Petition — Donald Schriver, Inc. v. National Labor Relations Board

Supreme Court brief1981

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Office- Supreme Court, U.S. |

g9-125% FILED

5 Jaw 19 1981

seemeenieen.s STEW:

Supreme Court of the Bnited States

OCTOBER TERM, 1980 ©

DONALD SCHRIVER, INC., SULLIVAN-KELLEY & ASSOCIATES,

Topaz CONTRACTING & DEVELOPMENT COMPANY, INC., AND

SULLIVAN AND ASSOCIATES,

Petitioners,

NATIONAL LABOR RELATIONS BO "

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES SUPREME COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

GERARD C. SMETANA

500 Marquette Bldg.

140 So. Dearborn St.

Chicago, Illinois 60603

(312) 346-4515

Witiam H. DuRoss, II ~

Of Counsel: Suite 200

Kovar & SMETANA 1919 Pennsylvania Ave., N.W.

500 Marquette Building Washington, D.C. 20006

140 So. Dearborn St. (202 ) 659-8687

Chicago, Illinois 60603

Suite 200

1919 Pennsylvania Ave., N.W.

Washington, D.C. 20006

QUESTIONS PRESENTED

1. Whether the Court of Appeals

misinterpreted Connell v. Plumbers Local

100, 421 U.S. 616 (1975), in broadening

the Section 8(e) construction industry

proviso \to protect secondary subcontract-

ing restrictions coercively imposed upon

contractors by craft unions which have

neither attempted to organize nor have

been designated as a bargaining agent of

tne contractors’ employees?

2. Whether secondary construction

industry subcontracting agreements,

unlawful under the “top down" organizing

restrictions in Connell v. Plumbers'

supra, become lawful solely because they

are sought as part of an agreement

covering wages, hours and working

conditions?

3. Whether the Court of Appeals erred

in supporting its broad construction of

the proviso by relying upon a purported

pre-1959 pattern of bargaining

contradicted by the stipulated record in

this case and not relied upon by the

Board?

4. Whether the Court of Appeals erred

in deferring to the decision of the NLRB

in which the Board based its decision upon

its interpretation in Connell v. Plumbers,

Supra, rather than the area of its

expertise?

5. Whether the Section 8(e)

construction industry proviso protects

restrictive subcontracting clauses which

apply (a) to all existent and future job-

sites regardless of whether the secondary

union represents employees working at the

jobsites; (b) regardless of whether the

employer uses craft’ employees at the job-

sites; (c) regardless of whether employees

of the union subcontractors are actually

working at the jobsites; (d) to jobsites

where the secondary employer lacks

contractual authority to determine whether

other subcontractors are union; and (e)

where affirmative evidence of jobsite

friction between union and non-union

employees is totally absent?

6. Whether the Court of Appeals

misinterpreted NLRB v. Ironworkers, 434

U.S. 335 (1978) by holding, contrary to

Section 8(f), that coerced efforts to

obtain or enforce pre-hire agreements

creates a collective bargaining relation-

ship between the union and the picketed

contractor?

7. Whether the Court of Appeals erred

in construing Section 8(f) of the Act to

permit labor organizations to seek by

coercive means, prohibited by Section

8(b)(4)(A) of the Act, pre-hire agreements

containing broad subcontracting restric-

tions?

8. May “contract standards" be

protected by a union through coercive

pressure to obtain a restrictive secondary

agreement for the henefit of employees

they do not yet represent?

TABLE OF CONTENTS

ORDERS AND OPINIONS BELOW ..... .

JURISDICTION a ia e 7 * ¢ o ° 2 e e °

Peewee AMVUUVED 6: a) *%) 6) 0's «6: 0 '*

STATEMENT

Il.

THE STIPULATED FACTS .... .«

The Contractors Operations

The Trades Council and

Local 1497 Threaten

Schriver to Obtain

Compliance With the

Memorandum Agreement and

the Local 1497 "Short

Form" Agreement... <8 6

The District Council and

Local 1752’ Picket Topaz

to Secure Compliance

WARE: CE ce ke Pete ee %

DECISIONS AND ORDERS BELOW. .

The Board's Decision and

Order i - — a — . ° = — a .

The Decision of the Court

OL ROGGE ae KS ek ee

iii

CONCLUSION

INTRODUCTION . 2. 2. « « «@

THE COURT OF APPEAL'S

DECISION THAT COERCIVE

ATTEMPTS TO OBTAIN

EMPLOYER ASSENT TO

"PRE-HIRE" CONTRACTS

CREATES A "COLLECTIVE |

BARGAINING RELATIONSHIP"

IS CONTRARY TO DECISIONS

OF THIS COUNRP .2i 3. ee ec

THE COURT OF APPEALS

DECISION THAT COERCIVE

ATTEMPTS TO OBTAIN PRE-

HIRE AGREEMENTS CREATE

A "COLLECTIVE BARGAIN-

ING RELATIONSHIP" IS

CONTRARY TO LEGISLATIVE

INTENT AND A DECISION

OF THIS COURT eh ee

THE DECISION BELOW

THAT THE CONSTRUCTION

INDUSTRY PROVISO

PROTECTS SUBCONTRACT-

ING CLAUSES REGARDLESS

OF SCOPE IS CONTRARY

TO THIS COURT'S

CONNELL DECISION ...

THE DECISION BELOW

IS CONTRARY TO A PANEL

DECISION OF THE

UNITED STATES COURT

OF APPEALS FOR THE

NINTH CIRCUIT . . «2. « «

CASES CITED

Page

Burlington Truck Lines, Inc. v.

United States, 472 U.S. 6

(1962) © * . 7 8 * 7 . 7 “ e oe s 44

J.I. Case Co. v. NLRB,

SEE Usk 538 CREE) » 0 8 0 0 Oey 4

Connell Construction Co. v.

Plumbers, Local 100, 421

U.S. 616 (1975) passim

Dallas Bldg. & Constr.

Trades Council v. NLRB,

396 F.2d 677 (1968) ....2..-. 33

Dee Cee Floor Covering, Inc.,

234 WORD 432 (1907) 6 ee 6 oe 35

Douds v. Local 1250, Retail

Store Union, 173 F.2d

764 (2d Cir. 1949) Se a we 37

Fibreboard Paper Products

v. NLRB, 379 U.S. 203

(1964) . n ce o * . * + - . . + + 27

Garment Wkrs. Union v. NLRB,

SOE. Uces Fat Lee «ee eS 34

Hill v. Florida, 325 U.S. 538

(1945) . o . . . . . . . . . * . 29

- .

Houston Insulation Contractors

Ass'n v. NLRB, 386 U.S. 664

(1967) e © 2 ° + « ° ” © °

Hutzler Bros. Co. v. NLRB,

630 F.2d 1012 (4th Cir.

1980) o * e e * o . ~ e e °

IAM v. NLRB, 311 U.S. 72

(1940) Bn ere ae an nae ae ee

NLRB v. Indiana & Michigan

Electric Co., 318 U.S. 9

(1943) ose woe. See ee ef

NLRB v. Iron Workers, 434

ot BBe pe a bog tae ee ae ee

National Woodwork Mfrs. Ass'n

v. NLRB, 386 U.S. 612

(1967) . a s + - . ° a o . e

Pacific Northwest Chapter

of the Associated

Builders & Contractors

Inc. V. NLRB, 609 F.2d

vans (USPS) 6 & one 0 oe! oe

Sears Roebuck & Co. v. San

Diego County District

Council of Carpenters,

S56 Us6. 180 UTSTE) «6 0 6 « et

passim

19, 44

31)

28 U.S. §1254(1)

National Labor Relations Act

STATUTES

as amended 61 Stat.

73 Stat. 519, 29 U.S.C.

§§151 et seq.)

Section 1

Section 7

Section 8(a)

8(a) (4) (A)

Section 8(b)

8(b) (4) (A)

8(b) (4) (ii) (A)

8(b) (7)

‘Section 8(e)

Section 8(f)

Section 9(a)

Section 201

Section 201(c)

vii

° 2

passim

ry ee

passim

15, 18

31, 32,5 33

passim

Pay | ox

| OTHER AUTHORITIES

PAGE

4 105 Cong. Rec. 18128 (1959)

remarks of Rep Barden)

H.R. Rep. No. 1147, 86th

Cong., 1st. Sess. 42 (1959) .. 40

Rep. No. 187, 86th Cong.

Ist. Sess. 28 (1959)

reprinted I. Leg. Hist.

of LMRDA. 1959, p. 424 Fe ve

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1980

NO. 80-

DONALD SCHRIVER, INC., SULLIVAN-

KELLEY & ASSOCIATES, TOPAZ

CONTRACTING & DEVELOPMENT

COMPANY, INC., AND

SULLIVAN AND ASSOCIATES,

PETITIONERS,

Vv.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE DISTRICT

OF COLUMBIA CIRCUIT

Donald Schriver, Inc. ("Schriver"),

Sullivan-Kelly & Associates, Topaz

Contracting & Development Company, Inc.

("Topaz"), and Sullivan and Associates,

°-%

hereby petition for a writ of certiorari

to review the judgment of the United

States Circuit Court of Appeals for the

District of Columbia Circuit, denying

Petitioners’ petition to review an order

of, the National Labor Relations Board.

ORDERS AND OPINIONS BELOW

The opinion of the Court of Appeals

(Pet. App. 1a-59-a) is not yet officially

reported. The decision and order of the

National Labor Relations Board (Pet. App.

60a-110a) is reported at 239 NLRB 264.

JURISDICTION

The judgment of the Court of Appeals

(Pet. App. 115a-116a) was entered on

October 20, 1980, pursuant to Section

10(£) of the National Labor Relations Act.

The jurisdiction of this Court is invoked

under 28 U.S.C. §1254(1).

°-%

hela

oa ee

STATUTE INVOLVED

The relevant provisions of Sections

1, 7, 8(a), 8(b), 8(e), 8(£), 9(a), and

201 of the National Labor Relations Act,

as amended (61 Stat. 136, 73 Stat. 519, 29

U.S.C. §§151, et seg.) are set forth in

Appendix C (Pet. App. 111-a-114-a).

STATEMENT

I. THE STIPULATED PACTS

A. The Contractors Operations

Schriver is a construction industry

builder-developer and general contractor

in Montebello, California. Schriver

directly employs carpenters as framers or

roofers as needed and one laborer who

performs clean-up work. Schriver

subcontracts all other construction work

to both union and non-union

contractors through competitive

bidding,?+ and has never employed any

other craft employees.

At all relevant times, none of

Schriver's carpenters have been members of

nor represented by any labor organization.

Nor has any labor organization attempted

to organize them for purposes of

collective bargaining.

lin May, 1975 Schriver

subcontracted about 70 percent of the

non-carpentry construction work at its

Montebello townhouse project to unionized

contractors.

°°.

Topaz engages iin construction work as

a general contractor and subcontractor in

Norwalk, California. In February, 1977

Topaz employed approximately 40 full-time

employees, 38 of whom perform carpentry

work. In addition, ten other employees

perform carpentry work about 70 percent of

the time. Topaz concurrently enters into

subcontracts with various general

contractors to perform carpentry work on

different jobsites and allocates its

carpentry employees accordingly. During

February, 1977, for example, Topaz was the

only non-union subcontractor at the

Claremont, California jobsite where it

employed between 10 and 20 carpenters for

five weeks. At the Monterey Park,

California jobsite the electrical work was

also subcontracted to a non-union

contractor. By early March, 1977 Topaz's

regular compliment of carpenters and

apprentices exceeded 80 employees working

at additional jobsites in Santa Ana

California, where only the concrete,

plumbing, electrical, air conditioning and

heating installation were union. At other

projects, Topaz hired entire new crews of

carpenters on May 24, 1977 to perform work

as a subcontractor on a shopping center in

Whittier, California, and again on June 6,

1977 to perform carpentry work as a sub-

contractor in Duarte, California. At the

Whitter jobsite, nineteen crafts were

union and Topaz and six other crafts are

not.

On at least one occasion in August,

1977, Topaz performed construction work as

a general contractor building garages to

be used as rental warehouses. All

construction work was subcontracted and

Topaz did not employ any carpenters. to

perform any work on this project.

Topaz has never executed or been a

party to any labor agreement with any

labor organization. None of Topaz's

carpentry or apprentice employees have

ever designated a labor organization to

represent them for the purpose of

collective bargaining.

7 _- %

B. The Trades Council and Local 1497

Threaten Schriver to Obtain

Compliance With the Memorandum

Agreement And the Local 1497

"Short Form" Agreement

Agreement

Since June 12, 1972 and continuing at

all relevant times, Schriver has been

signatory to a Memorandum Agreement with

the Los Angeles Building and Construction

Trades Council ("Trades Council"). The

Memorandum of Agreement is a one-year

contract,* which incorporates by

reference the provisions of the Master

Labor Agreement ("MLA"). The MLA is a

three year agreement between the Los

2article IV of the Agreement

provides:

The Employer, Developer and/or

Owner-Builder agrees that he shall

contract or subcontract all jobsite

work set forth in Article I above to

a person, firm, partnership or

corporation that is party to an

executed, current Agreement with the

appropriate Union having work and

territorial jurisdiction, affiliated

with the Council in which area the

work is performed.

°°.

?-%

Angeles County District Council of

Carpenters ("District Council") and its

affiliated Carpenters Local 1497 and Local

1752 and various employer associations.

Article I, Section 103, provides:

The Contractor agrees that he or any

of his subcontractors on the jobsite

will not contract or subcontract work

to be done at the site of

construction, alteration, painting,

or repair of a building, structure,

or other work, except to a person,

firm or corporation, party to an

appropriate, current labor agreement

with the appropriate union, or

subordinate body, affiliated with the

Building and Construction Trades

Department, AFL-CIO, or with the

International Brotherhood of

Teamsters, Chauffeurs, Warehousemen

and Helpers of America, or an

affiliate thereof.

This subcontracting clause applies at any

time on any construction jobsite within

the definition of the construction proviso

to Section 8(e) of the National Labor

Relations Act, where work within the .

jurisdiction of the Council, the District

Council, Local 1497, and Local 1752 is

being performed, regardless of whether or

not their members are present at any given

time on any given site.

Section 103.1 defines a

"subcontractor" and requires adherence to

union standards wage rates.2 t

Similarly, Section 103.2 requires all work

performed to conform with the MLA provi-

sions,4 and Section 102.3 requires all

3Section 103.1 provides: A

subcontractor for the purposes of this

Agreement. .. .-

is defined as any person, firm or

corporation holding a valid State

Contractors’ License and agrees under

contract in writing with the Contractor or

in writing with his sub- contractors to

perform any work covered by this

Agreement, and employs workmen as

employees to perform services covered by

this Agreement, including the performance

of labor, and/or furnishing or

installation of material, or the operation

of equipment. All employees of

subcontractors will perform work at the

appropriate hourly rate and will be

reported to such trust funds as required

by the Agreement.

4section 103.2 provides: All

work performed by the Contractors or

subcontractors to observe the provisions

of the MLA.°

Prior to May, 1975, neither the

Council nor any of its affiliates,

including the District Council, Local

1497, or Local 1752, attempted to enforce

the clauses described above.

subcontractors and all services rendered

for the Contractors or subcontractors, as

herein defined, shall be rendered in

accordance with each and all of the terms

and provisions hereof.

SThis clause reads: If the

Contractor or subcontractors shall

subcontract jobsite work covered under the

jurisdiction of the United Brotherhood of

Carpenters and Joiners of America,

including the furnishing and installation

of material, performance of labor, and the

operation of equipment, provision shall be

made in written contract for the

observance and compliance by his

subcontractors with the full terms of this

Agreement.

On May 22, 1975, Jim Sogoian,

business representative of Local 1497,

approached Schriver's superintendent on

the Montebello townhouse project and asked

him if the carpenters were "union." When

Martin said they were not, Sogoian said

Local 1497 would picket the jobsite unless

Schriver signed the Carpenter's Short Form

Agreement. Martin requested a copy of

this agreement. Sogoian returned to the

jobsite the next day with the Agreement

and again stated Local 1497 would picket

to obtain Schriver's signature on the

Agreement.

About one week later Sogoian met

Donald Schriver, President of Schriver, at

the jobsite and told him Schriver was

obligated to sign the Agreement, that the

1972 Memorandum Agreement signed by

Schriver was still in effect, and that

Schriver was thereby bound to the Local

1497 Agreement. Thereafter, Donald

Schriver spoke with V.C. Mathis, business

Representative of the District Council.

Mathis said Schriver was obligated to sign

the Local 1497 contract, he rejected

Schriver's offer to negotiate and

confirmed that the Local 1497 would picket

the Montebello jobsite and take legal

action unless Schriver signed the

Agreement.

On May 28, 1975, an agent of the

Council, at the direction of Mathis, sent

the following telegram to Denald Schriver:

YOU SUBCONTRACTED CARPENTRY WORK TO

CONTRACTORS WHO DO NOT HAVE AN

EXECUTED AGREEMENT WITH ANY UNION

AFFILIATED WITH THE COUNCIL. THIS

ACTION ON YOUR PART VIOLATES ARTICLE

IV OF YOUR AGREEMENT WITH THE COUNCIL

DATED JUNE 12, 1972. UNLESS THE

ABOVE-MENTIONED CONTRACTORS ARE

IMMEDIATELY REMOVED FROM THE JOB, WE

HAVE BEEN AUTHORIZED TO SUE YOU FOR

AN INJUNCTION AND DAMAGES. ®

6No lawsuit was filed, and

neither the Council nor Local 1497 engaged

in any picketing against Schriver.

