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

~ Nos. 91-261 and 91-274

IN THE

Supreme Court of the Anited States.

OCTOBER TERM, 1992

BUILDING AND CONSTRUCTION TRADES COUNCIL

OF THE METROPOLITAN DISTRICT,

Petitioner,

Vv.

ASSOCIATED BUILDERS AND CONTRACTORS

OF MASSACHUSETTS/RHODE ISLAND, INC., et al,

Respondents.

MASSACHUSETTS WATER RESOURCES

AUTHORITY AND KAISER ENGINEERS, INC.,

Petitioners,

v.

ASSOCIATED BUILDERS AND CONTRACTORS

OF MASSACHUSETTS/RHODE ISLAND, INC., et al,

Respondents.

On Writs of Certiorari to the United States

Court of Appeals for the First Circuit

BRIEF FOR THE ASSOCIATED GENERAL

CONTRACTORS OF AMERICA AS AMICUS CURIAE

IN SUPPORT OF RESPONDENTS

Of Counsel GLEN D. NAGER

MICHAEL E. KENNEDY (Counsel of Record)

THE ASSOCIATED GENERAL RICHARD F. SHAW

CONTRACTORS OF AMERICA DAVID A. YALOF

1957 E Street, N.W. JONES, DAY, REAVIS

Washington, D.C. 20006 & POGUE

(202) 393-2040 1450 G Street, N.W.

Washington, D.C. 20005

(202) 879-3939

Attorneys for the Associated

General Contractors of America

QUESTION PRESENTED

Whether the National Labor Relations Act preempts a state agency

that is not in the construction industry from entering into and

enforcing an agreement with a union that does not represent (or

seek to represent) the agency's employees to require private

construction employers to recognize that union and abide by the

terms of a labor agreement between the union and another

employer, under penalty of debarment from a $6.1 billion market

TABLE OF CONTENTS

Page

QUESTION PRESENTED

TABLE OF AUTHORITIES \

INTEREST OF THE AMICUS CURIAE 2

STATEMENT OF THE CASE 2

SUMMARY OF ARGUMENT 5

ARGUMENT 8

THE NLRA PREEMPTS THE STATE’S EFFORT TO IM

POSE A COLLECTIVE BARGAINING RELATIONSHIP

ON PRIVATE CONSTRUCTION INDUSTRY

EMPLOYERS AND, FURTHER, TO DICTATE THE

TERMS OF THAT RELATIONSHIP 9

PETTTIONERS AND THEIR AMICI] PROVIDE NO

PERSUASIVE REASONS FOR’ READING’ THE

CONSTRUCTION INDUSTRY PROVISIONS OF THE

NLRA TO INSULATE PUBLIC PURCHASERS OF

CONSTRUCTION FROM FEDERAL PREEMPTION 16

A. The First Proviso To Section 8(e) And Section 8(f)

Only Apply To Employers In The Construction

Industry And To Agreements That Result From A

Collective Bargaining Relationship

(111)

CONCLUSION

(1V)

TABLE OF CONTENTS - Continued

Page

B. Sections 8(e) And (f) Of The NLRA Do Not Allow

Third-Party Purchasers Of Construction To Enter

[Into Agreements With Construction Industry Unions

lo Limit Competition Among Construction Industry

Employers

4

(v)

TABLE OF AUTHORITIES

Cases

A.L. Adams Constr. Co. v. Georgia Power Co..

733 F.2d 853 (11th Cir. 1984), cert. denied,

471 U.S. 1075 (1985) | er 17, 18

Carpenters Local 1149 (American President Lines,

Ltd.), 221 N.L.R.B. 456 (1975), enf’d., 81 Lab

Cas. (CCH) ¢ 13,137 (D.C. Cir. 1977) 18

Clark v. Ryan, 818 F.2d 1102 (4th Cir. 1987) 17

Columbus Bldg. & Constr. Trades Council

(Kroger Co.), 149 N.L.R.B. 1224 (1964) 18

Connell Constr. Co., Inc. v. Plumbers & Steamfitters

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

Donald Schriver, Inc. v. NLRB, 635 F.2d 859

(D.C. Cir. 1980), cert. denied, 451 U.S. 976 (1981) 18

Forest City/Dillon-Tecon Pac. , 209 N.L.R.B. 867 (1974),

enf'd in part, 522 F.2d 1107 (9th Cir. 1975) 18

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987) 12

Frick Co., 141 N.L.R.B. 1204 (1963) 18

Golden State Transit Corp. v. Los Angeles,

475 U.S. 608 (1986) 9, 12, 15, 16

Golden State Transit Corp. v. Los Angeles,

493 U.S. 103 (1989) 9. 10

Jim McNeff, Inc. v. Todd, 461 U.S. 260 (1983) 9

Larry V. Muko, Inc. v. Southwestern Pennsylvania Bldg.

and Constr. Trades Council, 609 F.2d 1368 (3d Cir

1979) (en banc), cert. denied, 459 U.S. 916 (1982) 20, 22

Limbach Co. v. Sheet Metal Workers Int’l Ass’n..

949 F.2d 1241 (3d Cir. 1991) 22

Local 1937, Painters and Glaziers Dist. Council

No. 51 (Prince George’s Center, Inc.), 183

N.L.R.B. 37 (1970) , 18

Machinists v. Wisconsin Employment Relations

Comm'n, 427 U.S. 132 (1976) 6, 10

(V1)

TABLE OF AUTHORITIES - Continued

Metropolitan Life Ins. Co. v. Massachusetts,

471 U.S. 724 (1985) )

NLRB y. Iron Workers, 434 U.S. 335 (1978) .

NLRB vy. Nash-Finch Co., 404 U.S. 138 (1971)

NLRB vy. W.L. Rives Co., 328 F.2d 464 (Sth Cir

Operating Eng’rs Pension Trust v. Beck Engg

& Survevinge, 746 F.2d 557 (9th Cir. 1984)

San Diego Bldg. Trades Council v. Garmon,

359 U.S. 236 (1959)

1964)

South Prairie Constr. Co. v. Operating Eng’rs Local

627, 425 U.S. 800 (1976)

Wisconsin Dep’t. of Industry v. Gould, Inc.,

475 U.S. 282 (1986) 6. 9,

Woelke & Romero Framing, Inc. v. NLRB,

456 U.S. 645 (1982) 2.

Statutes

10, 12,

18, 20,

National Labor Relations Act, 29 U.S.C. § 151 ef seq.

29 U.S.C. § 157

29 U.S.C. § 158(a)

29 U.S.C. § 158(b)

29 U.S.C. § 158(e)

29 U.S.C. § 158(d)

29 U.S.C. § 158(f)

29 U.S.C. § 159

Railway Labor Act, 45 U.S.C. § 151 ef seq.

