Petition — PACIFIC NORTHWEST BUILDERS & CONTRACTORS, INC. v. NLR BOARD (Nos. 80-1808, 80-1798, 81-91)

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Office Supreme Court, U.S.

~~ g0-1808 : FILED

APR 29 1981

ALEXANDER L. STEVAS,

CLERK

NO.

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1980

PACIFIC NORTHWEST CHAPTER OF THE

ASSOCIATED BUILDERS & CONTRACTORS, INC.

PETITIONER

Vv.

NATIONAL LABOR RELATIONS BOARD

RESPONDENT

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Thomas M. Triplett

SCHWABE, WILLIAMSON, WYATT,

MOORE & ROBERTS

1200 Standard Plaza

Portland, Oregon 97204

Telephone: (503) 222-9981

Counsel of Record

QUESTIONS PRESENTED FOR REVIEW

a Whether the United States

Court of Appeals for the Ninth Circuit

misinterpreted this Court's decision in

Connell Construction Co., Inc. v. Plumbers

and Steamfitters Local Union No. 100, 421

U.S. 616 (1975) by concluding that it

authorized imposition of top-down

organizing restraints upon third parties

whenever the restraints are imposed in the

context of a collective bargaining

relationship.

2. Whether the United States

Court of Appeals for the Ninth Circuit

erred in holding that the construction

industry proviso to 8(e) immunizes all

subcontracting restraints imposed in the

context of a collective bargaining

relationship.

3. Whether Congress intended to

confine the scope of the construction

industry proviso of 8(e) to those

circumstances where there was potential for

job-site friction between union and

non-union workers.

4. Whether the Ninth Circuit

misinterpreted this Court's holding in

National Woodwork Manufacturers Association

v. NLRB, 386 U.S. 612 (1967) by

promulgating a mixed motives test.

5. Whether the Ninth Circuit

should reconsider its holding in National

Woodwork Manufacturers Association v. NLRB,

386 U.S. 612 (1967) which held that a

primary-secondary litmus test was to be

employed to determine the lawfulness of a

subcontract clause.

6. Whether 8(b)(7)(C) may be

applied to prohibit organizational or

recognitional picketing solely where a 9(a)

election could be conducted.

7. Whether the United States

Court of Appeals for the Ninth Circuit

erred in holding that an otherwise lawful

subcontracting clause may be forcefully

imposed through economic action upon an

employer.

LIST OF PARTIES

PACIFIC NORTHWEST CHAPTER OF THE

ASSOCIATED BUILDERS & CONTRACTORS, INC.

NATIONAL LABOR RELATIONS BOARD

OREGON-COLUMBIA CHAPTER, THE ASSOCIATED

GENERAL CONTRACTORS OF AMERICA, INC.

INTERNATIONAL UNION OF OPERATING ENGINEERS

LOCAL NO. 701

WOELKE & ROMERO FRAMING, INC.

CARPENTERS LOCAL NO. 944, UNITED BROTHERHOOD

OF CARPENTERS & JOINERS OF AMERICA, AFL-CIO

CARPENTERS LOCAL NO. 235, UNITED BROTHERHOOD

OF CARPENTERS & JOINERS OF AMERICA, AFL-CIO

TABLE OF CONTENTS

Questions Presented for Review .......

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BO 1 Rg ECOL SS ais a ee

Pee PEeen GEANWUREIOINEE so wre'd S00 0.0 eb oe 0b. 08

Beatement Of THO CASS so. occ ceccc cesar

A. Procedural Background ......

B. I icte.o Oh Osh e 6 ba 6 Meskee ss

Reasons for Granting the Writ ........

A. Introductory Statement .....

B. The Court of Appeals

decision conflicts with

this Court's Connell

GERD 5 Sig:hsue 0030's 0 0.6 be awrs

C. This case presents a

estion of national

mportance which has not

been but should be

D7 SS SI RSIS ee ;

D. The decision of the Court

of Appeals conflicts with

this Court's decision ......

Conclusion ........ a Mame og” Sg) rae a

st)

vu nv Nyy FDO WW Pe KF {10

INDEX OF AUTHORITIES

Page

Cases

Carpenters Local No. 944, United

- Brotherhood of Carpenters and

Joiners of America, AFL-CIO,

and Carpenters Local No. 235,

United Brotherhood of Carpenters

and Joiners of Amerca, AFL-CIO 9,

(Woelke & Romero Framing, Inc.), 10,

239 NLRB No. 40 (1978) .......... 1l

Colorado Building & Construction

Trades Council (Utilities Ser-

vices Engineering, Inc.), 239

NLRB No. 41 (1978) .......2eeeee. 9

Connell Construction Co., Inc. v. 1,

Plumbers and Steamfitters Local 17, 18,

Union No. 100, 421 U.S. 616 20, 21,

ES re Ry ae eee Sy |

Los Angeles Building and Construction

Trades Council and Local Union

No. 1497, United Brotherhood of

Carpenters & Joiners of America

(Donald Schriver, Inc. and

Sullivan-Kelly & Associates),

239 NLRB No. 42 (1978) .......... 94° 27

NLRB v. National Maritime Union, 486

F.2d 907 (2nd Cir. 1973) cert.

den. 416 U.S. 970 (1974) ........ 28

National Woodwork Manufacturers 2,

Association v. NLRB, 386 U.S. 27,

DAS OTE UMass 0 86 acee 4a Oe Se ike 28

iii

Statutes

Bese eGs 6S BSL OC SOG Weve cccccccvce. f

29.U.8.C. § 157 ...ce0c6 7e 17, 19, 20, 26

29 U.S.C. § 158 (a) cocccccccccccveeee 7

29 U.S.C. § 158 (b) cocccccccccccvceee 7

29 U.S.C. § 158 (b) (7) (C) .-ee--- 2 ,22

29 U.S.C. § 158 (e) ... 1, 2, 7, 8, 9, ll

17 ,18, 21, 22, °27

29 U.S.C. § 158 (£) ccccceecsccceee 7, 17

29 U.S.C. § 159 (A) wecccccceeee 2, FV, 17

29 U.S.C. § 1254 (1) ceeeceeeeneeeeeeee 7

Gl Stat 136 .cicccccccseccccccccccsccces J

Va OURS SIO ccc ccce wc cc cece aseeceecvccs 7

92 Stat 1629, 1632 w.cccccccvcccccceee Il

Public Law 95-486 ...ccccccccccccccece Ll

Rules

Rule 25, Rules of the Supreme Court

of the United States ............ ll

Fed. R. App. P. 35 (A) eeeeeeereeeeeeee 24

APPENDICES

Page

Appendix A

Opinion, United States Court of

Appeals for the Ninth Circuit ...A-l

Appendix B

Decision, United States Court of

Appeals for the Ninth Circuit ...A-112

Appendix C

Decision and Order, United States

of America Before the National

Labor Relations Board ........... A7147

Appendix D

Statutory Provisions ....... POY

NO.

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1980

PACIFIC NORTHWEST CHAPTER OF THE

ASSOCIATED BUILDERS & CONTRACTORS, INC.

PETITIONER

Vv.

NATIONAL LABOR RELAT: ONS BOARD

RESPONDENT

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Petitioner respectfully prays

that a Writ of Certiorari issue to review

the judgment of the United States Court of

Appeals for the Ninth Circuit, denying

petitioner's petition to review an order of

the National Labor Relations Board.

OPINIONS BELOW

Only the slip opinion of the

limited en banc panel of the Court of

Appeals for the Ninth Circuit has been

published. (Pet. App. A, pp. Al - A111).

The opinion of the panel of the Court of

Appeals for the Ninth Circuit is reported

at 609 F.2d. 1341 (1979) (Pet. App. B, pp.

A112 - A 146). The decision and order of

the National Labor Relations Board is

reported at 239 NLRB No. 43 (Pet. App. C.

pp. A-146 - A-186).

JURISDICTION

The judgment of the Court of

Appeals for the Ninth Circuit was entered

and filed on the 17th day of April, 1981.

The jurisdiction of this Court is invoked

under 28 USCA 1254 (1).

STATUTES INVOLVED

The relevant provisions of

Sections 7, 8(a), 8(b), 8(e), 8(f) and

9(a) of the National Labor Relations Act,

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

USC §§ 151 et seq) are set forth in

Appendix D. (Pet. App. D, pp. A-183

- A-186).

STATEMENT OF THE CASE

A. Procedural Background.

The Pacific Northwest Chapter of

the Associated Builders & Contractors, Inc.

(herein referred to as "Petitioner") filed

charges on April 26, 1977, against the

International Union of Operating Engineers,

Local Number 71 (herein referred to as

"Engineers"), and the Oregon-Columbia

Chapter, The Associated General Contractors

of America, Inc., (herein referred to as

"“AGC"). The charges alleged that the

“Engineers and AGC entered into an agreement

containing a clause which prohibited

subcontracting to all non-signatory

employers and that such clause violated

Section 8(e) of the National Labor

Relations Act. General Counsel's Office

issued a complaint; the parties stipulated

to the facts; and the matter was

transmitted directly to the Board for

decision.

Amicus curiae briefs were filed

with the NLRB by the American Federation of

Labor and Congress of Industrial

Organizations, the Building & Construction

Trade Department, AFL-CIO, and the Chamber

of Commerce of the United States of

America. The NLRB consolidated three other

cases arising in other parts of the

country? and heard an "unprecedented" six

hours 3

of oral arguments.

On November 13, 1978, the NLRB

rendered its decision and order in this and

the related cases. It held that

subcontracting clauses were immunized from

8(e) scrutiny by reason of the construction

industry proviso. It further held that

1colorado Building & Construction Trades

Council (Utilities Services Engineering, Inc.), 239

NIRB No. 41 (1978); Los Angeles Building and

Construction Trades Council and Local Union | No.

1497, United Brotherhood of Carpenters & Joiners of

America (Donald Schriver, “Inc. and Sullivan-Kelly &

Associates), 239 NLRB No. 42 (1978); Carpenters

Local No. 42 (1978); Carpenters Local No. 944,

United “Brotherhood of Carpenters and Joiners o of

America, AFL--CI0; and Carpenters Local No. 235,

United Brotherhood of Carpenters and Joiners “of

America, AFL--CIO (Woelke & Romero Framing, Inc.),

239 NLRB No. GO (1978).

1978 BNA Labor Relations Reporter Yearbook.

Spermission to present oral argumenc, as

amicus curiae, was granted to the Chamber of

Commerce of the United States, the American

Federation of Labor and Congress of Industrial

Organizations, the Building & Construction Trades

Councl, AFL-CIO, and the Laborers International

Union of North America, AF1-CIO.

such provisions may not be enforced through

self help.

Petitioner filed its petition

with the United States Court of Appeals for

the Ninth Circuit (herein "Court of

Appeals") for review of this decision and

order as did AGC and the Engineers and the

Board cross-petitioned for enforcement.

The Court of Appeals

consolidated, for purposes of oral argument

and decision, the proceeding brought by the

petitioner herein with Carpenters Local

No. 944, United Brotherhood of Carpenters

and Joiners of America, AFL-CIO; and

Carpenters Local No. 235, United

Brotherhood of Carpenters and Joiners of

America, AFL-CIO (Woelke & Romero Framing,

Inc.), 239 NLRB No. 40 (1978).* A

three-judge panel of the Court on

December 26, 1978, held that the

subcontracting clauses were not protected

by the construction industry proviso

to 8(e) and were therefore unlawful.

Thereafter, the NLRB and the

Engineers petitioned for rehearing en banc.

The Court granted this motion and ordered

rehearing before a limited en banc panel as

provided by Public Law 95-486, 92 Stat.

1629, 1632 and Rule 25 of the Court.

On April 17, 1981 the Court of

Appeals rendered its opinion and entered

4the Court granted motions on behalf of the

Chamber of Commerce of the United States of

America, the Air Conditioning and Refrigeration

Institute, Air Movement and Control Association,

American Boiler Manufacturers Association, American

Consulting Engineers Council, Architectural

Woodwork Institute, National Soceity of

Professional Engineers, National Woodwork

Manufacturers Association, Inc., and of the

Associated General Contractors of America, Inc. to

file briefs as amicus curiae.

judgment affirming the decision and order

of the NLRB.

B. Facts.

Preliminary Remarks.

The parties filed a stipulation

of facts with the NLRB. As will subse-

quently appear, it is the effect to be

given to these facts which raises the

issues presented here.

The Parties.

AGC is an association of

employers engaged in all types of

construction in the states of Oregon and

five counties of southwest Washington.

(R. 28). The employer members delegated

their collective bargaining authority to

AGC for the purpose, inter alia, of

negotiating and entering into collective

bargaining contracts on behalf of its

employer members. AGC has approximately

200 member contractors.

Engineers are a labor

organization which represent individuals in

the construction industry who perform work

contractually defined under various labor

agreements, including that with AGC. Its

jurisdiction is generously defined by the

collective bargaining agreement as follows:

“assembly and/or

disassembly in the

nog of all equipment

within the jurisdiction of

the union, regardless of

its use or whether such

equipment is mechanically,

electrically,

electronically,

hydraulically,

automatically or remotely

controlled."

It extends to all heavy highway work,

building work and also to off-site work at

quarries, asphalt plants, etc.

Petitioner is an organization of

contractors whose members are both union

and non-union. One of its organizational

purposes is to extend the concept of merit

shop, i.e., the opportunity of union and

non-union contractors to bid upon and work

on jobs based exclusively upon price,

quality and service and without discrimina-

tion of any sort.

The Contract.

The Collective Bargaining Agree-

ment contains the following provisions:

"ARTICLE VIII

Subcontractors and Other Employers

Section 1. Employers shall

not contract any work

covered by this Agreement to

be done at the site of the

construction, alteration,

painting or repair of a

building, structure, or other

work to any person, firm or

company who does not have an

existing labor agreement with

the Union covering such work.

Wk kk KK K

ARTICLE IX

Settlement of Disputes

Section 5. Should the

parties involved fail to

comply with the findings

within five (5) days after

such written notification by

either party or fail to

comply with any of the

provisions and/or time limits

established in this Article,

unless mutually agreed to extend such

limits, then all means of arbitration

shall be considered exhausted.

Either party may take such

action as they deem necessary

to enforce the findings

and/or time limits and they

shall not be considered in

violation of any part of this

Agreement." (Tr. 29).

A subcontractor was deemed to

refer:

"x * * to any person, firm or

corporation who agrees with,

orally or in writing, to

perform or who, in fact,

performs for, or on behalf

of, an Employer any part or

portion of work covered by

this Agreement." (R. 45).

The agreement required AGC, and

all other signatory employers, to

acknowledge Engineers as the sole and

exclusive representative of employees

covered thereunder; and compelled all

employees to become members of the union

not later than the eighth day following

commencement of employment or be terminated

(R. 48).

REASONS FOR GRANTING THE WRIT

A. Introductory Statement.

The Court of Appeals held that it

was proper for an association of

general contractors and a construction

industry union to enter into a collective

bargaining agreement which prohibits

signatory general contractors from doing

5 union

business with non-union and wrong

contractors. It concluded that such

agreements are lawful so long as there is a

collective bargaining relation between the

signatory employer and the union.

The construction industry is sui

generous. Congress recognized its

differences in a variety of statutory

fashions. It was not Congress’ intent,

however, to give any greater shelter from

SEmployers-who have been required to enter

into a collective bargaining agreement with a

different union pertaining to the particular work.

the prohibitions of 8(e) than those

differences required.

The effect of the decision is to

vest a brutal top-down organizational tool

in the hands of construction industry

unions. The decision will have the overt

and obvious effect of depriving employees

of their rights under Section 7 to

“refrain” from collective bargaining

activities; constitute a significant

impediment to exercise of their electoral

rights as granted under Section 9;

frustrate the congressional intent in

enactment of 8(f); add additional fuel to

the already spiraling inflationary cost of

construction work; and emasculate this

Court's decision in Connell Construction

Co., Inc. v. Plumbers and Steamfitters

Local Union No. 100, 421 U.S. 616 (1975)

(herein “"Connell").

The difference between the

construction industry and industries

generally do not suggest, let alone compel,

the decision reached by the Court of

Appeals. As will be demonstrated

hereinafter the Court of Appeals should

have adopted the principles enunciated by

this Court in Connell.

B. The Court of Appeals Decision

Conflicts with this Court's.

Connell Decision.

In Connell Construction Co., Inc.

v. Plumbers and Steamfitters Local Union

No. 100, 421 U.S. 616 (1975) hereinafter

referred to as "Connell", this Court

reviewed the scope of the Section 8(e)

construction industry proviso. In that

case the union sought to impose a restraint

upon the right of the employer to freely

contract with whom it chose despite the

fact that the employer neither employed any

employees and the union expressly

disclaimed any representational interest.

This Court properly recognized that

the language of the proviso was not to be read

literally and therefore made a meticulous

examination of the legislative history. It

held that subcontracting restraints, of any

nature, are lawful only when necessary to

carry out the congressional purpose expresed

in the proviso. «

The Court concluded that there

were two critical and sometimes competing

factors that must be juxtapositioned and

balanced in order to ascertain the scope of

the proviso.

