Secondary Boy-

cotts: The Reach of NLRA § 8(b)(4) and 8(e), 118 U. PA.

L. REv. 1000, 1004-1018 (1965) (describing “relevance and

content” of the primary-secondary dichotomy).

26a

a glaringly bright line.” ® Indeed, both the NLRB

and the courts, in interpreting the congressional man-

date prohibiting secondary activity, have necessarily

undertaken, as Justice Frankfurter put it, the task

of drawing lines “more nice than obvious.” *

The relevant statutory provisions are Sections 8(b)

(4) (B) and 8(e) of the NLRA.” The former—once

described as “surely one of the most labyrinthine pro-

visions ever included in a federal labor statute” ica

prohibits unions and their agents from engaging 1n

activities the object of which is forcing one employer

to cease doing business with another.” Although the

statutory language does not in terms focus on sec-

ondary activity,” both the legislative history * and

socal 761, IUERMW v. NLRB, 366 U.S. 667, 673 (1961)

(opinion of Frankfurter, J.).

86 Td. at 674.

81 99 IJ.8.C. §§ 158(b) (4) (B), (e) (1976).

88 Aaron, The Labor-Management Reporting and Disclosure

Act of 1959 (pt. 2), 73 HARV. L. REV. 1086, 1113 (1960).

89 See Lesnick, The Gravamen of the Secondary Boycott,

62 CoLuUM. L. REV. 1363, 1364 (1962).

% (b) Unfair labor practices by labor organization

It shall be an unfair labor practice for a labor organi-

zation or its agents—

* « * *

(4) (i) to engage in, or to induce or encourage any

individual employed by any person engaged in com-

merce or in an industry affecting commerce to en-

gage in, a strike or a refusal in the course of his

employment to use, manufacture, process, transport,

or otherwise handle or work on any goods, articles,

27a

a proviso that the prohibition does not apply to “any

primary strike or primary picketing” * make clear

the cardinal importance of the primary-secondary dis-

tinction. The latter provision, Section 8(e),” pro-

scribes not secondary activity, but “collective-bar-

gaining contracts whereby the employer ceases or

agrees to cease doing business with any other per-

materials, or commodities or to perform any services ;

or (ii) to threaten, coerce, or restrain any person

engaged in commerce or in an industry affecting

commerce, where in either case an object thereof is—

* * * nd

(B) forcing or requiring any person to cease

using, selling, handling, transporting, or other-

wise dealing in the products of any other pro-

ducer, processor, or manufacturer, or to cease

doing business with any other person, or forc-

ing or requiring any other employer to recog-

nize or bargain with a labor organization as the

representative of his employees unless such

labor organization has been certified as the rep-

resentatives of such employees under the provi-

sions of section 159 of this title: Provided,

That nothing contained in his clause (B) shall

be construed to make unlawful, where not other-

wise unlawful, any primary strike or primary

picketing[.]

29 U.S.C. § 158(b) (4) (B) (1976).

*1 See, e.g.,S. Rep. No. 105, 80th Cong., Ist Sess. 22 (1947),

reprinted in I NLRB, LEGISLATIVE HISTORY OF THE LABOR

MANAGEMENT RELATIONS ACT, 1947 at 428 (1948) (herein-

after cited as LEGISLATIVE HISTORY).

92 29 U.S.C. § 158(b) (4) (B) (1976).

3 29 U.S.C. § 158(e) (1976).

28a

son.” * Although the provision literally prohibits any

understanding aimed at forcing a cessation of busi-

ness,” it is clear that this proscription of “hot cargo”

agreements embodies the same distinction between

lawful primary and unlawful secondary activity as

% NLRB v. Enterprise Ass’n of Steam, etc. Pipefitters, 429

U.S. 507, 517 (1977).

% Jt shall be an unfair labor practice for any labor orga-

nization 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 deal-

ing in any of the products of any other employer, or to

cease doing business with any other person, and any con-

tract or agreement entered into heretofore or hereafter

containing such an agreement shall be to such extent un-

enforcible and void: Provided, That nothing in this sub-

section shall apply to an agreement between a labor

organization and an employer in the construction indus-

try relating to the contracting or subcontracting of work

to be done at the site of the construction, alteration, paint-

ing, or repair of a building, structure, or other work:

Provided further, That for the purposes of this subsec-

tion and subsection (b) (4) (B) of this section the terms

“any employer’, “any person engaged in commerce or an

industry affecting commerce’, and “any person” when

used in relation to the terms “any other producer, proces-

sor, or manufacturer’, “any other employer’, or “any

other person” shall not include persons in the relation of

a jobber, manufacturer, contractor, or subcontractor

working on the goods or premises of the jobber or manu-

facturer or performing parts of an integrated process of

production in the apparel and clothing industry: Provided

further, That nothing in this subchapter shall prohibit

the enforcement of any agreement which is within the

foregoing exception. .

29 U.S.C. § 158(e) (1976).

29a

Section 8(b) (4) (B), and applies only to agreements

with secondary objectives.”

The general aim of Congress in passing these pro-

hibitions is clear: that is, according to one com-

mentator, “to protect neutral employers—those not

directly involved in a labor dispute—from direct

union sanctions.” * The Senate Report accompany-

ing the Taft-Hartley Act casts this general purpose

in only slightly more specific terms: Congress sought

to proscribe “a strike against employer A [the sec-

ondary employer] for the purpose of forcing that em-

ployer to cease doing business with employer B [the

primary employer] * * * (with whom the union has

a dispute).” ** Unfortunately, attempts to character-

ize congressional intent with any more specificity

have not been notably successful.” Nevertheless, the

NLRB and the courts are required in the course of

deciding cases to apply the general congressional

%6 See NLRB v. Enterprise Ass’n of Steam, etc. Pipefitters,

429 U.S. 507, 517 (1977) (provision interpreted “as having

no broader reach than § 8(b) (4) itself”) ; National Woodwork

Manufacturers Ass’n V. NLRB, 386 U.S. 612, 620, 623-629

(1967).

*7 H. WELLINGTON, LABOR AND THE LEGAL PROCESS 275

(1968).

5S. Rep. No. 105, 80th Cong., Ist Sess. 22 (1947), re-

printed in LEGISLATIVE HISTORY, supra note 91, at 428.

* Professor Cox, for example, after reviewing the possi-

bilities presented under the current legislation, concluded that

the problems in applying the secondary boycott provisions

“can be minimized by more carefui statutory classification.”

A. Cox, LAW AND THE NATIONAL LABOR POLICY 38 (1960).

30a

proscription in various specific contexts:’” in cases,

for example, where there are ally employers; * in

common situs situations; in consumer picketing

cases; and in the context of work preservation

agreements.'** The last of these contexts is the one

with which we are presented here.

100 See Goetz, Secondary Boycotts and the LMRA: A Path

Through the Swamp, 19 KANS. L. REV. 651, 658-703 (1971)

(describing the various contexts in which secondary boycotts

occur).

101 See, e.g., NLRB v. Business Mach. & Office Appliance

Mechanics Conf. Board, 228 F.2d 553, 559 (2d Cir. 1955)

(“We therefore hold that an employer is not within the pro-

tection of §8(b) (4) [(B)] when he knowingly does work

which would otherwise be done by the striking employees of

the primary employer and where this work is paid for by the

primary employer pursuant to an arrangement devised and

originated by him to enable him to meet his contractual obli-

gations.’’).

102 See, e.g., Local 761, IUERMW v. NLRB, supra note 85;

366 U.S. at 680-682 (the portion of the struck employer’s

premises used by employees of independent contractors who

perform tasks connected to the normal operations of the struck

employer are not exempted from strike activity by the struck

employer’s employees under § 8(b) (4) [(B)].

103 See, e.g., NLRB v. Fruit & Vegetable Packers & Ware-

housemen, 377 U.S. 58, 71-72 (1964) (picketing confined to

persuading customers to cease buying the product of the pri-

mary employer is not proscribed by § 8(b) (4) (ii) (B)).

104 See, e.g., NLRB v. Enterprise Ass’n of Steam, etc. Pipe-

fitters, 429 U.S. 507, 517 (1977) (“Section 8(e) does not pro-

hibit agreements made for ‘primary’ purposes, including the

purpose of preserving for the contracting employees them-

selves work traditionally done by them.”). Alleged hot cargo

clauses may have application in areas other than work preser-

vation, but these are of no concern here. See Goetz, supra note

100, 19 KANS. L. REV. at 683-694.

i a aa aaa aaa a

3la

B. The Supreme Court’s Work Preservation Doc-

trine: National Woodwork and Pipefitters

An immutable feature of modern industrial econo-

mies is their dynamism. In large part this is due

to the profound impact that technological advances

have on the means of production. One can turn to

any sector of our economy—from communications to

transportation to food processing—and witness the

blinding speed with which modern technology can

alter our conception of the status quo.