Page

10, 12

9

10

18

18

1O, 1]

15. 16

24, 26

lO

10

10. 11

passim

1]

passim

10

ole.

~~

(V11)

TABLE OF AUTHORITIES - Continued

Page

Miscellaneous

D. Q. Mills, Industrial Relations and Manpower

in Construction (1972) 25

[. Campbell, Labor Law and Economics,

38 Stan. L. Rev. 991 (1986) 13, 20, 22

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

of Labor Law, 62 Va. L. Rev. 603 (1976) 26

U.S. Department of Labor, Labor Management

Services Administration, 7he Bargaining Structure

in Construction: Problems and Prospects (1980) 25

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1992

Nos. 91-261 and 91-274

BUILDING AND CONSTRUCTION TRADES COUNCLI

OF THE METROPOLITAN DISTRICT,

Petitioner

ASSOCIATED BUILDERS AND CONTRACTORS

OF MASSACHUSETTS/RHODE ISLAND, INC., ef ai..,

Respondents.

MASSACHUSETTS WATER RESOURCES AUTHORITY

AND KAISER ENGINEERS, INC.,

Petitioners.

ASSOCIATED BUILDERS AND CONTRACTORS

OF MASSACHUSETTS/RHODE ISLAND, INC., et al.

Respondents.

On Writs of Certiorari to the United States Court of Appeals

for the First Circuit

BRIEF FOR THE ASSOCIATED GENERAI

CONTRACTORS OF AMERICA AS AMICUS CURIAE IN

SUPPORT OF RESPONDENTS

INTEREST OF THE AMICUS CURIAE

The Associated General Contractors of America, Inc. ("AGC")

is a private, nonprofit trade association founded in 1918 to

represent the national interests of general construction contractors.

AGC members perform work on both private and public

construction projects

AGC has 100 state and local chapters, with at least one chapter

for each State and one chapter in Puerto Rico. Many of AGC’s

chapters have been and remain the vehicle for collective

bargaining with unions that represent construction craft workers.

At the same time, AGC and its chapters have represented and

continue to represent the interests of construction contractors that

are not signatories to collective bargaining agreements.

Because of the breadth and diversity of its membership, AGC

iS iN a unique position to inform the Court about the important

construction industry labor law and preemption issues raised by

this case. Indeed, AGC has participated in other cases before this

Court raising similar questions concerning the construction in-

dustry provisions of the National Labor Relations Act. See, e.g.,

Woelke & Romero Framing, Inc. v. NLRB, 456 U.S. 645 (1982);

Connell Constr. Co., Inc. v. Plumbers & Steamfitters Local Union

No. 100, 421 U.S. 616 (1975). The parties have consented to the

filing of this brief.’

STATEMENT OF THE CASE

|. The Massachusetts Water Resources Authority ("MWRA")

iS a governmental agency created by the Massachusetts legislature

The parties’ letters of consent have been filed with the Clerk pursuant

275

to Rule 37.3 of the Court

3

Pet. App. 3a.” MWRA is authorized to provide water supply

services, sewage collection, and treatment and disposal services

for the eastern half of Massachusetts, and is charged with

effecting a ten-year, $6.1 billion series of projects for a

court-ordered clean-up of the Boston Harbor. /d. To this end,

the MWRA furnishes funds for construction (assisted by state and

federal grants), owns the property upon which building will

occur, establishes bid conditions, and makes all contract awards

to contractors performing construction on the project. /d. at 3a,

74a

In April 1988, the MWRA retained Kaiser Engineers, Inc

("Kaiser") as its program/construction manager for the Boston

Harbor clean-up project. Pet. App. 3a-4a, 74a. Kaiser’s primary

function as program manager is to manage and supervise the

construction activity on the project. /d. at 4a, 74a. Kaiser is also

responsible for advising the MWRA about the development of

labor relations policy on the project. /d.

2. When work in Boston Harbor began, the MWRA allowed

both collective bargaining and open shop contractors to perform

the work. J.A. 72-74. In November 1988, however, two

member unions of the Building and Construction Trades Council

("Trades Council"), a coalition of 34 different unions in the local

building and construction trades, picketed the project in order to

protest the use of non-union labor by a contractor and, as a result,

precipitated a brief work stoppage. Pet. App. 4a; J.A. 73. In

response, Kaiser and the MWRA set up a reserve gate system,

and thereby established separate entrances to the job site for

employees of other contractors. Pet. App. 4a. Shortly thereafter,

the work stoppage ended. /d.

The MWRA thereafter determined that Kaiser should negotiate

a master labor agreement with the Trades Council. Pet. App. 5a,

' Unless otherwise specified, "Pet. App.” refers to the appendix to the

petition for a writ of certiorari in No. 91-274

4

_

75a. Kaiser and the Union understood that no agreement could

be implemented without the MWRA’s express approval. /d. On

May 22, 1989, the Trades Council and Kaiser, "on behalf of" the

MWRA, entered into such an agreement -- the Boston Harbor

Wastewater Treatment Facilities Project Labor Agreement (the

"Master Labor Agreement"). /d. at 107a.

The Master Labor Agreement recognizes the Trades Council

“as the sole and exclusive bargaining representative of all craft

employees" on the project, and makes its hiring halls the initial

and principal source for the project’s labor force. Pet. App. 6a.

It subjects all construction employees on the project to union

security provisions, and requires that they become union members

within seven days of their employment. /d. The Agreement also

provides that employees must seek redress for their grievances

only through the recognized labor organization, and that all con-

tractors will be bound to the Council’s wage, benefit, seniority,

apprenticeship, job classification and other rules. /d. It further

requires that all contractors make couiributions to “union benefit

trust funds." /d. Finally, the Agreement acknowledges that it is

"the policy of the [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." /d. at 5a,

109a. The Master Labor Agreement expressly excludes em-

ployees of the MWRA from its coverage, and denies that Kaiser

and the MWRA are "joint employers." /d. at 114a, 116a

On May 28, 1989, the MWRA approved the Agreement. Pet

App. 5a, 75a. On that same day, the MWRA ordered that Bid

Specification 13.1 be added to the specifications applicable to all

construction work in Boston Harbor. /d. Bid Specification 13.1

provides that each contractor, as a condition of being awarded a

contract, will abide by the provisions of the Master Labor

Agreement. /d. at Sa, 72a, 14la. Thus, although MWRA must

award all contracts and subcontracts to the lowest responsible and

"qualified" bidder, to be so “qualified,” a contractor must agree

to follow the provisions of the Master Labor Agreement. /d. at

l4la.

5

3. Following the issuance of Pid Specification 13.1,

respondents filed this suit alleging, among other things, that the

National Labor Relations Act ("NLRA" or "Act"), 29 U.S.C.