First, the Court considered the

important Section 7 rights of employees to

self organization and collective bargaining

and their correlative right "to refrain from

any and all of such activities." It held

that there was an overriding congressional

purpose to interdict top-down organizing

techniques of labor organizations which

frustrate employees in their effort to

exercise their statutory right to "refrain."

Second, the Court found that

Congress recognized that the construction

industry is different than industries

generally. It pinpointed the fact that

emplovees of different employers are thrust

together on common jobsites for short periods

of time. Congress and this Court hypothesized

that unless a contractor were permitted to

voluntarily restrain, through agreement with

the Union, subcontracting to non-union

contractors, that the potential for jobsite

friction could cripple the industry. It was

solely this concern, that of potential jobsite

friction, upon which Congress focused.

In Connell, this Court struck the

balance against the exercise of Section 7

rights when jobsite friction was possible.

When such friction was not possible, the

balance necessarily fell sharply on the

other side. In consequence, the Court

concluded that any subcontracting clause was

broader than the exigency its statutory prop

prop would support must be found to violate

8(e).

The underlying principles of

Connell have been violated by the Court of

Appeals decision. The subcontracting

clause here applies without regard to the

purposes underlying the proviso, i.e. there

are innumerable circumstances when jobsite

friction could not occur and yet the clause

would be held to apply.

The Ninth Circuit sought to prop

its departure from Connell upon a

nonexistent foundation. It was compelled

to recognize that the top-down organizing

Sone Ninth Circuit was concerned that it was

departing the Connell guidelines. This concern is

sprinkled throughout its opinion. For example, it

states:

"We can see that the language of the

Connell opinion dealing with congressional

antagonism to top-down organizing may well

lean in a direction contrary to our own views."

through a subcontracting restraint was condemnec

by this Court in the absence of a collective

bargaining relationship. It concluded that the

protection of 8(e) was granted in such circum-

stances because the employer had no 8(b)(7)(C)

protection. The Court of Appeals hypothesized

that since an employer who had a collective

bargaining relationship is entitled to 8(b)(7)(C

protection, neither Congress nor this Court

intended 8(e) to furnish additional protection.

The problem with all of this finespun rhetoric,

among others, is that no authority was cited fo1

the novel distinction because indeed the law is

to the contrary.’

"hs the General Counsel stated:

“However, where a construction industry

employer has no unit employees or less than a

representative complement, and a union pickets

to obtain an 8 (f) contract, it is our view

that since a question concerning representation

could not be held, such picketing would be

violative of 8 (b) (7) (C) from the first day.

Memorandum 79 - 32, p. 9."

The Court of Appeals has failed to

apply the principles enunciated by this Court

in the Connell decision. The four dissentors

succinctly recognized this departure.

C. This Case Presents a Question of

National Importance Which Has not Been

But Should be Decided.

Assuming, arguendo, that the Connell

decision must be confined to its facts and

the principles enunciated therein are concluded

to be of uncertain application here, then there

is an unsettled question of national significance

which should be settled here.

Throughout the history of these

proceedings, the primary issue, i.e., whether the

Connell ruling applies in the context of a

collective bargaining relation, has been treated

as one of overriding importance in the construction

industry.

The NLRB recognized its

importance. It was for this reason that it

consolidated four cases from across the

country; granted an unprecedented six hours

of oral argument; granted applications from

numerous parties to present amicus briefs

and oral argument.

The Court of Appeals also recognized

the importance of the issues tendered.

First, it allowed a series of amicus briefs

to be filed. Second, the Court of Appeals

granted rehearing and;

"Such a hearing or rehearing is

not favored and ordinarily will

not be ordered except * * *

(2) when the proceeding involves

a question of exceptional

importance." Rule 35(A) FRAP

Third, the Court of Appeals, in its

opinion, acknowledged:

"These cases raise important

questions concerning the scope of

8 (e) of the National Labor

Relations Act. * * *"p., 1

The perception of both the NLRB

and the Court of Appeals as to the

significance of the issues presented is

accurate. The lawfulness of restraints on

subcontracting know no geographic

boundaries. If the decision is permitted

to stand, it is predictable that this type

of clause will immediately become a

bargaining demand in each region where a

similar clause is not already in place.

Refusal on the part of a contractor to

agree may create national labor unrest.

An almost certain effect of this

decision will be to immunize such

provisions from antitrust scrutiny; to

present the already overburdened consumer

of construc-tion products, the public, with

the reality of rapidly escalating and

spiraling cost to purchase a home.

The decision will also effect the

rights of many nonunion employees. They

will be faced with an inexorable top-down

organizing inducement. Work opportunities

will be forfeited unless Section 7 rights

are sacrificed.

The nonunion contractor will

suffer. If it succumbs to pressure which

this clause presents, it will necessarily

infringe upon employee rights. If it fails

to succumb, he may find himself without

work.

Even the union contractor

suffers. Simple ecnomics dictates that

elimination of competition will produce

higher cost. Members of the public, and

particularly the individual who desires to

purchase a home, may have to forego

purchase because of cost. Thus the union

contractor's work opportunities will

themselves become more limited and, as

perversity would have it, the union

employee's work opportunities will also

dwindle.

In the six years since the Connell

decision was rendered the scope of the opinion

has been debated frequently. In addition to

this case, and the companion Shriver-Topaz

matter which is presently pending before this

Court upon Petition for Certiorari, there are

at least five other cases pending before the

U.S. District Court for the Ninth Circuit.

Decision is needed by the

construc-tion industry on this most important

ques-tion. Collective bargaining and day-to-day

administration of collective bargaining

agreements most urgently require a bright line

or litmus test guidance for future conduct.

D. The Decision of the Court of Appeals

Conflicts with This Court's Decision.

In National Woodwork

Manufacturers Association v. NLRB, 386 U.S.

612 (1967) this Court held that 8(e) interdicts

only secondary as opposed to primary boycotts,

whether effectuated by agreement or through

economic action. The dissent vigorously urged

that primary as well as secondary subcontracting

restraints were unlawful.”

The Ninth Circuit appears to

reject the primary/secondary dichotomy set

forth by this Court. Its enumeration of a

mixed motive test is alien to the teachings

of National Woodwork and the consistent

line of the NLRB decision. ?°

Petitioner has previously urged that National

Woodwork Manufacturers Association v. NLRB was

roperly decided. It contends that all primary

restraints are unlawful except in the construction

industry where the restraint must be secondary to

be unlawful.

10506 NLRB v. National Maritime Union, 486

ol gg (2nd. Cir. 1973) cert. den. 416 U.S. 970

1974).

CONCLUSION

For the foregoing reasons, this

Petition for Writ of Certiorari should be

granted.

Respectfully submitted,

SCHWABE, WILLIAMSON, WYATT,

MOORE & ROBERTS

By:

THOMAS M. TRIPLETT

of Attorneys for

Petitioner

A-1

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PACIFIC NORTHWEST CHAPTER)

OF THE ASOCIATED BUILDERS )

& CONTRACTORS, INC.,

Petitioner,

ee eee ee ee

NATIONAL LABOR RELATIONS

BOARD,

Respondent.

THE ASSOCIATED GENERAL

CONTRACTORS OF AMERICA,

INC.,

Petitioner,

NATIONAL LABOR RELATIONS

BOARD,

Respondent

ee er ee ee eee ee Se See See See eee See See See See Se See ee” See” See See Se Se See ee” See” Se” St” Se” Se Se

OPERATING ENGINEERS,

LOCAL NO. 701

Petitioner,

No. 78-3469

No. 78-3487

No. 78-3619

A-2

NATIONAL LABOR RELATIONS

BOARD,

Respondent

WOELKE & ROMERO FRAMING, —

INC.,

Petitioner,

NATIONAL LABOR RELATIONS

BOARD,

Respondent.

)

CARPENTERS LOCAL NO. 944 )

AND CARPENTERS LOCAL )

NO. 235,

)

Intervenors.

NATIONAL LABOR RELATIONS —

BOARD,

-V=

)

CARPENTERS LOCAL NO. 944, )

UNITED BROTHERHOOD OF )

CARPENTERS & JOINERS )

OF AMERICA, AFL-CIO, and )

CARPENTERS LOCAL NO. 235,)

UNITED BROTHERHOOD OF +=)

CARPENTERS & JOINERS OF )

AMERICA, AFL-CIO,

)

Respondent.

No. 78-3468

No. 79-7011

OPINION

A-3

Petitions for Review of Orders of

the National Labor Relations Board.

Argued and submitted October 16, 1980.

BEFORE : BROWNING, Chief Judge, CHOY,

WALLACE, SNEED ANDERSON, SCHROEDER,

FLETCHER, FARRIS, NELSON, CANBY and

NORRIS, Circuit Judges

_ CANBY, Circuit Judge

These cases raise important questions

concerning the scope of § 8(e) of the

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

§ 158(e), which prohibits "hot cargo"

agreements. The primary issue is whether

the construction industry proviso to

§ 8(e) renders lawful clauses in collective

bargaining contracts forbidding the

employers to subcontract work at any

construction site to a firm not having a

contract with the signatory union.

Additional issues are whether unions may

picket or strike to induce an employer to

enter these agreements and whether the

agreements, once entered, may be enforced

by picketing or strikes. We conclude that

the subcontracting clauses fall within the

A-4

construction industry proviso and

consequently do not violate § 8(e). We

also conclude that unions may picket or

' gtrike to obtain such agreements, but not

to enforce them. The orders of the

National Labor Relations Board are

accordingly enforced.

Facts.

Two orders of the Board are under

review here pursuant to 29 U.S.C. § 160(e)

and (f). The first concerns a collective

bargaining agreement between Oregon-Columbia

Chapter of the Associated General Contractors

of America, Inc. (AGC) and Local 701 of the

International Union of Operating Engineers

(Engineers). AGC is an association of

some 200 employers engaged in construction

in Oregon and southwest Washington. These

employers have delegated their collective

bargaining authority to AGC. AGC and

Engineers entered into a collective bargain-

A-5

ing agreement effective from June 1, 1975,

through May 31, 1980, which contained the

following clause:

Article VIII

Subcontractors and Other Employers.

Section 1. Employers shall

not contract any work covered

by this Agreement to be done

at the site of the construction,

alteration, painting or repair

of a building, structure or

other work to any person, firm

or company who does not have

an existing labor agreement

be the Union covering such

work.

Subsequent clauses!

provide for a

grievance procedure leading to arbitration

and further provide that should the parties

fail to comply with the arbitrator's deci-

sion, then "[{eJither party may take such

action as they deem necessary to enforce

the findings. . .." The effect of the

latter provision is to permit either party

to employ self-help, such as strikes or

lockouts, that would otherwise be prohibited

by another article of the agreement.

A-6

Upon complaint by Pacific Northwest

Chapter of the Associated Builders &

Contractors, Inc., Engineers and AGC were

charged with violating § 8(e)? of the

National Labor Relations Act, which

prohibits agreements between a labor

organization and an employer in which the

employer agrees to refrain from using the

products of another employer or to cease

doing business with any other person. The

case was submitted to the Board upon

stipulated facts and the Board found that,

while the agreement fell within the

prohibition of § 8(e), it was exempted

from the coverage of that provision by the

construction industry proviso applicable

to agreements “between a labor organization

and an employer in the construction industry

relating to the contracting or subcontract-

ing of work to be done at the site of the

construction, alteration, painting, or

repair of a building, structure, or other

A-7

work. . . ." The Board also ruled that

the clause authorizing enforcement of the

subcontracting provision by self-help was

invalid. All parties petitioned for

review and the Board sought enforcement of

its order.

The second decision of the Board

concerns Woelke and Romero Framing, Inc.,

(Woelke), a framing subcontractor in the

construction industry in Southern California.

Woelke was a party to a collective bargain-

ing agreement entered on July 5, 1974, with

the United Brotherhood of Carpenters and

Joiners of America, AFL-CIO (Carpenters),

a group which included Locals Number 235

and 944 involved in this litigation. That

agreement expired on Jun 15, 1977. From

about June 3, 1977, to August 4, 1977,

Carpenters and Woelke engaged in collective

bargaining for the purpose of negotiating

a successor agreement. They broke off

negotiations when they reached an impasse

A-8

3 One such issue was

over several issues.

the union's demand for a clause in the

contract that prohibited Woelke from

subcontracting work at any construction

jobsite "except to a person, firm or

corporation, party to an appropriate,

current labor agreement with the

appropriate union, or subordinate body

signatory to this Agreement. "* In support

of Carpenters' demand for this contract

provision, Locals 235 and 944 picketed

Woelke's construction sites, causing some

work stoppages. The two locas were charged

with violation of § 8(b)(4)(i) and (ii)(A)

of the Act” for picketing to require an

employer “to enter into an agreement which

is prohibited by section 8(e)."

The case was submitted to the Board

upon stipulation and the Board found that

the proposed subcontracting agreement was

not prohibited by § 8(e) because it fell

within the construction industry proviso,

A-9

and that picketing to obtain such a clause

therefore did not violate § 8(b)(4).

Woelke petitions for review of the Board's

order, and the Board seeks enforcement. °

Both decisions of the Board were

reviewed by a panel of this court. 609

F.2d 1341 (9th Cir. 1979). On the

authority of Connell Construction Co. v.

Plumbers & Steamfitters Local Union No. 100,

421 U.S. 616 (1975), the panel held that

the subcontractor clauses were prohibited

by § 8(e) and did not fall within the

protection of the construction industry

proviso because their applicability was

not limited to jobsites where members of

the signatory union were employed at some

time during the construction project.

Having found the present clauses

unenforceable, the panel did not reach the

questions whether picketing or striking

either to obtain or enforce a lawful

subcontractor clause would violate

A-10

§ 8(e). 609 F.2d at 1351. This court

subsequently ordered rehearing before a

limited en banc panel as provided by _

Public Law 95-486, 92 Stat. 1629, 1633 and

Rule 25 of this court.

II.

Issues.

Four issues are presented for deter-

mination in these cases:

(1) are the subcontracting clauses

"secondary" and therefore within the scope

of § 8(e)?

(2) If the clauses are within the

scope of § 8(e), are they exempted from

its proscription by the construction ©

industry proviso?

(3) If the subcontracting clauses

are lawful, does it nevertheless violate

§ 8(b)(4) for a union to picket or strike

to induce an employer to agree to one?

(4) If the subcontracting clauses

are lawful, does it nevertheless violate

A-11

§ 8(b)(4) to enforce them by picketing or

strikes?

III.

Applicability of § 8(e).

The subcontractor clauses in the

present case clearly require the signatory

employer to cease or refrain from using

the products of another employer or to

cease doing business with another person.

The clauses consequently fall within the

literal language of § 8(e). In National

Woodwork Manufacturer Association v. NLRB,

386 U.S. 612 (1967), however, the Supreme

Court held that § 8(e) is not to be read

as expansively as its language seems to

indicate. The Court pointed out that the

purpose of Congress in enacting § 8(e) was

to prohibit voluntary arrangments that

reached the same result as coercive

secondary boycotts prohibited by

§ 8(b)(4)(ii)(B) of the Act. The court

therefore held that an agreement between a

A-12

union and an employer which prohibited

certain kinds of subcontracting was

permissible so long as the objective was

to perserve work traditionally performed

at the jobsite by employees of the primary

employer. Such a "work preservation"

clause was viewed as primary and therefore

did not constitute an unfair labor

practice. ’

The test whether an agreement

was primary and permissible was "whether

the agreement or its maintenance is

addressed to the labor relations of the

contracting employer vis-a-vis his own

employees." Id. at 645. An agreement was

secondary and prohibited when "the

agreements and boycotts were tactically

calculated to satisfy union objectives

elsewhere." Id. at 644.

By the National Woodwork test, union

signatory clauses such as those in issue

here are secondary in objective. They do

not seek to preserve work for the employees

A-13

of the contracting employer by limiting

the amount of subcontracting. Nor do they

seek to protect the wage and benefit

standards of those same emploiyees in

their present employment by merely

limiting subcontracting to third parties

who maintain equivalent standards. Instead,

these union signatory clauses permit unlinm-

ited subcontracting to third parties who

maintain equivalent standards. Instead,

these union signatory clauses permit unlim-

ited subcontracting so long as the subcon-

tractors have an agreement with the con-

tracting union. Such clauses are properly

viewed as secondary, for they are intended

to satisfy union objectives involving

employees and employers outside of the bar-

gaining or work unit. Griffith Co. v. NLRB,

545 F.2d 1194 (9th Cir. 1976), cert. denied,

434 U.S. 854 (1977); NLRB v. National

Maritime Union, 486 F.2d 907 (2d Cir. 1973),

cert. denied, 416 U.S. 970 (1974).

