Amicus Curiae Brief — Building & Constr. Trades Council v. Associated Builders & Contractors of Massachusetts/Rhode Island, Inc.

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Nos. 91-261 “sad 91-27 APR 15 igee

FICE OF THE CLERK

In the Supreme Court of the United Sharer ——

OCTOBER TERM, 1991

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

JERRY M. HUNTER KENNETH W. STARR

. , ’ ; ‘7 .

(,eneral OUND SOL tor General

D. RANDALL FRYE MAUREEN E. MAHONEY

Acting Deputy Gene al Co nsel Depu = / IL OF (re ner

NORTON J. COMI EDWIN S. KNEEDLER

Deputy Associat | stant to the

General Counsel ‘ Solicitor General

De partment of Justice

Washington, D.C. 205380

LINDA SHER

Assistant General Counsel

National La hor Re lations Boa rd (<02) o14- val?

Washington, D.C. 20570

QUESTION PRESENTED

Sections 8ie) and &8(f) of the National Labor Relations

Act expressly permit private employers LO implement

agreements requiring all contractors performing work on

a construction project to adhere to a collective bargaining

agreement that establishes labor.terms and union recogni-

tion for the project as a whole’ The question presented

is whether the doctrine of implied preemption under the

NLRA nevertheless prohibits a state agency from acting

in its proprietary capacity to implement such an agree-

ment for a state public works construction project.

LL CLL LA LLL LLL LL A te tit st lS. a

TABLE OF CONTENTS

Page

Statement ............... . ae l

ET RS 7

EE i 18

TABLE OF AUTHORITIES

Cases:

Aero Electric Vv. Watkins, No. CV 90-0075-E-EJL

(D. Idaho May 14, 1991) 17

Associated Builders & Contractors vy. City of

Seward, No. A91-001 (D. Alaska Mar. 20, 1991),

appeal pending, No. 91-35511 (9th Cir.) 17

Associated General Contractors of America, Inc.

(St. Maurice, Helmkamp & Musser), 119

N.L.R.B. 1026 (1957), review denied and en-

forced sub nom. Operating Engineers Local

Union No. 3 Vv. NLRB, 266 F.2d 905 (D.C. Cir.),

cert. denied, 361 U.S. 834 (1959) 13

Building & Trades Council, et al. (Kaiser Engi-

neers, Inc.), Case 1-CE-71, GC Advice Memo

(N.L.R.B. June 25, 1990) . patie 5

Glenwood Bridge, Inc. V. City of Minneapolis, 940

F.2d 367 (8th Cir. 1991) ae 17

Golden State Transit Corp. v. City of Los Angeles,

475 U.S. 608 (1986) . me 6, 10

Golden State Transit Corp. ' V. City of Los Angeles,

a 6, 10, 11

Jim MeNeff, Inc. v. Todd, 461 U.S. 260'1983) A)

Laborers Vv. Curry, 371 U.S. 542 (1963) 18

Lodge 76, Machinists v. Wisconsin Employment

Relations Comm’n, 427 U.S. 182 (1976) 6, 8, 10, 11

Metropolitan Life Ins. Co. V. Massachusetts, 471

U.S. 724 (1985) ............. ' x

Meyers Vv. Bethlehem Shipbuilding Ce Orp., 808 U. s.

41 (1938) . fines 18

Modern Continental Construction Co. V. Lowell,

465 N.E.2d 1173 (Mass. 1984) . a 4

(IIT)

Cases—Continued : Page

Phoenix Engineering, Inc. V. M-K Ferguson of

Oak Ridge Co., No. Civ. 3-90-839 (E.D. Tenn.

Mar. 22, 1991), appeal pending, No. 91-5527

(6th Cir.)

San Diego Building Trades Council Vv. Garmon, 359

U.S. 236 (1959) 8,

Teamsters V. Morton, 377 U.S. 252 (1964)

United States Vv. Metropolitan District Comm’n,

757 F. Supp. 121 (D. Mass.), aff’d, 930 F.2d 132

(1st Cir. 1991)

Wisconsin Dep’t of Indus. v. Gould, 475 U.S. 282

(1986) 14, 15,

Woelke & Romero Framing, Inc. v. NLRB, 456 U.S.

645 (1982) 9,

Statutes :

Clean Water Act, 33 U.S.C. 1251 et seq.