§ 151 ef seq., preempts the actions taken by MWRA in entering

into an agreement with the Trades Council to impose the Master

Labor Agreement on private construction employers through Bid

Specification 13.1. Pet. App. 72a; J.A. 15, 22-23. The district

court, however, found that respondents were unlikely to succeed

on the merits and denied a requested injunction. Pet. App

76a-77a.

4. Qn appeal, the First Circuit sitting en banc reversed and

remanded for further proceedings. The court found that "the

State's intrusion into the bargaining process" was "pervasive" and

that, by “mandat[ing] that a labor agreement be reached before a

bid is awarded, ... dictat[ing] with whom that agreement is

going to be entered, and specif[ying] what its contents shall be,"

the MWRA has in fact “eliminate/d]/ the bargaining process

altogether." Pet. App. 17a (emphasis in original). As between

Kaiser and the Trades Council, the court accepted that the Master

Labor Agreement was a valid labor contract under Sections 8(e)

and (f) of the Act, but found that the validity of that agreement

did not itseif justify Bid Specification 13.1’s interference with the

organizational and collective bargaining processes that are the

subject of the Act. Pet. App. 24a-2S5a.

5. In dissent, Chief Judge Breyer started from the premise

that, were a private party letting these construction contracts, the

NLRA would have permitted it to take the actions that MWRA

had taken here. Pet. App. 32a. Chief Judge Breyer did not

believe that, in such circumstances, an intent to preempt could

reasonably be inferred from the Act. /d. at 41a, 45a.

SUMMARY OF ARGUMENT

[. The NLRA largely displaces all state regulation of

industrial relations. Pursuant to San Diego Bldg. Trades Council

v. Garmon, 359 U.S. 236 (1959), states are preempted from

6

regulating activity that the NLRA protects, prohibits, or arguably

protects or prohibits. Pursuant to Machinists v. Wisconsin

Employment Relations Comm’n, 427 U.S. 132 (1976), states are

preempted from regulating activity that Congress intended to be

unregulated by any governmental authority. Both forms of

preemption are implicated by this case.

By agreeing with the Trades Council to make employment on

the Boston Harbor project the price of an employee vote to

decertify the Trades Council, the MWRA has encumbered

employee rights under Section 8(f) to reject a construction

industry labor union and to cancel union security provisions. By

agreeing to condition bidder eligibility on recognition of the

Trades Council, the MWRA has encumbered the right of private

contractors to compete without coercion from persons outside the

construction industry. And, by imposing the agreement between

Kaiser and the Trades Council on all contractors working in

Boston Harbor, the MWRA has eliminated the free and

uninhibited organizational and collective bargaining processes that

Congress meant to leave unregulated. The former state actions

are preempted by Garmon; the latter state action is preempted by

Machinists.

The MWRA’s actions are not saved from preemption by

recognized exceptions for state minimum employment standards,

see Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724

(1985), or for state actions pursuing wholly “local interests," see

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

(1986). As the Solicitor General ironically concedes, those

exceptions do not apply to state actions which, like the MWRA’s

actions, directly conflict with the NLRA’s provisions or apply

only to organizational and collective bargaining processes reserved

by the Act to the parties. Nor is it relevant that the MWRA has

acted in an allegedly proprietary capacity through its bidding

regulations rather than pursuant to its police powers. States may

not take actions, in any form, that conflict with the NLRA or

interfere with its policies.

“

II. Petitioners’ argument that the MWRA’s actions are saved

from preemption because Sections 8(e) and (f) of the Act permit

private property ownets or developers to agree with construction

industry unions to impose project labor agreements on

construction industry employers is unfounded. The construction

industry proviso to Section 8(e) and Section 8(f) apply only to

employers “in the construction industry" and to those employers

“engaged primarily in the building and construction industry." A

private owner/developer that hires a general contractor to manage,

coordinate and oversee a construction project, and that does not

itself control the method and manner of construction, is not such

a construction industry employer.

In all events, this Court’s decision in Connell Constr. Co., Inc.

v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616

(1975), makes it clear that a mere third-party purchaser of

construction does not fall within the Section 8(e) proviso. A

private third-party purchaser of construction in the same position

as the MWRA has, like the employer in Connell, no present or

expected collective bargaining relationship with the union.

Connell holds that union signatory requirements may not be

enforced in such circumstances since Congress did not intend, in

Sections 8(e) and (f), to allow unions to engage in such

"top-down" organizing through a "stranger" employer, or to allow

unions to extend their limited statutory monopoly power into the

business end-product markets.

Petitioners have provided no persuasive reasons for extending

the protection of the Section 8(e) proviso or Section &(f) to

third-party purchasers of construction. The MWRA is not in a

"joint employer" relationship with Kaiser, and therefore cannot

properly have Kaiser’s shelter under the construction industry

provisions imputed to it. Moreover, the inherent economic power

of such a third-party purchaser, especially on market project of

this size and type, is precisely the concern that led the Court in

Connell to hold that hot cargo agreements with “stranger”

employers are outside the protections of the proviso.

Furthermore, there appears to be no evidence to establish that the

8

pattern of collective bargaining in the construction industry in

1959, which Congress intended to preserve in enacting the

proviso, included restrictive secondary contracting agreements

between construction industry unions and_third-party purchasers.

To the contrary, there is every reason to believe that such

arrangements are novel organizing tactics that were first

developed by unions in the early 1970s, and then extended to

third-party purchasers only in the mid-1980s

ARGUMENT

No one disputes that the NLRA permits a state agency to

negotiate and enter into a collective bargaining agreement with a

union that represents the agency’s own employees. But the

agreement of the MWRA and the Trades Council that is at issue

here does not concern the wages, hours or other terms and

conditions of employment of the MWRA’s public employees. As

the court below expressly noted (Pet. App. 19a-21a, 24a-25a), the

MWRA is not here defending its role as a public employer

entering into such an agreement. MWRA’s employees are not

represented by the Trades Council, and MWRA does not have a

collective bargaining relationship with any of the construction

industry unions in this case.

Nor is there any dispute that the NLRA permits private

construction industry employers to negotiate project labor

agreements that include broad subcontracting clauses and thereby

establish the wages, hours and other terms and conditions of

construction craft employment on public as well as private

construction projects. On the contrary, the court below accepted

(Pet. App. 24a) that Kaiser was free to negotiate such an

agreement on this public construction project.