A-14

It is contended by Engineers that the

objective of preserving work within the

entire multi-employer bargaining unit of

AGC is a primary goal and that this fact

should take its subcontracting clause

outside of the scope of § 8(e). This

argument fails for two reasons. First,

the clause in question does not limit sub-

contracting to firms that are membérs of

AGC. Outsiders having an agreement with

Engineers are eligible, even though they

and their employees are wholly foreign to

the multi-employer bargaining unit. The

clause therefore is not a primary work

preservation clause. NLRB v. National

Maritime Union, 486 F.2d at 914. Second,

§ 8(e) applies in any event to an agreement

which attempts to preserve work for an entire

multi-employer unit rather than for single

employers' employees. This court dealt with

the issue in NLRB v. Joint Council of Team-

sters No. 38, 338 F.2d 23, 28 (9th Cir. 1964):

A-15

Respondents seem to argue that

{the clause] falls within the

exception to section 8(e)

because it preserves the job

opportunities of employees

within the multi-employer

bargaining unit by prohibiting

subcontracting to any employer

outside that unit. But if

this argument were accepted,

the exception to section 8(e)

would permit precisely what

the section itself was

intended to prohibit: An

agreement by an employer to

boycott another unless the

latter entered into a union

contract.

Accord, NLRB v. National Maritime Union,

supra.

The union's further contention that

work preservation for the employees of

each contractor was one of the objectives

underlying the union subcontracting

clause, does not compel us to alter our

conclusion. Regardless of the union's

other objective, if “an object of a cluase

is to aid union members generally rather

than members of the unit, the object is

secondary and unlawful." National

A-16

Maritime Union, 19€ N.L.R.B. 1100, 1101

(1972), enforced, 486 F.2d 907 (2d

Cir. 1973), cert. denied, 416 U.S. 970

(1974) (emphasis supplied).

It is true that the primary-secondary

distinction is particularly difficult to

maintain in the construction industry,

where contractors and subcontractors

assemble their work forces for specific

short-term jobs. There is a great deal of

flexibility and interchangeability of

employees between bargaining units. As a

result, a subcontractor clause may well

serve the interests of union members in

the primary bargaining unit who may later

find themselves working for a subcontractor.

While we believe that fact to be of great

significance for purposes of determining

the scope of the construction industry

proviso, we do not view it as determinative

of the initial applicability of § 8(e)

itself. See NLRB v. National Maritime

A-17

Union, supra, at 913-14. The

primary-secondary distinction between

separate employers working the same

jobsite in the construction industry has

been adhered to in the past, NLRB v.

Denver Building & Construction Trades, "341

U.S. 675 (1951), and we do not feel free

to disregard it here. Moreover, the

consequences of viewing union signatory

clauses as primary would be not only to

remove them from the scope of § 8(e) but

also to remove picketing to enforce such

agreements from the prohibition of

§ 8(b)(4)(ii)(B). For reasons stated in

Section VI of this opinion, we believe

that permitting coercive enforcement of

union signatory clauses would he contrary

to the intent of Congress.

We accordingly hold that the union

signatory clauses in these cases are

secondary and within the scope of § 8(e).

Their validity consequently depends upon

A-18

their eligibility for inclusion within the

construction industry proviso to that

section.

IV.

Scope of the Construction Industry Proviso

to § 8(e).

In order to ascertain the scope of

the construction industry proviso, it is

necessary to examine its legislative

history in the light of the practices

existing in the industry at that time and

the law then applicable. In so reviewing

the origins of the 1959 Landrum-Griffin

Act of which § 8(e) and its proviso were a

part, we recognize that our initial |

conclusions as to its meaning are subject

to any modifications or corrections that

may be compelled by a fair reading of

Connell Construction Co. v. Plumbers &

Steamfitters Local Union No. 100, 421 U.S.

616 (1975). Indeed, it is the effect of

Connell that provides the primary ground

A-19

of controversy in the present litigation.

We believe, however, that the Connell

decision is best analyzed after a review

of the state of the industry and the

legislative and administrative history of

the proviso governing it.

(A) Construction Industry Background.

The primary characteristics which

differentiate the construction industry

from most others are well stated in the

Senate Report on the 1959 amendments:

The occasional nature of the

loyment relationship makes

this industry markedly

different from manufacturing

and other are of enterprise.

An individual employee typically

works for many employers and

for none of them continuously.

Jobs are frequently of short

duration, depending upon various

stages of construction.

S. Rep. No. 187, 86th Cong., lst Sess. 27

(1959); I Legislative History of The Labor-

Management Reporting and Disclosure Act of

1959 423 (hereinafter Leg. Hist.). These

peculiarities of the construction industry

A-20

created special problems for both unions

and employers long before 1959. Unions

had to overcome difficulties of organizing

temporary workers and of maintaining wage

and benefit standards in unstable

employment conditions. Employers required

a ready source of skilled workers

available for each new job, and had to be

able to forecast labor costs accurately.

To satisfy these needs, unions and

employers hammered out a number of mutual

accommodations. One such arrangment was

the closed shop, which was prevalent in

the inustry by the 1920's.® A second was

negotiation of area-wide agreements

covering all construction work of a

certain type, with multiple contracting

employers agreeing to the standards set in

9 of necessity, these

those agreements.

contracts dealt with wages, hours and

working conditions of employees yet to be

hired for particular jobs by particular

A-21

10 A third device was the agree-

employers.

ment to restrict subcontracting in various

wasy -- to firms maintaining union standards,

or to firms that were unionized, !+ or to

firms that agreed to bind themselves to

contracts with the union signatory to the

subcontracting clause.

Some of these devices were not

necessarily consistent with the

organizational scheme of the National

Labor Relations Act in its original form.

The Act initially cuased no disruption in

the pattern of collective bargaining in

the construction industry, however,

because the National Labor Relations Board

declined to exercise jurisdiction over

that industry. 2° The Taft-Hartley

Amendments to the Act, passed in 1947, led

to a reversal of the Board's position.

Those amendments prohibited striking or

picketing to coerce an employer to refrain

from dealing in the products of any other

A=-22

employer or to cease to do business with

any other person. § 8(b)(4)(A).24

Subsequent to the amendments, the Board's

General Counsel determined that the

construction industry would be regulated

by the Board. +>

One effect of applying the amended

Act to the construction industry was the

invalidation of collective bargaining agree-

ments entered before any employees were

hired on the job. Guy F. Atkinson Co. and

J.A.Jones Construction Co., 90 N.L.R.B.

143 (1950), enforcement denied on other

grounds, 195 F.2d 141 (9th Cir. 1952).

The amended Act was also applied to

prohibit a construction union from

picketing a jobsite in order to force the

general contractor with whom it had a

collective bargaining agreement to cease

doing business with a particular

subcontractor on the job whose employees

were non-union. NLRB v. Denver Building &

A=-23

Construction Trades Council, 341 U.S. 675

(1951). The picketing was found to

violate § 8(b)(4)(A)'s prohibition of

coercive secondary boycotts.

These applications of the amended

National Labor Relations Act to the

practices that there was agitation for

modification of the Act, particularly in

regard to prehire practices and secondary

activity. In 1954, President Eisenhower

called for amendments to permit prehire

agreements and to shorten to 7 days the

time by which a nonunion worker could be

required to join a union under a union-shop

agreement. 100 Cong. Rec. 111, [1954]

U.S. Code Cong. & Admin. News 1532. Again

in 1959, when calling for amendments to

tighten the prohibition against secondary

boycotts, the President added that

provisions were needed "to make clear that

secondary activity is permitted .

under certain circumstances, against

A-24

secondary employers engaged in work at a

common construction site with the primary

employer." S. Doc. 19, 86th Cong., lst

Sess.; 105 Cong. Rec. 1297; I Leg. Hist.

82.

Accommodation to the special

conditions of the construction industry

was consequently an important

consideration that found expression in the

1959 amendments to the Act. Those amendments,

however, also embodied another major goal

of Congress at the time--that of limiting

"hot cargo" agreements.

In June 1958, the Supreme Court had

decided Local 1976, United Brotherhood of

Carpenters v. NLRB, (Sand Door), 357 U.S.

93. Sand Door stated that a union did not

violate § 8(b)(4)(A) by securing the

voluntary participation of an employer in

a boycott of another employer's product.

Although the Court said it found no

occasion to determine the legality of “hot

A-25

cargo" clauses (by which an employer

agreed to boycott nonunion firms) as such,

id. at 107, Sand Door was widely

interpreted as permitting them. The

decision was seen as creating a loophole

in the Act, and it contributed heavily to

the move toward amending the secondary

boycott provision of the Act.

(B) The Landrum-Griffin Amendments and § 8(e).

The 1959 revisions of the Act accomp-

lished the congressional purposes in various

ways. The clearest accomodation to the

peculiar conditions of the construction

industry was found in § g(£), +6 which

authorized unions and employers in that

industry to enter prehire agreements fixing

terms and conditions of employment of

workers yet to be hired. This provision

amounts amounts to an exception to

§§ 8(a)(1), (2) and 8(b)(1)(A), which make

it an unfair labor practice for both the

employer and the union to enter a collective

A-26

bargaining agreement before the union

represents a majority of employees in the

unit. International Ladies Garment

Workers Union v. NLRB, 366 U.S. 731

(1961); see NLRB v. International

Association of Bridge, Structural &

Ornamental Iron Workers, 434 U.S. 335,

344-45 (1978). Section 8(f) also

shortened to 7 days the period of nonunion

workers to join the union undre a

union-shop agreement.

Conflicting policies were reflected

Clearly in the passage of § 8(e), which

was intended to narrow or close the

loophole for "hot cargo" agreements

created by the Sand Door decision. The

Senate bill prohibited such agreements

only in the trucking industry, 27 while the

House bill outlawed them everywhere. ?®

The Conference Committee adopted the House

version, but added the provisos creating

exceptions for the garment and construction

A-27

industries. The garment industry excep-

tion was unlimited as to time and place, 2°

while the construction industry proviso

excepted agreements "relating to the

conrracting or subcontracting of work to

be done at the site of the construction,

alteration, painting or repair of a

building, structure or other work..... "

It is the nature and meaning of the

construction industry proviso's restriction

to the jobsite that gives rise to the pre-

sent controversy. The contractors assert

that the proviso is intended to authorize

subcontracting clauses in collective

bargaining agreements only when union

workers are present at the jobsite, so

that the presence of nonunion workers

there might lead to friction. The unions

claim that the intent was to authorize

subcontracting clauses whether or not

union workers were at the jobsite, so long

as the clauses refer to work to be performed

A-28

at the construction site. Although the

matter is not free from doubt, we blieve

that the legislative history favors the

latter view.

tion Industry Proviso.

_ The legislative history regarding the

construction industry proviso is much less

exhaustive than that surrounding the

garment industry proviso, 2+ but there are

nevertheless indications of congressional

intent in the records. Senator Kennedy,

the chairman of the Conference Committee,

said of the two provisos, that "[(b]oth

changes were necessary to avoid serious

damage to the pattern of collective

bargaining in these industries." 105

Cong. Rec. 17899; II Leg. Histo. 1432.

Unlike the garment industry, the

construction industry was not exempted

from the provisions of § 8(b)(4) that

prohibited striking or picketing to coerce

A-29

a secondary boycott; it was merely exempted

from § 8(e)'s prohibition of agreements

between a union and an employer by which

the employer would boycott others. The

Conference Committee stated its intent in

regard to the proviso as follows:

The committee of conference does

not intend that this proviso

should be construed so as to

change the present 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. .. . To the extent

at such agreements are legal

today under section 8(b)(4)

. ., the proviso would prevent

such legality from being affected

by section 8(e).

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

39; I Leg. Hist. 943. Senator Kennedy

analyzed the proposed § 8(e) as follows:

The first proviso under new

§ 8(e) of the National Labor

RElations Act is intended to

“pagpehes the present state of the

aw with respect to picketing at

the site of a construction

project and with respect to the

validity of agreements relating

A-30

to the contracting of work to be

done at the site of a

construction project.

Agreements by which a contractor

in the construction indust rom-

ises not to subcontract ark on a

construction site to a nonunion con-

tractor appear to be legal today.

They will not be unlawful under

$ S(e). ...

It should be particularly noted

that the proviso relates only to

the "contracting or

subcontracting of work to be done

at the site of the construction."

The proviso does not cover

boycotts of goods manufactured in

an industrial plant for

installation at the jobsite, or

cupercere who do not work at the

jobsite.

105 Cong. Rec. 17900; II Leg. Hist. at 1433

(emphasis supplied).

As Senator Kennedy made clear, unions

continued to be forbidden to picket or

strike at a construction site for secondary

objectives, which meant that the holding of

Denver Building Trades, supra, was left in

effect. On the other hand, the Conference

A-31

Report and Senator Kennedy made it equally

clear that unions and employers could enter

subcontracting agreements as permitted by

law prior to the enactment of the new

§ 8(e).

It seems more likely than not that the

"present law" referred to by the Conference

Committee did not restrict the agreements

that Senator Kennedy said “appear to be

legal" to jobsites where union workers were

present. The Sand Door decision, supra,

which supplied much of the impetus for

§ 8(e), had legitimized secondary boycotts

the objectives of which clearly went beyond

the mere avoidance of shoulder-to-shoulder

friction between workers. It is true that

the construction industry proviso narrowed

the geographical scope of the Sand Door

rule by introducing the jobsite limitation,

but we do not interpret the words of the

proviso as indicating an intent to narrow

A-32

the substantive scope of the Sand Door rule

on the jobsite.

It should be noted that shortly before

enactment of the proviso, the District of

Columbia Circuit had upheld a subcontractor

agreement the terms of which were as broad

as those presently in issue. Operating

Engineers Local Union No.3 v. NLRB, 266

. F.2d 905 (D.C. Cir.), cert. denied sub nom.

St. Maurice v. NLRB, 361 U.S. 834 (1959).

While that case dealt with an interunion

dispute, the terms of the secondary

agreement were not restricted to that or

any other situation of jobsite conflict.

In upholding the agreement, the Court

referred to the Board's reasoning “that the

preclusion of future work to a prospective

subcontractor in the circumstances did not

justify the Board in holding that the

rights of unidentified employees of such

prospective employer were adversely

affécted." 266 F.2d at 908.

A-33

Moreover, a survey of major labor

contracts in existence in 1959 revealed

that more than 50 of them contained clauses

restricting subcontracting to firms

conplying with the terms of the prime

employer's agreement. Lunden,

Subcontracting Clauses in Major Contracts,

84 Monthly Labor Review 579 (Part I), 715

(Part II) at 715 (1961). While the survey

does not adequately differentiate between

union signatory clauses and union standards

clauses, it is nevertheless clear that

numbers of broad subcontractor agreements

were in existence.” The survey cafivasses

various limitations appearing in

subcontracting clauses in the construction

industry, but makes no mention of any

restrictions to the jobsite or references

to the problem of friction between union

and nonunion workers there. Id. at 715-16.

That there may not have been a consistent

pattern of subcontractor agreements of the

A-34

type in issue here is not crucial. What

does emerge from the contemporaneous scene

is that some such agreements existed and

were legal and that Congress did not appear

to intend a change in that condition.

Vv.

(A) The Connell Decision.

It was against this industrial and

legislative background that the Supreme

Court decided Connell Construction Co. v.

Plumbers & Steamfitters Local Union No.

100, 421 U.S. 616 (1975). Connell was an

antitrust suit brought by a general

contractor against a union that was

picketing in order to coerce the contractor

to enter an agreement to deal only with

subcontractors having a collective

bargaining agreement with the union. The

union expressly disclaimed any interest in

representing the general contractor's

employees. the picketing was successful

and the contractor sought to annul the

A-35

ensuing agreement on the crounds that it

24 One of the

violated the antitrust laws.

defenses raised by the union was that the

agreement could not be a violation of the

antitrust alws because it was authorized by

the proviso to § 8(e) of the National Labor

Relations Act. The Supreme Court rejected

that defense and held that broad

subcontracting agreements applicable to

every jobsite where the general contractor

might hire subcontractors were invalid when

entered outside of the context of a

collective bargaining relationship between

the union and the general contractor.

The employers who attack the

subcontracting clauses in the present case

argue that Connell's language necessarily

requires a conclusion that subcontracting

clauses are permissible only when they

serve the purpose of avoiding jobsite

friction between union and nonunion workers

employed at the same jobsite. So

A-36

interpreted, Connell would invalidate the

agreements in issue here at least until the

presence of union workers at a particular

jobsite triggered their application. We

concede at the outset that the Connell

opinion contains considerable emphasis on

problems of shoulder-to-shoulder friction

between union and nonunion workers at the

jobsite, and additional emphasis on

antagonism of the 1959 congress to

"top-down" organizing that is one of the

effects of subcontractor agreements.

Nevertheless, we believe that this reading

of the Connell decision misconstrues the

Supreme Court's view of § 8(e) and gives

too narrow a scope to the construction

industry proviso. We think that the

prevailing thrust of Connell is to the

contrary and favors a braoder view of the

exemption. Our conclusion is supported in

particular by the Connell opinion's

emphasis on the absence of a collective

A-37

bargaining relationship, its references to

legislative history, and its

characterization of the interests served by

the proviso.*>

Our view is reinforced by

the adverse practical consequences that

would follow from the narrower reading of

the proviso. Each of these factors bears

elaboration.