National Labor Relations Act, 29 U.S.C. 151 et seq.:

§ 2(2), 29 U.S.C. 152 (2)

§ 7,29 U.S.C. 157

§ 8(e), 29 U.S.C. 158 (e) 5, 6, 9, 11, 12,

§ 8(f), 29 U.S.C. 158 (f) 5, 6, 8, 9, 12,

42 U.S.C. 1983

Mass. Gen. Laws (& Supp. 1990) :

Ch. 30, § 39M (1990)

Ch. 149, §§ 44A-44L

1984 Mass. Acts 372

Miscellaneous:

105 Cong. Rec. 15,541 (1959)

Hearings on S. 1973 Before the Subcomm. on Labor

and Labor-Management Relations of the Senate

Comm. on Labor and Public Welfare, 82d Cong..,

Ist Sess. (1951)

Labor-Management Reform Legislation: Hearings

on S. 505, S. 748, S. 76, S. 1002, S. 1137, and

1311 Before the Subcomm. on Labor of the Sen-

ate Comm. on Labor and Republic Welfare, 86th

Cong., Ist Sess. (1959)

S. Rep. No. 187, 86th Cong., Ist Sess. (1959)

S. Rep. No. 1059, 82d Cong., 2d Sess. (1952) .

ho

ho

nN WW bd

13

13

14

13

Iu the Supreme Court of the United States

OCTOBER TERM, 1991

No. 91-261

3UILDING AND CONSTRUCTION TRADES COUNCIL

OF THE METROPOLITAN DISTRICT, PETITIONER

.

ASSOCIATED BUILDERS AND CONTRACTORS OF

MASSACHUSETTS / RHODE ISLAND, INC., ET AL.

No. 91-274

MASSACHUSETTS WATER RESOURCES AUTHORITY AND

KAISER ENGINEERS, INC., PETITIONERS

Uv.

ASSOCIATED BUILDERS AND CONTRACTORS OF

MASSACHUSETTS ‘RHODE ISLAND, INC., ET AL.

ON PETITIONS FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE FIRST CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

This brief is submitted in response to the Court’s invi-

tation to the Solicitor General to file a brief expressing

the views of the United States.

STATEMENT

1. The Massachusetts Water Resources Authority

(MWRA) is a governmental agency authorized by the

Massachusetts legislature to provide water-supply services

(1)

>

and sewage-collection, treatment and disposal services for

the eastern half of Massachusetts. Following a lawsuit

arising out of the discharge of sewage into Boston Harbor

in violation of the Clean Water Act, 33 U.S.C. 1251 ef

seg., the MWRA was ordered by a federal district court

to meet a detailed timetable to carry out the clean-up

of the Harbor. It is estimated that this task, known as

the es ~+ rn La rhy - (le: . - Project. will require the eXx-

penditure of 56.1 Dillion for public works over a ten-vear

period Se€ oi Z Stati \ V etropolita Distr

Comm’? 757 F. Supp. 121, 123 D. Mass. aff’d. 9380

. *

F.2d 132 (1st Cir. 1991 an

The rit I I ir] I ne role re f TO) h ?

MWRA’s enabling statute, 1984 Mass. Acts 372, and

Commonwealth’s public bidding laws, Mass. Gi

Laws ch. 149, $$ 44A-44L & ch. 30, §39M (& Su

19a) as Pet Ann. 20 Pursu an 4 +r +} e ] Ws

MWRA ovides the funds fo)

: e and federal! grat ‘

wards. MWRA Pet. App. 3a, 74a.

2. In April 1988, MWRA retained Kaiser Engineers,

—_

4 .. . “4 . y + ws ot . + ‘ .

Ine Kaiser’), a rivate construction

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TO) ne qura I ne projet Wi VV Ive

need wor tonpnag nd inf

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3

to numerous delays, thus placing the court-ordered time

schedule in jeopardy and subjecting MWRA to contempt

citations, These concerns were heightened by the limited

access to the major work site, Deer Island, which would

enable a sma]! number of pickets to stop the entire project.

MWRA Pet. App. 3a-4a, 74a-75a.

Aware of these concerns, Kaiser recommended to

MWRA that it be permitted to negotiate with unions in

the building and construction trades, through the Build-

ing and Construction Trades Council (Council), in an ef-

fort to arrive at an agreement that would assure labor

stability over the life of the project. Any agreement would

be subject to review and final approval by MWRA.

MWRA Pet. App. 75a, 105a. MWRA accepted Kaiser’s

recommendations, and in May 1989, Kaiser and the un-

ions negotiated an agreement—the Boston Harbor Waste-

water Treatment Facilities Project Labor Agreement (the

Master Labor Agreement). See id. at 107a-140a.

The Master Labor Agreement states that it is the policy

of MWRA that “the construction work covered by this

Agreement shall be contracted to Contractors who agree

to execute and be bound by the terms of this Agreement.”

MWRA Pet. App. 109a. It requires all contractors to

recognize the Council as the bargaining representative for

all craft employees performing work on the project, to

hire workers through the hiring halls of the Council’s

constituent unions, to require hired workers to join the

relevant union within seven days, to follow specified

dispute-resolution procedures, to apply the Council’s

wage, benefit, seniority, apyrensiceship and other rules,

and to make contributions to the Council unions’ benefit

funds. In return, the unions agreed not to engage in any

strikes or work stoppages during the ten-year life of the

project. /d. at 5a-6a, 32a, 75a.