The court below only held (Pet. App. 17a-21a, 24a-25a) that

the NLRA preempts the construction contract specification that the

MWRA and the Trades Council agreed to use here (1) to mandate

that private construction industry employers establish a bargaining

relationship with a designated union, and (2) to dictate the terms

9

of that relationship, under penalty of debarment from a $6.1

billion market. Contrary to the claim of petitioners and their

amici, this holding is neither startling nor perverse. It prevents

"top-down" organizing in the construction industry "to an extent

not contemplated by Congress." Jim McNeff, Inc. v. Todd, 461

U.S. 260, 268 (1983), citing NLRB v. Iron Workers, 434 U.S

335, 338 (1978) (Higdon). In addition, it ensures that the limited

monopoly power that the Act confers on construction industry

labor unions cannot be extended into the end-product market (so

as to raise consumer prices). See Connell Constr. Co., Inc. v.

Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616,

621-35 (1975).

In short, it is the argument of petitioners and their amici, and

not the decision below, that would, if accepted, turn the NLRA

on its head. Sections 8(e) and (f) of the NLRA do not permit

either a public or a private property owner/developer that is

merely purchasing construction from independent contractors to

enter into a “hot cargo" or "pre-hire"” agreement with a

construction industry union.

I. THE NLRA PREEMPTS THE STATE’S EFFORT TO

IMPOSE A COLLECTIVE BARGAINING RELATION-

SHIP ON PRIVATE CONSTRUCTION INDUSTRY

EMPLOYERS AND, FURTHER, TO DICTATE THE

TERMS OF THAT RELATIONSHIP.

As this Court has long recognized, the NLRA “largely

displaced state regulation of industrial relations." Wisconsin

Dep't. of Industry v. Gould, Inc., 475 U.S. 282, 286 (1986)

While the Act does not define the precise scope of this

displacement, the Court has developed two separate doctrines --

Garmon preemption and Machinists preemption -- that greatly

clarify the extent of implied preemption in the field of

labor-management relations. See Golden State Transit Corp. v.

Los Angeles, 493 U.S. 103, 110 (1989) (Golden State Il); Golden

10

State Transit Corp. v. Los Angeles, 475 U.S. 608, 613 (1986)

(Golden State !).

The Court’s decision in San Diego Bldg. Trades Council v.

Garmon, 359 U.S. 236 (1959), reveals that the NLRA preempts

state regulation of “activity that the NLRA protects, prohibits, or

arguably protects or prohibits." Wisconsin Dep't of Industry v.

Gould, Inc., 475 U.S. at 286. The purpose of Garmon

preemption is to ensure that the Act will be interpreted and

enforced by the congressionally designated federal agency, and

not by the states. Garmon, 359 U.S. at 241-245; see also

Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 748

n.26 (1985). Garmon preemption prevents "conflict in its

broadest sense" with the federal scheme. Wisconsin Dep't of

Industry v. Gould, Inc., 475 U.S. at 286.

Concomitantly, the Court’s decision in Machinists v. Wisconsin

Employment Relations Comm'n, 427 U.S. 132 (1976), reveals that

the NLRA also preempts state regulation of activity “that

Congress intended to be ‘unrestricted by amy governmental power

, Id. at 141 (citation omitted) (emphasis in original).

W hile the NLRA established an equitable process for determining

the terms and conditions of employment, the Act generally leaves

the outcome of that process to "'the free play of economic

forces.'" Jd. at 140, quoting NLRB v. Nash-Finch Co., 404 U.S.

138, 144 (1971). Thus, Machinists holds that state attempts to

interfere in conduct that Congress meant to be unregulated “are

as inconsistent with the federal regulatory scheme as are such

attempts by the [National Labor Relations Board]." Machinists,

427 U.S. at 153; id. at 149-50; Golden State Il, 493 U.S. at 110.

As the court below recognized (Pet. App. 15a-21a), both forms

of preemption are implicated by this case. The NLRA protects

the right of employees to decide whether to have a collective

bargaining representative and, if so, who that representative will

be. 29 U.S.C. §§ 157, 158(a), (6), 159 (1988). To be sure, the

Act permits employers "engaged primarily in the building and

construction industry" to negotiate and enter into agreements with

1]

construction industry labor unions before their employees have

had an opportunity to express their preferences. 29 U.S.C.

§ 158(f) (1988). The Act, however, also permits construction

industry employees to petition the National Labor Relations Board

("NLRB") to reject or change the union representative that a "pre-

hire" agreement imposes on such employees, and to cancel the

union security provisions of the agreement. /d. In addition, the

Act prohibits any employer that is not in the construction industry

or that lacks a collective bargaining relationship with a

construction industry union from expressly or impliedly agreeing

with a union that it will cease doing business with any other

person; indeed, the Act prohibits a union from threatening or

coercing such an employer to enter into such an agreement. 29

U.S.C. § 158(b)(4), (e) (1988). Finally, the Act protects the right

of employers to choose in good faith not to enter into collective

bargaining agreements that are unacceptable to them. 29 U.S.C.

§ 158(d) (1988).

In mandating that all private construction employers seeking to

bid on one or more of the projects in Boston Harbor agree to

recognize the Trades Council as the representative of their

employees, the MWRA has encumbered all of these rights.

Specifically, the MWRA has encumbered the employees’ Section

8(f) right to reject the Trades Council as their bargaining

representative. It has made their employment on the project the

price of choosing to decertify the Trades Council. Moreover, by

agreeing with the Trades Council to condition contractor

eligibility upon recognition of the Trades Council, the MWRA has

encumbered the contractors’ Section 8&(e) right to be free of

secondary pressures exerted by third parties outside the

construction industry. And, finally, when it then dictated each

and every term of the collective bargaining relationship that it had

imposed on these private construction employers, the MWRA

interfered with -- indeed, eliminated -- the collective bargaining

processes that Congress envisioned. Under Garmon, the former

State actions are preempted; under Machinists, the latter state

action is preempted.

12

It is true, as petitioners note (Pet. Br. 23-24), that Congress did

not intend the NLRA to create a regime in which employment

policies in the private sector would be wholly insulated from all

State actions. Thus, where states have imposed general

employment standards which do not conflict with the NLRA’s

provisions, and which are equally applicable in union and

non-union settings, the Court has held that the states’ actions are

not preempted. See, e.g., Metropolitan Life Ins. Co. Vv.

Massachusetts, 471 U.S. at 753-58; Fort Halifax Packing Co. v.

Coyne, 482 U.S. 1, 22 (1987). But where, as here, the states

have imposed standards which arguably conflict with the NLRA’s

provisions or which apply only to the organizational or collective

bargaining processes fostered by the Act, the Court has

consistently found that those state actions are preempted. See,

e.g., Wisconsin Dep’t of Industry v. Gould, Inc., 475 U.S. at

288-89; Golden State 1, 475 U.S. at 619. Indeed, preemption is

essential here to prevent the MWRA from facilitating the Trades

Council’s patent effort (1) to exceed the congressionally imposed

limits on a union’s power to organize the employees of private

construction employers from the "top down," and (2) to extend

the union’s monopoly power into the end-product market, and

thereby raise prices for consumers. See Connell, 421 U.S. at 621-35.