The first and most obvious distinction

of Connell from the present cases is that

the agreements in Connell arose outside of

the context of a collective bargaining

relationship. This fact was of course

crucial for antitrust purposes, because the

national policy of encouraging collective

bargaining has served as the basis for a

judicially created labor exemption from the

antitrust laws.2° The absence of such an

interest was pointedly referred to in

Connell:

itharist fa nibresenting

Connell's employees. The federal

policy favoring collective

A-38

bargaining therefore can offer no

shelter for the union's coercive

action against Connell or its

campaign to exclude nonunion

firms from the subcontracting

market.

421 U.S. at 626.*’ The focus of the

Connell decision was therefore

understandably upon the situation created

by subcontracting clauses in the basence of

a collective bargaining agreement with the

prime contracting employer.

That focus on the part of the Court

was not merely the product of the antitrust

setting of Connell, however. The parties

themselves had iramed the issues toward the

same end. the union contended that all

subcontractor agreements were validated by

the plain words of § 8(e). The employer

responded by urging that "despite the

unqualified language of the proviso,

Congress intended only to allow

subcontracting agreements within the

context of a collective-bargaining

relationship. . . ," but not those

A-39

involving a “stranger” contractor. Id. at

627.28 The subject of controversy, then,

was the validity of subcontractor

agreements outside of the collective

bargaining context, and the Connell opinion

must to a large degree be read in that

light. The Court's conclusion, reached

after a discussion of the legislative

history and policies behind § 8(e), was

Clearly limited to the situation before it:

We therefore hold that this

agreement, which is outside the

context of a collective

bargaining relationship and not

restricted to a particular

jobsite, .. . may be the basis

of a federal anti-trust

suit.

Id. at 635. the holding of Connell, then,

does not in the strict sense control the

cases before us.

The Connell opinion did, however,

discuss at length the reach of § 8(e) and

its construction industry proviso, upon

which the present cases turn. It therefore

becomes necessary to interpret the language

A-40

of connell and apply it to the situation of

the cases at bar where a collective

bargaining relationship existed between the

unions and the contractors with whom the

29 A major

agreements were sought.

question is whether the presence or

absence of a collective bargaining

relationship, obviously significant in the

antitrust context of Connell. remains

pivotal when the issue is purely one of

labor law.

We believe that there is a complex of

factors affecting labor relations in the

construction industry that renders the

collective bargaining relationship crucial

in the present cases and we find the

underlying policies reflected in parts of

the Connell opinion itself. We also

believe that these factors exist at the

construction jobsite but are by no means

limited to the problem of

shoulde--to-shoulder friction between

A-41

union and nonunion workers there. These

two themes -- the nature of the collective

bargaining relationship in the

construction industry and the manner in

which these characteristics are exhibited

at the jobsite -- are interwoven in Connell

as they are in the present controversy.

We will attempt, however, to discuss them

separately even though each will

necessarily intrude upon the other.

The legislative history already

discussed should make it clear that the

outstanding peculiarity of the

construction industry is that the work

force of any given employer -- contractor

or subcontractor -- is highly flexible and

grows or diminishes or even disappears

depending on the temporary contracting or

subcontracting arrangements at any

particular jobsite. As congress

recognized in passing § 9(f), collective

bargaining cannot even await the presence

A-42

of workers on the job. Moreover, when

there are workers already employed by a

general contractor, the interests of those

employees are not permanently or

inevitably bound to that single employer.

The employer has an option on any given

project to use some of his own workers, to

subcontract to an employer who will use

those same workers, or to subcontract to

one who will use others represented by the

same union, a different union, or no

union. Under those conditions the

employees and t’ 2ir unions are faced with

severe problems not only of maintaining

wage levels, but of protecting benefits

such as retirement pensions and paid

vacations that depend upon continuity of

employer contributions.

When a union representing a

contractor's employees seeks to. restrict

subcontracting to firms having a

collective bargaining agreement with the

A-43

union, the union in fact pursues a number

of objectives some of which might fairly

be characterized as primary and others as

secondary. The welfare of the employees

in the primary bargaining unit is clearly

likely to be affected by an employer's

choice to hire a subcontractor who may

himself employ those same employees. On

the other hand, the union clearly has

secondary goals that may include

organizing the employees of a

subcontractor who have no connection with

the primary bargaining unit.

It is quite true that when a union

seeks to serve the interests of employees

in its bargaining unit not as employees of

their existing employer, but as potential

employees of some other employer, the

arrangement is legally viewed as

secondary. National Woodwork, supra, at

644-45; National Maritime Union, supra.

We do not quarrel with this

A-44

well-established rule, nor with the rule

that when primary and secondary objectives

are combined, an agreement is regarded as

secondary for purposes of the National

Labor Relations Act. NLRB v. Denver

Buildings & Construction Trades Council,

341 :U.S. 675, 689 (1951).

We do, however, find sufficient

support in the legislative history of the

1959 Amendments to suggest that Congress

was sensitive to both the primary and

secondary considerations involved in

subcontractor arrangements and wished not

to interfere with these mixed union

objectives when they could be achieved by

agreement with the prime employer. Even

though a construction union's interest in

subcontracting at the jobsite is secondary

so as to bring it within § 8(e), it is far

more direct and involves the union's

members in the primary bargaining unit far

more than is the case when unions outside

A-45

of the construction industry pursue

secondary objectives.

The importance of this fact is that

it renders the existence of a collective

bargaining relationship highly

significant. When a union represents

employees of a prime contractor and seeks

a subcontracting agreement, it has the

interests of the employees in its primary

bargaining unit at stake to at least some

degree. In the Connell situation, the

union is utterly without any objective

that could be characterized as primary or

direct. Because the union in Connell

disclaimed any interest in representing

the employees of Connell, all of its goals

were necessarily secondary and could not

be connected to any primary

representational interest.

The significance of the restriction

of the § 8(e) proviso to work performed at

a jobsite may now become more clear. It

A-46

is at the jobsite that all of the special

characteristics of the construction

industry are manifested. It is true that

one of these characteristics is that union

workers are traditionally hostile to the

presence of nonunion workers on the same

job at the same time. But that is clearly

not the only or even the major

characteristic exhibited. It is at the

jobsite where the general contractor can

exercise the flexibility to use its own

workers or those of a subcontractor, where

the flexibility of subcontracting

arrangements may lead to multiple

employers hiring a few workers for short

30 and where working

periods of tiem,

conditions applicable to one set of

workers may very well affect others

working on the same project.?+

We believe that the Connell opinion

is sensitive both to the interconnection

of interests between employees of the

A-47

various contractors and subcontractors and

to the broad manner in which any or all of

these factors may be exhibited at the

jobsite. In dealing with the legislative

history of the construction industry

proviso, the opinion in Connell points out

that the proviso was "explained only by

bare reference to 'the pattern of

collective bargaining' in the industry."

421 U.S. at 628-29. The legislative

history discussed above indicates, we

believe, that the pattern of collective

bargaining included broad subcontracting

agreements. To the extent that the

just-quoted comment in Connell dismisses

the history regarding the pattern of

collective bargaining, it may well be

explained by the fact that Connell was

dealing with a case not considered by

congress, in which there was no collective

bargaining relationship. >

A-48

In any event, the subsequent language

of the Connell opinion appears quite

clearly to encompass the multiple

considerations affecting the construction

industry at the jobsite. The opinion

suggests that the construction industry

proviso may have been adopted “as a

partial substitute for an attempt to

voerrule" Denver Building Trades, 421 U.S.

at 629. Denver Building Trades had

outlawed the picketing of a contractor at

a jobsite in order to force it to cease

doing business with a nonunion

subcontractor working there. The Connell

opinion refers to congressional discussion

of special problems in the construction

industry related both to the § 8(e)

proviso and to the attempt to overrule

Denver Building Trades. That discussion,

according to the Court, "focused on the

problems of picketing a single nonunion

subcontractor on a multiemployer building

A-49

project, and the close relationship

between contractors and subcontractors at

the jobsite." Id. at 629-30. The Court's

footnote to this statement refers to

legislative history that clearly goes

beyond the problem of shoulder-to-shoulder

conflict between union and nonunion

workers at the jobsite. The first excerpt

referred to is by Senator Morse whose

statement includes the following:

The rormeamart | boycott ban is

based upon the concept of two

employers - a primary and a

secondary employer. Teh theory

is that a neutral employer

should not be compelled to

suffer because of a labor

dispute the union has with

somebody else, but the theory

breaks down when the two

employers are "allies." Senator

Taft said that the secondary

boycott section "is not intended

to apply to a case where the

third party is, in effect, in

cahoots with, 4 acting as a

part of, the primary

loyer." The eatisoal Labor

Relations Board and the courts

have failed to keep Senator

Taft's concept in mind. the

Board has considered

subsidiaries to be separate

employers. Other enterprises,

A-50

substantially controlled by the

same persons, have been

considered separate employers,

even though one manufactured a

product incorporated into the

aga article produced by the

other.

The case of the building and

construction industry

represented probably the most

flagrant injustice, where a

general contractor is, in

effect, entirely in control of

the kind of labor relations

taking place on a site which he

runs. He lets subcontracts

based upon price,

responsibility, and the ability

to handle labor relations.

He lets those contracts, very

well knowing the kind of labor

relations which may exist within

any of the subcontractor

companies. He is not acting in

the dark, Mr. President. He is

not innocent of any unfair labor

policies on the part of a

subcontractor.

105 Cong. Rec. 17880-81; II Leg. Hist. at

1425. Even where the sources cited by

Connell deal with union workers at the

jobsite, they reflect a number of

interests of the union that affect memsers

of its own bargaining unit as well as the

A-51

members in secondary employ. the

memorandum by representatives thompson and

Udall is illustrative:

Where all the men are employed

on the same project, the

division into different trades

, or crafts, each with its won

employer, must not be allowed to

obscure their common

interests-they work side by side

and the wages and working

conditions of one trade affect

all the others. This situation

is utterly unlike the situation

in true secondary boycotts, as

where carpenters in Los Angeles

refuse to work on nonunion doors

made in Minnesota by men whose

wages could not affect the wages

of at | pence in Los Angeles.

The illegality of such a boycott

would not be affected by the

amendment.

; [A] reason for outlawing

secondary boycotts is that they

drag neutral employers into

disputes in which they have no

interest. Where all the

employers affected are bound

together in the common work of

putting up a single building,

none is truly neutral. the

undertaking is so integral that

each is affected by and can

influence the conduct of the

others.

105 Cong. rec. 15541; II Leg. Hist. 1577.

A-52

These materials cited by the Connell Court

suggest a number of reasons why Congress

may have wanted to restrict the

construction industry's use of

subcontracting agreements to work done on

a jobsite. these aciitces do not limit

themselves to and, indeed, place very

little emphasis on, the problem of

shoulder-to-shoulder friction between

union and nonunion workers actually

present at the jobsite. .

The Connell opinion quotes National

Woodwork Manufacturers, supra, to the

effect that the construction industry

proviso is "designed to allow agreements

pertaining to certain secondary activities

on the construction site because of the

close community of interests there, but to

ban secondary-objective agreements

concerning nonjobsite work, in which

respect the construction industry is no

different from any other." 421 U.S. at

A-53

630, quoting 386 U.S. at 638-39. It is

clear that the Connell opinion views the

jobsite considerations of National

Woodwork as going well beyond the problem

of friction among workers, >* because

Connell next refers to some courts that

have suggested that the proviso serves an

“even narrower function" -- the

alleviation of "the frictions that may

arise when union men work continuously

alongside nonunion men on the same

construction site." Id. at 630, quoting

Drivers Local Union No. 695 v. NLRB, 361

F.2d 547, 553 (D.C. Cir. 1966). The

Connell opinion does not adopt this "even

narrower" reading of the proviso, and

indeed finds it unnecessary to treat the

matter further because in the Connell case

the union did not purport to represent any

of the interests served by the proviso.

421 U.S. at 631.>”

A-54

We believe that it would do some

violence to the language of the Connell

opinion to adopt the “even narrower" view

of the construction industry proviso which

the Court in Connell did not represent to

be its won. yet this consequence would

follow from restricting the applicability

of subcontractor agreements to those

instances where shoulder-shoulder jobsite

friction can occur. Instead, we think

that it si more in accord with the

language of Connell to permit those

agreements to apply to any jobsite at

which an employer with a collective

bargaining relationship with the union is

a contractor.

We concede that the language of the

Connell opinion dealing with congressional

antagonism to "top-down organizing" may

well lean in a direction contrary to our

views. We think it is countered by

Connell's recognition of other vital

A-55

concerns of collective bargaining in the

construction industry reflected in the

community of interest at the jobsite.

There is some "top-down organizing" effect

in any subcontracting agreement, including

those which all parties must admit would

be valid and within the proviso. When

there are union workers on the job next to

nonunion workers, the enforcement of a

subcontracting clause is still likely to

have a top-down organizing effect. the

answer to this point is simply that

Congress recognized that the community of

interests on the jobsite justified the

top-down organizational consequences that

may lead attend the protection of

legitimate collective bargaining

objectives there. The proviso is, after

all, an exception to the general thrust of

the 1959 amendments .°°

The Connell opinion's condemnation of

the "unlimited" top-down organizing weapon

A-56

with which it was confronted must be read

in the context of the applicable factual

and statutory framework. Because the

union in Connell disclaimed any interest

in organizing or representing connell's

employees, its picketing was not limited

to the 30 days established for

organizational picketing under § 8(b)(7).

It could therefore picket indefinitely to

obtain its objective of a subcontracting

agreement covering all subcontracting by

Connell. If the subcontractor clause were

held to be legitimate, there woudl be no

limit at all to the coercive force the

union coudl apply. The decision in

Connell solved this problem by holding

that the subcontracting agreement was an

unlawful goal when it was sought outside

of a collective bargaining context.

The situation is quite different when

a union seeks a subcontractor clause in

the context of a collective bargaining

An-57

relationship. In that situation, the

union's coercive force is limited. if the

Clause is sought in the course of

organizational or recognitional picketing,

that picketing will be subject to the

restrictions of § @(b)(7). If the union

already represents the contractor's

employees, the employer may resist any

attempts to secure a subcontractor

agreement by asserting its own bargaining

position and presenting its own demands.

The existence of a collective bargaining

relationship therefore avoids the

“unlimited” nature of the organizational

tool involved in Connell, where a stranger

contractor was powerless to resist

unlimited coercion by any means other than

signing the demanded subcontractor

agreement.

Finally, in summarizing the proviso's

effect, the Connell Court stated:

{(Wje think ite authorization

extends only to agreements in

A-58

the context of collective

bargaining relationships and, in

light of congressional

references to the Denver

waa

421 U.S at 633. While it might be

susceptible to another reading, we

interpret this language to mean that the

existence of a collective bargaining

relationship clearly brings a union

signator subcontracting agreemetn within

the proviso to § 8(e) and that in the

absence of a collective bargaining

relationship, it is possible that such an

agreement may be valid where the union

actually has workers on the job that may

be threatened with shoulder-to-shoulder

friction.>’

We consequently believe that

the quoted summary supports our conclusion

that Connell does not deny the protection

of the proviso to the subcontractor

agreements in the present cases.

A-59

(B) Practical Consequences.

Our reading of Connell to permit

broad subcontracting clauses within a

collective bargaining relationship not

only accords with the apparent thrust of

the legislative history, it si supported

by the sever practical limitations

attending a contrary conclusion.

Limitation of subcontracting agreements to

sites where there may be

shoulder-to-shoulder conflict between

union and nonunion workers presents

immense practical problems. if unions are

confined to negotiating these agreements

only when they find that there are union

employees on the jobsite, then they must

inventory and negotiate over an incredible

number of jobsites. AGC itself represents

some 200 general contract»rs. The number

of jobsites at which they contract is

unquestionably a multiple of that figure.

Jobsite by jobsite negotiation of

A-60

subcontracting agreements would seem

burdensome to the point of impossibility.

It also appears to run counter to

Congress's accommodation in § 8(f) to the

necessity in the industry of entering long

term agreements applying to employees not

yet hired for jobs not yet in existence.

S. Rep. No. 187, 86th Cong., lst Sess. 28

(1959); I Leg. Hist. 424.

Even if general subcontracting

agreements are permitted to be negotiated

wholsesale and then are triggered only

when union workers appear on the job, the

enforcement problems remain severe. The

transitory nature of employment at each

jobsite, as well as the difficulty of

defining the applicable time span during

which jobsite conflict is threatened,

38 If a rule

present substantial problems.

is adopted that the appearance of any

union worker on the job triggers

subcontracting agreements covering the

A-61

entire project, it presents an especially

strong incentive for anti-union

discrimination by employers.