Schriver did not comply with the Union's

demands.

7’ >

C. The Distict Council and Local

1752 Picket Topaz to Secure

Compliance With MLA

On or about February 22, 1977, Larry

Ruiz, a business representative of Local

1752, spoke to Lonnie Tackett, Topaz's

construction foreman at the Claremont,

California project. Ruiz asked why Topaz

was not signed up with Local 1752, Ruiz

said Local 1152 would have to picket if

Topaz did not sign. the contract. Topaz's

labor relations consultant, Mike Sullivan,

arrived at the jobsite while Ruiz |wager~

still there and asked Ruiz what cqikract

he had to sign. Sullivan ask ed, gpu iz if he

meant the regular carpenters’ contract

with the Master Labor Agreement, and Ruiz

replied, "Yes, that is the only contract

that I can sign with Topaz." Sullivan

said the contract was illegal, but that he

was willing to sign the contract for the

Claremont townhouses jobsite only, if

Local 1752 would accept all the men

working for Topaz and stop interferina

with the owner-builders. Ruiz replied

that he could not accept Sullivan's

°*%

conditions and could not sign any contract

other than the Master Labor Agreement.

On February 28, 1977, at a jobsite

meeting with Ruiz and Robert Wiess,

attorney for the Claremont townhouses

owner-builder Medvin-Norris, Joe Bickholt,

business representative of the District

Council, informed Sullivan that Local 1752

could not accept a contract limited to the

Claremont project.

In furtherance and support of their

demands, Local 1752 and District Council

picketed the Claremont construction

project from March 4, to March 14, 1977,

with signs, reading:

Topaz Contracting & Dev.

UNFAIR

Carpenters

Local 1752

Affiliated With The

Los Angeles Building and Construction

Trades Council

No Agreement

In late May, 1975, Petitioners filed the

Section 8(e) and &(b)(4)(ii)(A) charges,

as amended in March, 1977 upon which this

case arises.’

II. DECISIONS AND ORDERS BELOW

A. The Board's Decision and Order

The Board concluded that the Union's

coercive attempts to obtain initial

execution of broad restrictive

subcontracting clauses were privileged by

the construction industry proviso to

Section 8(e). Despite its acknowledgement

that no labor organization had achieved

majority designation as the collective

bargaining agent of any of Petitioners’

carpentry employees, the Board construed

the proviso to Section 8(e) to encompass

7Pursuant to agreement, the case

was transferred directly to the Board for

decision. On September 7, 1977, the

issues were submitted upon the parties'

pleadings, exhibits and factual

stipulations. On December 4, 1977, the

Board granted the joint motion and

transferred these cases for issuance of a

decision and order. No jurisdictional

issues are presented,

all subcontracting clauses, regardless of

scope, “sought in the context of

collective-bargaining relationships.

- « «" (Pet. App. 81-a). The Board

further broadly defined “collective

bargaining relationships” to include union

attempts to obtain employer agreement to

"pre-hire" agreements even by coercive

means, regardless of the wishes of current

affected employees (Pet. App. 88-a et

seq).

The Board considered Connell Constr. ~

Co. v. Plumbers, Local 100, 421 U.S. 616

(1975) to support the broad scope given

the construction industry proviso to

Section 8(e) and its view that an attempt

to obtain agreement to a “pre-hire"

contract creates a "collective bargaining

relationship" (Pet. App. 90-a).

The Board rejected the contention

that the construction industry proviso

privileges subcontracting clauses limited

to particular jobsites where friction

exists between union and non-union

employees and where signatory employers

are actually working, restricted to those

employers signatory to agreements with one

craft union, and enforceable only after

the designation by a majority of the _

affected employees of the signatory union

as their collective bargaining

relationship (Pet. App. 80-a-81-a).

B. The Decision of the Court of

Appeals “

The Court of Appeals (Circuit Judges

McGowan and Edwards and Judge Kashiwa, of

the Court of Claims sitting by

designation) affirmed the Board's

dismissal of Petitioners’ Section 8(e) and

8(b)(4)(ii)(A) complaint. The Court of

Appeals agreed with the Board that’ an

attempt to obtain a pre-hire agreement

lawful under Section 8(f) including

restrictive subcontracting clauses creates

the requisite “collective bargaining

relationship” within the meaning of this

Court's Connell decision. The Court of

Appeals also held that "it is irrelevant

that .. . the union lacks majority

status” (Pet. App. 28-a), even though the

ro}

panel recognized “that one of the major

aims of the 1959 amendments to the NLRA,

of which §8(e) was one, was to limit ‘top

down’ organizing campaigns"((Pet. App.

27-a)) and that “an 8(f£) agreement is not

identical in all respects to a standard

9(a) collective bargaining agreement” (Pet.

App. 33-a).

The Court of Appeals aiso refused to

follow an intervening panel decision of

the Ninth Circuit® which held that

the construction industry proviso

privileges subcontracting restrictions

limited to specific jobsites where ;

signatory union employees are employed

(Pet. App. 37-a). Instead, the Court of

Appeals viewed Section 8(e) as broadly

protecting “continuity of work and

benefits” for construction employees

beyond any concern to insulate union

8pacific Northwest Chapter of the

Associated Builders & Contractors Inc. v.

NLRB, 609 F.2d 1341 (1979) pending

rehearing en banc.

workers from working alongside non-union

employees at particular jobsites ia.9

REASONS FOR GRANTING THE WRIT

I. INTRODUCTION

The decision of the Court of Appeals

creates a rule of law under Section 8(e)

that is contrary to earlier .decisions of

this Court and effectively nullifies the

Act's paramount guarantee in Section 7

preserving for all employees, including

construction employees, freedom of choice

in their selection of a collective

bargaining representative. The decision

below has far-reaching adverse

consequences upon the free exercise of

employee rights unintended by Congress.

9The Court of Appeals enforced

that portion of the Board's decision

declaring certain “self-enforcement"

provisions of MLA violative of Section

8(e). This portion of the Roard's order

is uncontested on this Petition.

By permitting construction unions to

coercively obtain broad subcontracting

restrictions limiting work to craft unions

from unorganized employers, without first

or even concurrently organizing their

employees, the Court of Appeals reverses

Congress' legislative judgment that the

construction provision to Section 8(e)

privileges only voluntary subcontracting

restrictions unenforceable thereafter

until the construction union obtains

majority designation.

The rule of law upheld below

authorizes construction unions to obtain

by threats of jobsite picketing and by

such picketing coerced employer assent to

subcontracting restrictions and other

union imposed conditions of employment

upon non-union workers regardless of their

wishes, thereby permitting minority unions

to use subcontracting clause to obtain

prohibited “top down" organizing in the

construction industry. Such clauses have

the direct consequence of forcing

non-union employees to become union

members to secure the employment

opportunities restricted to employees of

unionized contractors.

Unless the petition is granted

fundamental statutory rights of

construction employees to select or not

their own collective bargaining

representative and of construction

employers to be free from subcontracting

restrictions sought by stranger unions

will be nullified.

The decision below also threatens the

cost-conscious process of competitive

bidding in one of our Nations largest

industries. Craft unions can now

establish exclusive control over all

construction work within their

jurisdictions and are free to picket job

sites where non-union employees perform

any crafv. work. It is of fundamental

importance to all contractors and users of

construction services that job site

competitive bidding not be foreclosed in

this depressed industry.

The Board recognized the significance

of the issues presented here by holding an

unprecedented seven hours of oral argument

by all interested parties, including the

AFL-CIO, international craft unions, the

Chamber of Commerce, contractors

associations, and individual contractors.

It is in the interests of contractors,

users, and the Nation that the legal

issues posed be promptly resolved by the

highest authority.

II. THE COURT OF APPEAL'S DECISION

THAT COERCIVE ATTEMPTS TO OBTAIN

EMPLOYER ASSENT TO "“PRE-HIRE"

CONTRACTS CREATES A "COLLECTIVE

BARGAINING RELATIONSHIP” IS

CONTRARY TO DECISIONS OF THIS

COURT

In Connell Constr. Co. v. Plumbers,

Local 100, 421 U.S. 616 (1975), this Court

concluded that the scope of construction

industry proviso can not supplant or

override the primary purpose of the

National Relations Act expressed in

Section 7 to protect the right of all

employees to “bargain collectively through

representatives of their own choosing."

29 U.S.C. §157. Speaking for a majority

of the Court, Mr. Justice Powell

recognized that unless subcontracting

restrictions could only be sought inside

"the context of a collective-bargaining

relationship" and applicable only "to a

particular jobsite” (421 U.S. at 635),

"construction unions [would attain] an

almost unlimited organizational weapon."

421 U.S. at 631. Consistent with the

paramount purpose of Sections 7 and 9(a)

of the Act guaranteeing employees freedom

of choice from both employer and union

interference in their selection or

rejection of a collective bargaining

representative, this Court was “unwilling

to read the [Section 8(e)] construction

industry proviso .. . to leave such a

glaring loophole in (Congress')

restrictions on ‘top-down' organizing

- « «” 421 U.S. at 633.

The Court effectuated the legislative

scheme by concluding that the proviso

authorized subcontracting restrictions in

the construction industry steming from

collective bargaining relationships.

The dissenting Justices did not object to

this portion of the Court's decision. In

their view, the National Labor Relations

Act, rather than the Sherman Anti-Trust

Act, provided the remedy for the adverse

economic consequences of subcontracting

restrictions sought outside a collective

bargaining relationship. -

In Connell a collective bargaining

relationship describes an ongoing

relationship between a labor organization

and a construction employer whose

employees have previously indicated by

majority vote in a Board conducted

election, or by reliable and uncoerced

union security or union bargaining

authorization designations that the union

seeking to restrict the employer's

subcontracting freedom is their choice as

a collective bargaining representative.

Otherwise Congress’ concern in the 1959

amendments to the Act to limit “top down"

organizing and preserve employee freedom

of choice in the construction industry

could still be frustrated.

This Court has consistently applied

this definition in earlier decisions. [In

National Woodwork Mfrs. Ass'n v. NLRB, 386

U.S. 612, 614 (1967), the Court used the

phase “collective bargaining relationship”

to describe an ongoing relationship

between Frouge, a general contractor, and

the carpenters international union to

employ members of a carpenters local where

the work would be performed. See 149 NLRB

at 653. At each jobsite where members

were working, the union enjoyed at least a

presumption of majority status, thereby

privileging the union's work preservation

demands because the demand arose in the

context of a collective bargaining rela-

tionship during which the affected craft

employees had indicated by their

maintenance of union membership that the

carpenters local was their choice of

bargaining representative statutorily

authorized to make such restrictive

demands upon Frouge.

Historically, this Court has

consistently recognized that work

preservation and subcontracting demands

are legitimate only if the demanding labor

organization is the certified bargaining

representative or otherwise legally

entitled to the presumption of a majority

status. In the first case holding an

employer legally required to bargain over

such demands, the stéeelworkers had been

the exclusive bargaining representative of

the affected employees since 1937.

Fibreboard Paper Prods. v. NLRB, 379 U.S.

203, 205 (1964). This Court's decision in

Houston Insulation Contractors Ass'n v.

NLRB, 386 U.S. 664 (1967) is likewise

founded upon a work preservation claim

advanced by Asbestos Workers, Local 22

which had previously been selected as the

bargaining representative of Armstrong's

employees.

Here, it is uncontested that the

Trades Council, the District Council, and

Carpenters Locals 1497 and 1752 have never

attempted to organize Schriver's or

Topaz's carpentry employees or to obtain

membership designations from them. It is

stipulated that none of Schriver's or

Topaz's carpentry employees were members

of Carpenters Locals 1497 or 1752. The

restrictive contract demands made by

picketing and threats of picketing did not

arise against the background of an ongoing

organizing campaign involving Schriver's

or Topaz's employees or of any non-union

carpentry employees working for other

contractors. There is then no record

support for the Court of Appeal's

assertion that "the unions...

explicitly sought to secure representation

of Schriver's Topaz' employees." (Pet.

App. 29-a) (emphasize in original). The

Unions simply ignored these employeees in

seeking identical subcontracting

restrictions sought by Local 100 in

Connell. Just as Local 100 ignored the

employees of the non-union subcontractors

by seeking subcontracting restrictions

from general contractors, the Unions here

ignored the collective bargaining agent

preferences of Schriver's and Topaz's

employees.

Contrary to the view of the Court of

Appeals (Pet. App. 30-a), a coercive

attempt to standardize the working

conditions of Schriver's and Topaz's

employees without their prior consent does

not render “the overriding concern of the

Supreme Court in Connell . - . entirely

inapplicable." This Court's concern there

was to preserve the very heart of the Act,

which guarantees employees the right to

decide which union, if any, they wish to

designate as their collective bargaining

agent. Hill v. Florida, 325 U.S. 538, 541

(1945); J.I. Case Co. v. NLRB, 321 U.S.

332, 339 (1944); NLRB v. Indiana & Mich.

Elec. Co., 318 U.S. 9, 19 (1943); IAM v. _

NLRB, 311 U.S. 72, 79 (1940) ("freedom of

choice ... is the essence of collective

bargaining"). Coercive attempts to

standardize wages by direct pressure

solely upon the emplover without even

attempting to organize the employees is

the very evil Congress sought to limit in

i |

the 1555 Landrum-Griffin amendments to the

Act. The fact that Topaz and Schriver

employed workers who could be organized

and represented by the Carpenters renders

their being ignored even more offensive to

the Act's freedom of choice guarantee than

the conduct of Local 100 in Connell.

"Congressional concern about coerced

designation of bargaining agents did not

evaporate as the focus turned to the

construction industry.” NLRB v. Iron

Workers, 434 U.S. 335, 347-48 (1978).

Petitioners agree with the Court of

Appeals (Pet. App. 45-a) that construction

industry employees have an interest in job

security. However, the Court below

ignores the basic scheme of the Act by

permitting the Unions to assert this

interest without the employees prior

consent. The Court of Appeals and the

Board exaggerate the alleged difficulties

of organizing Schriver's and Topaz's

carpentry employees. Both employers hired

stable work forces who enjoyed continuing

employment. These employees then were no

less accessible to solicitation at work or

in their homes than industrial or retail

employees. The burden of proving

inaccessibility is on the organizing

union. Sears, Roebuck and Co. v. San

Diego County District Council of

Carpenters, 436 U.S. 180, 205 (1978). The

Unions never attempted to organize the

employees, and thus can not complain about

lack of access to the employees. Hutzler

Bros. Co. v. NLRB, 630 F.2d 1012, 1017

(4th Cir. 1980). The record then contains

no support for the concerns expressed by

the Court of Appeals. !0

The Court of Appeals also improperly

subordinated Section 8(e) and 8(a)(4)(A)

to Section 8(b)(7). Whether the Union's

conduct is subject to 8(b)(7) begs the

question of whether the subcontractina

Clause, which was the Unions" primary

1Onor did Congress. Only where

employment terms were of short duration

did the Congress perceive organizing

difficulties (Pet. App. 32-a).

objective, is outside the Section 8(e)

construction proviso. As the Court of

Appeals properly stated (Pet. App. 20~a):

If an agreement is prohibited by

§8(e), §8(a)(4)(A) the Act prohibits

any picketing or threats of picketing

aimed at coercing an employer to

enter the agreement.

Therefore, even assuming recognitional

object within the scope of Section

8(b)(7), that section is irrelevant to the

scope of the construction industry

proviso to Section 8(e).

As we have shown above, the proviso

protects subcontracting restrictions in

the context of a collective bargaining

relationship established after the union

obtains majority status or the presumption

thereof. The fact that the subcontracting

clause is part of a short form agreement

alluding to other terms and conditions of

employment does not remove the

subcontracting clause from Section 8(e) or

remit the coerced employer to the

protection only of Section 8(b)(7). There

is nothing in this Court's holding and

reasoning in NLRB v. Iron Wkrs., supra,

which suggests Section 8(b)(7) is the sole

proscription upon “top down" recognition.

By holding to the contrary, the Court of

Appeals improperly repealed Section

8(a)(4)(A) and misinterpreted its holdings

in Dallas Bldg & Constr. Trades Council v.

NLRB, 396 F.2d 677 (1968), which

recognized that Section 8(e) unlike

Section 8(b)(7) prohibits .secondary “hot

cargo" clauses regardless of whether the

union seeks recognition. “Sections

8(b)(7) and 8(e) are aimed at wholiv

different problems.” 396 F.2d at #82. In

Dallas, Plumbers, Local 100 sought an

unchallenged subcontracting clause, and

the Court of Appeals in its opinion

nowhere suggested that picketing and

threats thereof to obtain unlawful

subcontracting clauses could only be

interdicted under Section 8(b)(7).

III. THE COURT OF APPEALS DECISION

THAT COERCIVE ATTEMPTS TO

OBTAIN PRE-HIRE AGREEMENTS

CREATE A “COLLECTIVE RARGAIN-

ING RELATIONSHIP” IS CONTRARY

TO LEGISLATIVE INTENT AND A

DECISION OF THIS COURT

Section 8(f) of the Act exempts the

execution of a “pre-hire" agreement in the

stry from the reach of

Section 8(a)(2), which prohibits employer

support for any labor organization which

does not actually represent an uncoerced

majority of the affected employees.

Garment wkrs. Union V.- NLRB, 366 U.S- 731,

738-39 (1961) (§8(a) (2) broadly protects

freedom of choice and majority rule in

employee selection of bargaining

representative). The mere execution of a

construction indu

ee ea eee .

