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

SEP 8 1992 |

;

OFFICE OF THE ULtnk

Nos. 91-261 and 91-274 |

In the

Supreme Court of the lnited States

OCTOBER TERM, 1992

BUILDING AND CONSTRUCTION TRADES COUNCII

OF THE METROPOLITAN DISTRICT, PETITIONER

ASSOCIATED BUILDERS AND CONTRACTORS OF

MASSACHUSETTS/RHODE ISLAND, INC., ET Al

MASSACHUSETTS WATER RESOURCES AUTHORITY

AND KAISER ENGINEERS, INC., PETITIONERS

\

ASSOCIATED BUILDERS AND CONTRACTORS OF

MASSACHUSETTS/RHODE ISLAND, INC., ET Al

On Writs of Certiorari to the United States

Court of Appeals for the First Circuit

BRIEF OF THE MASTER PRINTERS OF AMERICA

AS AMICUS CURIAE SUPPORTING RESPONDENTS

FRANCIS T. COLEMAN*

WILLIAM B. COWEN

Coleman, Coxson, Penello

Fogleman & Cowen

A Professional Corporation

655 Fifteenth Street, Suite 860

Washington, DC 20005

(202) 783-5250

Counsel for the Master Printers of America

* Counsel of Record

Kalmar gal Publishing Services. Washington »{ 202) 682-9800

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QUESTION PRESENTED

The National Labor Relations Act, 29 U.S.C. § 151 et seg..,

provides for comprehensive regulation of the relationships be-

tween employees, employers and unions in the private. sector.

Sections 8(e) and &(f) of the NLRA, 29 U.S.C. § 158(e)} and (f),

contain narrow exceptions to the general rules prohibiting an

employer from agreeing to restrict its subcontracting to union

signatory employers or from entering into a collective bargain-

ing agreement with a union that does not represent a majority of

its employees. These exceptions are expressly limited to

employers “in the construction industry” and to employers

“engaged primarily in the building and construction industry,”

respectively, and to agreements meeting very specific qualifica-

tions. The question presented is:

Whether a state agency, which is not otherwise subject to

the regulatory mantle of the NLRA and which does not directly

employ any construction employees, may nevertheless claim the

privilege of entering into collective bargaining agreements

under Sections &(f) and (e) of the NLRA, or otherwise adopt

policies which interfere with the federally regulated labor rela-

tions practices of those with whom it contracts.

rT

TABLE OF CONTENTS

INTEREST OF THE MASTER PRINTERS OF

I ea hs on oe ee ew 8 |

STATEMENT OF THECASE ....... 2

SUMMARY OF ARGUMENT... ... 5

EES eee x

“MARKET PARTICIPANT” DOCTRINE

IS INAPPLICABLE UNDER THE NATIONAL

LABOR RELATIONS ACT, 29 U.S.C. 815],

Sy SS x

A. The So-Called “Market Participant”

Doctrine Does Not Constitute An

Exemption To The Application Of

Traditional Pre-Empton Principles

Developed Under The NLRA ..... . x

I. TRADITIONAL PRE-EMPTION

8 Ea re | 12

A. Pre-emption Under San Diego Building

Trades Council v. Garmon, 359 U.S. 236

nS : 13

B. Pre-emption Under Machinists v

Wisconsin Employment Relations

Commission, 427 U.S. 132

ek kw 16

IT. EVEN ASSUMING THE “MARKET

PARTICIPANT” DOCTRINE HAS SOME

APPLICATION UNDER THE NLRA,

PETITIONERS’ “MARKET PARTICIPANT”

ANALYSIS ISFATALLY FLAWED ... . 21

A. The MWRA Is Not A “Market Participant”

As That Term Is Commonly Defined . . 21

B. Petitioners’ “Market Participant” Argument

ls Based Upon An Unsupported

WU. <é G oe 4 eGee oo kk 24

C. Since The NLRA Is Inapplicable To The

States, There Is No Basis For Limiting

The “Market Participant” Analysis To

Construction Industry Project Agreements

As Petitioners Contend ......... 27

CONCLUSION ...... laa ee a inaege oes 29

og a a~ |

gg i a a b- |

lV

TABLE OF AUTHORITIES

CASES

Associated Builders and Contractors of

Massachusetts/Rhode Island, Inc., et al. v. The

Massachusetts Water Resources Authority,

et al., 935 F.2d 345 (1st Cir. 1991) 2... 4,19

Belknap, Inc. v. Hale, 463 U.S. 491 (1983) 2... 11,13

Betts Cadillac Olds, Inc., 96 NLRB 268

| Pr ror arr ar a ee or ae eee 25

Brown v. Hotel Employees Union Local 54, 468 U.S.

oo a ae ee ee 15

Building & Trades Council, NURB Case No. 1-CE

71 (NLRB-GC June 25,1990) ........ 8, 26

Bus Employees v. Missouri, 374 U.S. 74 (1963). . 16

Connell Construction Company Inc. v. Plumbers and

Steamfitters Local Union No. 100 et al., 483

rae 1636 Ge Cm. TITS) . ww et 26

Connell Construction Co. v. Plumbers & Steamfit-

ters Union Local No. 100, 421 U.S. 616

SL Te Get orevertay Sle, 5 6 d's 23, 25-26

Exxon Company, U.S.A., 253 NLRB 213

SE Sa Pa a ed a ee ea ea ee wD 25

Golden State Transportation Corporation vy. City of

Los Angeles, 475 U.S. 608 (1986) 2.2... passim

Golden State Transportation Corporation vy. City of

Los Angeles, 493 U.S. 103 (1989) 2 ow... 4

International Ladies’ Garment Workers’ Union y.