We are presented, then, with a number

of practical and theoretical

considerations supporting our decision

that the present subcontracting

agreements, arrived at in the context of

collective bargaining relationships, are

withinthe proviso of § 8(e). First, there

are overwhelming practical difficulties in

confining the subcontractor agreements to

jobsites where actual union-nonunion or

interunion conflict occurs among workers.

Second, teh legislative history as well as

the actual conditions existing in the

construction industry militate in favor of

broad subcontractor clauses in collective

bargaining agreements. Third, the Connell

decision which admittedly has language

that might point to either result, may

fairly be read to support the validity of

A-62

subcontracting clauses when there is a

collective bargaining relationship,

regardless of the presence or absence of

union workers at the jobsite.

Given these considerations, we reject

a narrow interpretation of the proviso

which will substantially change the

existing practice in the industry. In

addition, we believe that due regard

should be given to the view of the

National Labor Relations Board supporting

these agreements.°” It is true tht the

position of the agency has not been an

unwavering one, *° but the Board's

articulation of current labor policy is

undoubtedly entitled to weight in our

decision.

VI.

Additional Issues.

It is contended by AGC that even if

the onstruction industry proviso

authorizes clauses requiring

A-63

subcontractors to have agreements with

unions in general, it does not permit

clauses to require a collective bargaining

agreement with a particular union. We

note, however, that nothing in the

language of the § 8(e) proviso suggests

such a limitation, even though

"“particular-union" clauses were a part of

industry practice at the time of its

enactment. Two months prior to the

creation of the proviso, the District of

Columbia Circuit upheld a

"particular-union": subcontractor

agreement it a decision that was submitted

to the House committee considering the

1959 amendments. Operating Engineers

Local Union No. 3 v. NLRB, supra; 2 House

Hearings 803-07. In the light of this

history, we do not feel free to find in

the proviso a limitation not written there

by Congress. We are joined in this

conclusion by the District of Columbia

A-64

Circuit in Donald Shriver, Inc. supra,

Slip op. at 52-5. WE also noted that

prohibition of "particular-union"

subcontractor clauses would defeat at

least some of the interests that we

earlier found to be served by the

construction industry proviso. One such

interest is that of a union in protecting

the wages and benefits of its members in

the primary bargaining unit who may later

work for subcontractors. That concern is

shared by no other union, and is best

served by a “particular-union" clause.

It is next contended, this time by

Woelke, that even if a subcontractor

agreement is protected by the construction

industry proviso, it is an unfair labor

practice for a union to picket or strike

in order to induce a contractor to enter

such an agreement. The legislative

history of the 1959 amendments is in ,

conflict on this point. 4+ The actual

A-65

working of § 8(b)(4)(ii)(A), however,

prohibits coercion of any person "to enter

into any agreement which is prohibited by

[§ 8(e))." 42 The negative implication of

this provision is surely that picketing or

striking to induce entry into an agreement

protected by the proviso to § 8(e) is

lawful.

After the 1959 amendments, the board

originally took the position that such

agreements had to be voluntarily entered,

but its position was uniformly rejected by

this and other courts of appeals.

Construction Production & Maintenance

Laborers Union, Local 383 v. NLRB,

(Coulson & Stevens Construction Co.) 323

F.2d 422 (9th Cir. 1963); Orange Belt

District Council of Painters No. 48 v.

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

eee

Essex County and Vicinity District Council

of Carpenters and Millwrights v. NLRB, 332

F.2d 636 (3d Cir. 1964). The Board

A-66

subsequently acquiesced in the court's

view. Northeastern Indiana Building &

Construction Council, 148 N.L.R.B. 854

(1964), remanded on other grounds, 352

F.2d 696 (D.C. Cir. 1965). We see no

reason to disturb the present law and to

read into the Act a limitation that runs

counter to the suggestion of its plain

words. Nor do we accept the contention

that picketing or striking to obtain a

subcontractor agreement violates the § 7

rights of employees of subcontractors;

they are no more affected by a

subcontractor agreemetn achieved by

picketing than by one voluntarily

entered.

The final issue concerns the effect

of the provision in the AGC contract that

permits each party to resort to self-help

when the other party does not comply with

an arbitration decision made pursuan to

the grievance procedure. *? The Board

A-67

concluded that these provisions authorized

picketing or strikes to enforce the

subcontractor agreement, and held that the

contract was consequently unlawful. The

rule that picketing or strikes may not be

used to enforce subcontractor agreements

arises from the fact that the 1959

amendments exempted the construction

industry from § 8(e)'s prohibition against

secondary boycott agreements, but did not

exempt it from § 8(b)(4)(ii)(B), which

forbids economic coercion to enforce such

a boycott. The legislative history maeks

clear Congress's intent that subcontractor

clauses entered pursuant to § 8(e) were to

be enforced judicially rather than by

self-help, ** and this court has followed

that view. NLRB v. International

Brotherhood of Electrical Workers, 405

F.2d 159, 163-64 (9th Cir. 1968), cert.

denied, 395 U.S. 921 (1969). We have also

held that such clauses may be enforced by

A-68

arbitration. La Mirada Trucking, Inc., v.

Teamsters Local Union 166, 538 F.2d 286

(9th Cir. 1976).

Engineers argue, without pressing the

point strongly, that self-help to enforce

an arbitration award that in turn enforces

a subcontractor agreement is not

unlawful . The picketing or strike,

according to the Union, is simply

enforcing the arbitration award and not

the underlying agreement. We believe that

acceptance of this contention would too

easily circumvent the clear intent of

Congress and would do violence to the

plain words of § 8(b)(4)(ii)(B). Nor can

we accept the suggestion of the Union that

the AGC agreement must be construed to

limit the self-help clause to self-help

which is determined to be lawful. We must

take the agreement to mean what it says.

Operating Engineers, Local No. 701 v.

NLRB, 578 F.2d 841, 842 (9th Cir. 1978);

A-69

Donald Schriver, Inc., v. NLRB, supra,

slip op. at 57-58.

VII.

Conclusion.

We find that provisions i a

collective bargaining agreement forbidding

the signatory employer to subcontract work

at a construction site to firms that do

not have a contract with the signatory

union are within § 8(e) of the National

Labor Relations Act, but are protected by

the construction industry proviso to the

section. They need not be limited to

jobsites presenting the possibility of

conflict between union and nonunion

workers. We also find that unions may

picket or strike to induce employers to

enter suhc agreements but that, once

entered, the agreement may not be enforced

by self-help. Clauses authorizing

self-help enforcement, directly or through

arbitration decisions, are consequently

A-70

invalid. We accordingly enforce the

orders of the Board in their entirety.

A-71

FOOTNOTES

1. Other relevant clauses of the AGC agreement are:

ARTICLE IX

Settlement of Disputes

Grievances Procedure

Section 1. In the settlement of disputes

arising out of a violation, misunderstanding

or difference in interpretation of this

agreement, the following procedure shall be

followed:

**REK

Section 5. Should the parties involved fail

to comply with the [arbitrator's] findings

within five (5) days after such written

notification by either party . . ., then all

means of arbitration shall be considered

exhausted.

Either party may take such action as they

deem necessary to enforce the findings...

and they shall not be considered in

violation of any part of this Agreement.

ARTICLE X

Strikes and Lockouts

Section 1. Unless otherwise provided

herein, it is mutually agreed that there

will be no strikes or lockouts, or cessation

of work by either party, for the duration of

this Agreement. All disputes arising under

this Agreement shall be submitted to the

procedures for the settlement of disputes as

provided in this Agreement. ...

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

| pertinent part:

A-72

It shall be an unfair labor practice for any

labor organization and any employer to enter

into any contract or agreement, express or

implied, whereby such employer ceases or

refrains or agrees to cease or refrain from

handling, using, selling, transporting or

otherwise dealing in any of the products of

any other employer, or to cease doing

business with any other person, and any

contract or agreement entered into

heretofore or hereafter containing such an

agreement shall be to such extent

unenforceable and void: 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 construction, alteration,

painting or repair of a building, structure,

or other work... .

3. Another issue over which the parties reached

impasse was Carpenters' demand to include Woelke's

foreman in the bargaining unit. The Board found that

picketing to enforce this demand violated § 8(b)(1)(B)

of the Act. The union has not contested that ruling in

this court. We therefore enforce the Board's order

concerning this issue.

4. The proposed clause provides:

The Contractor agrees that neither he nor

any of his subcontractors on the jobsite

will subcontract any work to be done at the

site of constrv:tion, alteration, painting

or repair of a building, structure or other

work (including quarries, rock, sand and

A-73

gravel plants, asphalt plants, ready-mix

concrete plants, established on or adjacent

to the jobsite to process or supply

materials for the convenience of the

Contractor for jobsite use) except to a

person, firm or corporation, party to an

appropriate, current labor agreement with

the appropriate Union, or subordinate body

signatory to this Agreement.

5. Sections 8(b)(4)(i) and (ii)(A) and (B), 29 U.S.C.

§ 158(b)(4)(i) and (ii)(A) and (B), provide:

(b) It shall be an unfair labor practice

for a labor organization or itw agents --

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

encourage any individual employed by

any person engaged in commerce or in an

industry affecting commerce to engage

in, a strike or a refusal in the course

of his employment to use, manufacture,

process, transport, or otherwise handle

or work on any goods, articles,

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

subsection (e) of this section;

(B) forcing or requiring any

person to cease using, selling,

handling, transporting, or

otherwise dealing in the products

of any other producer, processor,

or manufacturer, or to cease doing

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business with any other person, or

forcing or requiring any other

employer to recognize or bargain

with a labor organization as the

representative 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:

Provided, That nothing contained

in this clause (B) shall be

construed to make unlawful, where

not otherwise unlawful, any

primary strike or primary

picketing. ...

6. ‘Along with the present cases, reported at

239 N.L.R.B. 274 (1978) (Pacific Northwest) and

239 N.L.R.B. 241 (Woelke), the Board decided Los

Angeles Building & Construction Trade Council (Donald

Schriver, Inc.), 239 N.L.R.B. 264 (1978), and Colorado

Building & Construction Trades Council, 239 N.L.R.B.

253 (1978). The Board's order upholding broad

subcontractor agreements in Schriver was enforced by

the District of Columbia Circuit in an extensive and

instructive opinion by Judge Edwards. Donald Schriver,

Inc. v. NLRB, Nos. 78-2177, 79-1001, slip op. (D.C.

Cir. Oct. 20, 1980).

7. “Union standards" clauses, which require that an

employer not subcontract with anyone whose wage and

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benefit scale does not meet union standards, have also

been held primary. The purpose of such clauses is

deemed to be protection of the pay and benefit scales

of the workers of the primary employer. Truck Drivers

Union Local No. 413 v. NLRB, 334 F.2d 539, 548 (D.C.

Cir.), cert. denied, 379 U.S. 916 (1964); NLRB v.

National Maritime Union, 486 F.2d 907, 912 (2d Cir.

1973), cert. denied, 416 U.S. 970 (1974).

8. Haber, Industrial Relations in the Building

Industry 238-40 (1930). A study by the National

Manufacturers Association reported that in 1926, 69% of

all construction work was done under closed-shop

conditions. Id. at 240.

9. Dunlop, The Industrial Relations System in

Construction, in The Structure of Collective Bargaining

255, 256-57 (Weber ed. 1961).

10. S. Rep. No. 187, supra, 28; I Leg. Hist. 424. See

generally, Labor-Management Reform Legislation,

Hearings before the Subcommittee on Labor of the

Committee of Labor and Public Welfare, United States

Senate (hereinafter Senate Hearings), 86th Cong., Ist

Sess. 136 (testimony of Professor Cox).

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11. A union attempt to limit subcontracting to union

firms was held exempt from the antitrust laws as early

as 1934. Levering & Garrigues Co. v. Morrin, 71 F.2d

284 (2d Cir.), cert. denied, 293 U.S. 595 (1934).

12. Marcus, Secondary Boycotts, in Symposium on the

Labor-Management Reporting Disclosure Act of 1959, 822,

824 (Slovenko ed. 1961) (hereinafter referred to as

LMRDA Symposium).

13. Brown and Root, Inc., 51 N.L.R.5. 820 (1943);

Johns-Manville Corp., 61 N.L.R.B. 1 (1945).

14. The relevant portions of § 8(b)(4)(A) are now in

§ 8(b)(4)(ii)(B), quoted in note 4 supra.

15. Denham, Taft Act's Impact on the Construction

Industry, reprinted in 21 L.R.R.M. 44 (1948). The

Board's decision to exercise jurisdiction over the

industry following passage of the Taft-Hartley

Amendments resulted, in part, from the Amendments’

prohibiting the closed shop and “back up crews"

(featherbedding), two accepted practices in the

construction industry. Despite the General Counsel's

action, the Taft-Hartley Act was virtually ignored

within the construction industry until the Board

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decided United Ass'n of Journeymen & Apprentices of

Plumbing and Pipefitting Industry (Brown-Olds), 115

N.L.R.B. 594 (1956), and Mountain Pacific Chapter of

Associated General Contractors Inc. (Mountain-Pacific),

119 N.L.R.B. 883 (1958), remanded on other grounds, 270

F.2¢ 425 (9th Cir. 1959). Appruzzese, The LMRDA and

the Building and Construction Industry, LMRDA

Symposium, note 12, supra, 1019, 1029. Thereafter the

General Counsel granted a moratorium to the

construction industry to allow it to bring its hiring

hall practices into line with the provisions of the

Taft-Hartley Act. See Fenton, Union Hiring Halls:

NLRB Rules, Penalties, 42 L.R.R.M. 101, 103 (1958).

16. Section 8(f), 29 U.S.C. § 158(f), provides:

It shall not be an unfair labor practice

under subsections (a) and (b) of this

section for an employer engaged primarily in

the building and construction industry to

make an agreement covering employees engaged

(or who, upon their employment, wiki be

engaged) in the building and construction

industry with a labor organization of which

building and construction employees are

members (not established, maintained, or

assistcd by any action defined in

sub::ection (a) of this section as an unfair

lavor 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

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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

effective 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 subsection shall set

aside the final 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 not be

a bar to a petition filed pursuant to

section 159(c) or 159(e) of this title.

17. S. 1555, 1 Leg. Hist. 582.

18. H.R. 8342 as amended by H.R. 8400, I Leg. Hist.

683.

19. H.R. Rep. No. 1147 (Conference Report) 86th Cong.,

Ist Sess. 38-40; I Leg. Hist. 942-44 (1959).

20. The garment industry proviso to § 8(e), 29 U.S.C.

§ 158(e), states:

Provided further, That for the purpose of

this subsection and subsection (b)(4)(B) of

this section the terms "any employer", “any

person engaged in commerce or an industry

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affecting commerce", and "any person" when

used in relation to the terms "any other

producer, processor, or manufacturer", "any

other employer" or "any other person" shall

not include persons i: the relation of a

jobber, manufacturer, contractor, or

subcontractor working on the goods or

premises of the jobber or manufacturer or

performing parts of an integrated process of

production in the apparel and clothing

industry. ...

21. There is a substantial explanation in the

legislative history of the highly integrated

subcontiacting arrangements in the garment industry and

the problem of "sweatshop" conditions. See, e.g., 105

Cong. Rec. 17381, II Leg. Hist. 1385 (Senators Javits

and Goldwater); 105 Cong. Rec. 15538, II Leg. Hist.

1576 (Memorandum of Reps. Thompson and Udall); 105

Cong. Rec. 15848; II Leg. Hist. 1680 (Rep. Teller).

22. The Engineers decision was submitted to the House

committee investigating labor practices as part of the

testimony of Paul H. Robbins, Executive Director of the

National Society of Professional Engineers. 2 Hearings

Before a Joint Subcommittee of the Committee on

Education and Labor, House of Representatives, 86th

Cong., lst Sess. on H.R. 3540, H.R. 3302, H.R. 4473 and

H.R. 4474 and Related Bills Regarding Labor-Management

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Reform Legislation, 803-07 (1959) (hereafter House

Hearings).

In addition, Edward M. Carlton, office manager of

St. Maurice, Helkamp and Musser, the subcontractor

involved in Engineers, appeared before the Committee

and testified as to the scope of the contracting

clause:

The contract also contains a clause which is

referred to in the industry as the

subcontractor clauses. In effect, that

clauses (sic) says that any time an AGC

contractor subcontracts work the

subcontractor must agree to apply the terms

and conditions of the AGC Operating

Engineers' agreement to his employees.

This, of course, means that the

subcontractor's employees must become

members of Operating Engineers Local 3.

Since about 1955, the AGC and the

Operating Engineers have enlarged the

subcontractor clauses so that an AGC

contractor will not subcontract any work

unless the subcontractor agrees in advance

to be bound by the AGC Operating Engineers’

agreement.

5 House Hearings 2366 (Emphasis supplied).

Although the Engineers decision was not directly

referred to in the Senate Hearings, the problem of

union signatory clauses was brought to the committee's

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attention. Senate Hearings 752 (Testimony of Sen.