—_

ert

eee ee

pares

pre-hire agreement and, a fortiori, the

coerced attempted here to obta

as ent does not,

contrary to the Court of Appeals (Pet.

App. 28-a), create a collective bargaining

relationship which ipso facto places

rictions within the

in initial

sent to a pre-hire agreem

subcontracting rest

protection of the Section 8(e)

construction industry proviso. |

In NLRB v. Icon wkrs, supra, ‘

this Court carefully canvassed the

legislative history leading to the

enactment of Section 8(f). The Court

concluded Congress‘ limited purpose was to

privilege the execution of such agreements

but, consistent with the paramount federal

policy of the Act to protect employee free

choice of bargaining agent, a pre-hire

agreement did not acquire the status of a

binding collective bargaining contract

until and unless the signatory

construction union later obtained the

majority support of the affected craft

employees 434 U.S. at 346. Neither

Section 8(f) on its face nor the relevant

legislative history contains any support

for the view of the Court of Appeals (Pet.

App. 34-a) that an attempt to obtain a

pre-hire agreement creates a collective

bargaining relationship. |!

lohe Board's view, affirmed by

the Court of Appeals, is inconsistent with

its earlier view expressed in Dee Cee

Floor Covering, Inc., 232 NLRB 421, 422

(1977) (§8(£) “merely immunizes the

parties to such agreements from liability

under Section 8(a) (and (b) of the Act").

The same proposition, that a pre-hire

agreement creates a collective bargaining

relationship subject to judicial

enforcement under Section 301 of the Act

advanced by the AFL-cI10!2 in Iron

Wkrs, was specifically rejected by this

Court. 434 U.S. at 352. As Mr. Justice

Stewart stated, in dissent:- "an employer

may dismiss the [pre-hire] agreement as a

nullity.” 434 U.S. at 353.

The contrary holding below further

ignores the limited justification for

pre-hire agreements: to enable employers

to submit accurate bids, '° not to

lee rief for AFL-CIO Amicus

Curiae at 10-13. NLRB v. Iron Wkrs, 434

U.S. 335 (1978).

135, Rep. No. 187, 86th Cong.

Ist. Sess. 28 (1959), reprinted I Leg.

Hist. of LMRDA 1959 p. 424,

confer upon construction unions an

unlimited recognition weapon in

contravention of Congress’ concurrent

overriding purpose in 1959 to proscribe

"top down" recognition tactics. The Court

of Appeals has improperly converted

Section 8(f) into a "top down" recognition

mechanism which forfeits the public right

of all employees to determine their own

terms and conditions of employment. As

Judge Learned Hand observed: "Obviously,

the authority of such a union cannot

extend to any .. . subject matter which

the union has not been specifically

authorized to ‘adjust'." Douds v. Local

1250, Retail Store Union, 173 F.2d 764,

769 (2d Cir. 1949).

Here, it is stipulated that the

Unions have not attempted to obtain

majority status among Schriver's or

Topaz's regular complement of carpentry

employees. Accordingly, a pre-hire

agreement does not alone create a

collective bargaining relationship under

the National Labor Relations Act. |4

The Court in Connell also rejected

the argument by Plumbers Local 100 that

pre-hire agreements create a collective

bargaining relationship. This Court

‘4 one distinction between a

pre-hire "agreement" and an on-going

collective bargaining relationship

established under Section 9(a) of the Act

is confirmed by statutory comparison.

Section 8(f) of the Act does not contain a

Single reference to the term "collective

bargaining agreement" or "collective

bargaining relationship." The language

speaks only in terms of "agreements." The

first proviso to Section 9(a) (Stat. App.

114-a)in contrast, describes the type of

agreement which follows after the

establishment of majority status as a

"collective bargaining contract or

agreement." In Section 9(a), where the

word “agreement” is used in close

association with “collective bargaining

contract" rather than alone, its scope can

properly be ascertained from the limiting

words which precede it. If Congress had

intended the same type of bargaining

relationships to be created by both

sections, it likely would have used

identical terminoloqy in Section 8(f).

stated that pre-hire agreements could be

challenged as invalid "for lack of a

collective-bargaining relationshin." 421

U.S. at 631 n. 10. The Court did not

believe that Congress intended

unenforceable pre-hire agreements to

constitute a collective bargaining

relationship because such agreements offer

no protection against "top down"

recognition tactics. This Court, unlike

the Court of Appeals, was fully faithful

to the distinction drawn by Congress in

1959 between pre-hire "agreements" and

enforceable collective bargaining

contracts premised upon majority

designation of a bargaining agent.

The Unions here forefeited any claim

to lawful pre-hire agreements not only by

failing to obtain majority support but

also by violating Congress' proscription

against coercive attempts to obtain

employer assent to pre-hire agreements.

As this Court noted in NLRB v. Iron Wkrs.,

supra, 434 U.S. at 348 n. 10: “Congress

was careful to make its intention clear

7’ >

that pre-hire agreements were to be

arrived at voluntarily, and no element of

coercion was to be admitted into the

narrow exception being established to the

majority principle" (citing 105 Cong. Rec.

18128 (1959) (remarks of Rep. Barden);

H.R. Rep. No. 1147, 86th Cong., ist Sess.

42 (1959)). Even if a pre-hire contract

created a collective bargaining

relationship, such a relationship may not

lawfully be created by picketing and

threats of picketing. The contrary view

of the Court of Appeals encourages the

very type of coercive conduct condemned by

Congress in 1959, and undermines and

subverts the policy of Section 1 of the

Act "to eliminate the causes of certain

substantial obstructions to the free flow

of commerce. ..." (Stat. App. 111-a).

See also Section 201(c) (Stat. App.

114-a). The Court of Appeals has granted

construction unions unfettered coercive

means to obtain employer recognition in

contravention of the Acts freedom of

choice principle. This dramatic departure

from federal\labor policy requires review

by this Court.

IV. THE DECISION BELOW THAT THE

CONSTRUCTION INDUSTRY PROVISO

PROTECTS SUBCONTRACTING CLAUSES

REGARDLESS OF SCOPE IS CONTRARY

TO THIS COURT'S CONNELL DECISION

In Connell, supra, this Court defined

the scope of the Section 8(e) construction

industry proviso to privilége restrictive

subcontracting clauses only if sought in

the context of a collective barqaining

relationship and applicable to a

particular jobsite. 421 U.S. at 635. On

its face, Section 102 of MLA applies to

all current and future jobsites, even

those commenced after expiration of the

contract whenever Topaz or Schriver engace

in construction and reaardless whether

either contractor uses craft employees at

the jobsite who could be organized vy a

particular’craft union. The restrictions

further include jobsites where Topaz, like

Connell, performs construction work as a

general contractor and employs no

employees at the jobsite which any craft

union could organize. '> Section 102

of MLA has precisely the improper “top

down" organizing effect condemned in

Connell. And Schriver is restricted from

subcontracting any construction work to

non-union companies regardless of whether

Schriver employs any craft employees at a

particular jobsite. '® ?

"S75 August, 1977 Topaz was

general contractor at a warehouse project

owned by Joseph Von Rathjen Investment Coa.

of Los Angeles.

on the Montebello townshouse

project, Schriver subcontracted the

insulation, plaster, drywall, painting,

paving, finished carpentry, sheetmetal,

heating, masonry and formica work. About

30 percent of this work was contracted to

non-union concerns.

As applied to Topaz, the effect upon .

non-union subcontractors to sign contracts

with craft unions regardless of the wishes

of their employees is precisely the effect

of Local 100's demand upon Connell.

There, as here, such unrestricted

subcontracting prohibitions impermissably

encourage union recognition by unorganized

contractors to maintain their elgibility

to bid on work made available by Schriver

and Topaz-~-the very direct effect upon

non-union contractors condemned in

Connell. The Court of Appeals ignored

this “top down" recognition consequence.

This Court must once again, as it did in

Connell, correct this misconception of the

construction industry proviso. | As

————— A ce

the Court of Appeals (Pet,

App. 42-a) relied upon “evidence that the

pattern of collective bargaining in the

construction industry in 1959 included

subcontracting agreements such as those

present in this case." The Board,

however, did not rely upon any such

"evidence" in concluding Section

Of MLA was not void for overbreadth (Pet.

this Court previously held, Congress

intended to permit subcontracting

restrictions only where fully consistent

with the exercise of employee free choice,

not to create a loophole to "top down"

organizing restrictions. Connell Constr.

Co. v. Plumbers Local 100, 421 U.S. at

632.

V. THE DECISION BELOW IS CONTRARY

TO A PANEL DECISION OF THE UNITED

STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

In Pacific Northwest Chapter, etc. v.

NLRB, 609 F.2d 1341 (1979), a unanimous

App. 60a-110-a). The Court of Appeals

acted in disregard of a fundamental rule

%€ administrative law by affirming the

Roard upon a basis not relied upon by the

gency. Burlington Truck Lines, Inc. v.

United States, 371 U.S. 156, 168-69

(1962)

The stipulated record before the

Court of Appeals demonstrates that

restrictive subcontracting provisions were

present in less than 10 percent of

nationwide construction industry contracts

as of 1959. Congress cannot be fairly

imputed with an intent to preserve "a

pattern” which was in fact the exception

rather than the rule. .

panel of the Ninth Circuit held that the

Section 8(e) construction industry proviso

shelters subcontracting restrictions only

if demanded in circumstances where the

signatory craft union represents the craft

employees of the signatory construction

employer '® and the clause applies to

particular jobsites where employees

members of the signatory employer are at

work. 609 F.2d at 1347. The Ninth

adopted a view of the Section 8(e)

construction industry proviso fundamentally

ee ee ee eee ee ee

8 oekle & Romero employed

carpenters who were members of various

Carpenters Locals. The 200 employer

members of the Oregon-Columbia Chapter of

AGC employ members of Operating Engineers,

Local 701.

Both Carpenters Locals and Local 701

sought employer agreement to restrictive

subcontracting identical in scope to

Section 103 of MLA,

at odds with the Court below, '? which

specifically “refus[ed] to follow the holding

of the panel of the Ninth Circuit" (Pet. App.

49-a). It is essential then that the Court

accept this opportunity to resolve the

existing conflict over the scope of the

construction industry proviso between the

Ninth and District of Columbia Circuits.

Rule 17.1(a) R. Sup. Ct.

CONCLUSION

For the foregoing reasons, the

petition for writ of certiorari to the

United States Court of Appeals for the

District of Columbia should be granted,

eT ts granting the rehearing

petition on August 19, 1980, the Ninth

Circuit withdrew "the previous three-judge

panel assignment.” This order did not

withdraw the panel's unanimous opinion.

Gerard C. Smetana

500 Marquette Rlidg.

140 S. Dearborn St.

Chicago, IL. 60603

(312) 346-4515

William H. DuRoss, Ili

Suite 200

119 Pennsylvania Ave., N.W.

Washington, D.C. 20006

(202) 659-8697

- APPENDIX A

Notice: This opinion is subject to formal revision before publication in the

Federal Peporter or U.S.App.D.C. Reports. Users are requested to not.fy

the Clerk of any formal errors in order that corrections may be made before

the bound volumes go to press.

United States Cut of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

: No. 78-2177

DONALD SCHRIVER, INC., SULLIVAN-KELLEY &

ASSOCIATES, TOPAZ CONTRACTING & DEVELOPMENT

COMPANY, INC., AND SULLIVAN AND ASSOCIATES,

PETITIONERS

Wie

NATIONAL LABOR RELATIONS BOARD, RESPONDENTS

Los ANGELES BUILDING AND CONSTRUCTION TRADES

COUNCIL, CARPENTERS LOCAL No. 1497, e/ al.,

INTERVENORS

No. 79-1001

NATIONAL LABOR RELATIONS BOARD, PETITIONER

Los ANGELES BUILDING AND CONSTRUCTION TRADES

COUNCIL, et al... RESPONDENTS

DONALD SCHRIVER, INC., ef al., INTERVENORS

Bills of costs must be filed within 14 days after entry of judgment. The court

looks with disfavor upon motions to file bills of costs out of time.

l-a

Petition for Review and Application for Enforcement

of an order of the National Labor Relations Board

—aoeee

i taececsy entered

Juule

Argued June 17, 1980 | - this date

Decided October 20, 1980 |—~

Gerard C. Smetana with whom William H. DuRoss, III

was on the brief for Schriver Inc,, Petitioner in No. 78-

2177 and Intervenor in No. 79-1001.

John H. Ferguson, Attorney, National Labor Relations

Board with whom William A, Lubbers, General Counsel,

John E. Higgins, Deputy General Counsel, Robert E.

Allen, Acting Associate General Counsel, Elliott Moore,

Deputy Associate General Counsel and William M.

Bernstein, Attorney, National Labor Relations Board

were on the brief for Respondent in No. 78-2177.

Laurence J. Cohen with whom William Chapman,

George Kaufmann, Robert D. Kurnick and Laurence Gold

were on the brief for Los Angeles Building and Construc-

tion Trades Council, Intervenor in No. 78-2177 and Re-

spondent in No. 79-1001.

Leo Geffner for Carpenters Local No. 1497, et al., In-

tervenors in 78-2177 and Respondents in No. 79-1001.

Vincent J. Apruzzese, Stephen A. Bokat, Lawrence B.

Kraus, and Francis A. Mastro were on the brief for the

Chamber of Commerce of the United States, Amicus

Curiae in Nos. 78-2177 and 79-1001.

Kenneth C. McGuiness, Robert E. Williams and Daniel

R. Levinson were on the brief for Air Conditioning & Re-

frigeration Institute, et al., Amicus Curiae in Nos. 78-

2177 and 79-1001.

Robert J. Hickey and Peter G. Kilgore were on the brief

for Associated General Contractors of America Inc.,

Amicus Curiae in Nos. 78-2177 and 79-1001.

TABLE OF CONTENTS

Page

I. FACTUAL AND PROCEDURAL BACK-

CIEE es 6 vhs cb be Pie Ce gee Obina s sels Mees om 6

A. The Facts Involving Donald

OTN OE BIG i a le taedc css asks 7

B. The Facts Involving Topaz Con-

tracting and Developing Co., Inc. .... 1]

C. Proceedings Before the Board ...... 13

Il. STATUTORY FRAMEWORK AND THE

SUPREME COURT DECISION IN CON-

SOUS IAEE si. Os Said <hiaV CRAG Dhak vs eee ta Nag Seu 17

A. Statutory Framework .............. 17

B. The Supreme Court Decision in Con-

MOU Wako ols Aes ce Pae ee ee cuss 22

III. SUFFICIENCY OF A §8(f) RELATIONSHIP

Sur GA Tie OVI Eee ci eo haba cent cess 28

IV. THE SCOPE OF THE CONSTRUCTION

INDUSTRY PROVISO TO §8(e) ............ 35

A. Limitation With Respect to Particu-

gs SR ae ee ee 36

B. The Relevance of Physical Presence

BE LD OOS onan sons CROPS eu he's 50

C. The Legality of Union-Specific

ae ANB PRESENT. grape eens PBN not 52

; D. Deference to the Board..... ie hoon Ie 56

V. THE SELF-ENFORCEMENT FEATURE

OF THE AGREEMENTS |»)... ......... 00000 57

As. ADR UTS Ss ck Woxpaes cKaadete CComeR 59

3-a

Baptist

;

Before: MCGOWAN and EDWARDS, Circuit Judges, and

KASHIWA,* Judge, United States Court of

Claims.

Opinion for the Court filed by Circuit Judge EDWARDS.

EDWARDS, Circuit Judge: We are called upon in this

case to review a decision and order of the National Labor

Relations Board concerning the legality of certain subcon-

tracting agreements in the construction industry, in light

of the construction industry proviso to §8(e) of the Na-

tional Labor Relations Act. Three principal issues are

raised.

The first issue presented is whether subcontracting

agreements in the construction industry are lawful if

sought as part of a “prehire agreement” authorized by

§8(f) of the Act. The resolution of this issue turns on the

meaning to be ascribed to the decision in Connell Con-

struction Co. v. Plumbers & Steamfitters Local 100, 421

U.S. 616 (1975), where the Supreme Court held that. a

subcontracting agreement may only be sought in the con-

text of a “collective-bargaining relationship.” The second

issue presented concerns the proper scope of the construc-

tion industry proviso to §8(e). In particular, we are called

upon to consider whether subcontracting agreements in

the construction industry must be negotiated on a jobsite

hy jobsite basis or, if not, whether they must at least be

limited in application to particular jobsites at which both

union and nonunion workers are employed. Also raised as

a part of this second issue is the question whether subcon-

tracting agreements lawfully may require subcontractors

to be signatory to an agreement with a “particular” union.

The third and final issue presented is whether subcon-

tracting agreements may be included in a contract, that

also authorizes the union to take “any” action to enforce

“any” settlement or decision rendered pursuant to a con-

tractual grievance and arbitration procedure,

* Sitting by designation pursuant to 28 U.S.C. §293(a)(1976).

We hold that subcontracting agreements may be in-

cluded in a “prehire agreement” between a contractor and

a labor organization in the construction industry. In addi-

tion, we hold that such agreements need not be re-

negotiated at each jobsite or limited in application to par-

ticular jobsites at which both union and nonunion workers

are employed; we also hold that such agreements may be

‘union-specifie.” Finally, we hold that a subcontracting

agreement may not be included in a ¢ontract such as the

present that authorizes the union to take “self-help” meas-

ures to enforce the agreement.

We turn to consider each of these issues in detail.