NLRB, 366 U.S. 731 (1961) .....202022.. 14

Machinists v. Wisconsin Employment Relations

Commission, 42/7 U.S. 132 (1976) 2... .. passim

Vv

McBride's of Naylor Road, 229 NLRB 795

(i ne ye Oe 25

Metropolitan Life Insurance Company v. Mas-

sachusetts, 471 U.S.724 (1985)... 2... 13

Morrison-Knudsen, 13 Advice Mem. Rep. Par.23,

061 (NLRB-GC 1986) ............ 25-26

New York Tel. Co. v. New York State Labor Dept.,

Ge Was DOW CNOTOE 6 eee ieee ee es 1]

NLRB vy. Nash Finch Company, 404 U.S. 138

ge a a aoe ee 16

NLRB vy. United Food & Commercial Workers

Union, Local 23, AFL-CIO, 484 U.S. 112

Se ada er rece ae — 25

Plumbers Union, Local 246 (Marlin Mechani. «!,

Inc.), NLRB Case No. 32-CE-52 (NLRB-GC

oS ee eee 8, 25-27

San Diego Building Trades Council v. Garmon,

pe ee ee ere passim

United State v. Metropolitan District Commission,

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

EE 5 6-5 os 0-6 0 oe ee

Wisconsin Department of Industry, Labor and

Human Relations et al. v. Gould Inc., 475 U.S.

PT. -¢o sb «uk eo blk ee od passim

thr

Woelke & Romero Framing Inc. v. NLRB, et al., 456

Se E's be Uo Se as a oe 18, 22-23

Vi

Statutes

Mass. Gen. Laws, Ch. 92, § l-letseg. ....... 2

Mass Gen. Laws, Ch. 149, § § 45 A-45L

2 & Oe 2

National Labor Relations Act, as amended, 29

8S wh Se ee ae 45,8

>. Fae ee

BO oe ee oe oe ene ere ree 13-14

Sa ae Pero ae age, Seay See MEET passim

ear ae are en ee ee passim

Legislative History Materials

NLRB, Legislative History of the Labor Manage-

ment Reporting and Disclosure Act of

1959

IN THE

Supreme Court of the United States

OCTOBER TERM, 1992

No. 91-26]

BUILDING AND CONSTRUCTION TRADES COUNCIL

OF THE METROPOLITAN DISTRICT, PETITIONER

Vv.

ASSOCIATED BUILDERS AND CONTRACTORS OF

MASSACHUSETTS/RHODE ISLAND, INC., ET AL.

No. 91-274

MASSACHUSETTS WATER RESOURCES AUTHORITY

AND KAISER ENGINEERS, INC., PETITIONERS

V.

ASSOCIATED BUILDERS AND CONTRACTORS OF

MASSACHUSETTS/RHODE ISLAND, INC., ET AL.

On Writs of Certiorari to the United States

Court of Appeals for the First Circuit

BRIEF OF THE MASTER PRINTERS OF AMERICA

AS AMICUS CURIAE SUPPORTING RESPONDENTS

INTEREST OF THE MASTER PRINTERS OF

AMERICA

The Master Printers of America ("MPA") is a division of

Printing Industries of America, an international, not-for-profit

trade association, representing commercial printing estab-

lishments in the graphic arts industry throughout the U.S. and

Canada. MPA itself represents approximately 8,500 members,

whose employees are either wholly or partially union-free.

2

MPA is dedicated to serving these members through the

development of positive employee relations programs, and

making these programs available to its members.

If the Court were to adopt Petitioners’ argument in this

case, States would be allowed to restrict their contracting prac-

tices based upon the labor relations policies of the parties with

whom they contract. MPA’s interest in this litigation is to insure

that its members are not arbitrarily and improperly excluded

from the right to bid and perform state financed projects solely

because of their status as non-union employers.

STATEMENT OF THE CASE

The Massachusetts Water Resource Authority ("MWRA")

is an agency of the Commonwealth of Massachusetts. It is

responsible for providing water supply services and sewage

collection treatment and disposal services for the eastern half of

Massachusetts. As part cf its obligation to supply these services

the MWRA is responsible for overseeing and implementing the

court ordered clean-up of the Boston Harbor (“Boston Harbor

Project”). See, generally, United State v. Metropolitan District

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

(Ist Cir. 1991). The actions of the MWRA in fulfilling its duties

are governed by various state laws requiring, inter alia, that the

MWRA provide the funds for construction, own the property to

be built, establish all bid conditions, decide all contract awards,

pay the contractors, and generally exercise controls over all

aspects of the project. See, generally, Mass. Gen. Laws, Ch. 92,

§ 1-1, et seq., and the Commonwealth’s public bidding laws,

Mass. Gen. Laws, Ch. 149, §§ 45 A-45L and Ch. 30, § 39M.

In April 1988, the MWRA selected Kaiser Engineers Inc.

(“Kaiser’’) as its construction manager for the Boston Harbor

Project. In this capacity, Kaiser is responsible for overseeing,

on behalf of the MWRA, the construction of the new treatment

Ee

3

facilities and the upgrading of existing facilities needed for the

court ordered clean-up.