Curtis).

23. Office of the General Counsel, Memorandum 76-57,

December 15, 1976, reprinted in Labor Relations

Yearbook 1976, p. 295. Because Lunden failed

adequately to distinguish between union signatory and

union standards clauses, the General Counsel found that

study “inconclusive.” Id. at 308. The General

Counsel's own study concluded that there was no

“pattern” of collective bargaining in the industry, but

that the existing clauses constituted only a "mosaic."

Union signatory clauses, not restricted to a particular

jobsite, were part of that mosaic. Id. at 309.

24. Connell was another chapter in the dispute in

Dallas between building contractors and trade unions.

In Dallas Building & Construction Trades Council v.

NLRB, 396 F.2d 677 (D.C. Cir. 1968), a clause similar

to the one in Connell was at issue. Unlike Connell,

however, the general contractor that was picketed had

nonunion employees. Although the Trades Council

expressly disavowed any interest in organizing the

general contractor's workers, both the Board and the

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District of Columbia Circuit Court of Appeals concluded

otherwise. The..court held that because there was an

organizational objective the picketing was limited to

thirty days be § 8(b)(7), a period which the unions had

exceeded.

The court's opinion left open the possibility of

picketing more than thirty days if the unions could

conclusively show no organizational objective. In

order to avoid the § 8(b)(7) problem, the unions

picketed contractors who had no employees of their own.

The contractors sought to challenge this practice

before the Board, but the General Counsel refused to

issue a complaint. See Connell, 483 F.2d 1154, 1158

(Sth Cir. 1973), and 421 U.S. at 631-32 n. 10.

When Local 100 began picketing Connell, the

contractor did not file a complaint with the Board, but

immediately sued the union for violating both federal

and state antitrust laws.

25. But for the Connell decision, we would have no

difficulty in enforcing the Board's order. Prior to

Connell, this court, other circuits and the Board had

upheld broad subcontracting clauses in collective

A-83

bargaining agreements. See, e.g., Construction,

Production & Maintenance Laborers Union, Local 383 v.

NLRB, 323 F.2d 422 (9th Cir. 1963); Suburban Title

Center Inc. v. Rockford Building & Construction Trades

Council, 354 F.2d 1, 2-3 (7th Cir. 1965), cert. denied,

384 U.S. 960 (1966); United Association of Journeymen &

Apprentices of the Plumbing and Pipefitting Industry,

Local 48, 190 N.L.R.B. 415, 416-17 (1971).

26. See Connell, 421 U.S. at 622-23; St. Antoine,

Connell: Antitrust Law at the Expense of Labor Law, 62

Va. L. Rev. 603 (1976). Labor unions also have a

statutory exemption from the antitrust laws by virtue

of sections 6 and 20 of the Clayton Act, 15 U.S.C.

§ 17, 29 U.S.C., § 52, and sections 4, 5 and 13 of the

Norris-LaGuardia Act, 29 U.S.C. §§ 104, 105, 113.

These statutes declare that labor unions are not

combinations in restraint of trade and exempt specific

union activities including secondary boycotts from the

antitrust laws and from certain kinds of injunctive

relief. These statutes do not, however, exempt

concerted activity or agreements between unions and

non-labor parties. Connell, supra, 622-23. See

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generally, R. Gorman, Basic Text on Labor Law. 621-31

(1976).

27. The fact that Connell was an antitrust case

outside of the context of collective bargaining led to

a natural emphasis by the Court on the pursuit of

market efficiency through competition. This emphasis

reappears in the dissent here, infra p. __, but we

find it far less compelling in this labor case in which

no antitrust issues have been raised. The thrust of

the labor laws, of course, is frequently contrary to

that of the antitrust laws. See St. Antoine, supra,

n. 26.

28. The briefs in Connell concentrated entirely on the

distinction between the presence and absence of a

collective bargaining relationship in determining ive

validity of subcontracting clauses. The policy of

preventing jobsite friction was raised tangentially in

the appendix to Local 100's brief which included a

memorandum by the NLRB General Counsel explaining why

he would not issue a complaint in a case factually

similar to Connell. Significantly, that memorandum,

dealing with Hagler Construction Co., was distinguished

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in the Connell opinion as being " . . . addressed to a

different argument that a subcontracting clause should

be allowed only if there is a pre-existing collective

bargaining relationship with the general contractor or

if the general contractor has employees who perform the

kind of work covered by the agreement." 421 U.S. at

632 n. 10. (emphasis in original).

29. In Woelke, the union had entered a three-year

collective bargaining agreement with the employer and

the dispute arose during negotiations to renew the

contract. In Pacific Northwest, the union had long had

a continuous collective bargaining agreement with the

Association of General Contractors. We therefore need

not reach and express no opinion on the question

whether a "prehire" agreement entered or sought

pursuant to § 8(f) of the Act is a sufficient

"collective bargaining relationship" to render

permissible the entry of subcontracting agreements. We

note that prehire agreements were held sufficient to

legitimize subcontracting agreements in Donald Shriver

Inc. v. NLRB, Nos. 78-2177 and 79-1001, slip op. (D.C.

Cir. Oct. 20, 1980).

A-86

30. The 1977 Census of Construction Industries found

that there were more than 288,000 "specialty trade

contractors" (a category which includes fifteen

different subcontracting functions). On the average,

each ‘irm employed six construction workers.

U.S. Bureau of the Census, Census of Construction

Industries (1977), cited in Statistical Abstract of the

United States (1979) Table 1365, p. 776.

One commentator has aptly summarized the peculiar

problems confronted by labor unions attempting to

Organize construction workers as well as the techniques

which they have employed:

Union insistence on having the contractor

use only union men runs counter to the

general theory of free determination on

which the Wagner Act was based. Elections

on the part of the employees are

impractical, however, in an industry where

the employment may be over before an

election can be held, and where the

employees on the next job may be a

substantially different group. It would be

literally impossible to maintain a union if

the men had to be organized anew each time

they went to a new job. The industrial

union can afford the luxury of indifference

as to whom the employer hires because the

important thing is to organize the employees

once they are on the job. The building

trade union cannot operate efficiently

unless it can require the employer to hire

its members in the first place.

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{[B]uilding trade unions [therefore] have not

organized employees by techniques familiar

to manufacturing. Instead, the construction

unions have, in effect, organized the

employers. An agreement with the employer

that he will hire only union members is much

the most effective way to standardize

working conditions in an industry where jobs

are so fluid.

LMRDA Symposium, supra, note 12, at 1034, 1043.

31. See Donald Schriver Inc., supra, slip op.

at 43-46.

32. In Connell, the Fifth Circuit requested that the

parties and their amici submit supplemental briefs

concerning the pattern of bargaining practices at the

time of the 1959 amendments. The union was unable to

provide any information which would allow the

conclusion that stranger clauses were part of the

pattern and that Congress therefore intended to

preserve this practice. 483 F.2d at 1182 (dissenting

opinion). Such is not the case with regard to

particular union clauses. The decision of the District

of Columbia Circuit in Operating Engineers, supra, as

well as the House and Senate Hearings, supra, note 24,

A-88

suggest that Congress was well aware of the existence

of these clauses.

33. Senator Taft's remarks were part of a colloquy

with Senator Ives on June 30, 1949, 95 Cong.

Record 8709. Senator Taft was referring to the garment

industry, but he cited for his proposition a case that

involved the construction industry: Douds v.

Metropolitan Federation of Architects, Engineers,

Chemists & Technicians, Local 231, (Project Engineering

Co.), 75 F.Supp. 672 (S.D.N.Y. 1948).

34. Indeed, National Woodwork contains a footnote

reference succeeding the discussion of the "close

community of interests" on the jobsite. 386 U.S.

at 639 n. 32. That footnote refers to Essex County and

Vicinity District Council of Carpenters and Millwrights

v. NLRB, 332 F.2d 636 (3d Cir. 1964), which does deal

with shoulder-to-shoulder friction. It also refers,

however, to a Yale Law Journal Comment. The Impact of

the Taft-Hartley Act on the Building and Construction

Industry, 60 Yale L.J. 673, 684-89 (1951), which

discusses not only jobsite friction but also the

additional considerations of interchangeability of

A-89

workers, short time span, flexible contracting

arrangements, and numerous other interests that a union

representing a primary group of employees may have in

the employment arrangements of other employees at the

jobsite.

35. Essentially the same situation was dealt with by

this court in ACCO Construction Equipment, Inc. v.

NLRB, 511 F.2d 848 (9th Cir. 1975). ACCO does contain

language tending to restrict the jobsite proviso to the

goals of avoiding shoulder-to-shoulder friction, but we

do not read that as essential to its decision. ACCO

was written before Connell and it dealt with what were

essentially off-site workers who only occasionally

worked on-site. They and their employers were not at

all involved in the "community of interests" which are

emphasized in National Woodwork, Connell, and this

opinion. The union's objectives in organizing such

off-site workers were indirect and wholly secondary;

the primary interests of workers in the bargaining unit

at the jobsite could not be directly affected by, and

were not interchangeable with, the off-site workers.

eRe i ly

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36. Because the proviso is an exception to the 1959

amendments, we cannot accept the test for its

interpretation adopted at the conclusion of the

dissent. The issue is not which interpretation is the

more faithful to Congress’ overall goal in the 1959

amendments of curbing "top-down" organizing. Instead,

the question is which interpretation best effectuates

curbing “top-down" organizing and of protecting

collective bargaining under the peculiar conditions of

the construction industry.

37. Our reading of the quoted language in

Connell as presenting disjunctive alternatives

rather than conjunctive and cumulative

requirement is supported by the District of

Columbia Circuit and probably by the Third

Circuit. Donald Schriver, Inc., supra; Larry v.

Muko, Inc. v. Southwestern Pennsylvania Building

& Construction Trades Council, 609 F.2d 1368,

1374-75 (3rd Cir. 1979) (en banc). Lower courts

and commentators have varied in their approach

to the underlying issue. See Landscape

Specialties, Inc. v. Laborers' International

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Union, Local 806, 477 F. Supp. 17 (C.D. Cal.

1979); Long v. Floorcraft Carpet Co., 82 Labor

cases 7 10,044 (D. OR. 1977); St. Antoine,

supra, 62 Va. L. Rev. at 619; Janofsky & Hay,

Connell -- Consistent with Past, Indicative of

Future, Proceedings of N.Y.U. Twenty-Ninth

Annual Conference on Labor 3, 21-22 (1976).

Normally, a union without a collective

bargaining relationship that seeks a

subcontracting clause will be pursuing no

interest that could impact upon its primary

representation of anyone. The rare exception

might occur when the union has its own employees

working for some other employer on the jobsite

and shoulder-to-shoulder friction threatens.

38. The dissent makes the point that even

under our decision, unions must police jobsites

to ensure compliance with subcontractor clauses.

We believe that it is a more manageable task,

however, to police jobsites to ensure that

subcontractors working there have agreements

with the policing union than it is to determine

A-92

whether any union worker has been working on the

jobsite at any time, or perhaps at any time when

that worker's presence might lead to jobsite

friction.

39. NLRB v. Yeshiva University, 444 U.S.

6727 691 (1980). Compare Beth Israel Hospital

v. NLRB, 437 U.S. 483, 500-01 (1978), and NLRB

v. International Association of Bridge,

Structural & Oramental Iron Workers, 434 U.S.

335, 350-51 (1978), with NLRB v. International

Longshoremen's Association, 100 S. Ct. 2305

(1980).

40. See International Union of Operating

Engineers Locals 542, 542-A and 542-B, (York

County Bridge, Inc.) 216 N.L.R.B. 408, 409

(1975), enforced, 532 F.2d 902 (3d Cir. 1976),

cert. denied, 429 U.S. 1072 (1977); General

Counsel Memorandum, note 25, supra.

4i. Representative Barden, the Leader of

the House conferees, referred to the proviso as

permitting "voluntary agreements." 105 Cong.

Rec. 18128; II Leg. Hist. 1715.

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Senator Kennedy, the leader of the Senate

conferees, appeared to be of the view that

economic coercion was permissible; and stated

that the proviso was not intended to change the

law "with respect to the legality of a strike to

obtain such a contract." 105 Cong. Rec. 17900,

II Leg. Hist. 1433.

Senator Goldwater, one of the Senate

conferees, and the man who may have been most

responsible for the Landrum-Griffin Amendments,

see 105 Cong. Rec. 15516, II Leg. Hist. 1552

(statement of Rep. Madden), said that the

question was left open for the courts to decide.

105 Cong. Rec. 19772, II Leg. Hist. 1858.

42. (Emphasis supplied). Section

8(b)(4)(ii)(A) appears supra note 4.

43. See note 1, supra.

44. The Conference Committee, after

stating that it did not intend the proviso to

change existing law regarding subcontractor

agreements, stated: "Picketing to enforce such

contracts would be illegal under the Sand Door

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case Local 1796, United Brotherhood of

Carpenters v. NLRB, 357 U.S. 93 (1958)." H.R.

Rep. No. 1147, 86th Cong., Ist Sess. 39, I Leg.

Hist. 943. See also, 105 Cong. Rec. 17900, II

Leg. Hist. 1433 (remarks of Sen. Kennedy).

Senator Goldwater subsequently explained the

proviso as follows: "The union may go into a

court and sue [the contractor] if he fails to

live up to that agreement. But they cannot

strike or picket him to make him live up to

it. . .." 105 Cong. Rec. A8359, II Leg. Hist.

1830.

A-95

Son Ag gee Roper gD ogeay Ie

al. - Nos. 76-3469, 78-3487, 76-3619, 78-3468,

79-7011

SNEED, Circuit Judge, (with whom CHOY, ANDERSON

and FARRIS, Circuit Judges, concur) dissenting:

As with many legal issues, where one ends

up in this case depends upon were one starts.

While I have no disagreement with the court's

holding that union signatory clauses are

secondary and within the scope of section 8(e),

I respectfully dissent from its holding that

such clauses are invariably within the

construction industry proviso to section 8(e)

when a collective bargaining relationship exists

between the employer and the union seeking the

Clause. The majority reaches it conclusion by

commencing with the view that the construction

industry presents unique problems in labor

relations that require the legitimation of union

signatory clauses. Although admitting that the

legislative history is not compelling, the court

finds that legitimation was provided by the

construction industry proviso. My starting

A-96

point, on the other hand, is with Connell

Construction Co. v. Plumbers & Steamfitters Local

Union No. 100, 421 U.S. 616 (1975), and its

concern with the "top-down organizing" effect of

union signatory clauses. This concern led the

panel before which this case was heard

originally to hold as follows:

"We hold that the construction

industry proviso extends shelter

only when a collective bargaining

rb ager exists and even then

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 subcontractor." Pacific

Northwest Chapter of the Associated

Buildiers & Contractors, Inc. v.

woe, 009 F.2d 1341, 1347 (9th Cir.

I would adhere to that holding and to the

reasons given by the panel therefor. Id. at

1348-50.

The court rejects the panel's result

because it is said to represent an "even

narrower" view of the construction industry

proviso than that adopted by the Supreme court

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in Connell. F.2d (p. 26 majority

opinion). Alleviation of "the frictions that

may arise when union men work continuously

alongside nonunion men on the same construction

site," 421 U.S. at 630, is said not to have been

a concern of the Supreme Court in Connell

because in that case "the union did not purport

to represent any of the interest served by the

proviso." — F.2d __—s (p. 26). Presumably

this is because there was no collective

bargaining agreement between the employer and

union in that case.

As I see it, the crucial language in

Connell is as follows:

"We therefore hold that this

agreement, which is outside the

context of a collective-bargaining

relationship and not restricted to a

particular jobsite, but which

nonetheless obligates Connell to

subcontract work only to firms that

have a contract with Local 100, may be

the basis of a federal antitrust suit

because it has a potential for

restraining competition in the

business market in ways that would not

follow naturally from elimination of

competition over wages and working

conditions." 421 U.S. at 635.

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This language, as the majority acknowledges, is

not entirely unambiguous. It is, however, not

inconsistent with the panel's holding as set out

above; and, more importantly, that holding is

more empathetic with Connell's concern with the

"top-down" organizing effect of union signatory

clauses than is that of the majority.

It is true, as the majority states, that

any union signatory clause has some "top-down"

organizing effect. The difference between the

panel's holding and that of the en banc court

lies in the scope of this effect. The en banc

court permits a clause that forbids

subcontracting work covered by the collective

bargaining agreement to any firm not having a

contract with the signatory union. It matters

not whether any of the employees of the signatory

employer, who are members of the signatory

union, are employed on the jobsite. It matters

mot that, in the absence of the union signatory

clause, the work could have been subcontracted

to a firm which, even though adhering to union

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standards governing wages and working conditions,

was more efficient than its competitiors.

It must be acknowleged that the panel's

holding would not greatly diminish the

"top-down" organizing effect of the union

signatory clause. It would permit the choice of

the more efficient firm only when to do so would

entail no jobsite friction between members of

the signatory union and workers performing work

covered by the collective bargaining agreement.