It is inevitable that such rapid change will cause

cleavages within a society; one example is the dis-

placement of workers whose jobs and skills are tied

to supplanted forms of technology. As mentioned

earlier, there is no legislative scheme in this country

designed specifically to deal with labor disputes en-

gendered by technological innovations.” Such dis-

putes instead are channeled into the system of collec-

tive bargaining; the labor relations questions raised

by changes in the means of production are answered

by the parties themselves rather than through state

intervention.*”

105 One commentator has lamented that “[t]he pressures

created by momentous problems of productivity and job se-

curity under changing technological and market conditions

are contained or released by no more sensitive a legal instru-

ment than a legislative determination to protect neutrals from

being drawn into the disputes of others.”’ Lesnick, supra note

84, 118 U. Pa. L. REV. at 1041.

106 An interesting contrast is Great Britain, which not only

has a system of compensation designed to alleviate the strain

on workers who are made “redundant,” see note 11 supra, but

32a

The courts in this country, including the Supreme

Court, have wisely allowed for resolution of such dis-

putes through the collective bargaining process even

though the resolutions agreed to by the parties often

tread perilously close to the congressional proscrip-

tion of secondary boycotts.*” The classic example of

such a resolution is an agreement by the parties to

preserve work for the contracting employer’s em-

ployees when the nature or the location of that work

has changed due to technological advances. Inescap-

ably the effects of such agreements are felt upon

employers (and their employees) other than the con-

trolling employer. But those effects are incidental

ot the agreement with the contracting employer and

not necessarily reflective of a secondary objective

such as organizing the employees of the other affected

which also has attempted to solve its version of the containeri-

zation controversy through direct parliamentary intervention.

See Dock Work Regulations Act 1976.

10% The leading Supreme Court cases are discussed in text

at notes 109-1382 infra. For cases from the Court of Appeals,

see, e.g., American Boiler Manufacturers Ass’n V. NLRB, 404

F.2d 547, 561 (8th Cir. 1968), cert. denied, 398 U.S. 960

(1970) (no violation of the NLRA’s prohibition of secondary

boycotts when the union’s conduct was addressed to enforce-

ment of its collective bargaining agreement, when the conduct

related solely to preservation of the traditional tasks of j ob-

site plumbers, and when the union had no objectives else-

where) ; Meat & Highway Drivers, Dockmen, etc., Local 710

v. NLRB, 335 F.2d 709, 718 (D.C. Cir. 1964) (“If the jobs

are fairly claimable by the unit, they may, without violating

either § 8(e) or §8(b) (4) (A) or (B), be protected by pro-

vision for, and implementation of, no-subcontracting or union

standards clauses in the bargaining agreements.” (footnotes

omitted) ).

watt TAPS

PEROT EE CATE oe

6 Sin aR tarp! vas obs ae ts

88a

employers. Thus under the NLRA’s proscription of

secondary boycotts, these work preservation agree-

ments, as well as primary collective action enforcing

their terms, are not considered illegal.’

The validity of such agreements under the NLRA

is supported by sound policy reasons. First, it is of

paramount importance that Congress, rather than

imposing a solution, has chosen to follow the parties

themselves to deal with labor problems generated by

technological change. If the courts and the NLRB

were to upset reasonable efforts by the parties to

achieve some level of accommodation, this broad policy

choice of Congress would be frustrated. Second, un-

warranted interference by the NLRB and the courts

could inject a massive dose of uncertainty into the

planning functions of both management and labor.

If the parties suspect that reasonable attempts to ac-

commodate technological advances will be torn asunder

by a reviewing agency or court, they will be reluctant

to undertake the effort. Workers particularly could

be obdurate when asked to compromise some degree

of job security for the sake of efficiency if that com-

promise might later be cast aside. In the event of

industrial disruption caused by such induced intransi-

gence there would be no winners: not only would the

workers lose work, but also the efficiency gains rep-

resented by the innovation would needlessly, if per-

108 See note 184 infra (citing cases); H. WELLINGTON,

supra note 97, at 275 (“the [NLRA] does not interdict the

primary strike or its attendant consequences.” (emphasis

added; footnote omitted) ).

34a

haps temporarily, be lost to management and to our

national economy.

Two major Supreme Court cases control our un-

derstanding of the legality of work preservation

agreements under the NLRA. The first is National

Woodwork Manufacturers Ass’n v. NLRB,” a case

in which a provision in a collective bargaining agree-

ment was challenged under Section 8(e).**° The con-

tested clause stipulated that bargaining unit em-

ployees (carpenters) would not handle any doors that

were “pre-fitted,” 2e., made ready for installation

prior to shipment to the jobsite.’ The object of this

provision, according to the Administrative Law Judge,

the Board, and ultimately the Supreme Court, was

preservation of the fitting work performed tradition-

ally by onsite carpenters.’

In upholding the provision the Court expounded

upon the nature of the inquiry that courts and the

NLRB must undertake when determining the legality

of such agreements. “The determination * * * can-

not be made without an inquiry into whether, under

all the surrounding circumstances, the Union’s ob-

jective was preservation of work for [the contracting

employer’s] employees, or whether the agreements

and boycott were tactically calculated to satisfy union

10 386 U.S. 612 (1967).

110 29 U.S.C. § 158(e) (1976).

111 386 U.S. at 615-616.

112 Td. at 645-646.

CE BED GRRE SL Ee Es AA EAD EARS Rist NR a oe cm

35a

objectives elsewhere.” *** The Court continued: ‘The

touchstone is whether the agreement or its main

tenance is addressed to the labor relations of the

contracting employer vis-a-vis his own employees.” *™*

As one commentator has written of National Wood-

work, “Since the object of the union was to preserve

work for unit employees, and since it had no quarrel

with the union status or other personnel relations of

the door manufacturer, the contract provision was

upheld.”

In a case decided in 1977 the Supreme Court once

again confronted the work preservation issue, but

with a different result. In NLRB v. Enterprise Ass’n

of Steam, etc. Pipefitters,”* the Court refused to ap-

113 Jd, at 644 (footnote omitted). The Court provided an

elaboration of “all the surrounding circumstances” in a foot-

note:

As a general proposition, such circumstances might in-

clude the remoteness of the threat of displacement by the

banned product or services, the history of labor relations

between the union and the employers who would be boy-

cotted, and the economic personality of the industry. mahi

Id. at 644 n.38.

114 Jd, at 645 (footnote omitted).

115 R, GORMAN, LABOR LAW 265 (1976). On the day Na-

tional Woodwork was decided the Court also handed down a

companion case. In Houston Insulation Contractors’ Ass’n V.

NLRB, 386 U.S. 664 (1967), the Court, relying largely on

the reasoning in National Woodwork, held that a work preser-

vation agreement between a company and a local union could

be effectuated by another local of the same union. Sve R.

GORMAN, supra.

116 429 U.S. 507 (1977).

36a

prove union activity in support of what appeared to

be a work preservation clause. In Pipefitters a sub-

contractor on a construction project had agreed to

the contested clause in its labor agreement with its

Steamfitter employees. Under the clause all pipe

threading and cutting were to be performed on the

jobsite by the steamfitters, who had traditionally per-

formed this work.’” This provision notwithstanding,

the main contractor decided, and the subcontractor

agreed, to order pre-threaded and pre-cut pipes for

the job. The steamfitters refused to install the pipes,

and a work disruption ensued."®

The NLRB, confronted with this factual situation,

found that the contested clause had a primary pur-

pose—work preservation “*“—but that the union’s ac-

tivity to enforce the agreement did not.” The

NLRB’s holding was premised on its “right to con-

trol” test, which is based on the determination whether

the coerced employer—in Pipefitters, the subcontrac-

tor—could “control,” i.e., award, the work sought by

the union.” If coerced employer cannot control the

work, then it follows that the union’s actions are

117 Td, at 512.

118 Jd, at 511-513.

119 204 N.L.R.B. 760, 760 (1978).

120 Jd,

121 429 U.S. at 521. See R. DERESHINSKY, THE NLRB AND

SECONDARY Boycotts 117 (1972) (“Essentially, the test re-

quired that the employer have the right to control the matter

at issue in order to be designated a primary employer.”).

37a

directed not at this employer, but at another employer

who in fact does control the work. In Pipefitters the

object of the strike was to obtain work controlled not

by the subcontractor, with whom the steamfitters had

agreed to the lawful work preservation clause, but

by the main contractor; in the Board’s view this

meant that the object of the boycott was secondary.”

The decision of the NLRB was set aside on appeal

by this court,’ but the Supreme Court reversed our

decision.“ In so doing the Supreme Court vas ex-

ceedingly careful to cast its decision in terms of its

reasoning in National Woodwork. As the Court dis-

cerned the issue in Pipefitters, for example, it turned

on “whether the boycott was ‘addressed to the labor

relations of the contracting employer vis-a-vis his own

employees.’” ** This formulation of the issue cor-

responded to the Court’s view of the scope of Section

8(e), which also came from National Woodwork.

The provision “does not prohibit agreements made

for ‘primary’ purposes, including the purpose of pre-

serving for the contracting employees themselves work

traditionally done by them.” *”°

122 204 N.L.R.B. at 760.

128 Enterprise Ass’n of Steam, etc. Pipefitters V. NLBB, 521

F.2d 885 (1975) (en banc), rev'd, 429 U.S. 507 (1977).

124 429 U.S. at 532.

125 Jd, at 511 (quoting National Woodwork Manufacturers

Ass’n V. NLRB, 386 U.S. at 645).