I, FACTUAL AND PROCEDURAL BACKGROUND

On June 20, 1975 and on March 9, 1977, unfair labor

practice charges were filed alleging that certain labor or-

ganizations had improperly coerced two construction con-

tractors to enter into subcontracting agreements prohib-

ited by §8(e) of the National Labor Relations Act.! The

charges filed on June 20, 1975 stemmed from incidents in-

volving Donald Schriver, Inc. (“Schriver”); the charges

filed on March 9, 1977, and amended on March 15, 1977,

stemmed from incidents involving Topaz Contracting and

Developing Co., Inc. (‘Topaz’). Complaints were issued

by the Regional Director in each case and, on April 28,

'1977, the two cases were consolidated. App. 39.2 The Re-

1 On June 20, 1975, two charges were filed by Sullivan-Kelley

& Associates against the Los Angeles Building and Construction

Trades Council and Local 1497, United Brotherhood of Carpen-

ters and Joiners of America. Joint Appendix (App.) 5, 7. On

March 9, 1977, one set of charges was filed by Sullivan and As-

sociates against the Los Angeles County District Council of

Carpenters and Local 1752, United Brotherhood of Carpenters

and Joiners of America. App. 23. The charges filed on March 9,

1977 were amended on March 18, 1977. App. 25.

Section 8(e) is set forth in full, /wfra. at note 5.

?“App.” refers to the Joint Appendix submitted by the par-

ties. .

i |

gional Director issued a consolidated amended complaint

on July 6, 1977. App. 41.

The parties waived all proceedings before an Adminis-

trative Law Judge, and submitted a motion to transfer the

case directly to the National Labor Relations Board. App.

52. At the same time the parties entered into a complete

stipulation of facts, App. 55. On November 4, 1977 the

Board granted the motion to transfer, and the case was

heard on the following stipulated facts.

A. The Facts Involving Donald Sckriver, Ine.

Donald Schriver, Inc. is a developer and general con-

tractor in the building and construction industry in south-

ern California. App. 57, © 7(a).? Schriver falls within the

territorial jurisdiction of the Los Angeles Building and

Construction Trades Council (“Trades Council”) and Local

1497, United Brotherhood of Carpenters and Joiners of

America (“Local 1497”). Schriver directly employs only

carpenters and one full time laborer.. All other jobsite

work assumed by Schriver is subcontracted to other con-

tractors. App. 62, ¢ 14.

In June of 1972, Schriver was engaged as owner-builder

in the construction of a four-unit apartment complex in

Montebello, California. App. 62, £ 15. While working on

that project. Schriver entered into a standard agreement

with the Trades Council. That agreement contained cer-

tain genera] terms and, more importantly, also incorpo-

rated by reference the Master Labor Agreement (“MLA”)

entered into between various employer associations and

the Los Angeles County ‘District Council of Carpenters

(“District Council”), of which Local 1497 was a member.

App. 61, © 11(a).

By its terms, the 1972 agreement between Schriver and

the Trades Council was to remain in effect for one year,

3 References are to the stipulation of facts submitted by the

parties to the Board, reprinted in the Joint Appendix and desig-

nated by numbered paragraphs.

7-a

SEER

with automatie yearly renewals thereafter subject to

proper notice of cancellation by either party. Schriver has

never served the requisite notice of cancellation upon the

Trades Council, and at all material times has been signa-

tory to the above contract. App. 61, 4 11(b)~(c). At no

time have the employees of Schriver specifically desig-

nated the Trades Council or any of its affiliated unions as

their collective bargaining representative. App. 61,

{ 11(d).

The parties in the instant dispute appear to be in

agreement that the 1972 contract was a “prehire agree-

ment” and that such agreements are recognized by §8(f) of

the National Labor Relations Act.* The parties disagree,

4 29 U.S.C. § 158(f)(1976). That section provides:

It shall not be an unfair labor practice under subsections

(a) and (b) of this section for an employer engaged primar-

ily in the building and construction industry to make an

agreement covering employees engaged (or who, upon

their employment, will be engaged) in the building and

construction industry with a labor organization of which

building and construction employees are members (not es-

tablished, maintained, or assisted by any action defined in

subsection (a) of this section as an unfair labor practice)

because (1) the majority status of such labor organization

has not been established under the provisions of section

159 of this title prior to the making of such agreement, or

(2) such agreement requires as a condition of employment,

membership in such labor organization after the seventh

day following the beginning of such employment or the ef-

fective date of the agreement, whichever is later, or (3)

such agreement requires the employer to notify such labor

organization of opportunities for employment with such

employer, or gives such labor organization an opportunity

to refer qualified applicants for such employment, or (4)

such agreement specifies minimum training or experience

qualifications for employment or provides for priority in

opportunities for employment based upon length of service

with such employer, in the industry or in the particular

geographical area: Provided, That nothing in this subsec-

tion shall set aside the fina! proviso to subsection (a)(3) of

this section: Provided further, That any agreement which

would be invalid, but for clause (1) of this subsection, shall

however, with respect to the legality of certain terms in-

cluded within the 1972 contract. One such clause is Article

IV of the 1972 agreement between Schriver and the

Trades Council, which contained the following subcon-

tracting provision:

The Employer, Developer and/or Owner-Builder

agrees that he shall contract or subcontract all jobsite

work set forth in Article I above to a person, firm,

partnership or corporation that is party to an exe-

cuted, current Agreement with the appropriate Union

having work and territorial jurisdiction, affiliated

with the Council in which area the work is performed.

App. 61, © 12, Another such clause is Article I, section 103

of the MLA, incorporated by reference into the 1972 con-

tract, which provided:

The Contractor agrees that he or any of his subcon-

tractors on the jobsite will not contract or subcontract

work to be done at the site of construction, alteration,

painting or repair of a building, structure, or other

work, except to a person, firm or corporation, party

to an appropriate, current labor agreement with the

appropriate union, or subordinate body, affiliated

with the Building and Construction Trades Depart-

ment, AFL-CIO,.or with the International Brother-

hood of Teamsters, Chauffeurs, Warehousemen and

Helpers of America, or an affiliate thereof.

App. 60, * 10.

The parties stipulated that the provisions of the MLA

applied at any time and at any jobsite where work within

the jurisdiction of the unions was performed, regardless of

whether or not any union members were present at that

jobsite. App. 87, &. The contractor thus could not avoid

the applicability of the subcontracting clause by using only

nonunion labor.

In addition to the disputed subcontracting clauses, the

parties also disagree as to the legality of Article II], sec-

‘not be a bar to a petition filed pursuant to section 149(c) or

159(e) or this title.

tion 306 of the MLA, which authorized the union to take

“any” action to enforce awards or resolutions obtained

through the grievance and arbitration process. Section 306

provided that:

Nothing contained in this Agreement, or any part

thereof, shall affect or apply to the Union in any ac-

tion it may take against any Contractor or subcon-

tractor who has failed, neglected or refused to comply

with or execute any settlement or decision reached at

any step of the grievance procedure or through Arbi-

tration under the terms of Article V hereof... .

. App. 60, § 10.

_ After signing the 1972 agreement, Schriver did not em-

ploy union carpenters, and did not require the subcon-

trators on its jubsites to be union subcontractors. App. 62,

16. Although Schriver completed several large and small |

construction projects from 1972 to May of 1975, at no time

did any union representative protest to Schriver’s man-

uvement the failure to abide by the agreement. There was

no evidence, however, that the unions had notice of such

projects, App. 63, ¢ 19.

In May of 1975, Schriver was engaged in the construc-

tion of a townhouse project in Montebello, California. On

that project Schriver employed carpenters WHO performed

work within the craft jurisdiction of Local 1497, but who

were neither members of, nor represented by, Local 1497.

App. 68, £ 20. On the Montebello townhouse project,

Schriver contracted with several subcontractors, ap-

proximately 30 percent of which were not signatories to

contracts with appropriate labor organizations. At certain

times some crafts worked alone on the project; at other

times several crafts worked on the project simultaneously.

App. 63, § 21.

On May 22, 1975, Jim Sogoian, a business representa-

tive of Local 1497, approached Schriver’s superintendent

on the townhouse project. Sogoian asked whether the car-

penters on the job were “union,” and was told that they

10-a

were not. Sogoian informed the superintendent that Local

1497 would picket the jobsite if Schriver did not sign the

carpenters’ agreement. App. 66, § 22. That agreement in-

cluded the standard subcontracting clauses referred to

above.

Subsequently, negotiations were conducted between the

union and Schriver over the employment of carpenters at .

the Montebello site. Management officials at Schriver

were told by union representatives that the contractor was

legally bound by the 1972 agreement with the Trades

Council to sign the carpenters’ contract. Donald Schriver,

president of Schriver, Inc., attempted to obtain different

terms to the contract, but the union representatives in-

sisted that Schriver sign the standard carpenters’ agree-

ment. Union officials again threatened to picket if Schriver

did not sign the contract. App. 66, ¢ 28.

On May 28, 1975, the Trades Council sent the following

telegram to Schriver:

YOU SUBCONTRACTED CARPENTRY WORK TO

CONTRACTORS WHO DO NOT HAVE AN EXE-

CUTED AGREEMENT WITH ANY UNION AF-

FILIATED WITH THE COUNCIL. THIS ACTION

ON YOUR PART VIOLATES ARTICLE IV OF

YOUR AGREEMENT WITH THE COUNCIL

DATED JUNE 12, 1972. UNLESS THE ABOVE-

MENTIONED CONTRACTORS ARE IM-

MEDIATELY REMOVED FROM THE JOB, WE

HAVE BEEN AUTHORIZED TO SUE YOU FOR

AN INJUNCTION AND DAMAGES. |

App. 67, ¢ 26. Despite warning, Council officials did not

bring suit to enforce the 1972 agreement, and they did not

cause any persons to engage in any picketing against

Schriver: /d. Nevertheless, unfair labor practice charges

were filed on the basis of the threats of picketing.

B. The Facts Involving Topaz Contracting and De-

veloping Co., Le.

Topaz Contracting and Developing Co., Inc.. is a

California corporation engaged as a framing and carpentry

ll-a

contractor and general developer in the building and con-

struction industry in southern California. App. 58, § 8(a).

Topaz falls within the territorial jurisdiction of Local 1752,

United Brotherhood of Carpenters and Joiners of America

(“Local 1752”). On February 21, 1977, Topaz began car-

pentry work on a townhouse project in Claremont,

California. App. 67, § 27. All crafts on the project were

“union” except for the workers employed by Topaz. App.

74, § 45. Topaz has never been a party to any labor

agreement with any labor organization. App. 69, § 34.

Soon after Topaz began work on the Claremont project,

Larry Ruiz, a business representative of Loca] 1752, spoke

to a construction foreman for Topaz and asked him why

Tupaz was not signed up with the union, Ruiz stated that

the union would have to picket if Topaz did not sign a con-

tract. App. 67, © 28. Since Local 1752 was not the desig-

nated bargaining representative for the workers employed

by Topaz, it sought to enter into a §8(f) prehire agreement

with Topaz.

Following the inquiry by Ruiz, Mike Sullivan, a labor

relations consultant for Topaz, arrived at the Claremont

jobsite and asked Ruiz what contract Topaz had to sign.

Ruiz responded that Topaz had to sign the reguiar carpen-

ters’ contract of the Master Labor Agreement. That con-

tract contained the standard subcontracting clauses set

forth above. Sullivan told Ruiz that the proposed contract

was illegal but that the contractor would be willing to sign

the contract for the Claremont jobsite only. However,

Ruiz replied that he could not sign any contract other than

the Master Labor Agreement. App. 67, © 29.

In support of the contract demands, Local 1752 and the

District Council picketed the Claremont project for a

period of 10 days. The placards read as follows:

12-a

“9

Topaz Contracting & Dev.

UNFAIR

Carpenters

Local 1752

Affiliated with the

Los Angeles Building and Construction Trades Council

No Agreement

App. 68, § 31. At this point, unfair labor practice charges

were filed by the contractor.

C. Proceedings Before the Board

As shown above, the facts indicated that both Schriver

and Topaz employed nonunion carpenters to perform work

on construction sites. The facts also revealed that the

unions, although not the designated representatives of

either contractor’s employees, pressured the contractors

to agree to the terms and conditions of the Master Labor

Agreement. In the case of Schriver, the unions threatened

to picket the construction site if Schriver did not sign a

current contract. In the case of Topaz, the unions picketed

the construction site for 10 days with the object of requir-

ing Topaz to sign the Master Labor Agreement for the

first time.

The contracts that the unions sought to have executed

by both Schriver and Topaz included broad subcontracting

clauses, which prohibited the subcontracting of jobsite

work to contractors who were not signatories to current

agreements with particular unions having jurisdiction over

the work. The agreements also contained provisions per-

mitting the unions to take “any” action if the employer

failed to comply with any settlement or decision reached

pursuant to the terms of the contractual grievance and ar-

bitration procedure.

In filing unfair labor practice charges against the

unions, the contractors contended that the pressure

exerted by the unions to secure the agreements was un-

lawful because the subcontracting clauses contained in

those agreements violated §8(e) of the National Labor

13-a

Relations Act.5 The employers asserted two separate

grounds upon which they claimed the clauses violated

§8(e). First, the employers contended that the subcon-

tracting restrictions were not protected by the construc-

tion industry proviso to §8(e) because the clauses were not

sought in the context of a collective bargaining relation-

ship as required by the decision in Connell Construction

Co. v. Plumbers & Steamfitters Local 100, 421 U.S. 616)

(1975). Second, the contractors claimed that the clauses

were not protected by the proviso because the restrictions

were “overbroad,”

The clauses were alleged to be overbroad on several

grounds. Primarily, the employers argued that subcon-

5 29 U.S.C, §158(e)(1976). Section 8(e) provides:

it shall be an unfair labor practice for any labor organiza-

tion and any employer to enter into any contract or agree-

pnt. express or implied, whereby such employer ceases

or refrains or agrees to cease or refrain from handling,

using, selling, transporting or otherwise dealing in any of

the products of any other employer, or to cease doing busi-

néss with any other person, and any contract or agreement

entered into heretofore or hereafter containing such an

agreement shall be to such extent unenforcible and void:

Provided, That nothing in this subsection shall apply to an

agreement between a labor organization and an employer

in the construction industry relating to the contracting or

subcontracting of work to be done at the site of the con-

struction, alteration, painting, or repair of a building,

structure, or other work: Provided further, That for the

purposes of this subsection 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 pro-

ducer, processor, or manufacturer”, “any other employer”,

or “any other person” shall not include persons in the rela-

tion of a jobber, manufacturer, contractor, or subcontrac-

tor working on the goods or premises of the jobber or man-

ufacturer 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 forego-

ing exception.

14-a

tracting agreements in the construction industry may only

serve to prohibit the subcontracting of work to nonunion

subcontractors at particular jobsites where members of

the signatory union are actually employed.' Byis, the em-

ployers claimed that the subcontracting clauses in the

MLA were overbroad because not required to be re-

negotiated on a jobsite by jobsite basis, or at !east limited

in application to particular jobsites at which memfers of

the signatory union were present. In addition, the em-

ployers argued that the subcontracting clauses were over-

broad because they required subcontractors to be signa-

tory to contracts with particular unions.

In a series of companion cases, the Board rejected each

of these arguments.® The Board held that, standing alone,

the subcontracting agreements were protected by the con-

struction industry proviso to §8(e). The Board also held,

however, that these otherwise lawful provisions lost the

protection of the proviso to §8(e) because of section 306 of

Article III of the MLA, which the Board believed au-

thorized the unions to resort to economic action to enforce

the subcontracting restr tions.? Accordingly, in both the

Schriver and Topaz cases, the Board ordered the unions to

cease and desist from coercing or restraining the em-

plovers where the object thereof is forcing or requiring

the employers to enter into subcontracting agreements

*In conjunction with the present case, reported at 239

N.L.R.B. 264 (1978), the Board decided the following cases:

Carpenters Local 944 (Woelke & Romero Framing), 239

N.L.R.B. 241 (1978); Colorado Building & Construction Trades

Coancil, 239 N.L.R.B. 253 (1978); and Operating Engineers

Local 701 (Associated Builders), 239 N.L.R.B. 274 (1978).

Woelke & Romero Framing and Associated Builders were re-

versed in a panel decision of the Ninth Circuit, Pacific North-

west Chapter of the Associated Builders & Contractors, Inc. v.

NLRB, 609 F.2d 1341 (9th Cir. 1979), rehearing en bane

granted, No. 783469 (9th Cir. Aug. 19, 1980).

7 Two members of the Board dissented from this aspect of-the

decision. See 239 N.L.R.B. 264 at 270, nn.26 & 28.

15-a

which are prohibited by §8(e) by reason of the self-

enforcement provisions.

Two separate appeals are thus consolidated in this

court. In No. 78-2177, the employers and various amici

‘seek pursuant to §10(f) of the Act to review the Board de-

cision that the subcontracting clauses themselves to do not

violate §8(e).2 In No. 79-1001, the Board seeks enforce-

®Section 10(f), 29 U.S.C. §160(f)(1976), provides in pertinent

part that “[aJny person aggrieved by a final order of the Board

granting or denying in whole or in part the relief sought may

obtain a review of such order in any United States court of ap-

peals in the circuit wherein the unfair labor practice in question

was alleged to have been engaged in or wherein such person

resides or transacts business, or in the United States Court of

Appeals for the District of Columbia.”