Initially, work on the project began using both union and

non-union contractors. However, on May 22, 1989, Kaiser,

acting as MWRA’s agent, entered into the Boston Harbor Was-

tewater Treatment Facilities Project Labor Agreement (“Project

Agreement”) with the Building and Construction Trades Coun-

cil of the Metropolitan District and various affiliated unions

(“Trades Council” or “Petitioners”). This Project Agreement

recognizes the Trades Council as the representative of all con-

struction employees on the project and establishes the terms and

conditions of employment for the life of the 10 year project. The

agreement covers all contractors and subcontractors on the

project, and it contains a union security clause and provisions

for union hiring halls. It is undisputed that this Project Agree-

ment was entered into “on behalf of” the MWRA and that all of

the terms of the Project Agreement were approved by the

MWRA prior to its execution. It is also undisputed that the

agreement contains requirements which are unlawful under the

NLRA unless they satisfy the exceptions set forth in Sections

8(f) and (e) of the National Labor Relations Act. 29 U.S.C. §

158(f) and (e).

In order to implement the Project Agreement, the MWRA

adopted Specification 13.1 which requires any successful bidder

for project work, as a condition of being awarded the work, to

execute and abide by the terms of the Project Agreement be-

tween the MWRA and the Trades Council. This specification

effectively precludes any contractor from being awarded any

work on the Boston Harbor Project, whether union or non-union,

unless it agrees to waive its rights under the NLRA to determine

its own labor relations policies.

In March 1990, the Associated Builders and Contractors of

Massachusetts/Rhode Island and six of its affiliates (“Respon-

dents”), brought this action in the United States District Court

4

for the District of Massachusetts challenging both Specification

13.1 and the Project Agreement. On April 11, 1990, the District

Court denied Respondents’ request for a preliminary injunction

and an appeal followed. On October 24, 1990, a unanimous

panel of the Court of Appeals for the First Circuit reversed the

District Court and issued a preliminary injunction against enfor-

cement of the Project Agreement by the MWRA through any

bid specifications which require private contractors to waive

their statutory bargaining rights as a condition for working on

the Boston Harbor project. The Court of Appeals granted

rehearing en banc and, on May 15, 1991, a 3-2 majority of the

Court of Appeals reaffirmed the panel decision. Associated

Builders and Contractors of Massachusetts/Rhode Island, Inc.,

et al. v. The Massachusetts Waste Resources Authority, et al.,

935 F.2d 345 (Ist Cir. 1991).

Both the panel opinion and the majority below found that

the state agency's enforcement of the “union only’ project

agreement was pre-empted by the National Labor Relations Act,

29 U.S.C. § 151 et seg. Although the court found that the actions

of the MWRA implicated pre-emption principles under both

Garmon' and Machinists, the majority of its analysis focused

on the latter principles. Relying upon this Court's teaching in

the Golden State Transit Corp. cases,’ the Court found that the

MWRA had improperly interfered with the collective bargain-

ing process by imposing the Project Agreement upon any con-

tractor seeking to work on the Boston Harbor clean-up. The

Building and Construction Trades Council and the MWRA filed

petiuons for certiorari on August 12 and 13, 1991. On May 18,

' San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959).

Machinisis v. Wisconsin Employment Relations Commission, 427 U.S.

132 (1976).

Golden State Transportation Corporation v. City of Los Angeles, 475

U.S. 608 (1986) [Golden State 1\ and Golden State Transportation Corpora-

tion v. City of Los Angeles, 493 U.S. 103 (1989) [Golden State 1}.

5

1992, this Court granted the petitions and consolidated the cases

for argument.

When distilled to its essence, Petitioner's argument is that

the Massachusetts Water Resource Authority, acting as a so-

called “market participant,” should be allowed the same latitude

as private parties to enter into contracts or otherwise restrict its

contracting practices in such a way to exclude potential contrac-

tors whose labor relations policies do not conform with govern-

ment ordained criteria. Because private sector employers under

certain circumstances are allowed to restrict their contracting

practices based upon the labor relations policies of the parties

with whom they contract, the legal vindication of such a ruling

could result in the total exclusion of non-union employers and

their employees from bidding on and fulfilling contracts by the

state or divisions thereof in those jurisdictions where the state

or local government officials felt so inclined. Accordingly, the

ruling sought by Petitioners would nullify prior Court precedent

prohibiting state or local authorities from interfering in labor

relations policies of private employers and their employees

within their jurisdictions.

SUMMARY OF ARGUMENT

I. “MARKET PARTICIPANT” DOCTRINE IS

INAPPLICABLE UNDER THE NATIONAL LABOR

RELATIONS ACT, 29 U.S.C. § 151, ET SEQ.

In Wisconsin Department of Industry, Labor and Human

Relations et al. v. Gould Inc., 475 U.S. 282 (1986), the Court

rejected the so-called “market participant” doctrine as a defense

to pre-emption under the National Labor Relations Act (NLRA)

29 U.S.C. § 151 et seg. In urging the reversal of the en banc

opinion of the court of appeals below, Petitioners urge a

revisionist interpretation of Gould and a re-emergence of the

“market participant” doctrine under the NLRA. In support of

their argument, Petitioners quote out of context selected phrases

6

from the Court's decision in Gould. However, when viewed in

its proper context, it is clear that the language in the Court's

Opinion was not preserving any aspect of the “market par-

ticipant” doctrine under the NLRA. Rather, the Court merely

was emphasizing that its rejection of the “market participant”

doctrine should not be read as modifying the existing principles

for pre-emption.