126 Jd, at 517 (citing National Woodwork Manufacturers

Ass’n V. NLRB, 886 U.S. at 635).

38a

In holding that the strike in Pipefitters was un-

lawful secondary activity, the Supreme Court affirmed

several points of law that merit reiteration here.

First, the Court supported National Woodwork’s

admonition that courts and the NLRB examine “all

the surrounding circumstances” **’ when assessing the

validity of a work preservation clause.’** Second, the

Court also affirmed National Woodwork’s insistence

that to be considered a legal attempt at work preser-

vation the challenged boycott must focus on the “labor

relations of the contracting employer visd-vis his own

employees.” *” Third, the Court held that a pro-

vision in a collective bargaining agreement cannot it-

self immunize union activity that otherwise is sec-

ondary in character.” Fourth, the NLRB, accord-

ing to the Court, was perfectly within the law in

applying its right to control test as a means of de-

lineating the scope of lawful primary activity.™

Fifth, the Court reaffirmed that where the NLRB’s

decision is based on a proper understanding of the

prevailing law, appellate review is confined to a

determination of ‘whether the Board’s findings were

‘supported by substantial evidence on the record con-

sidered as a whole.’ ” *”

127 8386 U.S. at 644.

128 429 U.S. at 524.

129 886 U.S. at 645, quoted at 429 U.S. at 511, 528.

130 429 U.S. at 514-521.

181 Jd, at 521-528.

182 Td, at 531 (quoting 29 U.S.C. §160(e) (1976)).

soe abi eins maa

‘¢

39a

Before applying these legal standards to the cases

before us, we must make a brief excursus into the

litigation history of the Rules on Containers.

C. The Rules on Containers in the Courts

The Rules on Containers have been the subject of

extensive litigation over the past decade. The Second

Circuit was the first Court of Appeals to adjudge

the validity of the Rules when, in Intercontinental

Container Transport Corp. v. NLRB (ICTC),™ a

consolidator challenged the Rules as a conspiracy in

restraint of trade and hence as violative of the Sher-

man Act.** To decide whether the Rules amounted

to an antitrust violation the court had to determine

whether the union’s activities of bargaining for and

enforcing the Rules fell within the labor exemption

to the Sherman Act.** This determination rested in

part on “whether the action is in the union’s self-

interest in an area which is a proper subject of

union concern.” **°

The court had little difficulty in finding that the

Rules were in the interest of the union and its mem-

bers. Noting that the Supreme Court has repeatedly

133 426 F.2d 884 (2d Cir. 1970).

134 15 U.S.C. § 1 et seg. (1976).

185 See Amalgamated Meat Cutters v. Jewel Tea Co., 381

U.S. 676 (1965). For a recent statement of the Supreme

Court’s views on the labor exemption to the antitrust laws,

see Connell Constr. Co. v. Plumbers & Steamfitters, Local 100,

421 U.S. 616 (1975).

136 426 F.2d at 887.

40a

held that preservation of jobs is within the area of

proper union concern,’” the court concluded that

“Tt]he [Rules] have as their object the preservation

of work traditionally performed by longshoremen cov-

ered by the agreement.” ** Rather than aiding a

group of businessmen to violate the Sherman Act,

“the union here, acting solely in its own self-interest,

forced reluctant employers to yield to certain of its

demands.” '* The agreement between management

and labor on the containerization issue was held with-

in the labor exemption to the antitrust laws.

After the Second Circuit’s decision in JCTC, un-

fair labor practice charges were filed against the

ILA and the NYSA by two off-pier consolidators that

operated near the Port of New York. The charges

alleged that the Rules on Containers were an agree-

ment to engage in a secondary 'xiycott—a “hot

cargo” agreement—contrary to the NLRA ™ and that

enforcement of the Rules by the ILA was also viola-

tive of the Act’s proscription of secondary boycotts."

The Administrative Law Judge assigned to the case

upheld the Rules as valid work preservation clauses,

187 Jd. (citing National Woodwork Manufacturers Ass’n V.

NLRB, 386 U.S. 612 (1967) ; Fibreboard Paper Products

Corp. v. NLRB, 379 U.S. 203 (1964) ; Order of Railroad Tele-

graphers v. Chicago & Northwestern R. Co., 362 U.S. 330

(1960) ).

138 Jd.

139 Td. at 888.

140 29 U.S.C. § 158(e) (1976).

141 29 U.S.C. § 158(b) (4) (ii) (B) (1976).

Revit a.

ee Sink Dy anal tks Te ae "

Oe PO ny TORO en ee

4la

but he was reversed by the NLRB.“ The ILA and

the NYSA sought review of the NLRB’s decision in

the Second Circuit, which, in International Long-

shoremen’s Ass’n v. NLRB (Conex), affirmed the

Board.

The court noted its previous decision in ICTC, but

found the holding in that case distinguishable be-

cause [CTC arose in an antitrust context.“ In Conex,

by contrast, the court believed that a measure of

deference was owed the NLRB and that this factor

allowed it to affirm the Board without directly over-

ruling its decision in JCTC.“* The NLRB, in review-

ing the claim of the ILA and the NYSA that the

Rules were valid under the Supreme Court’s work

preservation doctrine enunciated in National Wood-

ian = saat Longshoremen’s Ass’n, 221 N.L.R.B. 956

43 537 F.2d 706 (2d Cir. 1976), cert. denied, 429 U.S. 1041

( 1977 ). Circuit Judge Feinberg dissented from the majority

decision issued by Senior Circuit Judge Moore and Senior

District Judge Wyzanski, sitting by designation.

144 Td. at 708 n.1.

4° Correspondingly, the District Court for the District of

New Jersey, in a suit brought subsequent to the Second Cir-

cuit’s decision in Conex, held that, just as an antitrust deter-

mination does not control a labor case, a labor law determina-

tion of unlawful work acquisition does not obviate the need

for inquiry under the antitrust laws. The court denied sum-

mary judgment in favor of antitrust claims that grew out of

Conex. See Consolidated Express, Inc. v. New York Shipping

— 452 —— 1024, 1036-1044 (D. N.J. 1977), rev’d on

er grounds, —— F.2d —— (8é Cir. ‘

1530, decided April 16, 1979). cutvitas sue eeuieaios

42a

work, had found: that the work at issue was not the

loading and unloading of ships, the traditional work

of the ILA, but the off-pier stripping and stuffing of

containers.“** In the relatively few years since the

advent of containerization, off-pier stripping and stuf-

fing of containers had been performed by the em-

ployees of consolidators; hence the ILA was really

engaged in work acquisition rather than work pre-

servation.” This conclusion, according to the divided

Second Circuit panel, was “supported by substantial

evidence and by sound analysis.” ** The Board’s or-

der thus was enforced.

The First Circuit, in International Longshoremen’s

Ass’n v. NLRB,” reached a conclusion similar to

that of the Second Circuit in Conex. The panel was

presented with a dispute apparently generated by an

expansive interpretation of the Rules by a Puerto

Rican local of the ILA, Local 1575. Although ob-

serving that Conex was “strikingly similar” to its

case,’ the First Circuit went on to note that “[t]he

fact situation we face presents a slightly stronger

ease for enforcement under National Woodwork than

did the situation considered by the Second Circuit.”

The NLRB had found that Local 1575 wished to ap-

146 291 N.L.R.B. at 959.

147 Id, at 959-961.

148 537 F.2d at 712.

149 560 F.2d 439 (1st Cir. 1977).

150 Jd, at 442-448.

151 Jd, at 445.

48a

ply the Rules not only so that any consolidating work

would be done by ILA labor at the pier, but also so

that members of the local would displace the non-

union employees at the consolidator’s facilities,’™

Hence the union, through its local, had manifested

an interest not only in work preservation, but also

in union organization of the excluded employer. The

union’s interest in the labor relations of the excluded

employer was in itself sufficient to make National

Woodwork’s work preservation exception to secondary

boycotts inapposite.“* Again, the Board’s order was

enforced.™

The Rules on Containers also have been reviewed

by the Fourth Circuit in a case arising out of

the instant proceeding in the Port of Hampton

Roads. In Humphrey v. International Longshore-

men’s Ass’n,’” that circuit vacated and remanded the

District Court’s order denying a temporary injunc-

tion sought by the Regional Director of the NLRB

152 Jd.

153 Td, at 445-446.

154 The First Circuit also discussed the Supreme Court’s

decision in Pipefitters, which was handed down just six days

after oral argument in the First Circuit case. The First Cir-

cuit reasonably interpreted Pipefitters as supportive of the

Board’s discretion in assigning degrees of importance to the

various circumstances involved in each case. 429 U.S. at 524.

The First Circuit concluded that the Supreme Court’s reason-

ing in Pipefitters “remove[s] any lingering doubts as to the

enforceability of the Board’s present order.” 560 F.2d at 446.

155 548 F.2d 494 (4th Cir. 1977).

44a

under 29 U.S.C. §160(/) (1976).”° The District

Court had held that the NLRB did not have reason-

able cause to believe that the Rules violated the

NLRA.*” The Fourth Circuit, however, found that

the District Judge had erred because the work in

controversy was not the ILA’s traditional work of

loading and unloading ships, but the off-pier work

of stripping and stuffing containers.** Consequently,

the court “conclude[d] that [the NLRB] ha[d]

ample reasonable cause to believe that appellees are

violating the Act.” **® The court ordered that on re-

mand the District Court enter the appropriate in-

junction.