’ Professor Thomas J. Campbell has lucidly explained the economic

dangers of permitting such an arrangement between a union and a

third-party purchaser such as MWRA:

The firs: is that, in dealing with product market effect, a potential for

a product market cartel effect is created. This could give labor more

of a return than even the maximum value of what labor contributes to

output. It would also implicate the competing regulatory regime of

antitrust. Second, even if labor does not derive any more total return

from such conduct than it could from manipulating elasticities of

substitution or other input supply, there is an incidence issue. The

redistributive intention of the Labor Act was not an unrestricted

license to capture consumer surplus (the benefit consumers enjoy from

having to pay less than they are willing to pay for a certain amount

of goods), but was directed at producer surplus (the profit derived

13

The Act does not preempt the states from pursuing wholly

“local interests" through means that are "peripheral" to the Act.

Thus, as petitioners and the Solicitor General repeatedly argue

(Pet. Br. 4-6, 16, 25-26; U.S. Br. 29), the MWRA may

legitimately attempt to ensure that potential labor disputes and

disruptions do not impede its ability to meet deadlines imposed by

a federal court for cleaning up the Boston Harbor. Time is a

critical component of much construction, and many private as

well as public owners insist upon timely performance by their

contractors. As do many private property owners/developers, the

MWRA may establish deadlines for substantial or final completion

of each contract. It may require bonds or other commitments to

ensure that work will be completed in a timely manner. It may

pay incentives to contractors for completing their performance

ahead of schedule, and it may assess liquidated damages for

from sales revenue in excess of costs, including a normal profit).

Admittedly, both kinds of surplus are diminished when a union

succeeds in increasing the wage bill, but restraints derived from

lowering the elasticity of demand in the product market directly favor

the producer over the consumer. By contrast, manipulation of the

elasticity of substitution and the elasticity of supply of other factors

increases the pressure the union can bring to bear on the employer,

which the employer can then pass along to consumers only according

to the preexisting elasticity of product demand. Thus, over the years,

the Board and courts have restricted the exercise of labor power

precisely where economics indicated the victim was most likely a

consumer not represented at the bargaining table, rather than

management sitting across from the union agreeing to the terms.

Consistent with this trend, the rule I suggest is that, in areas of

ambiguity, the law ought to be construed to deny labor the power to

manipulate the elasticity of final product demand. The statute and its

interpretation by the Board and the courts have, in large part, tended

in this direction.

T. Campbell, Labor Law and Economics, 38 Stan. L. Rev. 991,

1035-36 (1986) (footnote omitted).

14

delay. It may even proceed with the early phases of a project

before it completes the final design, in what is commonly called

"fast track" construction. And, if labor disputes arise, it may

sanction the.use of reserve gates on its property (as the MWRA

initially did here). But, as the court below concluded (Pet. App.

29a-30a), in pursuing its legitimate interest in the timely

completion of work, the MWRA may not interfere with the

construction industry employees’ right to choose whether to

organize and with the construction industry employers’ right to

compete free of secondary pressures exerted by third parties

outside the construction industry .*

Contrary to the rhetoric of petitioners (Pet. Br. 18-19, 21-22,

28-30, 33-36) and, to a lesser extent, their amici (see, e.g., U.S.

Br. 14, 17-20), it is of no moment that, in so intruding into and

interfering with rights conferred by the Act, the MWRA asserts

the role of a proprietor and implements its agreements through bid

specifications. This Court’s preemption decisions make it clear

that "the fact that the [government] acted through franchise

procedures rather than a court order or a general law ... is

irrelevant to our analysis." Golden State 1, 475 U.S. at 614 n.5.

* We therefore have no reason to disagree with petitioners (Pet. Br.

35-36) that the Court’s preemption decisions would not prevent a city

from advising a supplier of taxi services that it will take its business

elsewhere if interruptions in services caused by strikes are not halted.

The city in such a situation is not singling out a business for special

treatment simply because it is or is not unionized, and it is not requiring

the supplier to accede to any union demands (since the supplier may, of

course, elect to ensure uninterrupted services through the use of

permanent replacements or other means). By contrast, the MWRA is

singling out businesses for special treatment on the basis of whether they

will agree to become signatory to a collective bargaining agreement, and

it is requiring them, as a condition of bid eligibility, to accept the

union’s demands and to compel their employees to join the union. As

the Solicitor General concedes (U.S. Br. 19-20 n.14), this Court's

decisions would unquestionably require preemption of such state actions

outside the construction industry -- e.g., in the taxi service industry.

15

In fact, the Court has stated that "[t]o uphold [an otherwise

improper state action] simply because it operates through state

purchasing decisions . . . would make little sense." Wisconsin

Dep't of Industry v. Gould, Inc., 475 U.S. at 289. As the court

below explained: "Allowing a state to impose restrictions upon

all companies from which it purchases goods or services would

effectively permit it to regulate labor relations between private

employers and their employees[,] thus totally displacing the

NLRA, not just in this Project, but also statewide, and, if the

practice were to become generalized, nationally. Indeed, an

anti-union state government could allow only non-union

employers to bid on state projects, if the state-as-employer

argument is to be taken to its extreme." Pet. App. 21a (emphasis

in Original)

It may be, as petitioners and the Solicitor General argue (Pet.

Br. 33-35; U.S. Br. 18-20), that the Court in its prior cases was

"not faced ... with a statute that [could] even plausibly be

defended as a legitimate response to state procurement constraints

or to local economic needs." Wisconsin Dep’t of Industry v.

Gould, Inc. , 475 U.S. at 291. But the Court’s NLRA preemption

cases have consistently stated that "“'judicial concern has

necessarily focused on the nature of the activities which the State

has sought to regulate, rather than on the method of regulation

adopted.'" Golden State I, 475 U.S. at 614 n.5 (citations

omitted). Moreover, as explained above (supra, at 13-14), while

the states are entitled to respond to local procurement constraints

and economic needs, this Court’s preemption decisions make it

clear that the states may not take any actions which conflict with

the provisions of the NLRA or which interfere with the

organizational and collective bargaining processes that are the

subject of the Act. It is precisely for these reasons that the

Solicitor General does "not contend . . . that a State’s actions are

automatically insulated from preemption under the NLRA

whenever it acts as a purchaser of services or other market

participant." U.S. Br. 19-20 n.14. Indeed, the Solicitor General

concedes that the MWRA’s actions here would be preempted if

they had occurred “outside the construction industry" or were

16

otherwise inconsistent with Sections 8(e) or (f) of the NLRA. dd.