' Although the matter has never been raised by any party, we

discuss briefly whether the contractors have standing to seek

review of the Board’s decision and orders. Since the Board or-

ders here were issued against the unions, it could be argued

that the employers are not “aggrieved” parties within the

meaning of §10(f). However, given the posture of these cases,

including the specific findings of the Board on several material

issues, we hold that the employers do have standing to seek re-

view of the Board’s decision. The Board clearly “den[ied] in

whole or in part the relief sought” by the contractors, as set

forth in §10(f). The employers may have obtained some relief by

virtue of the Board’s orders, but it was far from the relief that

they sought. The Board’s orders simply required the unions to

cease and desist from enforcing or attempting to secure agree-

ments that are prohibited by §8(e) “by reason of self-

enforcement provisions.” See 239 N.L.R.B. 264 at 271-72 (em-

phasis supplied). The Board did not order the unions to cease

and desist from attempting to secure the subcontracting restric-

tions absent self-enforcement measures; the Board specifically

ruled that such clauses standing alone were protected by §8(e).

Thus, the employers were denied the principal relief that they

sought before the Board, and are thus “aggrieved” parties

_ within the meaning of $10(f). 4

This conclusion is supported by other cases in this ‘ircuit. In

l6-a

meyt of its order that the unions cease and desist from

attempting to secure the subcontracting clauses in con-

junction with self-enforcement provisions. The unions

were given leave to intervene in No. 78-2177, and the con-

tractors were given leave to intervene in No. 79-1001.

II. STATUTORY FRAMEWORK AND THE SUPREME COURT

DECISION IN CONNELL

In a complex case such as the present one, it is helpful

at the outset to set forth clearly the governing statutory

framework of the National Labor Relations Act. In addi-

tion, the applicable provisions of that Act must be vonsid-

ered in light of the Supreme Court decision in Connell

Construction Co. v. Plumbers & Steamfitters Local 100,

421 U.S. 616 (1975), which has some bearing on the resolu

tion of the issues in this case.

A. Statutory Framework

Several provisions of the NLRA bear on this case.

Primarily, this case considers the construction of, and re-

lationship between, §8(b)(4), §8(e) and §8(f) of the Act.

Section 8(f) of the Act provides that it shall not be an

unfair labor practice for unions and employers in the con-

struction industry to enter into collective agreements

(known as “prehire agreements”) even though the employ-

Truck Drivers and Helpers Local 728 v. NLRB, 386 F.2d 643

(D.C. Cir. 1967), the Board had found that an employer had

violated §8(a)(1) of the Act, but had refused to consider whether

§8(a)(3) had also been violated because of the remedy afforded

the union by reason of the violation of §8(a)(1). This court

nevertheless accepted the union’s petition to review the Buard

order. As stated by the court, “the failure of the Board to grant

the additional relief sought renders the Union a ‘person ag-

grieved’ by the Board’s order within the meaning of §10(f) of the

Act, 29 U.S.C. §160(f).” 386 F.2d at 644. See also Tertile

Workers Union of America v. NLRB, 475 F.2d 973, 974. n.2

(D.C. Cir. 1973).

l7-a

IT {_. a al

ees of that employer have not designated the union as

their lawful bargaining representative.® In the case of

such a “prehire” agreement, however, the employer or his

employees may repudiate the contract at any time.?°

NLRB v. Local 103, International Association of Bridge,

Structural &,Ornamental Iron Workers (Iron Workers),

434 U.S. 335 (1978). As a result, it has been held that a_

union may not picket to enforce an 8(f) agreement. /d.

Unions are also limited in their ability to coerce em-

ployers to enter 8(f) agreements. If an employer currently

employs workers who could vote in a representational

election, any recognitional or organizational picketing that

exceeds 30 days may be found to violate §8(b)(7) of the

Act. See Sears, Roebuck & Co. v. San Diego County Dis-

trict Council of Carpenters, 436 U.S. 180, 186 (1978);

NLRB tv. Local 542, International Union of Operating

Engineers, 331 F.2d 99 (3d Cir.), cert. denied, 379 U.S.

889 (1964). In the present case, the unfair labor practice

complaint did not allege a violation of §8(b)(7). Thus, the

recognitional picketing of Topaz for 10 days to secure the

&(f) agreement was not found by the Board to violate any

proscription of §8(b)(7)."?

* Section. &(f) is set forth in full at note 4, supra.

representative status may not be filed during the term of a col-

lective bargaining agreement that has a duration of up to three

years, or during the first three years of an agreement of longer

duration, except during an open period 60-90 days prior to the

-expiration date of the contract. General Cable Corp., 139

N.L.R.B. 1123 (1962).

11 The employers in this case have briefly argued that any

picketing to secure an &(f) agreement is unlawful. In support of

this argument, the employers point to the Supreme Court opin-

ion in Jron Workers, supra, where the Court examined the

legislative history to §&/f) and concluded, “Congress was careful

to make its intention clear that prehire agreements were to be

arrived at voluntarily, and no element of coercion was to be ad-

18-a

More restrictive provisions on picketing come into play,

however, if the agreement sought contains provisions ti.at

are prohibited by the Act. Fundamental to this case is the

§8(e) ban on so-called “hot cargo” or secondary subcon-

tracting agreements between employers and unions.!? Al-

though the line between primary and secondary agree-

ments is often difficult to draw, an agreement is generally

secondary, and thus prohibited by §8(e), if it requires an

employer to boycott the products or services of other par-

ties with an aim of influencing the labor relations policies

of those parties.!* In the present case, the Board held, and

mitted into the narrow exception being established to the

majority principle.” 434 U.S. at 348 n.10.

Counsel for the Board in the present case admits that “in

enacting Section 8(f) .. . Congress did not intend to authorize

minority construction unions to strike, picket, or otherwise

coerce employers to sign 8(f) agreements.” Appellee’s brief, p.

14. However, as the Supreme Court suggests in Sears, supra,

this can mean no more than that a union may not picket in ex-

cess of 30 days without filing a petition for an election under

§9(c), as set forth in §8(b)(7)(C). Otherwise, a charge of unlaw-

ful picketing to secure an 8(f) agreement would be meaningless.

The union would have a complete defense by simply claiming

that it intended to file a §9(c) representation petition within 30

days.

We recognize that a question may be raised in the rare in-

stance when a union pickets to secure an 8(f) agreement and,

due to the fact that no workers are employed at the time of the

picketing, a representational election is not possible. See NLRB

«. Local 542, supra. We need not and do not consider whether

coercion to secure an 8(f) agreement in such a situation violates

the Act. In the present case, both Schriver and Topaz employed

carpentry workers who were eligible to vote in a representa-

tional election. Thus the coercion employed to secure the 8(f)

agreements (such as the 10 day picketing of Topaz) did not vio-

late the Act.

12 Section 8(e) is set forth in full at note 5, supra.

13For a more complete analysis, see R. GORMAN, BASIC TEXT

ON LABOR Law 240-78 (1976). ’

19-a

it is not here contested, that the subcontracting clauses

contained in the MLA were secondary in nature and within

the general prohibition of §8(e). See 289 N.L.R.B. 264 at

267. If an agreement is prohibited by §8(e), §8(b)(4)(A) of

the Act prohibits any picketing or threats of picketing

aimed at coercing an employer to enter the agreement."

Section 8(e), however, also contains a “construction in-

dustry proviso” that permits certain secondary agree-

ments in the construction industry. In particular, the pro-

14 Section 8(b)(4) provides, in relevant part, that it shall be an

unfair labor practice for a labor organization or its agents:

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

employed by any person engaged in commerce or in an in-

dustry affecting commerce to engage in, a strike or a re-

fusal in the course of his employment to use, manufacture,

process, transport, or otherwise handle or work on any

goods, articles, 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—

(A) forcing or requiring any employer or self-employed

person to join any labor or employer organization or to

enter into any agreement which is prohibited by subsec-

tion (e) of this section;

- (B) forcing or requiring any person to cease using, sell-

ing, handling, transporting, or otherwise dealing in the

products of any other producer, processor, or manufac-

turer, or to cease doing business with any other person,

or forcing or requiring any other employer to recognize

or bargain with a labor organization as the representa-

tive of his employees unless such labor organization has

been certified as the representative of such employees

under the provisions of section 159 of this title: Pro-

vided, That nothing contained in this clause (B) shall be

construed to make unlawful, where not otherwise un-

lawful, any primary strike or primary picketing[.]

29 U.S.C. §158(b)(4)(1976)(emphasis supplied). A

ie |

viso allows an agreement between a union and an em-

ployer engaged in the construction industry “relating to

the contracting or subcontracting of work to be done at the

site of the construction.” 29 U.S.C. §158(e). If an agree-

ment is within the proviso to §8(e), the total ban on pick-

eting to secure the agreement contained in §8(b)(4)(A) is

not applicable.?5

Certain limitations do exist on picketing to obtain a

lawful 8(e) agreement. As developed below, the applicable

restrictions of §8(b)(7) remain. Dallas Building and Con-

struction Trades Council v. NLRB, 396 F.2d 677 (D.C.

Cir. 1968). In addition, §8(b)(4)(B)!® prohibits a union from

picketing to enforce an 8(e) agreement, or from picketing

15 The employers in this case have also argued that picketing

to secure any 8(e) agreement is unlawful, even if the agreement

is within the protection of the construction industry proviso.

Courts have repeatedly rejected this argument, for the statute

is clear. Section 8(b)(4)(A) only prohibits coercion to secure an

agreement “which is prohibited by subsection (e) of this sec-

tion.” 29 U.S.C. §158(b)(4)(A). An agreement protected by the

construction industry proviso is not prohibited by §8(e), and

thus picketing to secure such an agreement doves not violate

§8(b)(4)(A). Orange Belt District Council of Painiers No. 48 v.

NLRB, 328 F.2d 534, 537 (D.C. Cir. 1964); Exxcr County Dis-

trict Council of Carpenters v. NLRB, 332 F.2d 636, 641 (3d Cir.

1964); Construction Laborers Local 383 v. NLRB, 323 F.2d 422,

425 (9th Cir. 1963). As directly stated by this court in Orange

Belt, supra, at 587: “Secondary subcontracting clauses in the

construction industry are lawful, under the proviso to Section

8(e), and economic force may be used to obtain them not-

withstanding Section 8(b)(4)(A), because Section 8(b)(4)(A) in-

corporates that proviso by reference” (footnotes omitted).

Coercion used to secure an agreement protected by the con-

struction industry proviso to §8(e) does not violate §8(b)(4)(A).

Cf. NLRB v, Pipefitters Local 688, 429 U.S. 507 (1977).

16 Section 8(b)(4)(B) is set forth at note 14, supra. -

2l-a

to coerce a neutral contractor from doing business with an

already existing and identified nonunion subcontractor.

Orange Belt District Council of Painters No. 48 v. NLRB,

828 F.2d 534, 5387 (D.C. Cir. 1964). In the present case,

. however, the unfair labor practice complaint did not al-

lege any violation of §8(b)(4)(B).*7

The question presented by this case, therefore, is

whether the 8(f) agreements sought by the unions violated

§8(e), That question turns on whether or not the subcon-

tracting clauses contained in those agreements are within

the protection of the construction industry proviso to

§8(e). If, but only if, the agreements are not protected by

that proviso, the picketing and threats of picketing to se-

cure the agreements violated §8(b)(4)(A).

B. The Supreme Court Decision in Connell

In Connell Constrauc’ on Co.°v. Plumbers & Steamfit-

ters Local 100, 421 U.S. 616 (1975), the Supreme Court

considered at length the construction industry proviso to

§8(e). Since certain of the language in Connell forms the

basis for the employers’ contentions here, we are con-

strained to consider the applicability of the holdings in

Connell to the instant cases.

17 The complaint did not allege that the threats of picketing

against Schriver were made in an attempt to enforce an 8(f)

agreement, or to bring about a cessation of business with any of

Schriver’s nonunion subcontractors. Similarly, the complaint did

not claim that the unions picketed the Claremont project in an

attempt to pressure the neutral owner-builder to terminate its

subcontract with Topaz. The only charges brought in this case,

and the only complaints issued by the Board, allege that the

unions unlawfully pressured the contractors to exter into sub-

contracting agreements prohibited by §&8(e), and in so doing vio-

lated §8(b)(4)(A). See App. 5, 7, 14, 15, 23, 25, 32 and 49.

22-a

a =. | bs

To understand fully the Supreme Court decision in

Connell, it is essential to view the case in its proper his-

torical context. Connell represented another chapter in

the struggle between trade unions and general contractors

in the construction industry in Dallas, and arose in re-

sponse to the decision of this court in Dallas Building and

Construction Trades Council v. NLRB, 396 F.2d 677

(D.C. Cir. 1968). See Connell Construction Co. v. Plum-

bers & Steamfitters Local 100, 483 F.2d 1154, 1157-58 (Sth

Cir, 1973).

In Dallas Building and Construction Trades Council, a

trade union council in the Dallas area sought an agreement

with a construction employers” association that would re-

strict subcontracting to employers signatory to agree-

ments with appropriate local craft unions. The trades

council was not the authorized bargaining agent of any

contractors’ employees, and disavowed any intention to

become a bargaining representative. Upon the refusal of

the employer association to sign the subcontracting

agreement, the trades council served a similar demand on

four specific contractors. When these contractors also re-

fused to sign the agreement, the trades council pickcied

several of their jobsites. 396 F.2d at 678-79.

The picketed contractors filed unfair labor practice

charges against the trades council. Upon considering the

case, the NLRB found that the trades council had violated

$8(b)(7) by picketing with a recognitional object at a time

when no question of representation could ‘be raised due to

contract-bar rules.?® Both the Board and this court found

the council’s mere disclaimer of intention to seek recogni-

tion to be “unavailing.” 396 F.2d at 681. Since the trades

council had jurisdiction over employees who would be af-

fected by the subcontracting agreement and sought a con-

18 The employers association and several craft unions were

already parties to current collective bargaining agreements,

many of which had omitted subcontracting clauses. 396 F.2d at

678, 681.

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tinuing contractual relationship with their employers, the

trades council would necessarily be the “representative” of

the employees with respect to the subject matter of the

agreement. /d. at 638.1?

The trades council had primarily contended that the

subcontracting agreement was protected by the construc-

tion industry proviso to §8(e), and that Congress could not

have intended to limit so severely picketing to achieve

such agreements. This court rejected the council’s argu-

ment, and held that §8(b)(7) and §8(e) are aimed at wholly

different problems. The court held that even though an

agreement is lawful under §8(e), and picketing to secure

the agreement is not prohibited by §8(b)(4)(A), the pick-

eting may be prohibited by §8(b)(7) if it has an object that

is recognitional. 396 F.2d at 682.

In rejecting the council's argument, this court distin-

guished several cases, relied on by the trades council, that

had held that picketing had not violated §8(b)(7) because it

was not “recognitional.” The court stressed that those

cases were “clearly distinguishable” because the jabor or-

ganizations had sought no contractual ties or continuing

relationship with the employers, and because “the subcon-

tracted work was not also performed by the general con-

tractor’s own employees.” 396 F.2d at 683. The court also

noted that the Board had expressly ruled that picketing to

secure subcontracting agreements could not violate

§$8(b)(7) if the coverage of the propused contract was lim-

- ited to the type of work that was never performed by the

general contractor’s own employees. /d. at 682 n.8. In

these situations, a union by definition could not be deemed

to have a recognitional object, since the agreement would

not affect any workers the union could represent.

It was in the aftermath of this decision that the events

leading to Connell occurred. In Connell, the union once

19 The trades council argued unsuccessfully that the subcon-

trecting agreement had only a minor, secondary effect on the

signatory contractors’ employees, 396 F.2d at 681. .

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again sought a subcontracting agreement from a Dallas

contractor. Upon failing to obtain the agreement, the

union picketed and caused a massive walkout on the job-

site. The contractor eventually signed the agreement

under protest, and then brought suit in federal court

claiming a violation of federal and state antitrust laws.

The union defended on the ground that the agreement was

authorized by the construction industry proviso to §8(e).

See Connell Construction Co. v. Plumoers & Steamfitters

Local 100, 483 F.2d 1154, 1156-57 (Sth Cir. 1973).

In Connell, the union sought the subcontracting agree-

ment from an employer who did not employ any workers

within the jurisdiction of the union at the time of the de-

mand to contract and the picketing.?° The sole objective of

the union was to enter into an agreement with the contrac-

tor by which all work within the union's jurisdiction would

be subcontracted to firms who were signatory to a collec-

tive bargaining agreement with the union. Since the con-

tractor had no employees within the jurisdiction of the

union, the union could not be charged with any recogni-

tional objective. 483 F.2d at 1157.

In this way, the union in Connell sought to avoid the

reach of Dallas Building and Construction Trades Coun-

cil and §8(b)(7). Since there was no recognitional objective

to the picketing, the picketing could not violate $8(b)(7).

Since the subcontracting clause appeared to be protected

by the construction industry proviso to §8(e), the picketing

could not violate §8(b)(4)(A). Thus, the union appeared to

have found a means by which it could apply unlimited

20 The union again disclaimed any interest in recognition, and

the agreement expressly provided that the subcontracting lim-

itation applied on/y to work that the contractor did not perform

with his own employees and instead uniformly subcontracted to

_. other firms. See 483 F.2d at 1156 n.1.

25-a

pressure upon contractors to subcontract only with firms

who were signatory to agreements with the union. How-

ever, the Supreme Court disagreed and ruled that the

agreement was subject to federal antitrust laws. The

Court thus remanded the case for a determination of

whether the agreement restrained trade within the

meaning of the Sherman Act, /d. at 637.