D. Work Preservation and the Rules on Containers

Under the Rules on Containers included in the

1974-1977 collective bargaining agreement, ILA labor

was entitled to strip and stuff FSL containers when-

ever that work would otherwise be done within 50

miles of port by workers other than the employees

156 401 F.Supp. 1401 (E.D. Va. 1975), vacated, 548 F.2d 494

(4th Cir. 1977). Compare the District Court’s conflicting de-

cision in Humphrey v. International Longshoremen’s Ass’n,

D. Md. No. Y-75-1395, decided March 25, 1976 (unreported).

187 401 F.Supp. at 1407.

158 Circuit Judge Craven dissented from the majority opin-

ion authored by Circuit Judge Russell and joined by Chief

Judge Markey of the United States Court of Customs and

Patent Appeals, sitting by designation.

159 548 F.2d at 500 (footnote omitted).

45a

of the cargo’s beneficial owner.’” Houff and Asso-

ciated complained to the NLRB that this provision

and its enforcement by the ILA in the Ports of Bal-

timore and Hampton Roads allowed the ILA labor

to acquire work of Houff and Associated rather than

to preserve work for members of the ILA. Also un-

der the 1974-1977 Rules, ILA labor was entitled to

stuff and strip all LCL, TLT, and CFCL containers

that originated or terminated within 50 miles of

port. Dolphin and San Juan complained to the

NLRB that this provision and its enforcement by the

ILA in the Port of New York served to acquire work

traditionally done by Dolphin and San Juan rather

than to preserve work for members of the ILA. To

decide whether the NLRB’s receptivity to these

charges was well founded, we must apply the teach-

ing of National Woodwork and Pipefitters to the

NLRB’s decisions.*™

1. All the surrounding circumstances

Did the Board, in characterizing the challenged

Rules as work acquisition rather than work preser-

vation clauses, examine “all the surrounding cir-

160 See Rules 1(a) (2), (3), and 2B.(2), reprinted in Ap-

pendix B infra. The Dublin Supplement, discussed in text at

notes 35-36 swpra, exempted from these provisions FSL con-

tainers whose cargo was to be stripped within the 50-mile

radius and stored in a warehouse for at least 30 days. See

Rule 2B. (4), reprinted in Appendix B infra.

161 See Rule 1(a) (1), (2), reprinted in Appendix B infra.

162 See text at notes 127-132 supra (enumerating points of

law from National Woodwork and Pipefitters).

46a

cumstances’? ** When defining the work in contro-

versy—the first step in determining whether the

union was engaged in work preservation or work

acquisition **—the Board settled on off-pier stripping

and stuffing of containers.*” Because longshoremen

have always done their work on the piers, the Board

reasoned, they could not traditionally have performed

the work in controversy.’ Instead, employees of con-

solidators and trucking companies with off-pier termi-

nals did the work of stuffing and stripping containers

away from the pier.” Hence for ILA labor to lay

claim to this work amounted to work acquisition

rather than to preservation of traditional ILA work.**

This formulation of the work in controversy, how-

ever, could not reasonably have been based on “all

163 National Woodwork Manufacturers Ass’n Vv. NLRB, 386

U.S. 612, 644 (1967) ; see NLRB v. Enterprise Ass’n of Steam,

etc. Pipefitters, 429 U.S. 507, 524 (1977).

164 See International Longshoremen’s Ass’n, 221 N.L.R.B.

956, 959 (1975) (“in order to properly evaluate the validity

of ILA’s claim to the work, ‘it is essential to define with some

precision the work imcontroversy since that is the predicate

upon which the issue of work preservation must turn.’”

(quoting ALJ)).

165 See 231 N.L.R.B. at 352, 365 (off-pier stripping of FSL

containers within 50 miles of port); 98 L.R.R.M. at 1277

(“traditionally the off-pier stuffing and stripping of containers

was performed by consolidating companies and not longshore-

men’’).

166 231 N.L.R.B. at 365 ; 98 L.R.R.M. at 1277.

167 231 N.L.R.B. at 365 ; 98 L.R.R.M. at 1277.

168 231 N.L.R.B. at 365 ; 98 L.R.R.M. at 1277.

47a

the surrounding circumstances” as required by Na-

tional Woodwork and Pipefitters..° When a techno-

logical innovation is introduced in the workplace, new

work may be created and may initially be performed,

as in these cases, by employees other than those who

worked with the old technology. The crucial question

is how best to rationalize the work that results from

the innovation into traditional work patterns. As a

rule, this cannot be done by ignoring those traditional

work patterns when defining the work in contro-

versy. Rather than define a category of work based

on work patterns both prior and subsequent to the

innovation, the Board has defined the work in con-

troversy specifically in terms of the innovation, thus

by definition removing any opportunity for pre-in-

novation werkers to preserve their work. Under such

a formulation the Supreme Court’s work preservation

doctrine is sapped of all life.*”°

169 429 U.S. at 524; 386 U.S. at 644.

170 The Board’s definition of the work in controversy in the

instant cases stands in vivid contrast to its definition in Pipe-

fitters. In the latter case the NLRB held that the provision

at issue was a valid work preservation clause, 204 N.L.R.B. at

760, because the clause “was for the purpose of preserving

work [that the pipefitters] had traditionally performed.” Id.

That traditional work was the cutting and threading of pipes,

a category that, unlike the one chosen in the present cases,

takes into account work patterns both prior and subsequent to

the innovation. This definition of the work in controversy in

Pipefitters was not upset by the Supreme Court. 429 U.S. at

521 n.8. Rather, the Court focused primarily on the Board’s

application of the right to control test. As put by the Court,

“The question now befsre us is whether a union seeking the

kind of work traditionally performed by its members at a

NO OL

48a

There may be cases, of course, in which work en-

gendered by the technological innovation is so differ-

ent in character from the traditional work that

claims based on that traditional work can rightly

be discounted, even ignored. But we are not presented

with such a case here. The overriding similarities

between the traditional work of longshoremen and

the work of stuffing and stripping containers are

evident.’ Longshoremen have historically loaded and

unloaded ocean-borne cargo, which not only has meant

loading the cargo into and out of the hold of the ship,

but also has meant sorting the cargo and loading it

construction site violates § 8(b) (4) (B) when it induces its

members to engage in a work stoppage against an employer

who does not have control. over the assignment of the work

sought by the union.” Jd. at 510-511. The right to control

test is discussed in the context of the instant cases in text at

notes 187-192 infra.

171 Note the expansive language used by the NLRB when it

originally certified the longshore unit in th, Port of New

York:

All longshore employees engaged in work pertaining to

the rigging of ships, coaling of same, loading and unload-

ing of cargoes, including mail, ships’ stores and baggage,

handling lines in connection with the docking and un-

docking of ships, including hatch bosses; cargo repairmen,

checkers, clerks and time keepers and their assistants,

including head receiving and delivery clerks; general

maintenance, mechanical and miscellaneous workers;

horse and cattle fitters, grain ceilers, and marine car-

penters, in the Port of Greater New York and vicinity

sss

New York Shipping Ass’n, Inc., 116 N.L.R.B. 1183, 1188

(1956) (emphasis added; footnote omitted).

49a

on to equipment such as pallets.” From the long-

shoremen’s standpoint, therefore, containerization

merely represents a change in equipment.’”

Further, the very nature of containers belies any

notion that they present work distinctly different

from and unrelated to traditional longshoremen’s

work. As Judge Friendly recently observed in an-

other context, “Stripping a container of goods des-

tined to different consignees is the functional equiva-

lent of sorting cargo discharged from a ship; stuf-

fing a container is part of the loading of the ship

even though it is performed on shore and not in the

172 See text at notes and notes 9, 18, & 43 supra.

178 Although the location of the work has changed as well,

in the sense that the stripping and stuffing at controversy here

is done off pier, this is not an immutable characteristic of the

work; it just as easily could be done on pier. That the NLRB

found good reason for containers to be stripped before being

trucked—to meet state highway a’ 1 bridge laws, ta better

balance the cargo, to use trailer space efficiently (respondent’s

brief (B-HR) at 8)—is therefore immaterial. The essential

stripping need not occur away from the dock. Moreover, the

challenged Rules affect only those containers that are to be

stripped or stuffed within 50 miles of port; the shift of this

work back to the dock is not, therefore, implausible.

It should be noted that use of the new equipment—contain-

ers—does not require that ILA labor undergo retraining.

But even if it did, this would not perforce mean that efforts

to claim work involving the new equipment would be Sec-

ondary. See Note, Secondary Boycotts and Work Preservation,

77 YALE L. J. 1401, 1411 (1968) (“[I]f technological change

requires employee retraining, nothing in the primary-

secondary rationale justifies forbidding the union to claim

and preserve jobs.” (footnote omitted) ).