Simply put, there is not, and cannot be, an intelligible exception

drawn to NLRA preemption principles merely because the actions

of a state government are proprietary in nature.

fl. PETITIONERS AND THEIR AMICI PROVIDE NO

PERSUASIVE REASONS FOR READING THE

CONSTRUCTION INDUSTRY PROVISIONS OF THE

NLRA TO INSULATE PUBLIC PURCHASERS OF

CONSTRUCTION FROM FEDERAL PREEMPTION.

Just as he did in Golden State I, the Solicitor General joins with

the local government and the relevant unions in arguing (U.S. Br.

14-29: Pet. Br. 18-19, 24-36) that some of a state’s proprietary

actions should nevertheless be immune from NLRA preemption.

Specifically, the Solicitor General joins in the contention that

Sections &(e) and (f) of the NLRA permit private property

owners/developers to enter into and enforce project labor

agreements. From this basic premise, the Solicitor General and

petitioners reason that this Court cannot reasonably interpret the

NLRA to preempt state agencies, in their capacity as third-party

purchasers of construction, from entering into and enforcing such

agreements

The proposition that the states may compel whatever the Act

permits is frankly both troubling and dubious. Indeed, Machinists

preemption is designed precisely to prevent the states from so

dictating the choices of private parties in the labor-management

relations arena. See Wisconsin Dep’t of Industry v. Gould, Inc.,

475 U.S. at 290-91. No less significant, however, is that the

Solicitor General and the petitioners proceed from a false premise:

Sections 8(e) and (f) do not authorize private property

owners/developers, in their capacity as third-party purchasers of

construction, to enter into and enforce project labor agreements

17

A. The First Proviso To Section 8(e) And Section 8(f) Only

Apply To Employers In The Construction Industry And

To Agreements That Result From A Collective Bargain-

ing Relationship.

Section 8(e) makes it 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 doing business with any other

person...." 29 U.S.C. § 158(e) (1988). The “construction

industry proviso" to Section 8(e) states, however, “[t]hat 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

Id. (emphasis added). Section 8(f) provides that "[iJt

shall not be an unfair labor practice . . . for an employer engaged

primarily in the building and construction industry to make an

agreement .. . with a labor organization of which building and

construction employees are members ... because ... the

majority status of such labor organizations has not been

established . . . prior to the making of such agreement... ." 29

U.S.C. § 158(f) (1988) (emphasis added). Thus, a typical

third-party purchaser of construction, like the MWRA, cannot

find any right in Sections 8(e) or (f) to enter into and enforce a

project labor agreement.

To begin with, a third-party purchaser does not normally satisfy

the requirements of being “an employer in the construction

industry" and "an employer engaged primarily in the building and

construction industry." There is a consensus among the courts

and the NLRB that, to satisfy both of these requirements, the

employer's involvement in the construction project must be

substantial and much like the normal involvement of a prime or

general contractor. There must be evidence that the employer is

managing and coordinating the methods, techniques or procedures

of construction through employees that it places at the job site

See, e.g., Clark v. Ryan, 818 F.2d 1102, 1107 (4th Cir. 1987):

A.L. Adams Constr. Co. v. Georgia Power Co., 733 F.2d 853.

18

854 & n.3, 858 (11th Cir. 1984), cert. denied, 471 U.S. 1075

(1985); Operating Eng’rs Pension Trust v. Beck Eng’g &

Surveying, 746 F.2d 557, 562-64 (9th Cir. 1984). Merely

engaging general contractors, providing funding for construction

activity, and periodically visiting the construction site for

purposes of inspection is not enough. See A.L. Adams Constr.

Co. v. Georgia Power Co., 733 F.2d at 854 n.3; see also, e.g.,

NLRB vy. W.L. Rives Co., 328 F.2d 464, 469 (Sth Cir. 1964);

Carpenters Local 1149 (American President Lines, Lid.), 221

N.L.R.B. 456, 460-61 (1975), enfd., 81 Lab. Cas. (CCH)

€ 13,137 (D.C. Cir. 1977); Forest City/Dillon-Tecon Pac. , 209

N.L.R.B. 867, 868, 870-71 (1974), enf’d in part, 522 F.2d 1107

(9th Cir. 1975); Local 1937, Painters and Glaziers Dist. Council

No. 51 (Prince George’s Center, Inc.), 183 N.L.R.B. 37, 38

(1970); Columbus Bldg. & Constr. Trades Council (Kroger Co.)

149 N.L.R.B. 1224, 1225-26 (1964); Frick Co., 141 N.L.R.B.

1204, 1208 (1963). Just as a home owner that engages a general

contractor to build a home or to remodel a kitchen is not “an

employer in the construction industry" and "an employer engaged

primarily in the building and construction industry," neither is the

MWRA.

Indeed, a third-party purchaser of construction which, like the

MWRA, has no bargaining relationship with any construction

industry labor unions cannot plausibly claim the status of a

construction industry employer within the meaning of Sections

&(e) and (f). The text of these statutory provisions does not even

arguably extend to actions by third-party purchasers of

construction. Moreover, this Court has long recognized that the

construction industry proviso to Section 8(e) applies only to

agreements between a construction industry employer and a union

with whom the employer has a collective bargaining relationship.

Connell, 421 U.S. at 621-635. See also Woelke & Romero

Framing, Inc. v. NLRB, 456 U.S. 645, 652-54 (1982); Donald

Schriver, Inc. v. NLRB, 635 F.2d 859, 873-882 (D.C. Cir. 1980),

cert. denied, 451 U.S. 976 (1981).

19

Specifically, in Connell, this Court held that subcontracting

agreements between a construction industry union and "stranger"

contractors -- i.e., contractors with whom the union had no

collective bargaining relationship and whose employees the union

had no interest in representing -- were not sanctioned by the

construction industry proviso and could be challenged under the

NLRA and the antitrust laws. 421 U.S. at 626-35. In Connell.

such a union had picketed certain general contractors with whom

it had (and sought) no collective bargaining relationship in an

ultimately successful effort to obtain the agreement of those

contractors to let subcontracts only to firms that were parties to

the union’s collective bargaining agreement. /d. at 618-19. This

Court determined that "[t}his kind of direct restraint on the

business market has substantial anticompetitive effects, both actual

and potential, that would not follow naturally from the elimination

of competition over wages and working conditions." Jd. at 625.

After finding that "[oJne of the major aims of the 1959 Act was

to limit ‘top-down’ organizing campaigns, in which unions used

economic weapons to force recognition from an employer

regardless of the wishes of his employees," the Court further

determined that the statute’s “careful limits on the economic

pressure unions may use in aid of their organizational campaigns

would be undermined seriously if the proviso to § 8(e) were

construed to allow unions to seek subcontracting agreements, at

large, from any general contractor vulnerable to picketing." /d.

at 632, 633. Accordingly, this Court held that the proviso’s

“authorization extends only to agreements in the context of

collective bargaining relationships" and that the proviso did not

immunize the challenged agreement or, for that matter, the

picketing that preceded it. /d. at 633. See also id. at 637 n.19

The facts of this case are even more extreme than the facts of

Connell, where the employers could at least be said to be "in the

construction industry." The MWRA cannot satisfy even that

threshold requirement. Further, it has no collective bargaining

relationship with any of the construction industry unions that are

members of the Trades Council; and the Master Labor Agreement

expressly excludes MWRA’s employees from its coverage. Pet.