Il. TRADITIONAL PRE-EMPTION ANALYSIS

The majority below correctly found that the MWRA’s

actions in this matter negotiating, executing, and implementing

the project agreement at issue in this case implicates pre-emp-

tion under both San Diego Building Trades Council v. Garmon,

359 U.S. 236 (1989) and Machinists v. Wisconsin Employment

Relations Commission, 427 U.S. 132 (1976). Garmon pre-emp-

tion is implicated because the MWRA, through Specification

13.1 and the underlying Project Agreement which it enforces,

sought to interfere with the fundamental nights of employees

under the National Labor Relations Act to decide whether to

“join, form, or assist a labor organization,” as well as their nght

to participate in the collective bargaining process which has

established the terms and conditions of their employment for the

next ten years.

Machinists pre-emption is implicated because the MWRA

has interfered with the rights of Respondents and other private

sector contractors to determine in the first instance how to order

their labor relations. The legislative history of Section &(f) of

the National Labor Relations Act clearly demonstrates that

pre-hire agreements were intended to be entirely voluntary.

Thus, although Congress intended to allow such agreements,

employers were to be free from government or union coercion

in determining whether, or under what conditions, to enter into

such agreements. Clearly, such a voluntary decision on the part

of private employers is a matter which Congress chose to protect

7

und leave free from state regulation. Golden State Transit

Corporation v. City of Los Angeles, 475 U.S. 608 (1986).

lll. EVEN ASSUMING THE “MARKET PARTICIPANT”

DOCTRINE HAS SOME APPLICATION UNDER

THE NLRA, PETITIONERS’ “MARKET PAR-

TICIPANT” ANALYSIS IS FATALLY FLAWED.

Even assuming, arguendo, that some aspect of the “market

participant” doctrine survived Gould, the analysis of Petitioners

is fatally flawed in several respects. First, the MWRA cannot

be considered a “market participant” under any reasonable

definition or interpretation of that concept. The “market” in

which the MWRA seeks to be a “participant” is heavily regu-

lated by the NLRA; however, unlike its private sector counter-

parts who comprise this market, the MWRA is not regulated by

the NLRA at all. Moreover, the MWRA is not driven by the

same market forces as private sector participants in this market.

The MWRA is subject to political pressure and other influences

which do not effect private sector employers. Lastly, in contrast

to private sector employers, the MWRA is spending taxpayer-

generated funds. Thus, as a matter of fundamental fairness, the

MWRA should not be able to exclude certain contrac-

tors/employers and their employees from public works projects

based solely upon labor relations choices lawfully made by these

employees which are fully protected under the NLRA.

In addition, Petitioners’ “market participant” argument is

based upon the underlying premise that a private sector property

owner would be allowed to enter into a contract such as that

entered into by the MWRA. However, there is no legal prece-

dent for this proposition. Indeed, there is no authority what-

soever that a private property owner who itself employs no

construction employees may enter into and enforce an agree-

ment under Sections 8(f) and (e) of the National Labor Relations

Act. To the contrary, the NLRB General Counsel previously

has authorized a complaint in a case where the employer did not

%

hire and did not intend to hire any construction employees. See

Building & Trades Council, NLRB Case No. 1-CE-7] (NLRB-

GC June 25, 1990), note 12 and accompanying text (reprinted

as Appendix D at BCTC Pet. App. %3a-88a), citing Plumbers

Union Local 246 (Marlin Mechanical, Inc.), NLRB Case No.

32-CE-52 (NLRB-GC January 31, 1989) (original complaint

reprinted as Appendix A hereto).

The final flaw in the “market participant” argument is that

limiting the state to contracts allowed under the NLRA to private

sector employers would in fact be subjecting states to NLRA

regulation, a proposition which Congress specifically rejected.

Petitioners would measure the lawfuiness of state spending

decisions by the criteria applicable to private sector employers,

thus allowing states to enter into any contract allowed to a

private sector employer and denying this right where it would

be denied to private sector employers. Under such a rule, state

agencies, such as the MWRA, would be de facto subject to the

National Labor Relations Act. This would be directly contrary

to the express intention of Congress in excluding such agencies

from the definition of employer in Section 2(2) of the Act.

ARGUMENT

I. “MARKET PARTICIPANT” DOCTRINE IS INAP-

PLICABLE UNDER THE NATIONAL LABOR RELA-

TIONS ACT, 29 U.S.C. § 151, ET SEQ.

A. The So-Called “Market Participant” Doctrine Does

Not Constitute An Exemption To The Application

Of Traditional Pre-Emption Principles Developed

Under The NLRA.

In challenging the decision below, Petitioners make the

superficially appealing, but erroneous argument that the Mas-

sachusetts Water Resource Authority, as a so-called “market

participant,” should be allowed to enter into any contract or

otherwise adopt contracting practices which would be legally

Y

permissible if adopted by private sector employers. However,

this Court previously has rejected the “market participant”

doctrine as a defense to pre-emption under the National Labor

Relations Act. Wisconsin Department of Industry, Labor and

Human Relations, et al. v. Gould Inc., 475 U.S. 282 (1986).

Petitioners urge a revisionist interpretation of Gould and a

reemergence of the “market participant” doctrine as an excep-

tion to pre-emption under the NLRA.