50a

ship’s cargo holds.” ** The Supreme Court, in affirm-

ing Judge Friendly’s observations, wrote of container-

ization: “In effect, the operation of loading and un-

loading has been moved shoreward; the container is

a modern substitute for the hold of the vessel.” *”

The correspondence between the shift to containerized

shipping and the sharp reduction in employment op-

portunities for longshoremen bears witness to the wis-

dom of these observations.*”°

We hold that the NLRB committed reversible legal

error by ignoring circumstances crucial to responsible

application of the Supreme Court’s work preservation

doctrine enunciated in National Woodwork and Pipe-

174 Pittston Stevedoring Corp. Vv. Dellaventura, 544 F.2d 35,

58 (2d Cir. 1976), aff'd sub nom. Northeast Marine Terminal

Co. v. Caputo, 482 U.S. 249 (1977). This case held that the

Longshoremen’s and Harbor Workers’ Compensation Act

covers employees stuffing and stripping containers away from

the ships that carried them.

175 Northeast Marine Terminal Co. v. Caputo, 482 U.S. 249,

270 (1977), aff’g Pittston Stevedoring Corp. v. Dellaventura,

544 F.2d 35 (2d Cir. 1976) ,

176 See International Longshoremen’s Ass’n, 221 N.L.R.B.

956, 957 (1975) (“As fewer cargo units reached the piers,

there was a proportionate decrease in loading and unloading

work for the longeshoremen represented by [the] ILA.”) ;

note 10 supra (citing two estimates of productivity increases

due to containerization); JA(B-HR) 457a (Gleason testi-

mony) (the number of longshore employees and the number

of man-hours they have worked have gone down dramatically

in recent years). It is useful in this context to point out that

the Supreme Court in National Woodwork provided as an

example of a “surrounding circumstance” “the threat of dis-

placement by the banned product or services.” 386 U.S. at

644 n.38.

5la

fitters. If the NLRB cannot, as it has not in these

cases, establish that the new work is sufficiently un-

related to the old work to present a clear break with

the past, it must not ignore traditional work pat-

terns when defining the work in controversy. In this

case proper consideration of the relevant work pat-

terns both prior and subsequent to the advent of con-

tainerization might have led to a different categoriza-

tion for the work in controversy. The loading and

unloading of ocean-borne carg:0, with its directly re-

lated peripheral tasks such as sorting cargo, is an

example of one possible categorization.” It is the

province of the NLRB to settle upon the correct

categorization, of course, and we offer no opinion on

the proper one. We simply hold that the Board erred

as a matter of law by ignoring traditional work pat-

terns when defining the work in controversy."*

177 It is not difficult to imagine a party unhappy with this

court’s decision today subjecting that decision to the following

exercise in reductio ad absurdum: Under the court’s ruling,

cannot longshoremen literally chase containers around the

country, demanding the right to stuff and strip them? There

is a short answer: No. Our decision does not radiate beyond

the Rules on Containers, which are restricted in terms to a

50-mile area around each port.

178 In Conex the Board argued that the ILA had abandoned

any right to the work in controversy due both to its 1959

agreement with the NYSA, see text at notes 46-48 supra, and

to the period of time between the advent of containerization

and attempts by the ILA, through the Rules, to secure the

work. Even though the Second Circuit affirmed the Board, it

disavowed this point’s validity. 537 F.2d at 712.

The Board apparently does not rely on this abandonment

point in the instant cases, but Chairman Fanning used the

52a

point to justify the fact that he dissented in the Baltimore-

Hampton Roads case and concurred in the New York case.

In our view the abandonment point is without merit. We

break no new ground when we characterize collective bar-

gaining as “a constant and unending dialogue of powers.”

O. KAHN-FREUND, LABOUR AND THE LAW 15 (2d ed. 1977).

As in any dialogue, the most appropriate response cannot

always be framed instantaneously. Rather, ideas generally

develop over time; the best ideas may indeed require the

longest gestation periods. Be that as it may, the crucial point

here is that the dialogue over how best to assimilate contain-

erization—and, more particularly, the work of stuffing and

stripping containers in the port area—into traditional long-

shore work patterns has never ceased. As Part I of this opin-

ion demonstrates, the issue cf containerization has been a key

ingredient in ILA-shipper relations from the moment of its

inception to the present.

Further, the abandonment point ignores the possibility of

recapturing work that, due to technological innovation or man-

agerial initiative, has temporarily escaped from the bargain-

ing uni* Compare Note, Work Recapture Agreements and

Secondary Boycotts, 90 Harv. L. REv. 815 (1977) (arguing

for an intermediate category of “work recapture” between the

categories of “work preservation” and “work acquisition”),

with Meat & Highway Drivers, Dockmen, etc., Local 710 v.

NLRB, 335 F.2d 709, 714 (D.C. Cir. 1964) (“Moreover, in the

case before us, we have not work acquisition but work

recapture.”’).

A variation on the abandonment theme is offered by inter-

venor Houff Transfer, Inc. in the Baltimore and Hampton

Roads case. Houff argues that the negotiation of the royalty

payment provision in the Rules represents a conscious choice

on the part of the ILA to accept that payment instead of the

work of stuffing and stripping FSL containers. Intervenor’s

brief at 26 et seq. The argument is plausible only to the extent

that abandonment took place with respect to FSL containers

that go directly to their beneficial owners or to a point out-

side a 50-mile radius of the ports for stripping. The ILA has

consistently proven antagonistic to the idea that any contain-

ers can be stripped or stuffed in the port area by other than

ILA labor. This hardly amounts to abandonment, the royalty

€

53a

2. Whose labor relations?

National Woodwork instructed us, and Pipefitters

reinstructed us, that to be classified as work preserva-

tion a boycott must be focused on the “labor relations

of the contracting employer vis-d-vis his own em-

ployees.” 1” The boycott must not be “tactically cal-

culated to satisfy union objectives elsewhere.” *”

Ever since containerized shipping was first intro-

duced in New York, Baltimore, and Hampton Roads,

it has been a hotly debated item between shippers and

their_associations (CONASA, NYSA, STAB, HRSA,

etc.), on the one hand, and the ILA on the other.

Indeed, containerization bears primary responsibility

for months of work stoppages by ILA members in-

furiated by actions of shippers with respect to con-

tainerization.’” The Rules on Containers and activi-

ties seeking to enforce the Rules are directly traceable

to the collective bargaining relationship between the

shippers and the ILA and to the efforts of the parties,

within the confines of that relationship, to adjust to

an extremely thorny industrial issue: technological in-

payment notwithstanding. For a case where abandonment

may have taken place, see International Longshoremen’s &

Warehousemen’s Union, 208 N.L.R.B. 994 (1974), aff’d

(mem.), 515 F.2d 1018 (D.C. Cir. 1975), cert. denied, 424

U.S. 942 (1976).

179 886 U.S. at 645; see 429 U.S. at 511, 528.

180 886 U.S. at 644; see 429 U.S. at 511, 528.

181 See Part I supra. —

183 Id.

54a -

novation versus job security. Nowhere has it been es-

tablished, or even intimated, that the ILA, perhaps

with a view to organization, was attempting to focus

its boycott on the labor relations of the trucking

companies and the consolidators.'* Those employers

were affected by the boycott, to be sure, as were their

employees. But we must distinguish between the in-

cidental effects of primary activity, on the one hand,

and a secondary purpose on the other. The former

are allowable under the national labor laws,’* and

there has been no convincing showing by the NLRB

that the latter exists. The challenged boycott unques-

tionably focused on the “labor relations of the con-

tracting employer vis-d-vis his own employees.” **

18 Thus the First Circuit’s observation to this effect in

International Longshoremen’s Ass’n V. NLRB, 560 F.2d 4389,

445 (1st Cir. 1977), is inapposite here.

18% National Woodwork Manufacturers Ass’n Vv. NLRB, 386

U.S. 612, 627 (1967) (“however severe the impact of primary

activity on neutral employers, it was not thereby transformed

into activity with a secondary objective”). Courts of Appeals

have consistently followed the rule that a valid work preserva-

tion clause does not become illegal because it has a serious im-

pact upon third parties. See, e.g., Local 742, United Brhd of

Carpenters v. NLRB, 444 F.2d 895, 901 (D.C. Cir.), cert.

denied, 404 U.S. 986 (1971) ; American Boiler Manufacturers

Ass’n V. NLRB, 404 F.2d 547, 552 (8th Cir. 1968), cert.

denied, 398 U.S. 960 (1970) ; NLRB v. Local 28, Sheet Metal

Wkrs International Ass’n, 380 F.2d 827, 8380 (2d Cir. 1967).

185 386 U.S. at 645.

55a

3. The effect of the Rules on the legality of

union activity

Under Pipefitters a work preservation agreement

does not itself immunize secondary activity from the

effects of the congressional proscription of secondary

boycotts.** Neither the NLRB nor this court relies

on this thesis, hence this issue is not raised.

4. The right to control test

In Pipefitters the Supreme Court resolved a dis-

pute among the circuits by affirming the validity of

the Board’s right to control test as a means of de-

lineating primary activity."” Under this test an em-

ployer subjected to an industrial sanction by his em-

ployees must be able to control the disposition of the

work sought by those employees for their activity to

be considered primary.’® The Court held that this test

186 429 U.S. at 514-521.