The Supreme Court recognized in Connell that the lit-

eral language of the construction industry proviso to $8(e)

was broad and that the disputed subcontracting clauses

fell within the letter of the statute. The Court added,

however, that “§8(e) must be interpreted in light of the

statutory setting and the circumstances surrounding its

enactment,” and proceeded to consider the intention and

purpose of the statute. 421 U.S. at 628. The Court noted

that “the construction-industry proviso was explained only

by bare references to ‘the pattern of collective bargaining’

in the industry.” 7d. The Court described several policies

that may have motivated this special exception contained

in §8(e). The decision in Connell suggests that one pur-

pose of the enactment of the proviso to §8(e) may have

been an attempt by Congress to overrule NLRB ev. Denver

Building & Construction Trades Council, 341 U.S. 675

(1951), where the Supreme Court had ruled iat a labor

ecganization committed an unfair labor practice by pick-

eling a construction site with an object of furcing the gen-

eral contractor to terminate its contract with a nonunion

subcontractor. The decision in Connell also recognizes

that another purpose of the proviso may have been to

allow secondary agreements pertaining to activity on a

construction jobsite “because of the close community of

interests there,” National Woodwork Manufacturers

Ass'n vu. NLRB, 386 U.S. 612, 638-39 (1967), or, even

more narrowly, “to alleviate the frictions that may arise

when union men work continuously alongside nonunion

men on the same construction site,” Drivers Local 695 v.

NLRB, 361 F.2d 547, 553 (D.C. Cir. 1966). See 421 U.S, at

26-a

630. The Supreme Court was not called upon to choose be-

tween these possibilities, however, because the union con-

duct in Connell was not related to any of the above

policies. 7d. at 631.

Nevertheless, there is one point in Connell that is clear.

That point is that one of the major aims of the 1959

amendments to the NLRA, of which §8(e) was one, was to

limit “top-down” organizing campaigns. /d. at 632. The

Court noted changes made by Congress in 1959 to limit the

ability of a union to utilize such pressure to obtain recogni-

tion. /d. It was also clear to the Court in Connell that this

attempt to limit “top-down” organizing would be seriously

undermined if the proviso to §8(e) was construed to au-

thorize the subcontracting agreement sought in Connell.

As described above, if the agreements were indeed pro-

tected by the proviso, the union would have an unlimited

ability to pressure contractors to deal only with subcon-

tractors who were signatory to agreements with the

union, as long as that contractor employed no workers

within the union's jurisdiction.

The Supreme Court concluded, therefore, that “absent a

clear indication that Congress intended to leave such a

glaring loophole in its restrictions on ‘top-down’ .organiz-

ing,” the construction industry proviso should not be con-

strued to authorize the subcontracting agreement in Con-

well, Id. at 633. Instead, the Court concluded that the pro-

tection of the proviso to §8(e) “extends only to agreements

in the context of collective-bargaining relationships and, in

light of congressional references to the Denver Building

Trades problem, possibly to common situs relationships on

particular jobsites as well.” Jd. Since the union in Connell

had no interest in representing Cunnell’s employees, the

subcontracting agreements were held not to be within the

protection of the proviso to §&(e).

27-a

ITI. SUFFICIENCY OF A §8(f) RELATIONSHIP To SATISFY

CONNELL

As developed above, the Supreme Court in Conwell held

that the protection of the proviso to §8(e) extends only to

subcontracting agreements sought “in the context of

collective-bargaining relationships.” 421 U.S. at 633. In

the present case, the unions were not the designated bar-

gaining representative of a majority of either Schriver's or

Topaz’ employees and the subcontracting agreements were

not sought in the context of a standard §9(a) organizational

campaign or collective bargaining relationship. Instead,

the agreements were sought as part of a §8(f) prehire

agreement between the unions and the employer-

contractors. The employers’ first argument to this court is

that a §8(f) relationship is not sufficient to satisfy the

“collective-bargaining relationship” requirement of Con-

nell.

The Board in the present case held that the test set

forth in Connell is satisfied whenever a union seeks a

complete contractual relationship with ai employer, es-

tablishing wages, hours, and other terms and conditions of

employment; to satisfy Connell, it is irrelevant that the

contract is merely a “prehire agreement” authorized by

Ss(f) and the union lacks established majority status. 239

N.L.R.B. 264 at 268. We fully agree with this conelusion

of the Board. Since §S(f) provides the very means by

which unions and employers typically initiate a bargaining

relationship in the construction industry, we reject the

employers’ argument that an S(f) relationship is insuffi-

cient to satisfy the collective bargaining requirement of

Connell,

Fundamentally, it is clear that Conwell itself does not

mandate the employers’ position. It must be remembered

that in Connell, the union expressly disclaimed all recog-

nitional intent and sought a restrictive subcontracting

agreement from a contractor whose employees ‘ft could not

represent (a so-called “stranger contractor”). The” only

28-a

term of the agreement that the union sought in Connell

was a promise that the employer would subcontract work

only to firms signatory to a current collective bargaining

agreement with the union. The Supreme Court was thus

faced with a situation involving a union that had success-

fully bypassed the strictures of Dallas Building and

Construction Trades Council and the reach of §8(b)(7),

and had appeared to secure an unlimited weapon by which

it could apply organizational pressure on other contrac-

tors.

The present case bears absolutely no resemblance to

Connell. Rather than disclaim a recognitional object, the

unions in the present case explicitly sought to secure rep-

resentation of Schriver’s and Topaz’ emplovees. The

unions sought to enter into a complete agreement with the

contractors, covering the wages, benefits, and other con-

ditions of employment of the contractors’ own employees.

Their primary goal was not to apply organizational pres-

sure on ot/cr firms, but to standardize the working condi-

tions of the employees of these contractors.?) The unions

simply attempted to do so in the contexc of an &(f) prehire

agreement, the standard means of initiating collective

bargaining in the construction industry .??

24 Of course, the subcontracting clauses included within the

prehire agreements had certain secondary objectives. Such ob-

jectives are made lawful, however, by the construction industry

proviso to §S(e). The sole question before us here is whether a

prehire agreement, covering the full conditions of employment

of a contractor's own employees, is sufficient to satisfy the col-

lective bargaining requirement of Connell.

22 Although clearly not faced with the issue, the Supreme

Court suggested in Connell that the exisience of an S(f) prehire

agreement may be sufficient to satisfy the collective bargaining

requirement. In Connell, the union argued that the Board had

previously authorized subcontracting agreements with

“stranger” contractors, citing a case in which the Board had up-

held an Administrative Law Judge's conclusion that §8(e) did

not prohibit a restrictive subcontracting agreement between a

29-a

; Neal x Z

Fe :

As a result of this critical factual distinction between

Connell and the present case, the overriding concern of

the Supreme Court in Connell is entirely inapplicable

here. The Supreme Court holding in Cowell was based on

the fear that the careful limits established by Congress to

restrain the ability of unions to organize from the “top-

down” would be “undermined seriously” if the proviso to

§8(e) was construed to allow unions to seek subcontracting

agreements from contractors with which it had no bar-

gaining relationship. 421 U.S. at 633. Since the lack of

recognitional intent removed the union in Connell from

the reach of §8(b)(7), the Court’s concern was clearly jus-

tified.

That rationale is simply not available in the present

case, however. As established by this court in Dallas

Building and Construction Trades Council, the recogni-

tional object evidenced by the agreement sought in the

present case clearly subjects the unions to the stringent

limitations of §8(b)(7). The unions do not have an unlimited

ability to apply recognitional pressure on other contrac-

tors, as the union would have had in Connell had the Su-

preme Court extended the protection of §8(e) to agree-

ments with “stranger” contractors.

union and a general contractor who used none of his own em-

ployvees on the particular construction project. Los Angeles

Building & Construction Trades Council, 214 N.L.R.B. 562

(1974). In rejecting the argument, the Supreme Court noted

that in that case, “[tWie agreement in question may hace been a

prehire contract under §8(f), and it is not clear that the contrac-

tor argued that it was invalid for lack of a co!lective-bargaining

relationship.” 421 U.S. at 631 n.10 (emphzsis supplied). We do

not mean to imply that this off-hand statement is.a ringing en-

dorsement of the legality of a subcontracting provision con-

tained in an &(f) agreement, and recognize that this statement

could support either argument. The implication is present, how-

ever, that the existence of a prehire agreement makes Los

Angeles Building & Constraction Trades Council very different

from the situation presented in Connell.

30-s

The legislative history of §8(f) strongly supports the po-

sition that an 8(f) agreement occurs “in the context of

collective-bargaining” in the construction industry. Sec-

tion 8(f) was enacted as part of the 1959 amendments to

the National Labor Relations Act. The provision was

added due to the peculiar nature of employment in the

building and construction industry. As described in the

Senate Report concerning §8(f):

The occasional nature of the employment relationship

makes this industry markedly different from man-

ufacturing and other types of enterprise. An indi-

vidual employee typically works for many employers

and for none of them continuously. Jobs are fre-

quently of short duration, depending on various

stages of construction.

S. REP. No. 187, 86th Cong., Ist Sess. 27 (1959), re-

printed in I LEGISLATIVE HISTORY OF THE LABOR-

MANAGEMENT REPORTING AND DISCLOSURE ACT OF 1959

(LEGISLATIVE History), at 423 (1959). As a result of

these peculiarities, special arrangements became common

in the construction industry. As described by the Senate

Report:

In the building and construction industry it is cus-

tomary for employers to enter into collective har-

gaining agreements for periods of time running into

the future, perhaps 1 year or in many instances as

much as 3 years. Since the vast majority of building

projects are of relatively short duration, such labor

agreements necessarily apply to jubs which have not

been started and may net even be contemplated.

Id. at 28; I LeGisLaTive History at 424. The Report

noted that these agreements have special advantages for

employers as well as workers:

One reason for this practice is that it is necessary for

the employer to know his labor costs before making

the estimate upon which his bid will be based. A see-

ond reason is that the employer must be able to have

3l-a

available a supply of skilled craftsmen ready for quick

referral.

Id.

For these reasons and since the practice of signing such

agreements was “not entirely consistent with Wagner Act

rulings of the NLRB that exclusive bargaining contracts

can lawfully be concluded only if the union makes its

agreement after a representative number of employees

have been hired,” id., Congress added §8(f) to the Act.

That provision authorizes employers in the construction

industry to enter into comprehensive ayreements with

labor organizations that have not established majority

status in the manner provided by §&9 of the Act. As the

Senate Report bluntly concluded, “[rJepresentation elec-

tions in a Jarge segment of the industry are hot feasrble to

demonstrate such majority status due to the short periods

of actual employment by specific employers.” 1d. at 55; 1

LEGISLATIVE History at 451 (emphasis supplied).

Congress thus expressly recognized that §9(a) collective

bargaining relationships are often not feasible in the con-

struction industry. Due to the occasional nature of em-

ployment in that-industry, unions and employers may

enter “prehire” agreements that stabilize empioyment

vonditions in a particular geographic area over an ex-

tended period of time. It would make little sense to con-

chide that this necessary and most common type of collec-

tive bargaining relationship in the construction industry,

specifically recognized and authorized by Congress, is not

a “collective-bargaining relationship” as that term is used

in Connell,

There is nothing in the legislative history to suggest

that prehire agreements are limited to certain terms and

conditions of employment, and may not include athers.

23 For a good description of the advantages of an established

labor agreement for employer-contractors, «+ Pierson, Build-

ing Trades Bargaining in Southern Cal sornia, 70 MONTHLY

LAPOR REVIEW 14, at 14 (1950). K

32-a

The same Congress that adopted §8(f) in 1959 added to the

newly enacted §8(e) a proviso that expressly authorizes

subcontracting agreements in the construction industry.

There is no reason why Congress would protect subcon-

tracting agreements in the construction industry under

§8(e), and at the same time prohibit the most common and

possibly the only effective means by which such an agree-

ment may be obtained. We hold, therefore, that a subcon-

tracting agreement sought in the context of an &(f) prehire

agreement does not violate §8(e).

It is true that an &(f) agreement is not identical in all

respects to a standard 9(a) collective bargaining agree-

ment. An &(f) agreement is not protected by traditional

contract-bar rules, and the Supreme Court has recently

held that a union violates §8(b)(7) if it engages in extended

picketing to enforce a prehire agreement with an em-

plover. NLRB ve. Local 103, International Association of

Bridge, Stractaral & Ornamental Iron Workers, 484 U.S.

335 (1978). As also stated by the Supreme Court in Jron

Workers:

The employer's duty to bargain and honor the con-

tract is contingent on the union’s attaining majority

support at the various construction sites.

4 US. at 345. The Court further noted an earlicr state-

ment of the Board that a “prelire agreement is merely a

preliminary step that contemplates further action for the

development of a full bargaining relationship.” /d.;

Rattmann Construction Co., 191 N,L.R.B. 701, 702

(1971). These considerations certainly diminish the force

and effect of an S(f) agreement. They are irrelevant to our

conclusion, however, that a subcontracting provision

sought in the context of an &(f) prehire agreement occurs

“in the context of collective-bargaining” as required by

Connell,

The requirement in Couwnell that there be a collective

bargaining relationship only has meaning within its own

comext. Connell required a collective bargaining relation-

33-a

ship to guarantee that a union seeking a subcontracting

agreement could not sidestep §8(b)(7) and apply unlimited

secondary pressure on nonunion subcontractors. An at-

tempt by a union to establish an 8(f) relationship is suffi-

cient to satisfy that concern; a union seeking an 8(f)

agreement covering wages and other terms of employment

remains subject to the restrictions of §8(b)(7). Dallas

Building and Construction Trades Council v. NLRB, 396

F.2d 677 (D.C. Cir. 1968). Whether an 8(f) relationship is

otherwise deemed to be a “collective-bargaining relation-

ship” is a question totally academic to this case, missing

the entire purpose and thrust of Connell.

Even though a prehire agreement is merely a prelimi-

nary step towards the development of a full bargaining

relationship, Congress recognized in 1959 that it was most

often an indispensable step. As quoted above from the

Senate Report, representative elections leading up to a

traditional collective bargaining relationship generally

“are not feasible” in the construction industry. Senate Re-

port, supra, at 55; I LEGISLATIVE HISTORY at 451. The

Supreme Court in Jrun Workers also recognized the value

of a prehire agreement, despite its limited enforcement

capability:

Neither has the Board challenged the voh untary ob-

servance of otherwise valid §&(f) contracts, which is

the normal course of events, It is also undisputed that

when the union successfully seeks majority support,

the prehire agreement attains the status of a

collective- bargaining agreement executed by the em-

ployer with a union representing a majority of the

employees in the unit.

434 U.S. at 349-50 (emphasis supplied).

Thus, the ability to enforce an 8(f) agreement has noth-

ing to do with the lawfulness of a subcontracting agree-

ment contained within the S(f) contract. Indeed, describ-

ing 8(f) agreements, the Supreme Court in Jron Workers

noted that “a comparable situation” exists concerning hot

34-a

cargo clauses, “which are permitted in the construction in-

dustry by §8(e), 29 U.S.C. §158(e), but which cannot be

enforced by picketing.” 434 U.S. at 349 n.11 (emphasis

supplied).

It may be that the employers’ real complaint in the

present case is their belief that §8(b)(7) itself is insuffi-

cient to counter “top-down” organizational pressure in the

construction industry.?4 It is not for this court, however,

to rewrite the careful statutory scheme established by

Congress. Due to the applicability of §8(b)(7), the unions

in the present case do not have the unlimited right to

apply secondary pressure of the sort that triggered the

Supreme Court decision in Connell. If the present restric-

tions of §8(b)(7) are inadequate to deal with problems

arising during union organizational drives, then further

change must come from Congress, not from this court.

The subcuntracting agreements in the present case were

sought in the context of a collective bargaining relation-

ship. They do not violate §8(e) by reason of their inclusion

in an &(f) prehire agreement.

IV. THE SCOPE OF THE CONSTRUCTION INDUSTRY

PROVISO TO §S8(e)

The employers’ second major argument on appeal is that

the subcontracting agreements sought in the present case

#4 This was suggested during the oral argument before this

cuurt when counsel for the employers stated: “As a policy mat-

ter, §8(b)(7) is not an effective remedy. The reason it is not an

effective remedy is because it isn't just picketing for 30 days. As

a practica]) matter, the union, the way the Board—this is not

the question before this court—but the way the Board has in-

terpreted 8(b)7) the union can picket for 75 and 100 days.

So 8(b)(7) does not solve this problem.” It is noteworthy that

counsel did Abt vontend that S(b)(7) was Unavailable to deal with

recognitional pickeging; rather. he contended that the statutory

proscription and remedy were not always effective to serve em-

ployer interests.

35-a

oe tae ii

are beyond the permissible “scope” of the construction in-

dustry proviso to §8(e). The parties stipulated that the

subcontracting clauses applied “at anytime and any con-

struction jobsite within the definition of the construction

proviso to Section 8(e) of the NLRA, as amended, where

work within the jurisdiction of Respondents is being per-

furmed, regardless of whether or not members of Re-

spondents are present at any given time at any given

The employers primarily ¢laim that the agreements are

overbroad because the subcontracting clauses need not be

renegotiated on a jobsite by jobsite basis after it is deter-

mined that workers of the signatory union will be present

on that jobsite. Alternatively, the emplovers argue that

the clauses at least should be limited in application to

those present and future jobsites where signatory union

workers actually will be employed. In addition, the em-

ployers claim that the agreements are overbroad because

the subcontracting clauses require subcontractors to be

signatory to contracts with particular labor organizations.