In Gould, the Court was asked to adjudicate the validity of

a Wisconsin statute debarring repeat violators of the National

Labor Relations Act from doing business with the state. In

holding that the Wisconsin statue was pre-empted by the NLRA,

the Court specifically rejected Wisconsin's argument that its

Status as a “market participant” privileged its conduct. The

Court stated

[T]he ‘market participant’ doctrine reflects the par-

ticular concerns underlying the Commerce Clause, not

any general notion regarding the necessary extent of

State power in areas where Congress has acted.

. * ~ *

What the Commerce Clause would permit States to do

in the absence of the NLRA is thus an entirely different

question from what States may do with the Actin place.

Congressional purpose is the ‘ultimate touchstone’ of

pre-emption analysis ... and we cannot believe that

Congress intended to allow States to interfere with the

‘interrelated federal scheme of law, remedy, and

administration’ ... under the NLRA as long as they did

so through exercises of the spending power.

475 U.S. at 289-290 (citations omitted, emphasis added).

The Court specifically rejected the state’s argument that the

statute should be upheld since the conduct in question was not

prohibited to private sector employers under the Act.

10

Nothing in the NLRA, of course, prevents private

purchasers from boycotting labor law violators. But

government occupies a unique position of power in our

society, and its conduct, regardless of form, is rightly

subject to special restraints. Qutside the area of Com-

merce Clause jurisprudence, it is far from unusual for

federal law to prohibit States from making spending

decisions in ways that are permissible for private pur-

ties.

* . ° *

The NLRA, moreover, has long been understood to

protecta range of conduct against state but not private

interference.

* - » -

The Act treats state action differently from private

action not merely because they frequently have dif-

ferent forms, but also because in our system States

simply are different from private parties and have a

different role to play.

475 U.S. at 290 (citations omitted, emphasis added).

In urging the Court to resurrect the “market participant”

doctrine under the NLRA, Petitioners focus on the Court's

caveat in Gould that “[wle do not say that state purchasing

decisions may never be influenced by labor considerations.”

However, the quote is taken out of context, omitting key lan-

guage demonstrating that the Court did not intend its caveat to

preserve the “market participant” doctrine as a defense to pre-

emption under the NLRA. The full quote reads:

We do not say that state purchasing decisions may

never be influenced by labor considerations, any more

than the NLRA prevents State regulatory power from

ever touching on matters of industrial relations.

Doubtless some state spending policies, like some

exercises of the police power, address conduct that is

of such ‘peripheral concern’ to he NLRA, or that

implicates ‘interests so deeply rooted in local feeling

and responsibility,’ that pre-emption should not be

inferred. Garmon, 359 U.S., at 243-244; see also, e.z.,

Belknap, Inc. v. Hale, 463 U.S. 491, 498 (1983). And

some spending determinations that bear on labor rela-

tions were intentionally left to the States by Congress.

See, New York Tel. Co. v. New York State Labor Dept.,

440 U.S. 519 (1979). But Wisconsin’s debarment rule

clearly falls into none of these categories. We are 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, or with a law

that pursues a task Congress intended to leave to the

States.

475 U.S. at 291 (emphasis added).

Taken in context, the Court's caveat, far from announcing

any new exemption to basic pre-emption principles, merely

affirms that its rejection of the “market participant” doctrine

does not alter existing pre-emption rules which under certain

circumstances allow state action of “peripheral concern” to the

NLRA or which involves “deeply rooted” state interests. No

such circumstances are involved in the instant case.4

+ These generally recognized exceptions to the pre-emption doctrine

simply do not apply in the instant case. The power of a state to interfere with

the freedom of choice guaranteed employees under the NLRA goes to the

very heart of the federally regulated scheme of labor relations. In the instant

case the state’s purchasing power is being used in such a way as to penalize

employees for exercising their nght to remain union-free by depriving them

of the opportunity to work on state funded projects. Such an ability to thrust

itself into the federally-protected decision making process of employees

subject to the NLRA clearly constitutes an action which is more than a

peripheral concern of the federal statute and, indeed, strikes al the very core

of the NLRA's free choice guarantees. Nor does the purchasing power of the

Stale, as evidenced in the instant case, involve such “deeply rooted” state

interests as to fall within the pre-emption cxcepuons.

12

In summary, in Wisconsin Department of Industry v.

Gould, supra, the Court clearly drew a parallel under the NLRA

between a state's regulatory power and its spending power. In

either case, the Court held that the traditional pre-emption

analysis is to be applied. Contrary to Petitioner's argument, the

‘market participant” doctrine does not provide a mechanism for

escaping this traditional pre-emption analysis. Thus, the acuon

of the MWRA in negotiating, executing & implementing the

instant project agreement which seeks to contro! the labor

relations policies of bidders and poteuatial bidders remains sub-

ject to a traditional pre-emption analysis under San Diego

Building Trades Council vy. Garmon, 359 U.S. 236 (1959) and

Machinists v. Wisconsin Employment Relations Commission,

427 U.S. 132 (1976), and their progeny.

Il. TRADITIONAL PRE-EMPTION ANALYSIS

Applying the analysis which this Court has employed in

previous pre-emption cases, it is clear that the instant case meets

standards which have been laid down for the application of the

pre-emption doctrine and does not fall into any of the doctrine’s

recognized exceptions.