187 Four circuits had rejected the right to control test as a

departure from National Woodwork’s instruction to consider

“all the surrounding circumstances.” 386 U.S. at 644. See

Local 636, United Ass’n of Journeymen Vv. NLRB, 480 F.2d

906 (D.C. Cir. 1970); Beacon Castle Square Building Corp.

v. NLRB, 406 F.2d 188 (4th Cir. 1969) (dictum) ; American

Boiler Manufacturers Ass’n v. NLRB, 404 F.2d 556 (8th Cir.

1968), cert. denied, 398 U.S. 960 (1970) ; NLRB v. Local 164,

International Brhd of Electrical Wkrs, 888 F.2d 105 (8d Cir.

1968). The Fourth and Ninth Circuits accepted the test’s

validity. Associated General Contractors, Inc. v. NLRB, 514

F.2d 488 (9th Cir. 1975) ; George Koch Sons, Inc. v. NLRB,

490 F.2d 828 (4th Cir. 1978).

188 429 U.S. at 521.

| |

56a

was an acceptable gloss on the congressional proscrip-

tion of secondary boycotts.'®

Ironically, after defending use of this test in cir-

cuit after circuit and finally vindicating its use in the

highest court in the land, the NLRB’s posture in the

cases before us is not supported by rational applica-

tion of the right to control test. CONASA and NYSA

shippers—the employers of the boycotting ILA mem-

bers in these cases, and the coerced employers under

Pipefitters—controlled the disposition of all the con-

tainers at issue.’*” Indeed, according to the Board the

Rules reach no containers except those owned or leased

by the shippers.” Thus when the relevant Container

189 Td, at 514-521.

19 The Board notes that the Equipment Interchange Agree-

ment used by United States Lines granted truckers “control”

over containers in their “custedy and possession.” 231

N.L.R.B. at 361, 365. As these cases amply demonstrate, how-

ever, and as the NLRB itself recognizes, 231 N.L.R.B. at 362-

363 ; 98 L.R.R.M. at 1277, the shipper’s power of disposal over

the containers:is not thereby impaired, as the shipper can

simply refuse to release a container to a trucking company or

consolidator. We also find this point dispositive of the Board’s

contentions with respect to the right of consolidators and

trucking companies to control the cargo inside the containers.

' Unless the shippers turn over “ie containers, as they ulti-

mately chose not to do in the cases before us, this “right” is

without substance.

19198 L.R.R.M. at 1277 (“Briefly, these Rules require that

any containers owned or leased by employer-members [of

CONASA] * * *.” (emphasis added) ). See JA(B-HR) 415a.

This observation of the NLRB appears to be in conflict both

with the terms of the 1974 Rules, see Rule 1(a) (1), reprinted

in Appendix B infra, and with its earlier determination in

Conezx, see 221 N.L.R.B. at 960. Containers “used” by

57a

Committees found the shippers in violation of the

Rules and fined them, the shippers, after unsuccess-

fully seeking indemnification from the truckers and

consolidators, simply refused to supply their con-

tainers to the truckers and consolidators so that the

Rules. would be complied with—that is, so that ILA

labor would do the work if the work were to be done.

It is difficult to imagine a more forceful demonstra-

tion of control.'”

5. The substantial evidence standard

The Pipefitters Court made abundantly clear that,

under the NLRA,™ courts reviewing NLRB decisions

are bound by the Board’s factual findings if supported

by substantial evidence on the record considered as a

whole. But the salient facts underlying the cases

before us are not in dispute. This is the fourth cir-

cuit to adjudge the validity of the Rules on Con-

CONASA shippers also come under the Rules. The important

points here, however, are that petitioners’ contentions that

the shippers owned or leased the containers at issue are un-

refuted and that, in any event, the shippers clearly had “‘con-

trol” over the disposition of the containers.

192 Thus, in light both of our preceding discussion on the

proper formulation of the work in controversy, see text at

notes 163-178 supra, and of the shippers’ control over disposi-

tion of containers, the Supreme Court’s following characteri-

zation in Pipefitters is inapplicable to the instant cases: “the

union sought to acquire work that it never had and that its

employer had no power to give it * * *.” 429 U.S. at 530 n.16.

198 29 U.S.C. 160(e) (1976).

1% 429 U.S. at 530-681.

58a

- tainers or of action seeking to enforce the Rules, and

the factual backgrounds of these cases overlap to a

Significant degree.’** As the NLRB forthrightly ob-

served with respect to the instant case arising in Bal-

timore and Hampton Roads, “‘[P]etitioners’ real com-

plaint is with the Board’s analytic framework not its

findings of fact,” *** a characterization in which the

petitioners heartily concur.’” And as to the New York

case, the Board commented that its

decision in Conex is controlling. The Conex case

involved the identical Respondents [NYSA and

ILA] and dealt with the same Rules on Contain-

ers. The charging parties in Conex were also

consolidating companies engaged in off-pier strip-

ping and stuffing of containers. * * * '*9)

In Conex Judge Wyzanski, who wrote the majority

opinion affirming the NLRB, stated that “[t]here is

no dispute as to the objective facts in this case.” '”

Like the petitioners and the other circuits, this

19% See text at notes 133-159 supra. Also, the District

Court’s decision in Consolidated Express, Inc. vy. New York

Shipping Ass’n, 452 F.Supp. 1024 (D. N.J. 1977), has been

the subject of an interlocutory appeal to the Third Circuit,

— F.2d —— (3d Cir. Nos. 78-1529 & 78-1530, decided

April 16, 1979), aff’g in part & rev’g in seu 452 F.Supp.

1024.

19% Respondent’s brief (B-HR) at 34 n.20.

1% See, e.g., petitioner’s (CONASA) reply brief (B-HR)

at 2.

196 98 L.R.R.M. at 1277.

199 537 F.2d at 708.

59a

court has no dispute with the Board’s factual findings.

Rather, our conflict with the NLRB is exclusively fo-

cused on the Board’s misinterpretation and misappli-

cation of the prevailing law—the doctrine of work

preservation.” The Supreme Court has consistently

maintained that NLRB rulings should not be sustained

by reviewing courts where those rulings rest on “er-

roneou legal foundations.” ** The NLRB’s decisions

before us are of such a character, and thus reversal

is warranted.”

III. CONCLUSION: CONTAINERIZATION AND THE

NATIONAL LABOR POLICY

The relationship between the ILA and CONASA

shippers has been under continual strain over the

past two decades due to containerization.?” Their re-

lationship has survived prolonged negotiations, presi-

dential intervention, and the occasional use of econ-

200 See text at notes 105-132 supra.

201 NLRB v. Babcock & Wilcox Co., 351 U.S. 105, 112

(1956) ; see NLRB v. Brown, 380 U.S. 278, 290-292 (1965).

202 In Nos. 77-1735 and 77-1758 intervenor Houff Transfer,

Inc. maintains that, because these cases focus on FSL con-

tainers while Conex (and No. 78-1510) focuses on CFCL,

LTL, and LCL containers, the respective factual backgrounds

are distinguishable. Intervenor’s brief at 37-40. However,

because we find that the Board committed an error of law in

both the New York and the Baltimore-Hampton Roads cases,

Houff’s argument is not relevant.

208 See Part I supra.

60a

omic force.™ The result of their efforts is the Rules

on Containers. These Rules represent a reasoned

response to the difficult problem of technological in-

novation and are an exemplar of the self-government

contemplated by Congress when it left the bulk of

industrial problems to be resolved in the private sec-

tor.” The Rules seek neither to stymie technological

innovation nor to introduce manual labor in situa-

tions where the work otherwise would be handled by

more efficient mechanized means;”” rather, the Rules

204 Id. It hardly requires mention that use of economic force

in collective bargaining is fully within the contemplation of

the national labor laws. In NLRB v. Insurance Agents Inter-

national Union, 361 U.S. 477, 489 (1960), the Supreme Court

stated, “The presence of economic weapons in reserve; and

their actual exercise on occasion by the parties, is part and

parcel of the system that the Wagner and Taft-Hartley Acts

have recognized.” See NLRB v. Burns International Security

Services, Inc., 406 U.S. 272, 287 (1972) (“Preventing indus-

trial strife is an important aim of federal labor legislation,

but Congress has not chosen to make the bargaining freedom

of employers and unions totally subordinate to this goal.

When a bargaining impasse is reached, strikes and lockouts

may occur.”); Air Line Pilots Ass’n International v. CAB,

502 F.2d 458, 456 (D.C. Cir. 1974), cert. denied, 420 U.S. 972

(1975) (national labor policy rests upon the principle that

parties are free to marshal economic resources in resolution

of labor disputes, consistent with the rights and prohibitions

of labor statutes).

208 See generally Shulman, Reason, Contract, and Law in

Labor Relations, 68 Harv. L. REv. 999 (1955).

2° Containers that were not stuffed and stripped in com-

pliance with the Rules, however, have been, and doubtless in

the future will be, subjected to duplicate stuffing and stripping

by ILA labor. Consider one commentator’s characterization

6la

intend to secure for ILA labor any stripping and stuff-

ing of containers that is to be performed within 50

miles of port by other than the employees of the

cargo’s beneficial owner. Courts and the NLRB must

take great care not to disturb the parties’ reasoned at-

tempts at self-governance unless those attempts con-

travene the law. For the reasons stated in this

opinion, we believe that the NLRB has failed to

demonstrate that the Rules on Containers and action

seeking to enforce the Rules are in contravention of

the law. Accordingly, the NLRB’s decisions in these

cases are vacated, and its cross-applications for en-

forcement are denied. We remand to the NLRB for

any further proceedings it deems appropriate.