On May 28, 1989, MWRA approved the Master Labor

Agreement as the labor policy for the project and directed

>

that Specification 13.1 be added to the bid specifications

~

for all new construction work.2 MWRA Pet. App. 5a, 75a.

Specification 13.1 provides, in pertinent part, that:

[E]ach successful bidger and any and all levels of

subcontractors, as a condition of being awarded a

contract or subcontract, will agree to abide by the

provisions of the [Master Labor Agreement] as exe-

cuted and effective May 22, 1989, by and between

[Kaiser], on behalf of [MWRA], and the | Trades

Council] * * * and will be bound by the provisions

of that agreement in the same manner as any other

provision of the contract * * *.

Id. at 141a-142a. Successful bidders are accordingly re-

quired to abide by the Master Labor Agreement, but the

bidding is not restricted to union contractors. The speci-

fications provide that any qualified bidder may compete

for a contract, without regard to whether the contractor

has a pre-existing bargaining relationship with a union,

and the contract must be awarded to the lowest qualified

bidder.

Nonunion bidders are also not required to sign any

other agreement with any unions for other projects. In

addition, although a contractor must agree to use the

local union’s job referral system for labor on the project

(or to give preference to applicants referred by the local

union if the union has no such referral system), the job

referral system must be operated in a non-discriminatory

manner so that employees who are not already union

members are nevertheless eligible for project work.

MWRA Pet. App. 103a-104a, 110a, 116a-117a.

38. On March 5, 1990, respondent Associated Builders

and Contractors of Massachusetts/Rhode Island (ABC)—

2 Massachusetts law expressly requires the MWRA, as well as

other procuring agencies, to award contracts pursuant to a com-

petitive bidding process. See page 2, supra; Pet. App. 3a; Modern

Continental Construction Co. Vv. Lowell, 465 N.E.2d 1173 (Mass

1984).

a —_ - ———— ee ——-_- —- — —_— — -—- -— — ee ee

an association of nonunion contractors—filed this s

the United States District Court for the Distri

sachusetts seeking an injunction barring enforceme

Bid Specification 13.1 on the ground, inter a

impermissibly interferes with the system of free coll

bargaining contemplated by the National Labor Ri

Act (NLRA). On April 11, 1990, the district court

sued a memorandum and order rejecting AB‘

emption and other claims, and denied a preliminar

junction. MWRA Pet. App. 72a-83a.

In the meantime, another contractors’ associatio1

Utility Contractors Association of New Englan

an unfair labor practice charge with the National L:

Relations Board (NLRB), alleging that Kaiser's

agreement with the Council violates the NLRA. On J

25, 1990, after the district court had ruled, the Gs

Counsel of NLRB refused to issue a complaint, fir

that the agreement is lawful under the constructior

dustry proviso to Section 8(e) of the NLRA, 29 U.S.

158(e), and is a valid prehire agreement und

8(f), 29 U.S.C. 158(f). See Building & Trades C

et al. (Kaiser Engineers, Inc.), Case 1-CE-71, GC Ad

Memo (reproduced at MWRA Pet. App. 88a-93a

4. On October 24, 1990, a pane! of the Fir

reversed the district court’s decision, agreeing with AB'

contention that MWRA’s Bid Specification 13.1

empted by the NLRA. MWRA Pet. App. 49a-7]

rehearing en banc, the court of appeals, by a

adhered to that ruling. Jd. at la-48a.*

The en bane majority believed that “the preser

is most heavily influenced by the Supreme Court’s

%’ After issuance of the panel’s “ecision, the district «

a preliminary injunction barring enforcement of Bid Spe

13.1. The en banc court continued that injunctior

rehearing. MWRA Pet. App. 86a-87a. The ultimats

the en banc court, which affirmed the panel’s dé

that injunction in effect. Jd. at 3la

ings in the Golde» State Transit Corp. cases,‘ which re-

lied and expanded upon the Machinists doctrine.’ *

MWRA Pet. App. 15a. It understood “the lesson of the

Golden State cases |to be] that, where interference into

the collective bargaining process by the state is direct, an

asserted state interest of the type at issue here, whether

‘proprietary’ or otherwise, cannot justify the interfer-

ence.” Jd. at 30a. In this case, the majority concluded

that Bid Specification 13.1, by requiring all contractors to

comply with the Masier Labor Agreement negotiated by

Kaiser, constitutes direct interference with the collective

bargaining process. Jd. at 17a. The majority recognized

that Sections 8(e) and 8(f) of the NLRA expressly per-

mit such special contractual arrangements in the con-

struction industry, id. at 22a-24a, and that under those

provisions, “the Master Labor Agreement between the

Trades Council and Kaiser is a valid labor contract.” Jd.

at 24a. But it found the legality of the agreement itself

to be “irrelevant” to the question whether Bid Specifica-

tion 13.1—by which MWRA requires adherence to that

agreement—is preempted. /d. at 24a-25a.