Pre-emption under the National Labor Relations Act has

evolved under two distinct lines of cases. The first, known as

Garmon pre-emption, see San Diego Building Trades Council

v.Garmon, 359 U.S. 236 (1959), prohibits states from regulating

“activity that the NLRA protects, prohibits or arguably protects

or prohibits.” Wisconsin Department of Industry v. Gould Inc.,

475 U.S. 282 (1986). Garmon pre-emption is intended to

preclude state interference with the Labor Board's interpretation

and active enforcement of the “integrated scheme of regulation”

established by the NLRA. Golden State Transportation Cor-

poration v. City of Los Angeles, 475 U.S. 608 (1986). A second

line of reasoning, known as Machinists pre-emption, see

Machinists v. Wisconsin Employment Relations Commission,

427 U.S. 132 (1976), precludes state and municipal regulation

13

“conceming conduct that Congress intended to be unregulated.”

Metropolitan Life Insurance Company v. Massachusetts, 47)

U.S. 724 (1985).

The majority below correctly found that the action of the

Massachusetts Water Resource Authority in negotiating, ex-

ecuting and implementing the project agreement at issue in this

case implicates both forms of pre-emption.

A. Pre-emption Under San Diego Building Trades Coun-

cil v. Garmon, 359 U.S. 236 (1959).

A Garmon analysis begins with a determination as to

whether or not the state action in question impacts upon an

activity “that the NLRA protects, prohibits, or arguably protects

or prohibits.”” See Gould, supra. If the conduct with which the

state has sought to interfere is actually protected by federal law,

“pre-emption follows not as a matter of protecting primary

jurisdiction, but as a matter of substantive right.” Brown vy.

Hotel Employees Union Local 54, 468 U.S. 491 (1984). If the

conduct is only arguably protected by federal Jaw, a balancing

test is utilized to determine whether the conduct is of such

“peripheral concern” to the NLRA or whether it involves “‘in-

terests so deeply rooted in loca! feeling and responsibility” that

pre-emption should not be inferred. Garmon, 359 U.S. at 243-

244; see also e.g., Belknap Inc. v. Hale, 463 U.S. 491, 498

(1983).

Even a cursory examination of Specification 13.1, and the

underlying Project Agreement which it enforces, demonstrates

beyond debate that the action of the MWRA in negotiating,

executing and implementing the project agreement impinges on

important Section 7 rights of employees. The NLRA’s fun-

damental precept is based on the premise that:

Employees shall have the right to self-organization, to

form, join or assist labor organizations, to bargain

collectively through representatives of their own

BEST AVAILA

14

choosing . . . and shall also have the right to refrain

from any or all such activities... .

29 U.S.C. § 157.

Article Ill of the Project Agreement recognizes the signatory

unions as the exclusive representative of all construction

employees within the scope of the agreement, and compels

covered employees, as a condition of employment, to become a

member of a signatory union within a specified time period.

Thus, the MWRA, through Specification 13.1, has eviscerated

the Section 7 rights of project employees to decide for themsel-

ves which, if any, labor organization should be their repre-

sentative. By virtue of this agreement, these same employees

have also been denied the fundamental right to decide whether

to “join, form or assist fa] labor organization|s]"’- and in the

process have forfeited ir right to participate in the collective

bargainin. process wh..n has pre-determined their terms and

conditions of employment for the next ten years.

It is likewise a well-recognized principle of the National

Labor Relations Act that an employer commits an unfair labor

practice by dealing with a union that does not have the support

of a majority of the workers. See /nternational Ladies’ Garment

Workers’ Union v. NLRB, 366 U.S. 731, 737-738 (1961). As

the Court noted in that case, “there could be no clearer abridge-

ment of Section 7 of the Act, assuring employees the right to

bargain collectively through representatives of their own choos-

ing or to refrain from such activity” than to grant exclusive

bargaining status to an agency selected by a minority of the

employees, thereby imposing that agreement on the non-con-

senting majority. Id. at 737.

Petitioners do not dispute that these important Section 7

rights have been compromised.> However, they assert that the

> Petitioners declined to address pre-emption under Garmon in their

brief. Nevertheless, Petitioners have attempted to export the “state interest”

exception to pre-emption under Garmon to a Machinists analysis. Since the

LE COPY \s

actions of the MWRA should be judicially approved because a

private sector employer would have been allowed to engage in

this conduct. They further assert that this conduct is permissible

as ‘‘a legitimate response to state procurement constraints or to

local economic needs.” Pet. brief at 34-35.

As to Petitioners’ first argument in this respect, the alleged

ability of a private sector employer to engage in similar conduct

is irrelevant to a pre-emption analysis.® “The NLRA, moreover,

has long been understood to protect a range of conduct against

State but not private interference.” Gould, 475 U.S. at 290.

With respect to Petitioners’ second contention, this Court's

decision in Brown v. Hotel Employees Union Local 54, supra,

makes it clear that no balancing of state interests is permissible

where the state action in question interferes with conduct which

is actually protected under the Act.

Even if a balancing of state interests were appropriate in

this case, Petitioners misstate the focus of the balance to be

made. In seeking to balance state interests against potential

conflicts with national labor policy, the Court has sought ia-

variably to identify the “legitimate and compelling state interest”

to be protected. Brown v. Hotel Employees Union Local 54, 468

U.S. at 509 (emphasis added); see also San Diego Building

Trades Council et al. v.Garmon, 359 U.S. at 247. Historically,

such a compelling state interest has been found only in the case

of violence, imminent and immediate threats to the public order,

and combatting local crime which had infested a parucular

industry, none of which is applicable here. /d.

While the overall importance of the Boston Harbor cleanup

project is not disputable, there is no showing that the project

Court previously has refused to reach the question of whether this exception

applies to a Machinists analysis, Golden State Transit Corporation v. City of

Los Angeles, 475 U.S. 608, 618 note 8, we address Petitioners’ arguments as

part of a Garmon analysis.