Thus, a provision in the agreement precluding

subcontracting of all the covered work would

prevent choice of the more efficient firm and

thus provide a substantial "top-down" organizing

effect. A clause prohibiting subcontracting is

permissible. National Woodwork Manufacturers

Association v. NLRB, 386 U.S. 612, 644-46

(1967); see also Fibreboard Paper Products Corp.

v. NLRB, 379 U.S. 203 (1964); NLRB v. Johnson,

368 F.2d 549 (9th Cir. 1966). However, the

panel's holding would afford an opportunity by

which an employer could accept a union signatory

A-100

clause without sacrificing all right to choose

the more efficient subcontractor. Preservation

of this opportunity would be more consistent

with the primary concern of Connell than is the

position of the en banc court. I doubt that the

en banc court seriously contends otherwise. It

does believe that the preservation of this

opportunity would provide a "strong incentive

for anti-union discrimination by employers."

___ F.2d ss (ip. 29). I am dubious. Under

either view an anti-union employer will strive

to avoid a union signatory clause. That an

employer under the panel's view would have a

limited opportunity to subcontract to a firm not

having an agreement with the signatory union is

not likely to make it more anti-union.

I agree with the en banc court that the

legislative history of the construction industry

proviso is not conclusive. We have previously

considered the legislative history of the

proviso. ACCO Construction Equipment, Inc. v.

NLRB, 511 F.2d 848, 851 (9th Cir. 1975). In

A-101

surveying the legislative history, we concluded

that the dominant motive of Congress in adopting

the proviso was to permit agreements that aimed

at eliminating jobsite friction between union

and nonunion workers. Id. at 851; accord,

Drivers Local 695 v. NLRB, 361 F.2d 547, 553

'(D.C. Cir. 1966); Essex County District Council

of Carpenters v. NLRB, 332 F.2d 636, 640 (3d

Cir. 1964). And the National Labor Relations

Board previously believed: "(T]he 8(e) proviso

was intended to prevent labor strife among

nonunion and union employees at the same

jobsite." International Union of Operating

Engineers, Locals 542, 542-A and 542-B, 216 .

N.L.R.B. 408, 409 (1975), enforced, 532 F.2d 902

(3d Cir. 1976), cert. denied, 429 U.S. 1072

(1977). I see no reason to depart from our

earlier analysis of the purpose of the proviso.

Admittedly, Senator Kennedy thought that

the construction industry proviso would permit

subcontracting clauses such as those challenged

in these cases. Others argued that the proviso

A-102

was intended to permit agreements not to use

prefabricated pipe unless union workers did the

fabricating. 105 Cong. Rec. 19785-86, 19809

(1959); II Leg. Hist. 1815-16 (extension of

remarks of Senator McNamara and Representative

Thompson); contra 105 Cong. Rec. 20004-05

(1959); II Leg. Hist. 1861 (extension remarks of

Representative Kearns). But neither of these

purposes were clearly understood as the reason

for the proviso. As Connell and ACCO concluded,

the legislavtive history supports the conclusion

that most congressmen thought the proviso was

intended to address the problem of jobsite

friction. See e.g., I Leg. Hist. 82 (message

from President Eisenhower to Congress); 105

Cong. Rec. 15852, II Leg. Hist. 1684 (statement

of Congressman Goodell); 105 Cong. Rec.

17333-34, II Leg. Hist. 1383-84 (proposed

instructions for Senate conferees). Also, as I

read the excerpt from the memorandum by

Representatives Thompson and Udall quoted by the

en banc court, it too strongly supports the

A-103

conclusion that the proviso was aimed at the

jobsite friction problem. The references to

employees working "side by side" on a “single

building" so indicate. 105 Cong. Rec. 15541

(1959); II Leg. Hist. 1577.

The en banc court notes that some

subcontractor clauses similar to those

challenged in these cases existed in 1959.

Since they conclude that the Congress intended

to preserve the law relating to the construction

industry as it then existed, the court argues

that Congress intended that the proviso would

protect broad subcontractor clauses. I believe

this reasoning gives far too much weight to the

bare reference to the pattern of collective

bargaining referred to in the Committee Report.

See Connell, supra, 421 U.S. at 628-29.

Furthermore, the lawfulness and permissible

scope of subcontractor agreements had not been

conclusively determined in 1959. And the

proviso clearly changed the law by explicitly

limiting its protection to jobsite work. That

A-104

limitation at least partially overruled the Sand

Door case, Local 1976, United Brotherhood of

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

the most that can be said is that Congress

intended to preserve the existing law within the

scope of the proviso. That proposition,

however, begs rather than answers the question

of what the proper scope of the proviso is.

That is what this case is about. Our decision,

whatever it is, can draw but little comfort from

the legislative history.

The majority also argues that practical

considerations favor the result they reach. But

the practical problems of following the panel's

decision would not have been severe. If broad

subcontractor clauses are approved, unions must

still police construction sites to ensure

compliance. No more is required by a rule

limiting subcontractor clauses to jobsites at

which members of the signatory union are

employed. The serious practical problems raised

by the majority would arise only if

A-105

subcontractor clauses were required to be

renegotiated on a jobsite by jobsite basis, but

that would not be required by the panel's

interpretation of the proviso.

Thus, we come to the nub of the matter.

Which interpretation of the proviso is more

faithful to curbing "top-down" organizing,

which, it must be remembered, was Congress's

objective in adopting the 1959 Act which

included section 8(e). Connell, supra, 421 U.S.

at 632-33. The holding of the panel gets my

nod.2/

A-106

FOOTNOTE

1. Because the panel concluded that the broad

subcontractor clause in the AGC agreement violated

section 8(e), it did not address the lawfulness of

the agreement's self-help enforcement provision.

609 F.2d at 1351. I agree with the majority of

this en banc court that the self-help enforcement

provision must be interpreted to mean what it says

and that Congress clearly intended that subcontractor

clauses were to be enforced judicially rather than

by strikes or picketing. Therefore, I agree that

the self-help clause in the AGC contract is invalid.

A-107

Pacific Northwest Chapter of the Associated

Builders & Contractors, iInc., et al. NLRB, et

al. - Nos. 78-3469, 78-3619, 78-3468, “F9- y+ re

FARRIS, Circuit Judge, with whom Judge Choy and

Judge Anderson join, dissenting:

I join Judge Sneed's dissent in all

respects and add some comments regarding the

scope of the construction industry proviso.

The collective bargaining agreements here

prohibit signatory general contractors from

subcontracting any work covered by the agreement

at any construction site to nonsignatory

contractors. These agreements violate

subsection 8(e) of the National Labor Relations

Act, 29 U.S.C. § 158(e) (1976), unless they are

permitted under the construction industry

proviso, which allows “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 construction... ." Id. The precise

issue here is whether that proviso legalizes

agreements that limit subcontracting at sites

where the employer has no employees represented

A-108

by the union. The majority holds that it does.

I disagree.

In Connell Construction Co. v. Plumbers

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

Court concluded that the construction industry

proviso did not authorize a construction

industry employer and a union not representing

its employees to agree to limit the employer's

right to subcontract. Finding no congressional

purpose in extending the proviso to legalize

agreements between employers and "stranger"

unions, the Court narrowly construed the proviso

to limit its scope “to agreements in the context

of collective-bargaining relationships and .

possibly to common-situs relationships on

particular jobsites as well." Id. at 633.

Here, the three judge panel concluded that

the proviso was designed to deal with the

special problem of jobsite friction in the

construction industry. It read the proviso to

allow a collective bargaining agreement to

restrict an employer's subcontracting at the

A-109

jobsite where it employs the union's members.

The majority asserts that another

purpose--maintenance of contract standards in

the industry--requires that the proviso be read

to allow restrictions on the use of nonsignatory

subcontractors at any jobsite. See also Donald

Shriver, Inc. v. NLRB, No. 78-2177, slip op. at

43-47 & n.29 (D.C. Cir. Oct. 20, 1980). I agree

that a congressional purpose in addition to

reduction of jobsite friction may require a

broader scope for the proviso, but I do not

agree that maintenance of contract standards in

the industry is such a purpose. The Court in

Connell read the proviso to allow restraints in

the context of collective bargaining

relationships. That does not mean that when a

relationship exists any restraint can be

imposed; rather, the relationship only has a

bearing on the legality of the restraint when

the relationship and the restraint are related.

It is not sufficient that the restraint serves

the interest of workers in the industry

A-110

generally. It must serve the interests of the

workers represented by the union in the course

of their employment by the employer.

The only way the all-jobsite restraints

here can serve the interests of these workers is

by preventing loss of work due to

subcontracting. This problem, however, is

resolved by a common, primary restraint: the

union standards clause. Such clauses

effectively insulate workers from falling

industry standards by removing the incentive to

subcontract. At the same time they avoid many

of the evils inherent in the restraints here.

In my view the construction industry proviso is

not concerned with maintenance of contract

standards. See generally Archibald Cox, Derek

Bok & Robert Gorman, Cases and Materials on Labor

Law 892-95 (8th ed. 1977) (while garment

industry proviso was concerned with maintenance

of industry standards, construction industry

proviso was concerned with jobsite friction).

The proviso should not be read to permit

A-111

restraints which extend to jobsites where no

unit employees are present and which are

therefore unrelated to reduction of jobsite

friction.

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A-113

NATIONAL LABOR RELATIONS

BOARD,

Respondent

WOELKE & ROMERO FRAMING,

INC.,

Petitioner,

NATIONAL LABOR RELATIONS

BOARD,

Respondent

and

CARPENTERS LOCAL NO. 944,

UNITED BROTHERHOOD OF

CARPENTERS AND eg

OF AMERICA, AFL-CIO, AND

CARPENTERS LOCAL NO. 235,

UNITED BROTHERHOOD OF

CARPENTERS AND JOINERS

OF AMERICAN, AFL-CIO,

Intervenors.

NATIONAL LABOR RELATIONS

BOARD,

Vv.

CARPENTERS LOCAL NO. 944,

UNITED BROTHERHOOD OF

CARPENTERS AND agg a

OF AMERICA, AFL-CIO, AND

CARPENTERS LOCAL NO. 235,

UNITED BROTHERHOOD OF

)

No. 78-3468

No. 79-7011

OPINION

A-112

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PACIFIC NORTHWEST CHAPTER)

OF THE ASOCIATED BUILDERS)

& CONTRACTORS, INC.,

Petitioner,

Vv.

NATIONAL LABOR RELATIONS

BOARD,

Respondent.

OREGON=-COLUMBIA CHAPTER,

THE ASSOCIATED GENERAL

CONTRACTORS OF AMERICA,

INC.,

Petitioner,

Vv.

NATIONAL LABOR RELATIONS

BOARD,

Respondent

INTERNATIONAL UNION OF

OPERATING ENGINEERS,

LOCAL NO. 701

Petitioner,

ee ee ee ee ee ee ee ee ee ee Se eee ee Se Se ee Se ee See See Se See See See See See” See Se See” See” Se Seem” eee Se” “eee “eee”

No. 78-3469

No. 78-3487

No. 78-3619

A-114

CARPENTERS AND JOINERS

OF AMERICAN, AFL-CIO,

Respondents.

ee eee eee ee ee”

On Petition for Review of the Order of the

National Labor Relations Board

Before: SNEED and KENNEDY, Circuit Judges,

and EAST*, District Judge

SNEED, Circuit Judge:

Construction contractors challenge in «

these cases the legality of a provision in

a collective bargaining agreement which pro-

hibits a signatory contractor from assigning

work to subcontractors unless the subcon-

tractors have a collective bargaining agree-

ment with the signatory union. The National

Labor Relations Board has ruled that such a

provision does not violate the prohibition

in the National Labor Relations Act (the Act)

against "hot cargo" agreements .2/

*Honorable William G. East, Senior United States

District Judge for the District of Oregon, sitting by

designation.

A-115

In deciding these cases we must

determine the scope of the Supreme Court's

holding in Connell Construction Co. v.

Plumbers Local 100, 421 U.S. 616 (1975).

We hold that under Connell the clauses

before use are not lawful under section 8(e)

of the Act, 29 U.S.C. § 158(e), and are

not within the construction industry

proviso of section 8(e).

Our jurisdiction rests on 29 U.S.C.

§ 160(e) and (f)(1976).

FACTUAL BACKGROUND

Two decisions of the Board are before

us for review. The first considered the

legality of a collective bargaining

agreement between the Oregon-Columbia

Chapter of the Associated General

Contractors of America, Inc. (AGC), which

is an association of approximately 200

employers engaged in construction in

Oregon an southwest Washington, and the

A-116

International Union of Operating

Engineers, Local 701 (Engineers). The

agreement, effective from June 1, 1975

through May 31, 1980, contains a provision

precluding AGC employers from assigning

jobsite work covered by the agreement to

any subcontractor which does not have a

current labor agreement with Engineers. 2/

Another provision makes violations of the

agreement subject to a grievance and

arbitration procedure, and the results of

arbitration are enforceable by "such

action as they [the parties] deem

necessary. . ." This article would thus

permit enforcement of the agreement,

including the subcontractor clause,

through strikes or picketing.

Following a charge filed by another

association of construction employers, the

General Counsel of the NLRB issued a

complaint alleging that the agreement's

subcontractor clause and enforcement

A-117

provision violate section 8(e) of the

act .2/ The case was heard by the Board

upon stipulated facts and it held that,

while the subcontractor clause fell within

the general proscription of section 8(e),

the clause was protected by the section's

construction industry provision. However,

the Board invalidated the self-help

enforcement provision insofar as it

authorized economic sanctions in support

of the subcontractor clause. All parties

petitioned this court for review and

modification of the Board's order. The

Board, of course, seeks enforcement of its

order.

The second decision of the Board

which we review considered challenges to a

proposed collective bargaining agreement

which locals of the United Brotherhood of

Carpenters and Joiners of America, AFL-CIO

(Carpenters), sought to establish with

Woelke & Romero Framing, Inc. (Woelke), a

A-118

framing subcontractor who has performed

work for various construction contractors

in souther California. Between 1974 and

1977, Woelke was a party to a collective

bargaining agreement with Carpenters.

This agreement was due to expire on

June 15, 1977, Woelke was a party to a

collective bargaining agreement with

Carpenters. This agreement was due to

expire on June 15, 1977, and, beginning on

June 3, 1977, Woelke commenced negotiations

with Carpenters concerning a successor

arrangement. Two provisions of the

proposed new agreement generated

contention. One of these provisions

forbade Woelke to subcontract jobsite work

except with firms having a current labor

agreement with Carpenters. 4/ The second

provision included foremen within the unit

of employees whom Carpenters would

represent. According to the parties'

stipulations, foremen function as

A-119 4

supervisors and also as Woelke's selected

representatives for purposes of collective

bargaining or the adjustment of

grievances. Impasse over these provisions

led to the termination of negotiations on

August 4, 1977. Thereafter, Carpenters

picketed Woelke at four jobsites. As a

consequence of this picketing, employees

of the subcontractors of general

contractors at two of the jobsites refused

to work.

Upon charges filed by Woelke, the

General Counsel of the NLRB issued a

complaint against Carpenters. After

hearing the case upon stipulated facts,

the Board decided that the proposed

subcontractor clause was protected by the

construction industry proviso. It

follows, the Board held, that picketing by

Carpenters did not violate the prohibition

in section 8(b)(4)(i) and (ii)(A) of the

Act, 29 U.S.C. § 158(b)(4)(i) and (ii)(A).2/

A-120

Before reaching this conclusion the Board

held that but for the construction industry

proviso the proposed subcontractor clauses

would violate section 8(e).

In addition, the Board concluded that

bargaining to impasse and picketing

intended to compel the unionization of

Woelke foremen constituted a violation of

section 8(b)(1)(B) of the Act, 29 U.S.C.

§ 158(b)(1)(B).2/ and ordered Carpenters

to desist from this practice.

The Board requests enforcement of

this order. Woelke seeks reversal of the

Board's decision with respect to the

subcontractor clause.

We shall discuss first the critical

issue of these cases, viz. the scope of

the construction industry proviso as

applied to the subcontractor cluases

involved in each case. Thereafter the

remaining issues pertinent to each case

will be addressed.

A-121

Il.

SCOPE OF THE CONSTRUCTION INDUSTRY PROVISO

Our analysis will proceed as did that

of the Board. That is, we shall initially

determine whether these clauses fall

within the general proscription of

section 8(e) and, inasmuch as we agree

with the Board's conclusions that

section 8(e) does proscribe these clauses,

we shall then determine whether the

clauses are, nonetheless, protected by the

construction industry proviso. As already

indicated our conclusion with respect to

the scope of the proviso differs from that

of the Board.

A. Does Section 8(e) Proscribe These

Clauses?

The subcontractor clauses in these

cases require that the employer not do

business with another employer unless that

employer has a labor agreement with the

signatory union. Reading section 8(e)

A-122

literally there is no doubt that that

section 8(e) proscribes such clauses. The

problem is not that simple, however. In

National Woodwork Manufacturers Association

v. NLRB, 386 U.S. 612 (1967), the Supreme

Court read into section 8(e) a distinction

betwen primary and secondary objectives.