A. Limitation With Respect to Particular Jobsites

The employers find support for their principa] claim in

{ovnell, where the Supreme Court considered briefly the

roposes of the construction industry proviso to $8(e). The

decision in Connell noted that the Supreme Court had

‘previously interpreted the proviso as a measure designed

to allow subcontracting agreements “because of the close

community of interests” on the construction site, and that

other courts had sugyested even more narrowly that the

purpose of the proviso was “to alleviate the frictions that

may arise when union men work continuously alongside

nonunion men on the same construction site.” Sec 421 U.S.

at 630, and cases cited.

In addition, the employers’ argument was recently ac-

~ cepted by a panel of the Ninth Circuit in Pacifie North-

west Chapter of the Associated Builders & Contractors,

36-a

a |

Inc. v. NLRB, 609 F.2d 1341 (9th Cir. 1979), rehearing en

banc granted, No. 78-3469 (9th Cir. Aug. 19, 1980). In

Pacific Northwest, the court held that the construction in-

dustry proviso extends shelter “only when the employer or

his subcontractor has employees who are members of the

signatory union at work at some time at the jobsite at

which the employer wishes to engage a nonunion subcon-

tractor.” 609 F.2d at 1347, In other words, the Ninth Cir-

cuit panel decision would limit the protection of the pro-

viso to subcontracting agreements in which the employer

promised not to put signatory union workers and other

nonunion workers on the same jobsite. Under such an in-

terpretation of §8(e), an employer could completely cir-

cumvent the subcontracting agreement by simply keeping

all union workers off the jab,

The Board argues that this narrow interpretation of the

purpose and scope of the proviso is incorrect and should

not be adopted by this court. In particular, the Board ar-

vues that the purpose of the construction industry proviso

is not limited to insulating signatory union workers from

having to work on particular jobsites alongside nonunion

workers; the Board also contends that §8(e) protects sub-

contracting agreements in the construction industry in

order to protect continuity of work and benefits for em-

ployees, a goal made difficult by the nature of employment

in that industry. The Board thus urges that the subcon-

tracting clauses in the present case do not fall outside the

scope of the proviso to §8(e). '

We believe that the interpretation of the Board is con-

sistent with the intent of Congress in enacting the con-

struction industry proviso to §&8(e). Accordingly, we refuse

to adopt the narrow interpretation of the proviso adopted

by the panel decision of the Ninth Cireuit in Pacific

Northwest.

At the outset, we note that the proviso itself to §8(e)

contains no limitation such as that proposed by the em-

ployers in this case. Instead, the proviso broadfy au-

37-a

thorizes agreements in the construction industry “relating

to the contracting or subcontracting of work to be done at

the site of the construction,” §8(e), 29 U.S.C. §158(e). The

agreements in the present case thus plainly fall within the

literal protection of the statute. We recognize, however,

as the Supreme Court stated in Connell, that “§8(e) must

be interpreted in light of the statutory setting and the cir-

cumstances surrounding its enactment.” 421 U.S. at 628.

We would emphasize, however, that the Supreme Court in

Connell did not dispose of the issue before us. The Court

in Connell was faced solely with the question whether a

subcontracting agreement could be sought outside the con-

text of a collective bargaining relationship. The Court did

not consider the scope of the construction industry proviso

o §8(e), the precise question now before us. As recognized

by the panel decision in Pacifie Northwest:

However, since the subcontractor agreement in Con-

nell occurred outside the collective bargaining con-

text altogether, the Court was not required to decide

whether and under what circumstances a subcontrac-

tor clause contained in a valid labor agreement would

receive the protection of the proviso.. What Cownell

left unanswered we must confront and answer.

( Y F.2d at 1348.25

We turn then to consider the “statutory setting and the

circumstances surrounding” the enactment of §8(e). Before

examining the legislative history in detail, however, it will

be useful to mention briefly the legislative and case law

_ 28 The Supreme Court also did not determine the purpose be-

hind the construction industry proviso. Although noting that the

proviso may hate been enacted because of the close community

of interests on the jobsite, or even simply to alleviate the fric-

tions that arise when union and nonunion workers are employed

together, the Court did not decide the questiqn since the union

in Connell did not suggest that its subcontracting agreement

‘related to any of those policies. 421 U.S. at 630-31.

38-a

a ae

history preceding the passage of §8(e). Certain “‘sec-

ondary” activity was forbidden prior to the 1959 amend-

ments to the Act. In particular, §8(b)(4)(A? of the Act pro-

hibited a union from inducing employees to strike or to

refuse to handle goods when an object of such activity was

to force an employer to cease doing business with some

third party. In the Sand Duor case, Local 1976, United

Brotherhuod of Carpenters v. NLRB, 357 U.S. 93 (1958),

however, the Supreme Court stated that a boycott vol-

untarily engaged in by an employer did not violate the

Act, and that a union could approach an employer to per-

suade him to engage in such a boycott as long as it, re-

frained from prohibited concerted activity. 357 U.S. at

98-99, 76

In 1959, Congress moved to close this “loophole” and

prohibit such “hot cargo” agreements themselves, See

Mullins v. Kaiser Steel Corp., No, 79-1463, slip op. at 20

(D.C. Cir. Sept. 17, 1980); National Woodwork Man-

afacturers Ass'n v. NLRB, 386 U.S. 612, 634 (1967). The

_ Senate version of §8(e) merely would have made it an un-

IT, eee Ie 4

ee F

3M —

fair labor practice for an employer in the trucking industry

tu agree to boycott the products of any other employer.

See H.R. REP. No. 1147, 86th Cong., 1st Sess. (Confer-

ence Report) 39 (1959); I LEGISLATIVE HISTORY at 943,

The House amended the bill to make it an unfair labor

practice for any labor organization and any empioyer to

enter into such an agreement. /d. The conference commit-

tee adopted the House amendment, but added three pro-

visos, one of which is the construction industry proviso at

issue in this case, /d.

The Conference Report briefly describes the purpose of

the construction industry proviso to $8(e). After stressing

#6 A secondary agreement voluntarily entered into could be

“enforced” through the grievance procedure, by judicial] action,

or by promises of a “tougher than usual” stance of the union at

the next contract negotiation or grievance adjustment. See R.

GORMAN, BaSic TEXT ON LABOR LAw 262 (1976).

39-a

that the proviso extends only to work to be performed at

the site of the construction, the Report states:

The committee of conference does not intend that this

proviso should be construed so as to change the pres-

ent state of the law with respect to the validity of this

specific type of agreement relating to work to be done

at the site of the construction project or to remove

the limitations which the present law imposes with

respect to such agreements. Picketing to enforce such

contracts would be illegal under the Sand Door case

(Local 1796 [sic], United Brotherhood of Carpenters

v. NLRB, 357 U.S. 93 (1958)). To the extent that such

agreements are legal today under section 8(b)(4) of

the National Labor Relations Act, as amended, the

proviso would prevent such legality from being af-

fected by section 8(e).

Conference Report at 39; I LEGISLATIVE HISTORY at 943

(emphasis supplied).

Similar remarks were made during subsequent Congres-

sional debate. As Senator John F. Kennedy, chairman of

the joint conference, stated on the Senate floor:

The Landrum-Griffin bill extended the “hot-cargo”

provisions of the Senate bill, which we applied only to

Teamsters, to all agreements between an employer

and a labor union by which the employer agrees not to

do business with another concern. The Senate insisted

upon a qualification for the clothing and apparel in-

dustries and for agreements relating to work to be

done at the site of a construction project. Both

changes were necessary to avoid serious damage to

the pattern of collective bargaining in these indus-

tries.

105 ConG. REC. 17899 (1959); II LEGISLATIVE HISTORY at

1432 (emphasis supplied). See also remarks of Representa-

tive Thompson on the House floor, 105 ConG. REc. 18134

(1959); II LEGISLATIVE HISTORY at 1721,

From an examination of the legislative history, there-

fore, one point alone is clear: the construction industry

“

40-a y

proviso to §8(e) was intended to preserve the pattern of

collective bargaining in the construction industry as it

existed prior to 1959 and the enactment of §8(e). As indeed

recognized by the Supreme Court in Connell:

Although the garment-industry proviso was sup-

ported by detailed explanations in both Houses, the

construction-industry proviso. was explained only by

bare references to “the pattern of colleetive bargain-

ing” in the industry.

421 U.S. at 628-29 (footnotes omitted),

Unfortunately, as suggested by the Court in Convell,

the legislative history does not spell out exactly what “the

pattern of collective bargaining” in the industry was prior

to 1959, or precisely what serious damage would be

afflicted should that pattern be changed. Remarks by Sen-

ator Kennedy, however, make clear that Congress be-

lieved that subcontracting agreements were lawful in the

construction industry prior to 1959:

Agreements by which a contractor in the construction

industry promises not to subcontract work on a ¢on-

struction site to a nonunion contractor appear to be

legal today. They will not be unlawful unJer section

8(e). The proviso is also applicable to all other agree-

ments involving undertakings not to do work on a

construction project site with other con:t.xetors or

subcontractors regardless of the precise relation be-

tween them.

105 ConG. REc. at 17900; II LEGISLATIVE HISTORY at

1433.

The employers in this action have not cited a single case

in which a subcontracting agreement was found to be un-

lawful prior to 1959 by reason of the fact that the agree-

ment was not limited to particular jobsites at which sig-

natory union workers were employed. There is absolutely

no evidence that such agreements were prohibited prior to

1959, and the legislative history makes clear that if an

agreement was lawful in 1959, the construction industry

4l-a

proviso “would prevent such legality from being affected

by section 8(e).” Conference Report, supra, at 39; I

- LEGISLATIVE History at 943.

- a oe

On the other hand, there is evidence that the pattern of

collective bargaining in the construction industry in 1959

included subcontracting agreements such as those present

in this case. Perhaps most influential is a report published

in 1961, containing the results of a study which examined

“the prevalence and characteristics of subcontracting pro-

visions in major collective bargaining agreements in effect

in 1959, prior to the Taft-Hartley amendments contained

in the Labor-Management Reporting and Disclosure Act of

1959.” Lunden, Subcontracting Clauses in Major Con-

tracts, 84 MONTHLY LABOR REVIEW 579 (part I), 715 (part

IT), at 579 (1961).?7

-After describing the prevalence of subcontracting

' agreements in the construction industry, the study avted:

The single most frequent requirement, found in more

than 50 major contracts, called for the subcontractor

to comply with all the terms and conditions of the

prime employer's agreement. This provigion “blan-

kets in” the subcontractor, no matter what project he

works on in the lecal union's jurisdiction or which

prime employer he works for.

Jd. at 715. Although the report surveys and describes

every type of subcontracting agreement used in a major

collective bargaining agreement in the construction indus-

try at that time, not one agreement was found to limit the

_ applicability of the subcontracting restriction to particu-

lar jobsites at which both union and nonunion workers

were employed. Id, at 715-16.

27 The Bureau of Labor Statistics compiled 1,687 major collec-

| tive bargaining agreements covering 1.000 or more workers

States exclusive of those in m Ane railroad and airline jncereriee.”

i Ia. at 381,

c . aS 42-a

res ne: aay ES, iA . IS GES

\ ota aaa aa a 7

In keeping with this fact, the Board has consistently

held in cases decided since 1959 that subcontracting

agreements need not be limited to particular jobsites.

After surveying a series of cases involving subcontracting

agreements such as those at issue in this case, the Board

in Carpenters Local 944 (Woelke & Romero Framing), 239

N.L.R.B. 241 (1978) concluded:2*

Thus, the Board has upheld clauses, such as those

herein, which are not limited to particular existing

jobsites or to the duration of particular jobs.

239 N.L.R.B. at 248. The Board further noted that:

As can be seen from the foregoing cases, as well as

others too numerous to cite, the Board, with court

approval, has construed the construction. industry

proviso literally to protect “any egreement” between

qualified parties which limits subcontracting of work

to be performed at the site of construction to em-

ployers who are signatory to a specific union agree-

ment or to an agreement generally with the “appro-

priate union” (meaning. generally, an affiliate of a

building and construction trades council).

Id. |

There are reasons why subcontracting agreements in

the construction industry—prior to 1959 as well as

tuday—have not been limited to particular, identified job-

sites. As stated in the Lunden study on subcontracting

agreements in existence in 1959, supra:

In the construction industry, subcontracting is gener-

ally accepted by unions and employers as a normal

condition of work. Few provisions were found that at-

tempted to preserve job opportunities by creating

certain conditions under which management could

contract out. For example, only one clause prohibited

subcontracting if it would result in layoff, and a very

8 Wolke & Romero Framing was reversed by a panel of the

Ninth Circuit in Pacitic Northwest, supra, rehearing en bane

granted, No. 78-3469 (9th Cir. Aug. 19, 1980).

43-a

small number required the company to notify the

union in advance of subcontracting or to subcontract-

only after receiving union approval. On the other

hand, the protection of contract standards was of

major interest. The most common restrictions re-

quired the subcontractor to comply with the terms of

the prime employer’s contract, to have a union

agreement of his own, or to employ union labor and

use union-made material.

84 MONTHLY LABOR REVIEW at 715 (emphasis supplied).

In other words, the purpose of subcontracting provi-

sions in the construction industry is not simply to avoid

“friction” on the jobsite that may arise when both union

and nonunion workers are present. A fundamental purpose

of subcontracting agreements is, and always has been, to

protect contract standards in the construction industry, a

goal that would be unattainable in that industry if subcon-

tracting agreements were not allowed.

Understanding the special nature of employment in the

construction industry is critical to understanding the spe-

cial purpose of subcontracting agreements in that indus-

try. Due to the infeasibility of negotiation on a project by

project basis, “master” or “prehire” agreements are

negotiated with an employer in the construction industry,

establishing unifurm conditions of employment over an ex-

tended period of time and geographic area. Special fringe

shenefit funds are created. Standing alone, however, such

agreements are incapable of protecting the conditions they

establish, as a result of an additional facet of employment

in the construction industry.

In the construction industry, subcontracting is the usual

rather than the extraordinary practice. Workers are not

typically attached to one employer; rather, workers are

organized in employment pools to be hired out either by

the contractor with whom they have an agreement or by a

subcontractor to whom the work is assigned. The only way

44-a

that workers in the employment pool may be certain to

receive the protection and benefits provided by the master

collective bargaining agreement is if subcontracting is

limited to subcontractors who are signatory to that

agreement, or who provide identical terms.

In other words, in most cases it makes little difference

to construction workers whether they are employed di-

rectly by the contractor with whom they have an agree-

ment or by an assigned subcontractor, as long as the

standards of their original employment contract are pro-

tected. The fulfillment of that goal is guaranteed by sub-

contracting agreements such as those at issue here. Thus,

the freedom of the contractor signatory to the agreement

to either perform work directly or subcontract out is pre-

served, while at the same time workers are guaranteed

that contract standards will be protected in either event.

Employees working under a collective bargaining

“greement on a construction site have an interest in not

being replaced through subcontracting by other workers

willing to do the same work without the same compensa-

tion or benefits. The special nature of the construction in-

dustry, however, forces that interest to be expressed in a

special manner. Since their employment will be terminated

in any event once a given project is completed, the concern

of these employees is not simply that they will be replaced

at the particular location at which they are working with

nonunion workers. As a result of the temporary and

transitory nature of employment in the construction indus-

try, workers are more concerned that the union-

represented pool of workers to which they belong will be

“replaced” at future projects. Since the employee pool is

not attached to a particular employer but to the industry

as a whole, workers in the construction industry have no

interest in forbidding “contracting-out” altogether, as do

their counterparts in the industrial sector. Instead, their

interest is in assuring that their collective bargaining

agreement is respected on each jobsite upon which*their

45-a

employer works whether he does the work himself or sub-

contracts it out.

It is evident, therefore, that to require subcontracting

agreements to be renegotiated on a jobsite by jobsite

basis, or limited in application to jobsites where union

workers are already present, would completely subvert a

primary purpose of subcontracting agreements in the con-

struction industry. This is an extremely important consid-

eration here because, as noted above, the construction in-

dustry proviso to §8(e) was intended to embrace lawful

practices in effect in the industry as of 1959.

Moreover, it is simply not feasible for employers and

unions in the construction industry to renegotiate agree-

ments on each jobsite, a fact recognized by Congress in

enacting §8(f) in 1959. To repeat the words of the Senate

Report, labor agreements in the construction industry

“necessarily apply to jobs which have not been started and

may nut even be contemplated.” Senate Report, supra, at

28; I LEGISLATIVE HIsToRY at 124. The position urged

upon us by the employers would force unions and em-

ployers to negotiate subcontracting agreements on a job-

site by jobsite basis, despite the fact that §S(f) authorizes

collective bargaining agreements in the construction in-

‘ustry without limitation with respect to the employer's

current and future jobsites in the area covered by the

union's jurisdiction. We believe it to be inconceivable that

the same Congress that enacted §8(f) to accommodate the

special characteristics of the construction industry ignored

those very same characteristics in enacting the construc-

tion industry proviso to §8(e). Certainly nothing in the

legislative history to those sections suggests such a result.

Accordingly, we hold that the subcontracting agree-

ments in the present case did not violate §8(e) by reason of

the fact that the clauses did not need to he renegotiated on

each individual jobsite, or because the clauses were not

46-a

limited to particular jobsites at which signatory union

workers were already employed.?9

This holding is not contrary to Cuvnell. It is true that it

would have been even easier to standardize employment

conditions in the construction industry had the Supreme

Court in Connell held that subcontracting agreements

could be sought outside the context of collective bargain-

ing. The fact that the Supreme Court rejected that out-

come, however, does not mandate a similar resolution

here.