As discussed below, a similarly situated private sector property owner

could not enter into a similar project agreement.

16

itself is at risk. This Court has never held that state interests in

general are sufficient to justify the subordination of specifically

protected employee rights embodied in the NLRA. Indeed. in

this respect, this case is similar to Bus Employees v. Missouri,

374 U.S. 74 (1963), where the Court held that the state’s general

interest in providing uninterrupted transportation service to its

citizens did not justify the state’s prohibition of a strike by the

unionized employees of a privately owned bus company.

By negotiating, executing and implementing the Project

Agreement herein, the MWRA has directly interfered with

crucial and critical rights of employees which the National

Labor Relations Act specifically protects. In such situations in

the past, this Court has not hesitated to find that the state’s action

was pre-empted by the NLRA, and it should do no less in the

instant case. San Diego Building Trades Council et al. vy.

Garmon, 359 U.S. 236 (1959).

B. Pre-emption Under Machinists v. Wisconsin Employ-

ment Relations Commission, 427 U.S. 132 (1976).

A Machinists analysis begins with the recognition that the

questioned state action concerns conduct which is neither

protected nor prohibited by the National Labor Relations Act.

but which Congress “intended to be unregulated.” Golden State

Transit Corporation v. City of Los Angeles, 475 U.S. 608, 614

(1986). The Machinists doctrine recognizes the integral nature

of federal regulation under the NLRA, and protects those areas

which Congress intentionally left “to be controlled by the free

play of economic forces.” Machinists, 427 U.S. at 140. quoting

NLRB v. Nash Finch Company, 404 U.S. 138 (1971).

The question in this case is the extent to which a state

agency, such as the MWRA, may compel private sector contrac-

tors to execute a specific collective bargaining agreement under

Section 8(f) and (e) of the National Labor Relations Act as a

condition of being awarded work on a public works project. It

must be noted that this is not a case where the state agency

hy,

i

determined to do business only with union contractors. although

such a decision clearly would be unlawful. Here the state

agency has excluded al/ private sector contractors from the

Boston Harbor project, both union and nonunion, except for

those contractors willing to agree to terms and conditions of

employment dictated by the MWRA

lhe leyislative history of Section &(f) of the National Labor

Relations Act, 29 U.S.C. § 158(f), demonstrates that pre-hire

agreements were intended to be entirely voluntary. The House

report on the Labor-Management Reporting and Disclosure Act

of 1959 (LMRDA), Pub. L. No. 86-257, 73 Stat. 519. states

The Conference adopted the provision of the Senate

bill permitting pre-hire agreements in the building and

construction industry. [Section 705] Nothing in such

provision 1s intended to...authorize the use of force,

ceercion, strikes or picketing to compel any person to

enter into such pre-hire agreements

Legislative History of the Labor-Management Reporting and

Disclosure Act of 1959, Volume | at 946 (official reprinting

1985)

In addition, during the floor debate Congressman Graham

Barden, the floor manager for the Conference Report, cited as

controlling the following colloquy between Senators Kennedy

and Holland concerning the precursor of Section 705 of the

LMRDA

Mr. Holland. Was it the intention of the committee that

section 604(a) shall require employers to enter into

prehire agreements where the union has not been the

recognized or certified bargaining agent of the

employees involved?

Mr. Kennedy. | shall answer the Senator from Florida

as follows and it is my intention by so answering,

to establish the legislative history on this question: It

1%

was not the intention of the committee to require by

section 604(a) the making of prehire agreements, but,

rather, to permit them; nor was it the intention of the

committee to authorize a labor organization to strike,

picket, or otherwise coerce an employer to sign a

prehire agreement where the majority status of the

union had not been established. The purpose of this

section is to permit voluntary prehire agreements. This

is because of the inability to conduct representational

elections in the construction industry.

Legislative History of the Labor-Management Reporting and

Disclosure Act of 1959, Volume Il at 1715 (official reprinting

1985).

The voluntary nature of agreements under Section &(f) and

(e) of the National Labor Relations Act is critical to their

legality. The legislative history of these provisions makes clear

that Congress was concerned that employer and employee rights

not be subordinated through any force or compulsion. Thus,

although Congress intended to allow such agreements,

employers were to be free from government or union coercion

in determining whether, or under what conditions, to enter into

such agreements. Clearly, an employer's decision whether to

enter into such an agreement is a matter which Congress “‘in-

tended to be unregulated.’ Golden State Transit Corporation vy.

City of Los Angeles, 475 U.S. 608 (1986),

Here, the MWRA has interfered with this unregulated

decision by compelling private sector contractors to execute a

specific collective bargaining agreement under Section &(f) and

(e) of the National Labor Relations Act as a condition of being

awarded work on a public works project. Petitioners suggest

that sact-state compulsion was contemplated by Congress in

enacting Sections &(f) and (e) of the National Labor Relations

Act. The legislative history, however, does not support this

suggestion. As the Court noted in Woelke & Romero Framing

p

19

Inc. v. NLRB, et al., 456 U.S. 645, 663-664 (1982), the voluntary

aspect of these statutory provisions are guaranteed by other

provisions of the National Labor Relations Act. Most of these

protections simply are not available when a state agency such

as the MWRA is involved. Thus, the integrated regulatory

framework envisioned by Congress in legislating Section &(f)

and (e) as part of the National Labor Relations Act, is not

applicabie when an entity like the MWRA is a party to the

activity otherwise regulated by the NLRA. Since the statutory

safeguards enacted by Congress to limit abuses of Sections &(f)

and (¢) of the NLRA are not applicable to the MWRA, there is

no reasonable basis for concluding that Congress intended state

agencies, such as the MWRA, to enter into agreements under

Sections 8(f) and (e) of the National Labor Relations Act.