So ordered.

of ILA behavior that in the past has slowed the rate of in-

novation:

There is reason to believe, or at the very least the

question must remain open, that the optimum rate in

which labor-saving technology is introduced is not the

fastest possible rate. To the extent that this is true, union

impediments may be considered as not merely obstacles

to progress, but as efforts to buy time in which the human

costs of change can be softened and made more tolerable.

Ross, supra note 7, 7, 21 LaB. L. J. at 419.

62a

APPENDIX A

1968 Hampton Roads Rules on Containers

I. CONTAINERIZATION

Containers owned or leased by Empioyer-signatory

members (including containers on wheeis) containing

LTL loads or consolidated full-container loads, which

are destined for or come from, any person (includ-

ing a consolidator who stuffs containers of outbound

cargo or a distributor who strips containers of in-

bound cargo and including a forwarder, who is either

a consolidator of outbound cargo or a distributor of

inbound cargo) who is not the beneficial owner of the

cargo, and which either come from or is destined to

any point within a 50-mile radius from the center of

any North Atlantic District port, shall be stuffed and

stripped by ILA longshore labor at longshore rates on

a waterfront facility under the terms and conditions

of the General Cargo Agreement. (Rules on Contain-

ers are listed below.)

II. RULES ON CONTAINERS

The following provisions are intended to protect

and preserve the work jurisdiction of longshoremen

and all other ILA crafts at deepsea piers or terminals.

To assure compliance with the collective bargaining

provisions the following rules and regulations shall

be applied.

A. Definitions and Rule as to Containers Covered

Stuffing—means the act of placing cargo into

a container

63a

Stripping—means the act of removing cargo

from a container

Loading—means the act of placing containers

aboard a vessel

Discharging—means the act of removing con-

tainers from a vessel.

These provisions relate solely to containers meeting

each and all of the following criteria:

1. Containers owned or leased by employer-signa-

tory members (including containers on wheels) which

contain LTL loads or consolidated full container

loads.

2. Such containers which come from or go to any

person (including a consolidator who stuffs contain-

ers of outbound cargo or a distributor who strips

containers of outbound cargo or a distributor who

strips containers of inbound cargo and including a

forwarded, who is either a consolidator of outbound

cargo or a distributor of inbound cargo) who is not the

beneficial owner of the cargo.

3. Such containers which come from or go to any

point within a geograpical area of any port in the

North Atlantic District described by a 50-mile circle

within its radius extending out from the center of

each port. It is understood that the center of Hamp-

ton Roads will be defined as Middle Ground Light.

B. Rule of Stripping and Stuffing Applied to Such

Containers

A container which comes within each and all of the

criteria set forth in “A” above shall be stuffed and

64a

stripped by ILA longshore labor. Such ILA labor

shall be paid and employed at longshore rates under

the terms and conditions of the General Cargo Agree-

ment. Such stuffing and stripping shall be performed

on a waterfront facility, pier or dock. No container

of cargo shall be stuffed or stripped by ILA long-

shore labor more than once. Notwithstanding the

above provisions, LTL loads or consolidated container

loads of mail, of household goods with no other type

of cargo in the container, and of personal effects of

military personnel shall be exempt from the rule of

stripping and stuffing.

C. Rules on No Avoidance or Evasion

The above rules are intended to be fairly and rea-

sonably applied by the parties. To obtain non-dis-

criminatory and fair implementation of the above, the

following principles shall apply.

1. Agreement in the Port as to the geographic area

as provided in “A (3)” is based on present LTL move-

ment patters in the port. Should any person, firm or

corporation, for the purpose of evading the provisions

of “B” hereof, seek to change such pattern by shifting

its operations to, or commencing new operations at,

a point outside agreed-upon geographic area, then

either party may raise the question whether said

point should be included within the said geographic

area, and upon agreement that the purpose of the shift

in its operations was to evade the provisions of “B”,

then said point shall be deemed to be within the said

geographic area for the purpose of these rules.

65a

2. Containers owned or leased by companies which

are affiliated either directly or through a holding com-

pany with an employer-member shall be deemed to be

containers owned or leased by employer-members.

Affiliation shall include subsidiaries and/or affiliates

which are effectively controlled by the employer-mem-

ber, its parent, or stockholders of either of them. «

3. It shall be the obligation of employer-members

to clearly mark each container’s documentation as to

whether or not it is an “A” container which is to be

stuffed and stripped at the waterfront facility (pier

or dock).

4, Each employer-member shall keep records of

each container supplied to a consolidator or other

non-owner of cargo, located within the agreed geo-

graphic area, and such record shall be available to the

Committee provided in (7) below. With respect to

all containers received at or delivered from the vessel,

a record of the same shall be made by ILA Checkers

or Clerks.

5. Failure to stuff or strip a container as required

under these rules will be considered a violation of the

contract between the parties. Use of improper, fic-

titious or incorrect documentation to evade the pro-

visions of “B” shall also be considered a violation of

the contract. If for any reason a container is no

longer at the waterfront facility at which it should

have been stuffed or stripped under the rules then

the steamship carrier found guilty of intent to cause

improper, fictitious, or incorrect documentation to

evade the provisions of “B” above shall pay to the

66a

joint Welfare Fund $150.00 per container which

should have been stuffed or stripped.

6. If any shippers or their agents who have at

any time used, are now using, or in the future use

containers owned or leased by employer-members,

hereafter use containers not owned or leased by em-

ployer-members, for the purpose of evading the pro-

visions of “B” hereof, then the containers so used shall

be considered to be within “A” and “B”,

7. A committee represented equally by manage-

ment and Union shall be formed and shall have the re-

sponsibility and power to hear and pass judgment

on any violations of these rules. Any inability to

agree shall be processed as a grievance under the ap-

plicable contract except as limited by “C (8)” hereof.

8. If the purpose of protecting and preserving the

present work jurisdiction of longshoremen and all

other deepsea ILA crafts over any containers loaded

with LTL cargo, or consolidated full container loads

as defined herein is not accomplished by the provisions

of these rules on containers, then either party shall

have the right to renegotiate these provisions or any

part thereof by giving notice to the other party. This

provision shall not be subject to arbitration. Pending

renegotiation and settlement of the given dispute, the

employees may decline to work the specific containers

involved in the dispute and such refusal to work shall

not be subject to arbitration. The renegotiation re-

ferred to above will not be subject to arbitration.

Interpretation of this provision shall not be deter-

mined by an arbitrator but by a court of competent

jurisdiction.

67a

APPENDIX B

1974 Rules on Containers

CONASA-ILA RULES ON CONTAINERS

PREAMBLE

This Agreement made and entered into by and be-

tween the carrier and direct employer members of

the CONASA Port Associations (hereinafter referred

to collectively as “CONASA”’’) and the International

Longshoremen’s Association, AFL-CIO (“ILA”), its

Atlantic Coast District (“ACD”) and its affiliated

local unions in each CONASA port (“locals”) covers

all container work as a waterfront facility which in-

cludes but is not limited to the receiving and delivery

of cargo, the loading and discharging of said cargo

into and out of containers, the maintenance of con-

tainers, and the loading and discharging of containers -

on and off ships.

CONASA agrees that it will not directly perform

work done on a container waterfront facility (as

hereinafter defined) or contract out such work which

historically and regularly has been & currently is

performed by employees covered by CONASA-ILA

Agreements, including CONASA-ILA craft agree-

ments, unless such work on such container water-

front facility is performed by employees covered by

CONASA-ILA Agreements.

RULES

The following pr.visions are intended to protect

and preserve the work jurisdiction of longshoremen

68a

and all other ILA crafts which was performed at

deepsea waterfront facilities. These rules do not have

any effect on work which historically was not per-

formed at a waterfront facility by deepsea ILA labor.

To assure compliance with the collective bargaining

provisions, the following rules and regulations shall

be applied uniformly in all CONASA Ports to all im-

ports or export cargo in containers:

Definitions

(a) Loading a Container—means the act of plac-

ing cargo into a container.

(b) Discharging a Container—means the act of re-

moving cargo from a container.

of placing containers aboard a vessel.

(d) Discharging Containers from a vessel—means

the act of removing containers from a vessel.

(e) Waterfront facility—means a pier or dock

where vessels are normally worked including a con-

tainer compound operated by a carrier or direct em-

ployer. |

(f) Qualified Shipper—means the manufacturer or

seller having a proprietary financial interest (other

than in the transportation or physical consolidation

or deconsolidation) in the export cargo being trans-

ported and who is named in the dock/cargo receipt.

(g) Qualified Consignee—Means the purchaser or

one who otherwise has a proprietary financial interest

(other than in the transportation or physical con-

solidation or deconsolidation) in the import cargo be-

69a

ing transported and who is named in the delivery

order.

(h) Consolidated Container Load—means a con-

tainer load of cargo where such cargo belongs to more

than one shipper on export cargo or one consignee on

import cargo.