In dissent, Chief Judge Breyer, joined by Judge Camp-

bell, believed the “‘only question in this case is whether the

NLRA forbids the MWRA, because it is a state agency,

to do what the Act explicitly permits a private contractor

to do.” MWRA Pet. App. 32a. In his view, far from

upsetting the balance between labor and management

that Congress intended, the MWRA’s contracting decision

affects labor-management relations “only to the extent

that Congress foresaw and (with respect to general con-

tractors) explicitly authorized” in Sections 8(e) and

8(f). Pet. App. 34a.

* See Golden State Transit Corp. v. City of Los Angeles, 475 U.S

608 (1986) (Golden State I), and Golden State Transit Corp. v

City of Los Angeles, 493 U.S. 103 (1989) (Golden State 71).

-

5See Lodge 76, Machinists v. Wisconsin Employment Relations

Comm'n, 427 U.S. 132 (1976).

DISCUSSION

In our view, the court of appeals erred. It should have

fcund that Massachusetts did not exceed its legitimate

authority to specify the terms and conditions for contract-

ing on its own public works project. Implied preemption

under the NLRA is inappropriate in this context because

the Commonwealth has not sought to regulate collective

bargaining in Massachusetts. It has only sought to exer-

cise a proprietary right that Congress expressly conferred

on private employers—the right to require all contractors

working on a construction project to adhere to a collective

bargaining agreement with a union. The NLRA was de-

signed to avoid undue interference in the States’ conduct

of their own affairs by excluding States from the defini-

tion of “employers” covered by the Act, yet the decision

below expands the implied preemption doctrine to deny

States rights that are afforded even to private employers.

Although there is as yet no conflict in the decisions of

the courts of appeals, we believe that the issue is of

such substantial importance that review is warranted.

This Court’s precedents do not clearly resolve the pre-

emption issue that is thoroughly discussed in the divided

opinions of the en bane court below. This uncertainty

poses significant difficulties for States seeking to assure

stability in the performance of their public works proj-

ects. In this case alone, the decision has nullified a key

contractual provision in the massive public works project

for the clean-up of Boston Harbor—a project that must

be completed according to a schedule established by the

judgment in a suit brought by the United States to rem-

edy substantial violations of the Clean Water Act. The

decision similarly threatens the validity of other project

agreements that have been utilized in connection with

construction of a wide variety of other major public

works across the country, and will serve to deter the

States from utilizing such terms in new public warks

projects until the issue is finally settled. We therefore

a

believe that it is appropriate to grant certiorari in this

case.

1. The holding by the court of appeals majority that

federal law preempts MWRA’s requirement that contrac-

tors on MWRA’s construction project abide by the labor

agreement previously negotiated by its construction man-

ager rests primarily on that branch of NLRA preemp-

tion law known as Machinists preemption. MWRA Pet.

App. 15a, 30a; see Machinists v. Wisconsin Employment

Relations Comm’n, 427 U.S. 1382 (1976); see also Team-

sters V. Morton, 377 U.S. 252 (1964). This Court has ex-

plained that the Machinists doctrine is designed “to gov-

ern pre-emption questions that arose concerning activity

that was neither arguably protected * * * nor arguably

prohibited” by the NLRA’s specific terms. Metropolitan

Life Ins. Co. v. Massachusetts, 471 U.S. 724, 749 (1985).°

Under that doctrine, the courts must determine if a

State’s regulation of conduct conflicts with Congress’s in-

tention that certain labor-related conduct remain “un-

regulated” and left to “the free play of economic forces.”

Machinists, 427 U.S. at 140.

* The Machinists doctrine is distinct from the other major branch

of NLRA preemption doctrine—Garmon preemption—which gov-

erns cases involving state regulation of conduct that is either argu-

ably protected or arguably prohibited by the NLRA’s specific regu-

latory terms. See San Diego Building Trades Council v. Garmon,

359 U.S. 236 (1959); see also Metropolitan Life Ins. Co. Vv. Mass-

achusetts, 471 U.S. at 748-751 (describing “two distinct NLRA

preemption principles”).

Although relying primarily on the Machinists doctrine, the ma-

jority below expressed the view that the Garmon preemption doc-

trine also “most likely applies to Specification 13.1.” MWRA Pet.