29 We note that there is a remote, hypothetical situation in

which the employers’ argument could come into play. Conceiv-

ably, a genera) contractor could be engaged at a future jobsite

where he did not use avy carpenters, union or nenunion. If a

prehire agreement with a carpenters union required that he

subcontract work on that jobsite to union plumbers and union

electricians, that agreement might arguably be beyond the

scope of the proviso to §8(e). Since no carpenters are employed

on the jobsite, there can be no interest in maintaining contract

standards for carpentry workers, Similarly, since no carpenters

are ever on the jobsite, there can be no friction hetween union

carpenters and other nonunion workers.

This hypothetical situation is not presented Kere, however.

Certainly on all jobsites involved in this case, the employers

used carpentry workers. More importantly, we do not believe

that the subcontracting agreements at issue would themselves

restrict subcontracting in the above hypothetical situation. As

stipulated by the parties, the subcontracting agreements apply

“at anytime and any construction jobsite within the definition of

the construction proviso to Section S(e) of the NLRA, as

amended, where work within the jurisdiction of Respondents is

heong performed, regardiess of whether or not members of Re-

spondents are present at any given time at any given site.”

App. 87, € 83. In the above hypothetical situation, it would ap-

pear that work within the jurisdiction of the union was not being

performed. In any event, since the situation is not presented by

the facts of this case and has not been addressed by the parties,

we leave its resolution to another day.

47-a

As developed above, the subcontracting agreements in

the present case are consistent with the pattern of collec-

tive bargaining in the construction industry existing at the

time of the 1959 amendments to the NLRA. In contrast,

the subcontracting agreement sought in Connell was “a

relatively novel organizing tactic in the building trades.”

St. Antoine, Connell: Antitrust Law at the Expense of

Labor Law, 62 VA. L. REV. 603, 628 (1976). In his dissent

from the Fifth Circuit’s opinion in Connell, Judge Clark

noted that the union in Connell had been unable, in re-

sponse to a specific request for supplemental briefs, “to

point out any source of information which would show thai

subcontractor contracts such as the one in this case were

even occasionally utilized in the industry prior to 1959,

much less so common a practice that we could assume

Congress intended to preserve that part of the pattern of

collective bargaining in the industry.” 483 F.2d at 1182.

In addition to the lack of evidence showing that the sub-

contracting provision in Conwell was consistent with the

pattern of bargaining in the industry, the Supreme Court

in Connell was also faced with a union tactic that effec-

tively avoided certain of the clear proscriptions of $8(b)(4)

and §8(b)(7). Thus, the Court in Connell did not feel bound

by the literal language of $8(e) and, instead, insposed a

limitation not expressly included in the statuce in order to

enforce a clear congressional mandate to restrict ‘“top-

down” organizing. 421 U.S. at 628, 633.

In the present case, the “glaring loophole” found in

Connell does not exist; no congressivnal purpose is un-

dermined by the union conduct at issue. Instead, the

agreements sought are fully consistent with the declared

legislative purpose of maintaining the pattern of collective

bargaining as it existed in the construction industry prior

to 1959. In such a situation, we believe that it is not the

Statute and impose a significant limitation that is fot ex-

48-a

pressly included in the statute. Any further modification

of the statute must cume from Congress.

For all of these reasons, we refuse to follow the holding

of the panel of the Ninth Circuit in Pacific Northwest

Chapter of the Associated Builders & Contractors, Inc. v.

NLRB, 609 F.2d 1341 (9th Cir. 1979), rehearing en bane

granted, No. 78-3469 (9th Cir. Aug. 19, 1980). We believe

that the panel decision has misinterpreted the legislative

history and has too narrowly construed the purpose behind

the construction industry proviso to §8(e).%°

%° Without repeating the analysis presented above, we re-

spectfully disagree with the panel opinion of the Ninth Circuit

on several points. The court reached its conclusion through a

series of steps. First, the court concluded that the Sand Dour

case, 357 U.S. 93, did not conclusively establish the legality and

scope of subcontracting agreements prior to 1959. 609 F.2d at

134>-49. Second, the Ninth Circuit concluded that it is not en-

tlrely clear that the construction industry ;roviso was intended

to preserve the existing state of the law in the industry, since

the proviso added a limitation of “jobsite work” that did not

exist prior to 1959. Jd. at 1349. Finally. finding the legislative

histury to be inconclusive, the court considered the purpose of

the provir» and concluded that the sole purpose was to avoid

wMen-nenurion jobsite friction. 7d. at 1249-50. Acvordingly. the

court limited the permissible scope of the proviso to union-

nonunion confliets on the jobsite.

We believe that the court has misapplied the legislative his-

tory of &&(e). Regardless of whether or not Sand Dour conelu-

sively resolved the legality of subcontracting agreements, no

court had ever held such agreements to be unlawful prior to

1459. or had in any wa) narrowed their -cope. As developed

above, we believe that Congress perceived in 19359 that deci-

sions of the Board and the courts had created “loopholes” by

which secondary agreements Voluntarily entered were lawful,

and enacted $S(e) to change that result outside the construction

and apparel industries. As stated in Brown ¢. General Services

Administration, 425 U.S. 820, 828 C976), “the relevant inquiry

is not whether Congress correctly perceived the then state of

49-a

B. The Relevance of Physical Presence at the Jobsite

There is an additional and more refined argument of the

employers in this case that must also be addressed, We

have concluded that subcontracting agreements exist in

the construction industry for at least two separate rea-

sons. First, subcontracting agreements are allowed so that

unions may protect established contract standards against

the threat posed by the prevalence of subcontracting and

the short term nature of employment in the construction

industry. Second, once union workers are employed on a

jobsite, subcontracting agreements are allowed so that

those workers will not be forced to work alongside nonun-

ion workers on the same jobsite.

The emplovers in this case have focused most of their

attention on the first of these major concerns, The em-

plovers also have argued, however, that subcontracting

avreements should not be allowed to extend beyond the

Dine When signatory union workers are physically present

on the jobsite, In other words, the argument runs, even

the Jaw, but rather what its perception of the state of the law

Wits.”

In addition, to us it is beyond dispute that Congress intended

te leave the current state of the construction industry un-

Changed, concerning the subcontracting of work to be done at

the jobsite. The fact that Congress limited the proviso to jobsite

work does not in any way affect the legality or scope of subecon-

tracting agreements that do in fact concern work completed at

the jobsite.

Most importantly, we believe that the Ninth Circuit panel de-

cision defined the purpose of the construction industry proviso

to $S(e) too narrowly. Although the elimination of jobsite frie-

tion is indeed a legitimate concern, we believe that: subcon-

tracting agreements existed and continue to exist in the con-

struction industry as a means of protecting contract standards,

a goal made difficult as a result of the prevalence of syhcon-

tracting in that industry and the temporary and transitory Na-

ture of employment.

50-a

though the signatory union is utilized on the jobsite, thus

satisfying the first major concern above, there are times

when subcontracted work is performed and the signatory

craft is not simultaneously working on the jobsite and,

thus, at such times, the second major concern above is not

applicable.

We decline to accept this argument in the present case.

We believe that to do so would be overly formalistic and

once again ignore the realities of employment situations on

a construction jobsite.

It is firmly established, and not here contested, that at

the very least, subcontracting agreements are allowed in

the construction industry because of the “close community

of interests” existing on a construction site and “the fric-

tions that may arise” when union workers are employed

along with nonunion workers on the same project. See

Connell, supra, 421 U.S. at 630. We do not believe these

statements to mean, however, that problems arise solely

when union workers are forced to work “elbow-to-elbow”

with other nonunion workers.

More realistically, “friction” may arise when two sets of

workers are employed on a common construction site

under substantially different employment conditions. It is

true that, nominally, different crafts on the project are

likely to have separate employers. While the Supreme

Court established, in NLRB v. Denecr Building and

Construction Trades Connell, 341 U.S. 675 (1951), that

these employers on a common jobsite remain separate and

distinct, Congress recognized in $8(e) that there is a very

special relationship between them. The entire thrust of.

the proviso to §$8(e) is that craft work on a construction

site cannot be treated as isolated and removed from other

craft work.

There is simply nothing in the legislative history of the

proviso to §S(e), or in practices in the construction indus-

try prior to 1959, to suggest the limitation urged by the

emplovers here. Accordingly, we affirm the position ef the

A”?

ae ales

Board and hold that subcontracting agreements need not

be so limited. In doing so, however, we wish to emphasize

that it is inipossible for this court to anticipate every pos-

sible variation that may arise concerning subcontracting

arrangements on a construction jobsite. There may be

situations where the relationship between craft work on a

jobsite is so remote, so removed in time of performance,

that one craft would have no interest in how work is per-

formed by another craft. While we do not believe the sub-

contracting agreements in the present case to be beyond

the scope of the proviso to §8(e), we leave the final limits

of the protection afforded by the proviso to be decided in

future cases, where specific factual events will illuminate

problems and issues in a manner much clearer than that

presented by the very general facts of this case.

C. The Legality of Union-Speeitic Clauses

Finally, the employers argue, in a somewhat cursory

fushion, that the subcontracting agreements at issue here

are bevond the scope of the proviso to $S8(¢) because the

avreements permit subcontracting only with particular

anions affiliated with the Trades Council.

The Supreme Court in Cornell noted that the subcon-

Lracting agreement at issue in that case prohibited subcon-

tracting to any firm that did not have an agrecinent with

the specific union local. giving the union “complete control

over subcontract work offered by general contractors that

had signed [the subcontracting] agreements.” 421 U.S. at

624. The Court went on to state:

Such control could result in significant adverse effects

on the market and on consumers—effects unrelated to

the union's legitimate goals of organizing workers and

standardizing working conditions.

Id. Since the Court held that the subcontracting agree-

ments in Connell were not protected by the proviso to

$8(e) because not sought in the context of a collective bar-

gaining relationship, the Court did not resolve whether

52-a

union-specific subcontracting agreements are outside the

scope of the proviso.

Neither the employers nor the amici point to any case

that has accepted this limitation on the proviso. The Board

in fact has consistently upheld the validity of union-

specific agreements. As recognized by the Board in

Woelke & Romero Framing, supra, 239 N.L.R.B, 241

(1978):

Since the enactment of the 1959 amendments to the

Act, the Board and courts have consistently upheld

contract provisions between employers and unions in

the construction industry which permit the employer

to subcontract work to be performed at the site of the

construction only to subcontractors who are signatory

to contracts either with a particular union or with

unions having jurisdiction over the type of work in-

volved.

Id. at 247.9 Although the panel of the Ninth Circuit in

Paechie Northwest, supra, reversed much of Woelke &

Romero Framing and placed other severe restrictions on

the scope of the construction industry proviso, the panel

opinion nevertheless explicitly refused to limit the proviso

to $S(e) to subcontracting agreements that are not “par-

ticular union” agreements. Sec 609 F.2d at 1350 n.8.

We agree with the view that union-specifie subcon-

iracting agreements are within the scope of the construc-

tion industry proviso to §8(e). Although we are not called

upon to weigh “the union's legitimate goals of organizing

workers and, standardizing working conditions” against

any “significant adverse effects on the market and on con-

sumers,” we believe that in this case these legitimate

union goals are in fact sufficient to justify union-specific

agreements. We once again note that there is nothing in

the literal wording of the statute sugyesting the limitation

that the employers here seek. Nor is there any overriding

33 See also Carpenters Local 15, 240 N.1.R.B. No, 92 (Jan.

25, 1979).

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congressional purpose that would be undermined if §8(e) is

construed to permit union-specific agreements, such as

that which caused the Supreme Court to avoid the literal

language of the Act in Connell.

Instead, we believe that the legislative history supports

the proposition that subcontracting agreements in the con-

struction industry may be union-specific. As fully de-

veloped above, the principal concern of Congress in

enacting the construction industry proviso was to preserve

the pattern and practice of bargaining in the construction

industry. There is evidence that nearly all subcontracting

agreements in existence in the construction industry in

1959 were in fact union-specific agreements.

As described above, a comprehensive study was con-

ducted of subcontracting agreements in existence at the

time of the 1959 amendments to the NLRA. Lunden,

Subcontracting Agreeme nts iM Mayor Contracts, 84

MONTHLY LABOR REVIEW 479 (part I), 715 (part IJ)

(1961). That study included a survey of major contracts in

the construction industry, 83 of which contained subcon-

tracting agreements.

The findings of the survey are again relevant here. As

stated by the study:

The single most frequent requirement, found in more

than 50 major contracts, called for the subcontractor

to comply with all the terms and conditions of the

prime employer's agreement.

Id. at 715. In Local 437, IBEW, 180 N.L.R.B. 420 (1969),

the Board specifically established that such clauses permit

subcontracting only to emplovers who have recognized the

signatory union, since the phrase “complying with the

terms of this agreement” covers union recognition as well

as all other terms. 180 N.L.R.B. at 420. Accord, Building

and Construction Trades Council «. NLRB, 328 F.2d 340

(D.C. Cir. 1964).

The study also noted:

Closely allied to this approach was a second large

group of construction industry contracts which re-

quired the subcontractor to be under agreement with

the same local, with another local of the same interna-

tional union, with a recognized building trades union,

or with an AFL-CIO affiliate.

84 MONTHLY LABOR REVIEW at 716. Union-specifie sub-

contracting agreements were clearly common in the con-

struction industry at the time of the enactment of §8(e).

We also believe that union-specifiec subcontracting

agreements are consistent with the purposes of §8(e). As

fully developed above, the purpose of the construction in-

dustry proviso to §8(e) is not simply to permit a union on a

jobsite to ensure that only “union” workers are present on

the site, and thus avoid union-nonunion “friction.” 3? It is

through subcontracting agreements that a union may pro-

tect established contract standards in the construction in-

dustry. It is through subcontracting ayreements that a

unin may guarantee payments to particular established

pension funds. We believe that restricting the protection

of the proviso to $Sle) to “generic” union subcontractors is

inconsistent with these legitimate union goals. Absent

suine compelling reason such as that present in Connell,

we refuse to ignore the literal wording of the statute and

adopt such a restriction.

“2 As recognized by the ALJ in Carjauters Local 15, 240

N.L.R.B. No. 52 at 16 (Jan. 25, 1979): “To cunstrue the previso

as authorizing only such agreements as limit subcontracting to

unienized companies would also make a mockery of the protec-

tien afforded thereby, for it could be circumvented by any group

of employees which chose te sivle themselves ‘union.

Even if avoiding “friction” on the jobsite was the sole cunsid-

eration, there is no guarantee that there is less friction on a

jobsite when members of competing unions are forced to work

alongside each other, than when unien and nonunion workers

are employed on the same jobsite. See Pacitic Northwest,

supra, at 1390.8; Carpe: ters Local 15, supra, at 16.17.

*3 We recognize that one implication of this holding is that a

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D. Deference to the Board

For all of the reasons presented above, we believe that

the Board’s interpretation of the scope of the construction

industry proviso to §&(e) is entirely consistent with the

legislative history of that section and the purposes for

which it was enacted. In closing, we note that in matters

of statutory construction, we are bound to give cunsider-

able deference to the interpretation of the statute by the

Board. NLRB v. Brvadcast Employees and Technicians

Local 31, No. 78-2045, slip op. at 11 (D.C. Cir. July 23,

1980). As stated by the Supreme Court in Iron Workers:

Courts may prefer a different application of the rel-

evant sections, but “|[t}he function of striking that

balance to effectuate national labor policy is often a

difficult and delicate responsibility, which the Con-

gress committed primarily to the National Laber Re-

lations Board, subject to limited judicial review.”

NLRB ev. Truck Deicers, 353 U.S. 87, 96 (1957):

NLRB - Tesaranes Ag nts, 36] U.S. 477, 499 (1960).

184 U.S. S35 at 350 (1978). We certainly cannot say. as

was said in American Ship Bu lding Co. vr. NLRB, 330

U.S. 300. 318 (1965), that the position taken by the Board

is “fundamentally inconsistent with the! structure of the

Act and the function of the sections relied upen.”

subcontractor signatory to a contract with a competing onion

may be frozen out of work with a contractor whe signs a unien-

specific subcuntracting agreement with another union. Certainly

this consideration must be balanced against the concerns ex-

pressed above. In doing so. however, we were influenced by a

finding of an ALJ that was affirmed by the Board in Carpenters

Local 15, supra. In aphelding unien-specifie subcontracting

agreements and rejecting this preblem, the ALJ noted: “|The

problem is more theeretical than real. Except for some slight

overlapping of functions here and there. there is usually only a

single union that represents each ) articular craft in the con-

struction industry.” Jd. at 17. There is nothing in the record of

this case to suggest otherwise. 2

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In summary, we hold that the subcontracting agree-

ments in the present case are within the scope of the con-

struction industry proviso to §8(e). Accordingly, the pres-

sure exerted to secure the agreements did not violate

§8(b)(4)(A).

V, THE SELF-ENFORCEMENT FEATURE OF

THE AGREEMENTS

One final issue remains. Although the Board did not find

that the subcontracting agreements violated §8(e) for any

of the reasons discussed above, the Board did conclude

that the agreements lost the protection of §S8(e) by rezson

of the fact that section 306 of the Master Labor Ayree-

ment authurized the unions to take “any” action to enforce

“any” settlement or decision obtained in the grievance and

arbitration procedure.*4 The Board found that this provi-

sion of the contract authorized economic action by the

unions to enforce the subcontracting restrictions. 239

N.L.R.B. 264, at 270-71.%° S

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