20

App. 114a-116a. Moreover, the Trades Council has no

discernible interest in representing MWRA’s employees in the

future. Rather, the union is seeking to represent those who work

for private construction employers that are bidders on work from

the MWRA. Pet. App. 112a. Indeed, as in Connell, it was prior

picketing and ensuing work stoppages by members of the Trades

Council that led MWRA to agree with the Trades Council to

dictate the terms and conditions of all labor relations on the

Boston Harbor project. Pet. App. 4a.

Even more importantly, the effects of the MWRA’s actions are

at least as pernicious as those decried in Connell. By agreeing

with the Trades Council to require all of the participants in a $6. |

billion market for new construction to recognize the Trades

Council, the MWRA has facilitated a massive effort by the Trades

Council to organize construction employees from the "top down, °

irrespective of their wishes. Moreover, the MWRA has allowed

the Trades Council to use its monopoly power over labor to

prevent open and unrestricted competition by all qualified

contractors, in disregard of the cost of the Boston Harbor project

for the consumers and taxpayers who ultimately will pay for it.

Connell makes it clear that the construction industry proviso does

not authorize such "top-down" organizing through a “stranger”

employer, or any other direct extension of labor's limited

statutory monopoly power into the end-product market. See 421

U.S. at 624-26, 632-33; see also Woelke & Romero Framing, 456

U.S. at 663-64; Larry V. Muko, Inc. v. Southwestern

Pennsylvania Bldg. and Constr. Trades Council, 609 F.2d 1368,

1372-75 (3d Cir. 1979) (en banc), cert. denied, 459 U.S. 916

(1982); T. Campbell, Labor Law and Economics, 38 Stan. L.

Rev. 991, 1033 (1986) (Connell stands for the proposition that a

union may not direct pressure “against a consumer of the services

provided by the employer with whom the union has a bargaining

relationship, unless the union is seeking to organize the employees

of such a consumer" (emphasis in original)).

21

B. Sections 8(e) And (f) Of The NLRA Do Not Allow

Third-Party Purchasers Of Construction To Enter Into

Agreements With Construction Industry Unions To

Limit Competition Among Construction Industry

Employers.

Amazingly, petitioners and their amici do not even discuss the

limitations of the construction industry proviso to Section 8(e) or

the equally express limitations of Section 8(f). Nor do they

mention Connell or its holding that the construction industry

proviso to Section 8(e) does not extend to agreements that lie

outside any collective bargaining relationship. Indeed, they offer

no persuasive reasons for inferring that Congress intended to

allow third-party purchasers of construction, public or private, to

agree with construction industry labor unions to dictate the labor

relations of other employers.

1. Petitioners and their amici principally argue (Pet. Br. 20,

24-26, 28-29; U.S. Br. 17-18, 21-22, 22-24) that, since the

pre-hire agreement between Kaiser and the Trades Council is

lawful, the MWRA’s agreement with the Trades Council to

enforce that agreement must be as well. In the process, however,

they disregard their own frequent admissions that Kaiser is not

deciding what work to contract or to subcontract, or to whom

Rather, it is the MWRA that makes all of the contract awards.

What lies at the heart of this case are the restrictions that the

MWRA has agreed with the Trades Council to impose on the

selection of contractors working in Boston Harbor. Since the

MWRA has no collective bargaining relationship of its own with

the Trades Council and is not a construction industry employer,

the MWRA cannot properly claim that its actions are directly

immunized under the Section 8(e) proviso and Section 8(f).

Moreover, since the Master Labor Agreement makes it clear (Pet.

App. 1 16a) that Kaiser and the MWRA are not "joint employers"

(i.e., employers whose operations, employees and control are so

intermingled that they may legally be treated as one), the MWRA

cannot properly claim that any coverage of Kaiser by the

construction industry proviso or Section 8(f) may be imputed to

>

es

it. See South Prairie Constr. Co. v. Operating Eng’rs Local 627,

425 U.S. 800. 802-804 (1976); Limbach Co. v. Sheet Metal

Workers Int'l Ass’n., 949 F.2d 1241, 1260-63 (3d Cir. 1991)

2. Petitioners and their amici object (Pet. Br. 20, 24-26; U.S

Br. 21-22, 22-23) that the MWRA exerts no economic pressure

on any contractor, subcontractor or employee other than the

pressures that inhere in the Master Labor Agreement itself, and

then argue that it makes no sense to exclude the MWRA’s

agreement with the Trades Council to enforce the Master Labor

Agreement from the intended coverage of the proviso. This

objection ignores the fact that, as a third-party purchaser of

construction, especially on a project of this type.and size, the

MWRA can bring enormous economic pressures to bear on

private construction employers -- far above and beyond any

pressure that an ordinary general contractor in a collective

bargaining relationship with a union can exert. The MWRA has

the power to debar and to accept higher prices at the taxpayers’

Or consumers’ expense. See Larry V. Muko, Inc., 609 F.2d at

1372-76: see generally Campbell, 38 Stan. L. Rev. at 1032-36.

Indeed, it was the potential for excessive secondary pressures that

led the Court in Connell to hold that a restrictive “hot cargo"

agreement with a “stranger” employer is outside the construction

industry proviso to Section 8(e). See Connell, 421 U.S. at

624-26, 632-33.

Contrary to petitioners’ suggestion (Pet. Br. 28-29), it makes no

difference whether there is a source of law that would prohibit persons

subject to the Railway Labor Act ("RLA”), 45 U.S.C. § 151 ef seq.,

from entering into such restrictive third-party arrangements (although,

given the availability of the antitrust laws, we see no reason to concede

the point). This Court made it clear in Machinists and Garmon that,

even though public agencies are not “employers” within the meaning of

NLRA Section 2(2), and thus not directly subject to the NLRA'’s

prohibitions, the Supremacy Clause makes their actions subject to NLRA

preemption. By contrast, RLA employers are not subject to the

Supremacy Clause or, because of NLRA Section 2(2), the prohibitions

23

3. Petitioners and their amici further err in suggesting (Pet.

Br. 20, 24-26, 35-36; U.S. Br. 21-22, 22-23) that, if MWRA’s

actions are held to fall outside the sphere of conduct contemplated

by the proviso to Section 8(e) and Section 8(f), third-party

purchasers will be denied the right to choose to purchase

construction from contractors which have entered into project

labor agreements. The MWRA has not, however, made a

unilateral decision to purchase construction from contractors that

have entered into a project labor agreement. Rather, as

petitioners have acknowledged (see Pet. Br. 25-29; see also J.A.