An agreement which advances only primary

objectives of the bargaining employees,

such as preserving work opportunities, is

not unlawful. Thus, a court must consider:

. whether, under all the surround-

ing circumstances, the Union's objective

was preservation of work for [the

contracting employer's]] employees, or

whether the agreements ... were

tactically calculated to satisfy union

objectives elsewhere. Were the latter

the case [the contracting employer]

- » would be a neutral bystander, and

the agreement . . . would, within the

intent of Congress, become secondary.

There need not be an actual dispute

with the boycotted employer. . . for

the activity to fall within this

category, so long as the tactical object

of the agreement and its maintenance

A-123

is that employer, or benefits

to other than the boycotting

employees of the primary

employer thus making the

agreement or boycott secondary

in its aim. The touchstone is

whether the agreement is

addressed to the labor

relations of the contracting

employer vis-a-vis his own

employees.

Id. at 644-45 (citations omitted).

Applying this standard, this court

has recognized that a union signatory

clause--as opposed to a union or area

standards clause, which merely requires

that the employees of subcontractors work

under the same terms and conditions as

those enjoyed by union members--is

normally secondary in nature. Griffith

Co. v. NLRB, 545 F.2d 1194, 1199 (9th Cir.

1976), cert. denied, 434 U.S. 854 (1977).

As the Second Circuit observed in NLRB v.

National Maritime Union, 486 F.2d 907, 913

(2d Cir. 1973), cert. denied, 416 U.S. 970

(1974): “[{i]Jf£ the clause is a union

Signatory clause, the union has an

A-124

interest, independent of the interests of

the employees being represented, in

furthering its own organizational ends or

in protecting the interest of its other

bargaining units."

Nor can these clauses be regarded as

valid work preservation provisions. They

do not assure work opportunities for

employees in the respective work units,

i.e., employees of AGC or of Woelke;

rather, they operate for the general

benefit of the respective unions. Hence,

neither provision is directed to "the

labor relations of the contracting

employer vis-a-vis his own employees."

National Woodwork Manufacturers, 386 U.S.

at 645. We agree with the Board,

therefore, that the subcontractor clauses

fall within the general prohibition of

section 8(e).

A-125

B. Does the Construction Industry

Proviso Authorize These Clauses?

1. The Interpretation Required

by Connell Construction Co.

In determining whether these

subcontractor clauses are protected by the

construction industry proviso, we

encounter the Supreme Court's decision in

Connell Construction Co. v. Plumbers Local

100, 421 U.S. 616 (1975). There the

union, as a result of picketing, had

obtained a subccontractor agreement with a

general building contractor even though

the union did not represent or seek to

represent the contractor's own employees.

When the contractor challenged the

agreement under the Sherman Act, the union

defended, in part, by arguing that the

agreement was expressly authorized by the

construction industry proviso. Declaring

that "section 8(e) must be interpreted in

light of the statutory setting and the

A-126

circumstances surrounding its enactment,"

id. at 628, the Supreme Court observed

that the section was part of a program

enacted to limit "top-down" organizing

campaigns. The construction industry

proviso, though an exeption to the

section's general proscription, should be

construed so as not to undermine that

objective. Id. at 628-33. The Court

concluded that the subcontractor clause in

that case was not covered by the proviso.

It expressed its holding in the manner:

"We therefore hold that

this agreement, which is outside

the context of a collective

bargaining relationship and

not restricted to a particular

jobsite, but which nonetheless

obligates Connell to subcontract

work work only of firms that

have a contract with Local 100,

may be the basis of a federal

antitrust suit because it has

a potential for restraining

competition in the business

market in ways that would not

follow naturally from elimination

of competition over wages and

working conditions."

Id. at 635.

A-127

The Board in the cases here being

reviewed emphasized heavily the Supreme

Court's reliance on the absence of a

collective bargaining relationship. Where

this relationship exists it held union

signatory clauses were within the

construction industry proviso. The Board

stated:

"The bottom line of the

Court's opinion, as we construe

it, is that the construction

industry proviso to Section 8(e)

permits subcontracting clauses

such as those here in the

context of a collective bargain-

ing relationship, and possibly

wihtout such a relationship if

the clauses are aimed at

avoiding the Denver Building

Trades tn

LRB v. Denver Buildin

arate ay U.S. 675 (1951)]

We disagree. We hold that the

construction industry proviso extends

shelter only when a collective bargaining

relationship exists and even then only

when the employer or his subcontractor has

employees who are members of the signatory

union at work at some time at the jobsite

A-128

at which the employer wishes to engage a

nonunion subcontractor. It follows that

under our holding a general contractor,

who does not use at any time on a particular

jobsite at which the employer wishes to

engage a nonunion subcontractor. It follows

that under our holding a general contractor,

who does not use at any time on a particular

jobsite his employees who are members of

the signatory union, and does not engage

subcontractors whose employees are members

of the signatory union, can engage nonunion

subcontractors to perform work on that

particular jobsite that otherwise would be

done by members of the signatory union.

To do so would not, in our opinion, violate

a valid union signatory clause. To hold

otherwise extends the construction

industry proviso beyond the limits we

attribute to Connell.

Out holding recognizes the validity

of a provision in a collective bargaining

A-129

agreement that with respect to any

particular jobsite will preclude the

possibility of members of the signatory

union being required to share work with

nonunion workers. Under a provision of

this sort the employment of one member of

the signatory union on the jobsite assures

that all relevant work on that jobsite

will be done by signatory union members.

We believe this is a more accurate reading

of Connell's holding than that of the Board.

We acknowledge that the teaching of

Connell, as applied to the issue we are

considering, it not unambiguous. The

Court stated that the construction

industry proviso applies only to work

performed at the jobsite and then added,

quoting Drivers Local 695 v. NLRB, 361

F.2d 547, 553 (D.C. Cir. 1966), that some

courts had assigned the proviso the "even

narrower function" of alleviating "'the

frictions that may arise when union men

A-130

work continuously alongside nonunion men

on the same construction site.'" Connell,

421 U.S. at 630. The Court's statement

left open this “even narrower" view of the

proviso's scope. However, since the

subcontractor agreement in Connell

occurred outside the collective bargaining

context altogether, the Court was not

required to decide whether and under what

circumstances a subcontractor clause

contained in a valid labor agreement would

receive the protection of the proviso.

What Connell left unanswered we must

confront and answer.

2. Reasons In Support of Our

Holding.

We believe our response is supported

by the proviso's background and statutory

setting. Section 8(e) was enacted as part

of the Labor-Management Reporting and

Disclsoure Act of 1959. The section was

designed, as the Supreme Court noted in

A-131

Connell, to strengthen the prohibition in

section 8(b)(4) against secondary

activities by forbidding agreements which

might be used to circumvent that section's

ban on the use of economic coercion for

secondary objectives. Id. at 628.

However, the prohibition in section 8(e)

against hot cargo agreements was made

subject to two exceptions: a broad

exemption for the garment industry, and

the more limited exception for the

construction industry.

The unions and the Board contend

that, at least with respect to agreements

made within the context of collective

bargaining, the proviso should be given

the expansive scope which its literal terms

suggest. Their argument can be stated

syllogistically: At the time the proviso

was enacted, the union signatory subcon-

tractor provisions were lawful. The

proviso was intended to preserve in the

A-132

construction industry the law as it then

existed. Hence, the proviso was intended,

and should be construed, to protect

subcontractor provisions.

The difficulty with this argument is

that neither of the premises can be

accepted without qualification. In 1959,

when section 8(e) was enacted, the

lawfulness and permissible scope of

subcontractor agreements had not been

conclusively determined. Local 1976,

United Brotherhood of Carpenters v. NLRB,

357 U.S. 93 (1958), the so-called Sand

Door case which in the unions' view

defined the state of the law at that time,

involved an agreement forbidding the use

of nonunion material, not a subcontractor

provision. Moreover, the issue in Sand

Door was whether union picketing and

coercion designed to enforce a hot cargo

provision was unlawful under section 8(b(4),

id. at 108, expressly declined to consider

A-133

"the invalidity of hot cargo provisions as

such." Id. at 107. Thus, the lawfulness

of union signatotry clauses such as those

challenged here was not determined in Sand

Door.

Furthermore, even if subcontractor

clauses were lawful proir to the passage

of the Labor-Management Reporting and

Disclosure Act, it is unclear to what

extent the construction industry proviso

was intended to preserve the then current

law. . The unions rely upon statements made

by Senator Kennedy and an extract from the

Conference Report which suggest that the

proviso would not change the law of the

Sand Door decision. Yet in explicitly

limiting the proviso's protection to

jobsite work, Congress adopted a

restriction which was never mentioned in

Sand Door. Indeed, in the same paragraph

which indicates that the law of Sand Door

would be preserved, the Conference Report

A-134

states that the proviso would not protect

"agreements relating to supplies or

products or materials. . . delivered on

the site of the construction," which was

»orecisely the kind of agreementa t issue,

and allegedly declared to be lawful, in

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

Cong., lst Sess. 39, reprinted in

I Legislative History of the

labor-Management Reporting and Disclosure

Act of 1959 at 943 (1959). Hence, the

broad assertion that the construction

industry proviso was designed to leave the

law unchanged is inacurate. Congress may

have intended to preserve existing law

within the scope of the proviso. That

proposition, however, begs rather than

answers the question of what the proper

scope of the proviso is.

We must, therefore, look to the

purpose Congress sought to serve by

enacting an exception for the construction

industry. In ACCO Construction Equipment,

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Inc. v. NLRB, 511 F.2d 848, 851 (9th Cir.

1975), this court surveyed the legislative

history of section 8(e) and concluded:

"Although the legislative history

of the proviso is ofttimes

vague and inconclusive, what

does emerge is an underlying

congressional concern with

minimizing jobsite tension.

In contrast to most other

industries, a variety of

craftsmen employed by differ-

ent contractors and subcon-

tractors work continuously

side by side on construction

projects. Where the employees

of some are union members and

the employees of others are

not, ere is a potential, or

so Congress believed, for

jobsite conflict. Hence, "the

purpose of the section 8(e)

proviso was to alleviate the

frictions that may arise when

union men work continuously

alongside nonunion men on the

same construction site."

Drivers, Salesmen, Etc., Local

695 v. NLBR, 124 U.S.App.D.C.

93, 361 F.2d 547, 553 (1966)

(emphasis added). What

appears critical is that the

potential for conflict is

likely to arise only when the

union laborers are in frequent

and relatively close contact

with the union craftsmen.

The court's conclusion in ACCO is

consistent with the Supreme Court's

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reasoning in Connell. Connell noted that

the construction industry proviso resulted

from efforts to overrule the holding of

NLRB v. Denver Building Trades Council,

341 U.S. 675 (1951), in which the Supreme

Court had ruled that union picketing which

was intended to force a general

construction contractor to terminate its

contract with a nonunion subcontractor

violated section 8(b)(4). Connell, 421

U.S. at 629. The Denver Building Trades

decision was objectionable because, as

Justice Douglas had argued in dissent,

“fajll the union asked was that union men

not be compelled to work alongside nonunion

men on the same job." Denver Building

Trades, 341 U.S. at 692 (emphasis added).

Thus, the purpose of the proviso was to

permit unions and construction employers

to avoid the tension and discontent that

exists when members of a union are

required to work on the same jobsite with

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nonunion workers of the same craft or

trade. 8/ Our holding permits the

avoidance of precisely that source of

tension and discontent.

We cannot extend the proviso's

protection beyond the purpose for which

the exemption was created without creating

a shield of immunity for agreements which

we believe Congress wished to prohibit.

Hence, the purpose of th exception

dictates its scope. A subcontractor

clause in a contract with a particular

union which flatly forbids the use of

subcontractors who have no contract with

the signatory union on jobsites,

regardless of whether workers of the

signatory union will also be employed on

those sites, goes well beyond the kind of

arrangement which the proviso was created

to protect. If a general contractor

assigns work on a construction site only

to nonunion subcontractors, the problem of

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jobsite friction between union and

nonunion employuees of a particular craft

or trade does not arise. Indeed, a

general contractor that assigns no

employees who are members of th2 signatory

union to a particular construction project

occupies the same position, with respect

to that project and the signatory union

personnel elsewhere is, for purposes of the

proviso, irrelevant.

We find additional support for our

interpretation of the construction

industry exception in the proviso's

statutory setting. Section 7 of the Act,

29 U.S.C. § 157, provides, with limited

exceptions, that employees have the right

to refrain from any or all union activities.

In addition, if employees choose to

unionize, they have the right to bargain

"through representatives of their own

choosing. . ." Although section 8(f) of

the Act, 29 U.S.C. § 158(f£), permits

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"“pre-hire" labor agreements in the

construction industry, that section does

not override the workers' rights of self-

determination. Connell, 421 U.S. at 632.

A union signatory subcontractor clause

operates to force nonunion firms and their

employees to submit to union representation

in order to be eligible for subcontracting

opportunities, thus undermining the rights

established in section 7. The agreement

between AGC and Engineers, for instance,

forcloses to nonunion firms employment

opportunities with any of 200 construction

contractors throughout Oregon and southwest

Washington. The potential coercive effect

of such a provision is manifest. The

clause is thus precisely the kind of

instrument for "top-down" organizaing

which the Supreme Court condemned in

Connell: Id. at 631, 632. For those

reasons, we believe that the position

taken by the Board, which legitimates the

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use of such an organizing weapon by a

union as long as the union has a collective

bargaining relationship with a signatory

employer, is improper.

III.

REMAINING ISSUES

Having decided the principal issue

reaised by these cases, we now consider

the proper disposition of each of the

cases before us.

For reasons elaborated in the

preceding section, the subcontractor

clause contained in the collective

bargaining agreement between AGC and

Engineers constitutes a violation of

section 8(e). The clause in its present

form, as section 8(e) provides, is

unenforceable. Hence, we need not decide

whether the agreement's self-held

enforcement provision as applied to a

lawful subcontractor clause would violate

section 8(e).

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The subcontractor provision proposed

by Carpenters in negotiations with Woelke

is also unlawful under section 8(e).

Picketing engaged in by Carpenters in

order to compel Woelke to accept the

provisoin was thus a violation of

section 8(b)(4)(i) and (ii)(A), and should

have been enjoined by the Board. The

Board's order is accordingly modified to

enjoin Carpenters fro picketing or using

economic coercion for the purpose of

inducing Woelke to enter into any agree-

ment which contains such a provision.

Our disposition of this issue makes it

unnecessary to consider Woelke's additional

contention that picketing intended to

compel acceptance even of a lawful

subcontractor clause is prohibited by

section 8(b)(4)(i) and (ii)(A).

The Board requests enforcement of its

order enjoining the use by Carpenters of

picketing, strikes, or other coercion in

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order to compel Woelke to include within

the bargaining unit foremen who are

supervisors or Woelke's representatives

for purposes of collective bargaining or

the adjustment of grievances. Carpenters

has not contested the Board's ruling that

picketing or coercion used for this

purpose constitutes a violation of

section 8(b)(1)(B) of the Act. The

Board's order with respect to this issue

should be enforced.

The Board shall modify its orders in

these cases to conform to the views

expressed in this opinion, and those

orders, as modified, are ordered

enforced.

Enforced as Modified.

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FOOTNOTES

1. A hot cargo provision, so named because of the

prevalence at one time of such provisions in Teamsters

Union contracts, is an agreement between a union and

an employer by which the employer promises not to use

the materials--or, as in this case, the services--of

nonunion employers.

2. The subcontractor clause provides in pertinent

part as follows:

Employers shall not contract any work covered by

this Agreement to be done at the site of the

construction, alteration, painting, or repair of

a building, structure or other work to any

person, firm or company who does not have an

existing labor agreement with the Union covering

such work.

3. Section 8(e) provides in pertinent part as

follows:

It shall be an unfair labor practice for any

labor organization and any employer to enter into

any contract or agreement, express or implied,

whereby such employer ceases or refrains or

agrees to cease or refrain from handling, using,

selling, transporting or otherwise dealing in any

of the products of any other employer, or to

cease doing business with any other person, and

any contract or agreement entered into heretofore

or hereafter containing such an agreement shall

be to such extent 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 construction, alteration,

painting, or repair of a building, structure, or

other work. . .

29 U.S.C. § 158(e) (1976).

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4. The proposed clause provides:

The Contractor agrees that neither he nor

any of his subcontractors on the jobsite will

subcontract any work to be done at the site of

construction, alteration, painting or repair of a

building, structure or other work (including

quarries, rock, sand and gravel plants, asphalt

plants, ready-mix concrete plants, established on

or adjacent to the jobsite to process or supply

materials for the convenience of the Contractor

for jobsite use) except to a person, firm or

corporation, party to an appropriate, current

labor agreement with the appropriate Union, or

subordina

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