App. 30a: see also id. at 15a, 2la. The only explanation for this

view was an assertion that the agreement’s provision for union

recognition interferes with employee rights under Section 7 of the

NLRA, 29 U.S.C. 157. Pet. App. 2la. However, as we explain at

pages 9-10, infra, Section 8(f) of the NLRA specifically sanctions

prehire agreements in the construction industry and protects em-

ployee free choice by permitting employees to file a petition for a

representation election during the term of such an agreement.

The state action in issue here does not cause any

impermissible interference with federal labor policy, be-

cause the use of binding project labor agreements in the

construction industry is specifically sanctioned by Sec-

tions S(e) and Sif) of the NLRA. Section 8(e) ordi-

narily prohibits agreements between an employer and a

union that preclude an employer from doing business

with any other party, such as a non-union contractor.

The section contains a “construction industry proviso,”

however, which nevertheless permits preclusive arrange-

ments between a union and an employer in the construc-

tion industry that concern the contracting or subcontract-

ing of work to be performed at a construction jobsite.

Furthermore, Section 8(f) of the NLRA also adopts a

special rule of labor relations for the construction in-

dustry by permitting “prehire agreements” under which

employers will recognize unions as bargaining representa-

tives of employees who have not yet been hired.’

Operating together, Sections 8(e) and 8(f) validate

project labor agreements in the construction industry—

collective bargaining agreements that establish labor

terms and union recognition for a construction project

as a whole, and that require all contractors and subcon-

tractors who are subsequently engaged to work on the

project to agree to be bound by the agreement’s provi-

sions. See Jim McNeff, Inc. v. Todd, 461 U.S. 260, 265-

266, 270 n.9 (1983); Woelke & Romero Framing, Ine. V.

NLRB, 456 U.S. 645, 659-660 & n.12, 662, 663 & n.15

(1982). Accordingly, both the majority and the dis-

senters below agreed that there would have been no in-

terference with or distortion of the economic forces that

Congress expected to govern labor relations in the con-

struction industry if the project labor agreement chal-

* To protect ¢mployee free choice, however, Section 8(f) contains

a proviso that permits employees, once hired, to utilize the NLRB

election process if they choose to reject the bargaining representa-

tive, or to cancel the union security provisions of the prehire

agreement.

10

lenged in this case had been entered into solely by a pri-

vate general contractor such as Kaiser. MWRA Pet. App.

24a, 34a-35a. They disagreed, however, on whether it

makes a difference that an agency of the Commonwealth

of Massachusetts (MWRA), rather than a private party,

authorized negotiation of the agreement and then ef-

fectuated it by requiring contractors to adhere to its

terms as a condition of performing work on the state-

owned project. Id. at 27a-28a, 35a, 40a-41a.

2. a. In finding MWRA’s Bid Specification 13.1 pre-

empted, the majority relied principally upon this Court’s

decisions in the Golden State cases. See note 4, supra.

In Golden State I, the Court held that the city’s action

in conditioning renewal of the company’s taxicab operat-

ing license on the company’s settlement of its labor dis-

pute with the union by a certain date was preempted by

the NLRA. The Court reasoned that the city had “|en-

tered] into the substantive aspects of the bargaining

process to an extent Congress has not countenanced” by

setting “time limits on negotiations [and] economic

struggle.” 475 U.S. at 616 (quoting Machinists, 427

U.S. at 149). In Golden State II, the Court held that the

company was entitled to sue for compensatory damages

under 42 U.S.C. 1983, because the city’s action in vio-

lating the company’s “right to use permissible economic

tactics to withstand the strike” deprived it of “a personal

liberty” guaranteed by federal law. 493 U.S. at 112.

The majority below read the Golden State cases as es-

tablishing an absolute rule that “where interference into

the collective bargaining process by the State is dtrect,

an asserted state interest of the type at issue here,

whether ‘proprietary’ or otherwise, cannot justify the in-

terference.” MWRA Pet. App. 30a. The Golden State

decisions, however, do not create any absolute preemption

policy. Rather, the test under Golden State is avhether

the State has “[entered] into the substantive aspects of

the bargaining process to an extent Congress has not

countenanced.”’ Golden State l, A75 U.S. 616 (emphasis

1]

added) (quoting Machinists, 427 U.S. at 149). Thus, the

Golden State decisions require inquiry into whether the

particular state action conflicts with an intention by

Congress to leave the specific conduct involved to the free

play of economic forces. In this case, the dissenting

judges below correctly concluded that MWRA’s actions

are in all relevant respects indistinguishable from those

of private contractors that are expressly permitted by

the NLRA despite their potential impact on the free play

of economic forces between other contractors and their

employees on a construction project, and that those ac-

tions do not affect the NLRA’s operation in any ways un-

intended by Congress.