Rule 1—Containers To Be Loaded or Discharged by

Deepsea ILA Labor

(a) Cargo in containers referred to below shall be

loaded into or discharged out of containers only at a

waterfront facility by deepsea ILA labor:

(1) Containers owned, leased or used by car-

riers (including containers on wheels and trail-

ers), hereinafter “containers”, which contain

consolidated container loads, which come from

or go to any point within a geographic area of

any CONASA port described by a 50-mile circle

with its radius extending out from the center of

each port. (hereinafter “geographic area”) or

(2) Containers which come from a single ship-

per which is not the manufacturer (“manufac-

turer’s label’) into which the cargo has been

loaded (consolidated) by other than its own em-

ployees and such containers come from any point

within the “geographic area,” or

(3) Containers designated for a single consignee

from which the cargo is discharged (deconsoli-

dated) by other than its own employees within

the “geographic area” and which is not ware-

housed in accordance with Rule 2(B).

70a

(b) Such ILA labor shall be paid and employed

at deep-sea longshore rates under the terms and con-

ditions of the deep-sea ILA labor agreement in each

CONASA port, including the provisions for all fringe

benefits and any and all other benefits receivable by

deep-sea ILA craft workers in each such Port. No

cargo shall be loaded into or discharged out of any

container by ILA deep-sea labor more than once.

(a) (1) and (2) above, shall be received at the water-

front facility by deep-sea ILA labor and such cargo

shall be loaded into a container at the waterfront

facility for loading aboard ship.

(d) All import consolidated cargo, described in 1

(a) (1) and (3) above, shall be discharged from the

container and the cargo placed on the waterfront

facility where it will be delivered and picked up by

each consignee.

(e) No carrier or direct employee shall supply iis

containers to any consolidator or de-consolidator. No

carrier or direct employer shall operate a facility in

violation of the Rules on Containers which specifi-

cally require that all Rule 1 Containers be loaded or

discharged at a waterfront facility.

Rule 2—Containers Not to be Loaded or Discharged

by ILA Labor

Cargo in containers referred to below shall not be

loaded or discharged by ILA labor:

A. Export Cargo:

(1) All cargo loaded in containers outside the

“geographic area’”’,

Tla

(2) Containers loadeu with cargo at a qualified

shipper’s facility with its own employees.

(3) Containers loaded with the cargo of a single

manufacturer (manufacturer’s label).

(4) Consolidated container loads of mail, house-

hold effects of a person who is relocating his place of

residence, with no other type of cargo in the con-

tainer, or personal effects of military personnel.

B. Import Cargo;

(1) All cargo discharged from containers outside

the “geographic area”.

(2) Containers discharged at a qualified con-

signee’s facility by its own employees.

(3) Consolidated container loads of mail, house-

hold effects of a person who is relocating his place

of business, with no other type of cargo in the con-

tainer, or personal effects of military personnel.

(4) Containers of a qualified consignee discharged

at a bona fide public warehouse within the “geo-

graphic area” which comply with all of the follow-

ing conditions.

1. The container cargo is warehoused at a bona

fide public warehouse.

2. The qualified consignee pays the normal labor

charges in and out; and the normal warehouse

storage fees for a minimum period of thirty or

more days, and;

8. The cargo being warehoused (a) in the nor-

mal course of the business of the qualified con-

signee; (b) title to such goods has not been

72a

transferred from the qualified consignee to an-

other.

The carrier on request will furnish all documenta-

tion and other information which permits the Con-

tainer Committee in the port to determine whether

conditions 1, 2 and 3 have been met. This exception

shall not apply where cargo is warehoused for the

purpose of avoidance or evasion of Rule 1. It is

limited to containers warehoused as provided in the

above conditions and any warehouse which does not

conform to such conditions shall be deemed a con-

solidator or de-consolidator.

Rule 3—Batching

When an employer-member or carrier uses a

trucker to remove or deliver containers in batches,

or in substantial number, from or to a terminal to

another place of rest (outside of its terminal) where

containers are stored pending their delivery to a

consignee (or after being received from a shipper

and while waiting the arrival of a ship), for the pur-

pose of reducing the work jurisdiction of the ILA or

any of its crafts, such use is deemed to be batching

and an evasion of these Rules in violation of the

CONASA-ILA contract.

Rule 4—Headload

Where a single qualified shipper sends an export

container which contains all of his own cargo to a

waterfront facility and such container is not full, the

carrier or direct employer may load this container

73a

with additional cargo at the waterfront facility. On

import cargo, the carrier or direct employer may dis-

charge any such additional cargo and send the re-

maining cargo in the container to the qualified con-

signee. The loading or discharging of cargo at ILA

ports shall be performed at a waterfront facility by

deepsea ILA labor.

Rule 5—Overland Movement of Containers from

CONASA Port to Non-CONASA Port

If a carrier moves containers from a CONASA

Port to a non-CONASA Port for the purpose of

evading the Rules on Containers, the carrier is in

violation of the CONASA-ILA Agreement. If the

cargo is being moved to a non-CONASA-ILA Port in

the normal course of business, and not for the pur-

pose of evasion, then such movement is no a violation.

Rule 6—Importers Advertising Evasion of Rules

The circulation, in writing, by importers of methods

developed by them to evade the Rules on Containers

by issuing single bills of lading on what are in fact

consolidated container loads shall be deemed a viola-

tion and all CONASA-ILA Container Committees

shall be advised to stop such evasion at the water-

front facilities.

Rule 7—No Avoidance or Evasion

The above rules are intended to be fairly and rea-

sonably applied by the parties. To obtain non-dis-

T4a

criminatory and fair implementation of the above, the

following principles shall apply:

(a) Geographic Area—Agreement in the Port to

the geographic area as provided in Rule 1 is

based on present consolidated movement patterns

in the port. Should any person, firm or corpora-

tion for the purpose of evading the provisions of

the Rules on Containers, seek to change such

pattern by shifting its operations to. or com-

mencing new operations at, a point outside said

agreed upon geographic area, then either party

may raise the question whether said point should

be included within the said geographic area, and

upon agreement that the purpose of the shift in

its operations was to evade the provisions of the

Rules on Containers, then said point shall be

deemed to be within the said geographic area

for the purpose of these rules.

(b) Containers Owned, Leased or Used—Con-

tainers owned, leased or used by companies

which are affiliated either directly or through a

holding company with a carrier or a direct em-

ployer shall be deemed to be containers owned,

leased or used by a carrier or direct employer.

Affiliation shall include subsidiaries and/or affili-

ates which are effectively controlled by the car-

rier or direct employer, its parent, or stockhold-

ers of either of them.

charge a container as required under these rules

will be considered a violation of the contract be-

tween the parties. Use of improper, fictitious or

incorrect documentation to evade the provisions

75a

of Rule 1 and Rule 2 shall also be considered a

violation of the contract. If for any reason a

container is no longer at the waterfront facility

at which it should have been loaded or discharged

under the Rules, then the carrier or its agent or

direct employer shall pay, to the joint Container

Royalty Fund, liquidated damages of $1,000 per

container which should have been loaded or dis-

charged. If any carrier does not pay liquidated

damages within 30 days after exhausting its

right to appeal the imposition of liquidated dam-

ages to the Committee provided in Rule 9(a)

below, the ILA shall have the right to stop work-

ig such carrier’s containers until such damages

are paid.

(d) Any facility operated in violation of the

.Container Rules will not have service supplied

to it by any direct employer and the ILA will

not supply labor to such facility.

Rule 8—Renegotiation and Cancellation—

No Arbitration

These Rules shall be in effect for the term of the

CONASA-ILA Agreement, provided, however, that

either party shall have the right to cancel the Rules

on Containers at any time on or after December 1,

1974, on thirty (30) days written notice of a desire

to renegotiate the provisions of these Rules. Negotia-

tions shall be held during such thirty (30) day period

and if the parties are unable to agree by the end of

such period, these Rules shall be deemed cancelled.

Thereafter, the ILA shall have the right to refuse to

76a

handle containers and CONASA shall have the right

to refuse to hire employees under the said Rules. The

negotiations referred to above shall, under no condi-

tion, be subject to the grievance or abritration pro-

visions of any CONASA-ILA Agreement.

Rule 9—Enforcement of the Rules on Containers

To assure effective, fair and non-discriminatory en-

forcement of the above Rules, the following regula-

tions shall apply:

(a) A Committee in each CONASA port repre-

sented equally by management and union shall

be formed and shall have the responsibility and

power to hear and pass judgment on any viola-

tions of these Rules. Any inability to agree shall

be processed as a grievance under the applicable

contract except as limited by Rule 8 hereof. A

joint committee, known as the CONASA-ILA

Container Committee, represented equally by

management and labor and made up of repre-

sentatives (to be mutually agreed upon) from

each CONASA Port, namely, Boston, Rhode Is-

land, New York, Philadelphia, Baltimore and

Hampton Roads shall meet at least quarterly

each year for the purpose of insuring uniformity

in the interpretation of these Rules.

(b) A Committee of carriers, together with

CONASA-ILA Container Committee will develop

uniform documentation which shall be required

to be prepared and maintained by all carriers in

order to readily identify all Rule 1 containers

which are subject to loading or discharging by

deepsea ILA labor. It shall be the obli

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