41), and as the dissent below presumed (see Pet. App. 32a ("In

return for the MWRA’s promise to insist that contractors sign the

agreement, the Council has promised the MWRA labor peace

throughout the 10-year life of the construction project”)), the

MWRA has agreed with the Trades Council to condition contract

awards on recognition of the Trades Council and acceptance of

the labor agreement negotiated by Kaiser and the Council. It is

this agreement to organize construction industry employees from

the “top down" and to exclude from the bidding competition

employers that do not agree to recognize the union that conflicts

with the provisions and policies of the NLRA and is preempted.°

4. Petitioners and their amici protest (Pet. Br. 13-15, 18,

30-33; U.S. Br. 24-28) that Sections 8(e) and (f) were intended

to preserve the status quo regarding agreements between unions

and employers in the construction industry in 1959 and, further,

that project labor agreements between construction industry unions

and public and private property owners/developers were pervasive

at that time. it is clear that Congress wanted to preserve the

of the NLRA.

* Contrary to the argument of petitioners and the Solicitor General (Pet.

Br. 36; U.S. Br. 29), finding preemption here does not mean the end of

project labor agreements on public construction projects. It simply

means that private construction employers will retain the responsibility

for such agreements

24

pattern of collective bargaining that existed in the construction

industry in 1959. See Woelke & Romero Framing, 456 U.S. at

657. But the available evidence does not support the claim that

property owners/developers were routinely entering into “hot

cargo" agreements with unions in 1959.

Petitioners and their amici principally cite to the legislative

history of Sections 8(e) and (f) to support their claim that the

pattern in the industry in 1959 included such third-party

arrangements. See Pet. Br. 30-33; U.S. Br. 24-28. But the

legislative history at most supports only the proposition that

project labor agreements were used on both public and private

construction projects. While there is some evidence that some

public agencies viewed project labor agreements between

construction industry employers and unions as desirable in some

contexts, the legislative history does not provide amy examples of

project labor agreements that were subject to the approval of the

third-party purchaser and were enforced by that purchaser. On

the contrary, as best we can tell from the legislative record, all of

the examples brought to Congress’ attention were classic

subcontracting agreements between a general construction

contractor and a union with whom that contractor had a collective

bargaining relationship.’

Petitioners also cite to two secondary sources and a 1986

Advice Memorandum of the Associate General Counsel of the

NLRB to support their claim that the pattern in the industry in

1959 included third-party arrangements like the one in issue here

See Pet. Br. 13-15, 18. But the secondary sources and the

It is not clear whether any of the agreements described in general

terms in the legislative history cited by petitioners (Pet. Br. 30-33) were

as extensive and detailed as the agreement between Kaiser and the

Trades Council. Thus, petitioners overstate the degree to which the

legislative history supports their assertion that the pattern in the

construction industry in 1959 included agreements like the one between

Kaiser and the Trades Council.

25

Advice Memorandum merely suggest that, in some situations,

property owner/developers may have supported the use of project

labor agreements. These sources do not establish how frequently

property owners/developers have done so, whether the owners

were mere third-party purchasers when they did so (as opposed to

"employers in the construction industry"), or whether the

owners/developers had collective bargaining relationships with the

unions with whom those project labor agreements were

negotiated. These sources thus cannot begin to establish that, in

1959, the accepted industry pattern included agreements that, as

here, were conditioned on a third-party purchaser’s approval and

were to be enforced by a third-party purchaser that had no

collective bargaining relationship with the union.°*

Indeed, the available evidence suggests that such arrangements

were not part of the industry pattern in 1959. The Court in

Connell expressly determined that "stranger" contractor

arrangements did not exist in abundance, if at all, in 1959. See

Connell, 421 U.S. at 627-33. Moreover, both this Court and

industrial relations experts have since sugge. ted that this was a

“novel organizing tactic" that first developed in the early 1970s

The Mills quote (see Pet. Br. 13-14), published in 1972, cites

absolutely no authority for its assertion and gives no indication of the

extent of the purported "involvement" of the owner. See D. Q. Mills,

Industrial Relations and Manpower in Construction 40 (1972). The

Labor Department study (see Pet. Br. 14) expressly states that the

agreements discussed "are multicraft agreements, generally signed by the

local building trades council and/or all local unions involved, and by the

prime contractors on the project." U.S. Department of Labor, Labor

Management Services Administration, The Bargaining Structure in

Construction: Problems and Prospects, at 14 (1980) (emphasis added)

The Advice Memorandum similarly involves a 1980s project labor

agreement between a union and a prime contractor; moreover, no unfair

labor practice charge was filed against the owner and the Advice

Memorandum expresses no opinion about the propriety of the owner's

actions. See Pet. App. in No. 91-261, at 98a-99a, 101a-102a.

26

See Woelke & Romero Framing, 456 U.S. at 653-54 n.8; T. St.

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

Va. L. Rev. 603, 628 (1976). And, finally, the fact that no case

concerning the legality of this kind of third-party purchaser

arrangement arose until the mid-1980s reinforces the view that

this practice is, in reality, a relatively recent phenomenon.

5. Finally, petitioners err in suggesting (Pet. Br. 36) that Bid

Specification 13.1 is not preempted because private construction

employers have the option of seeking other work. The fact

remains that Section 8(e) prohibits this kind of secondary coercion

by a third-party purchaser of construction. It was enacted

precisely so that construction industry and other employers would

not be faced with such coercion (and so that their employees

would be protected against this kind of "top-down" organizing

tactic). While the construction industry proviso to Section 8(e)

and Section 8(f) create a limited exception, Connell makes it clear

that the congressional policies against secondary boycotts and

“top-down” organizing require that "stranger" arrangements like

the one in issue here be excluded from the exception. Thus, it is

the petitioners, and not the decision below, who "err[] not, as

may often happen, by nudging congressional enactments or legal

doctrines somewhat too far, but by abruptly and unaccountably

standing them on their head." Pet. Br. 36

CONCLUSION

The judgment of the court of appeals should be affirmed.

Of Counsel

Michael E. Kennedy

THE ASSOCIATED GENERAL

CONTRACTORS OF AMERICA

1957 E Street, N.W

Washington, D.C

(202) 393-2040

September 8, 1992

20006

Respectfully submitted,

Glen D. Nager

(Counsel of Record)

Richard F. Shaw

David A. Yalof

JONES, DAY, REAVIS &

POGUE

1450 G Street, N.W.

Washington, D.C. 20005

(202) 879-3939

Attorneys for the Associated

General Contractors of

America