The first step in the Golden State/Machinists analysis

is to identify the precise right that the NLRA assertedly

‘protect|s| against governmental interference.” Golden

State II, 493 U.S. at 108. In the view of respondents and

the majority below, the protected right is the right of

contractors “to negotiate their own terms of employment

or to operate on a non-union basis.” Br. in Opp. 4;

MWRA Pet. App. 18a, 21a. Although employers in other

industries may have that right, the construction indus-

try proviso to Section 8(e) limits both the legal right

and practical ability of contractors in that industry to

order their own labor relations. By virtue of the proviso,

a general contractor has the right to require all other em-

ployers working on a particular jobsite to adhere to the

terms of a master labor agreement it has entered into

with union representatives. Accordingly, the nonunion

contractors that are members of respondent ABC would

have had no right protected by the NLRA to obtain work

on a nonunion basis at the Boston Harbor Project if it

had been privately owned, if the owner had retained

Kaiser as its general contractor, and if Kaiser, in turn.

had entered into a project agreement identical to that

challenged here. It follows that MWRA is trenching o:

no right accorded by the NLRA to nonunion (or other)

contractors by requiring them, as a condition of obtain-

@

.

£

12

ing work on the project, to abide by the union agreement

that Kaiser negotiated with MWRA’s approval.

b. The majority below in fact acknowledged that “un-

der the exceptions established by Sections 8(e) and 8(f) of

the Act, the Master Labor Agreement between the Trades

Council and Kaiser is a valid labor contract.” MWRA

Pet. App. 24a. But it found that conclusion to be “ir-

relevant to the preemption issue at hand,” because the

“history of Sections 8(e) and 8(f) discusses private em-

ployers only,” and nowhere “is there any indication that

a state would be allowed to impose this type of regula-

tion.” Pet. App. 24a-25a. The majority also believed that

“Congress is perfectly capable of distinguishing between

states and private parties when it chooses, and it has so

chosen here,” since Sections 8(e) and 8(f) refer to an

“employer,” and Section 2(2) (29 U.S.C. 152(2)) ex-

cludes from the definition of that term “any State or

political subdivison thereof.” Pet. App. 27a.

However, as Chief Judge Breyer pointed out in dissent,

“Congress had two perfectly good reasons for not making

the construction-industry exceptions explicitly applicable

to states, and neither of these reasons suggests any pre-

emptive intent.” MWRA Pet. App. 41a. First, “the list

of forbidden practices, to which the exceptions apply,

itself applies only to an ‘employer,’ defined to exclude

‘any State,’ thereby leaving the regulation of labor rela-

tions between a state and its own employees primarily to

state law”; accordingly, a “drafter, writing a statutory

exception to the resulting prohibition, would not normally

extend its scope beyond those subject to the prohibition

in the first place.” Ibid. Second, when Congress enacted

the construction industry exceptions in 1959, it “had

little reason to believe that a court might find, hidden in

the silence of the Act, some other relevant prohibition

applicable to a state.” Ibid.

Further, this Court has concluded that when Congress

enacted Section 8(e)’s construction industry proviso and

Section 8(f), it intended to preserve the existing “pat-

13

tern of collective bargaining in the construction indus-

try.” Woelke & Romero, 456 U.S. at 657. It therefore is

significant that in the detailed testimony preceding en-

actment of those provisions, the pattern described for

construction of public works (e.g., dams, roadways, and

bridges) was no different from that for purely private

projects.* In addition, the reasons identified in the legis-

lative history for authorizing prehire bargaining in the

construction industry—the special circumstances making

meaningful posthire collective bargaining difficult, the

general contractor’s need to predict labor costs, and the

contractor’s need to have available a steady supply of

8 See, e.g., Hearings on S. 1973 Before the Subcomm. on Labor

and Labor-Management Relations of the Senate Comm. on Labor

and Public Welfare, 82d Cong., 1st Sess. 27, 29, 31, 35, 39, 45

(1951); see also Council Pet. 11 (discussing Labor Department

study concluding that project agreements have been used for many

decades on both private and public development projects).

The Court in Woelke & Romero also relied (456 U.S. at 658-659

& n.11) on the discussion in the legislative history of Associated

General Contractors of America, Inc. (St. Maurice, Helkamp &

Musser), 119 N.L.R.B. 1026 (1957), review denied and enforced

sub nom. Operating Engineers Local Union No. 3 v. NLRB, 266

F.2d 905 (D.C. Cir.), cert. denied, 361 U.S. 834 (1959). That case

involved a union agreement governing construction work on Travis

Air Force Base in California that was undertaken pursuant to a

contract with the Army Corps of Engineers. 119 N.L.R.B. at 1027,

1049; 266 F.2d at 906. See also 105 Cong. Rec. 15,541 (1959)

(Mem. of Reps. Thompson and Udall, cited in Woelke & Romero,

456 U.S. at 662 n.13) (“the building trades unions and contractors

follow the practice of working out a scale of wages and other

terms of employment which will be applicable to all projects within

a specified geographical area for a substantial period of time,” and

“(tjhis practice has been encouraged by the Atomic Energy Com-

mission and other Government agencies’) ; Labor-Management Re-

form Legislation: Hearings on S. 505, S. 748, S. 76, S. 1002, 8S.

1137, and S. 1311 Before the Subcomm. on Labor of the Senate

Comm. on Labor and Public Welfzre, 86th Cong., Ist Sess. 496

(1959) (testimony of Richard J. Gray, President of Building and

Construction Trades Department, AFL-CIO, quoting S. Rep. No.

1509, 82d Cong., 2d Sess. 3-4 (1952)) (the “United States Govern-

ment * * * is directly concerned in the proper pricing and completion

14

labor °—hold true whether it is a public contractor or a

private contractor that lets the contracts for the work.

This background greatly undermines the court of appeals’

and respondents’ notion that Congress, without saying so,

intended to deny the States and their political subdivi-

sions the benefits of agreements permitted by Sections

S(e) and 8(f) when they act in a proprietary capacity.

By contrast, we share petitioners’ view that the posi-

tion of the majority below would frustrate congressional

intent and produce arbitrary distinctions in prehire prac-

tices within the construction industry. Whether there is a

prehire union agreement covering an entire project

“would often reflect, not size of the project, or desire

of the parties, or special conditions of the industry, but

simply whether or not the entity letting the contracts is

an arm of the state or private.” MWRA Pet. App. 40a.

And even among state projects, “the presence or absence

of such an agreement would depend upon whether state

law permits the state in question to have a private con-

tractor (who, then, presumably, would be free to enter

into a prehire agreement), or, as in Massachusetts, re-

quires the state agency to sign the relevant contracts

itself.”” Id. at 40a-41a.

e. The court of appeals majority also believed that its

holding was supported by Wisconsin Dep’t of Industry Vv.

Gould, 475 U.S. 282 (1986), which heid that a Wisconsin

statute debarring certain repeat violators of the NLRA

from doing business with the State was preempted by the

NLRA. See MWRA Pet. App. 25a-30a. In rejecting the

contention that the State was merely acting as a pur-

chaser of services, the Court acknowledged that “[n]oth-

ing in the NLRA * * * prevents private purchasers from

f construction projects for defense installations and production

I ties ! prehire agreements are important for “large pr

ts, particularly for defense installations and plants”

* See, e.g., S. Rep. No. 187, 86th Cong., Ist Sess. 27-29 (1959

reproduced at MWRA Pet. App. 46a-48a); see also Pet. App. 37a

1Oa Brever + J . dissenting

15

boycotting labor law violators,” but added that “[t]he

Act treats state action differently from private action

* * * because in our system States simply are different

from private parties and have a different role to play.”

175 U.S. at 290.

Gould, however, is clearly distinguishable from this

case. The state debarment rule in Gould “serve[d] plainly

as a means of enforcing the NLRA,” and “[nJo other

purpose could credibly be ascribed” to it. 475 U.S. at

287. Here, by contrast, MWRA is not seeking to enforce

the NLRA, punish NLRA violators, or further any regu-

latory role. It seeks only to protect its own proprietary

interests in the stable and efficient development of a major

governmental project, and it does so, as a private de

veloper would, through lawful arrangements relating to

project labor agreements. Indeed, the labor agreement in

issue here actually was negotiated, apparently without

direction from MWRA, by Kaiser, the private construc-

tion manager and general contractor that MWRA selected.

Nothing in Gould suggests that where, as here, the

State is seeking to further its legitimate proprietary

concerns through an arrangement expressly authorized by

the NLRA, its action nevertheless is preempted. To the

contrary, the Gould Court specifically noted that it was

“not say{ing| that state purchasing decisions may never

be influenced by labor considerations,” and that it was

“not faced here with a statute that can even plausibly be

defended as a legitimate response to state procurement

constraints or to local economic needs.”’ 475 U.S. at 291.

This case directly implicates those concerns, and thus

presents the issue left open by Gould. e

3. We recognize that the First Circuit decsion does not. *

conflict with the decision of any other court of appeals, but

we nevertheless believe that review by this Court is war-

ranted. The preemption analysis adopted in this case has

invalidated a major contractual undertaking by the Com-

monwealth of Massachusetts, and thereby threatened the

16

timely, cost-effective clean-up of the Boston Harbor.”

The decision also casts doubt on the validity of similar

project labor agreements that have been utilized for the

construction of a wide variety of public projects (both

state and federal), including hospitals, tunnels, airports,

convention centers, hydroelectric projects, waste treat-

ment facilities, and mass transit systems. See Council

Pet. 12-18 & n.5: MWRA Pet. 12; California, et al.,

Amicus Br. 2 n.1."' In the circumstances of these proj-

ects, the responsible governmental entities, including fed-

eral agencies, found that such agreements were important

to ensuring stability, an available labor supply, and

timely completion of major construction projects needed

to further substantial public purposes. The undertaking

of such public projects is a central function of state and

19 We are advised that the unions have only agreed to continue

to honor the agreement pending the outcome of the proceedings in

this Court. If certiorari is not granted, the unions may seek to

repudiate the agreement, on the premise that a fundamental term

of the bargain has been invalidated.

11 Respondents attempt (Br. in Opp. 5) to distinguish between

“union-only” project agreements and those that “establish certain

conditions of employment without interfering in the process of

collective bargaining.” They assert that “there is no evidence in

the record of this case that ‘union-only’ project agreements are

‘widely-used’ by state or local governments anywhere in the coun-

try.” However, as the Unions point out (Council Reply Br. 4-5),

respondents “offer no evidence that there are, in actual practice,

two distinct types of project labor agreements, or that in the public

sector, use of the supposedly ‘less offensive’ type of agreement pre-

dominates.” Indeed, the Baltimore Harbor Tunnel Thruway agree-

ment (see C.A. App. 451), the only agreement cited by respondents

as an example of the supposedly “less offensive” type, requires all

contractors to abide by a collective bargaining agreement and recog-

nize, union representation of their employees. See C.A. App. 455,

462-463. Moreover, as the Council observes (Reply Br. 5), “a public

entity’s decision to require contractors to adhere to a supposedly

‘less offensive’ project agreement—which is still a collectively bar-

gained agreement that ‘establish[es] certain conditions of employ-

ment’ * for all project work”—would also appear to be unlaw-

ful under the First Circuit’s reasoning.

17

local governments. Such projects therefore “implicate

‘interests so deeply rooted in local feeling and responsi-

bility,’ that pre-emption should not be inferred.” Gould,

475 U.S. at 291 (quoting Garmon, 359 U.S. at 243-244).

A number of similar challenges have in fact been filed

in at least three other circuits. These cases indicate that

the issue is a recurring one, that this Court will ulti-

mately have to resolve the question, and that deferring

review has highly adverse consequences for state and local

governments. Relying on the decision below, led

a divided

panel of the Eighth Circuit recently enjoined the City of

Minneapolis from using a project Jabor agreement in its

construction of a new municipal bridge. See Glenwood

Bridge, Inc. v. City of Minneapolis, 940 F.2d 367 (1991

Challenges to public works projects carried out under sim-

ilar arrangements are a now pending in two other

circuits where the preemption claims were rejected by

the district courts. Phoenix Engineering, Inc. v. M-K

Ferguson of Oak Ridge Co., No. Civ. 3-90-8389 (E.D.

Tenn. Mar. 22, 1991), appeal pending, No. 91-5527 (6th

Cir.) (rejecting claim that NLRA prohibited involvement

by Department of Energy in project labor agreement

for construction services at Department’s Oak Ridge

Operations); Avreo Electric v. Watkins, No. CV 90-

0075-E-EJL (D. Idaho May 14, 1991) (rejecting claim

that NLRA bars project labor agreement on Department

of Energy project }: Associated Builders & Contractors

v. City of Seward, No. A91-001 (D. Alaska Mar. 20.

1991), appeal pending, No. 91-35511 (9th Cir. grant-

ing summary judgment in favor of the city). Although

} 7 |

'

other circuits may ultimately reject the view of the First

and Kight Cireuits, there is no reason to exnect the en

There is no merit to respondents’ contention (Br. in Opp. 15

that this Court should not nt revi because the court of

’

)

: ] } . . > } . .

peals’ decisior a endered <¢ ei rom the denial of a pre

pad

© 4

CONCLUSION

The petitions for a writ of certiorari should be granted.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

JERRY M. HUNTER MAUREEN E. MAHONEY

General Counsel Deputy Solicitor General

D. RANDALL FRYE EDWIN S. KNEEDLER

Acting Deputy General Counsel Assistant to the

NorRTON J. COME Solicitor General

Deputy Associate General Counsel

LINDA SHER

Assistant General Counsel

National Labor Relations Board

APRIL 1992

liminary injunction and the case is therefore at an interlocutory

stage. The court of appeals has decided that MWRA may not re-

quire prospective contractors to adhere to the project agreement

as a condition of bidding for work. That decision, which was ren-

dered first by a panel and then by the court sitting en banc, deter-

mines with finality the legal issue of federal preemption tuvolved

in this case. In these circumstances, the issue is ripe for review

by this Court. See Myers v. Bethlehem Shipbuilding Corp., 303

U.S. 41, 51 (1938); see also Laborers v. Curry, 371 U.S. 542, 552

(1963).

W v. S. GOVERNMENT PRINTING OFrica, 1902 312324 45368

C—O ~