Section 8(f) of the National Labor Relations Act is anarrow

exception to the general rule protecting employee free choice

and employer management rights. It is applicable only to an

employer “engaged primarily in the building and construction

industry” and to agreements meeting very specific qualifica-

tions. Petitioners attempt to make much of the statement of the

majority below that “the master labor agreement between the

Trades Council and Kaiser is a valid labor contract.” 935 F.2d

at 356. However, when read in context, it is clear that the

majorityanerely was observing that absent the involvement of

the MWRA the contract otherwise satisfied the requirements of

section &(f) and (e) of the Act. Since it is the involvement of

the MWRA and the negotiation, execution and implementation

of the Master Labor Agreement which is at issue in this case,

the legitimacy of the contract absent such involvement truly is

“urelevant to the pre-emption issue at hand.”” 935 F.2d at 357

The fact that the project agreement between Trades Coun

cil and Kaiser in this case otherwise satisfies the reqa@irements

of Section &(f) and (e) of the National Labor Relations Act, does

not conclude the matter in this case. Section &(f) is specifically

20

limited to employers “engaged primarily in the building and

construction industry” and Section &(e) is limited to employers

“in the construction industry.” Here, the Massachusetts Water

and Resource Authority neither is an employer under the Act,

nor is it “engaged primarily in the building and construction

industry.”

Althougt Petitioners urge the Court to ignore the fact that

the MWRA is explicitly excluded from the National Labor

Relations Act, they make no attempt to argue that the MWRA

is “primarily engaged in the building and construction industry.”

The reason for this omission in their briefs is clear, the MWRA

is neither “in the construction industry,” nor is it “engaged

primarily in the building and construction industry.” Accord-

ingly, aside from its non-employer status under the NLRA. the

MWRA does not meet the threshold requirements for signing a

pre-hire agreement.’

. Contrary to the arguments of Petitioners and the United States, the

legislative history does not Support the conclusion that in passing the Con-

Struction Industry Amendments in 1959 Congress anticipated government-

mandated project agreements. Although the legislative history does contain

references to public works projects built under project agreements, there is

ho showing that these agreements were mandated by the responsible

governmental agency. Historically, such project agreements have been

negotiated by the responsible private sector contractors without government

imterference. Thus, the legislative history shows only that Congress an-

ticipated that private contractors on public works projects would be permitted,

not required, to enter into agreements under Section &(f) and (e) of the NLRA.

Also, it should be noted that none of the factors considered by Congress

iN passing the Construction Industry Amendments in 1959 are applicable to

the MWRA. Although Petitioners make the contrary argument, even a

Cursory exammation demonstrates otherwise. The two dominant reasons for

enacting Section &(f) of the National Labor Relations Act were (1) to provide

predictable labor costs to allow construction contrac tors to formulate accurate

bids, and (2) to provide construction contractors ready access to an available

pool of skilled workers

21

Ill. EVEN ASSUMING THE “MARKET PARTICIPANT”

DOCTRINE HAS SOME APPLICATION UNDER

THE NLRA, PETITIONERS’ “MARKET PAR

TICIPANT” ANALYSIS IS FATALLY FLAWED

A. The MWRA Is Not A “Market Participant” As That

Term Is Commonly Defined.

Even assuming arguendo that some aspect of the “market

participant” doctrine survived Gould, Petitioners’ analysis is

fatally flawed because the MWRA cannot be considered a

“market participant” under any reasonable definition or inter

pretation of that concept. Any analysis of the “market par-

ticipant” doctrine must begin with an examination of the

relevant market in which the state seeks to participate. In the

instant case, the market in question is the market for construction

services and the MWRA as a “participant” in this market wishes

to control the labor relations of private sector contractors. Un-

questionably, this market is heavily regulated by the National

Labor Relations Act.

Here, it is undisputed that the MWRA does not intend to employ any

construcuon employees. Thus, it cannot fairly be said that the MWRA has

any need for™ predictable labor costs.” The MWRA’s only legitimate concern

iS with predictable construction costs, which can be accomplished through

the state's compeutive bidding procedure. Similariy, the MWRA has no need

lor a ready supply of labor. Its only legitimate concer is that its contractors

are able to staff the project. This can be done in a number of ways without

compromising important nghts under the National Labor Relations Act. For

example, the MWRA could require any successful bidder to demonstrate by

Objective means the ability to provide sufficient manpower. In the private

sector, both union and non-union employers can be expected and required to

make such a showing

Finally, although Congress also was concerned with the relatively shor

duration of construction projects making traditional representation elections

impractical, this factor has no application to the Boston Harbor project, which

is expected to last over ten years. In any event, individual contractors on the

project remain free to negotiate &(f) agreements if they deem it to be in thei

interest

”

~~

As is clearly demonstrated by Petitioners’ brief, efforts to

control third-party labor relations through the negotiation, ex-

ecution and implementation of project labor agreements, such

as that involved herein, implicates numerous provisions of the

National Labor Relations Act. Thus, the NLRA controls who

may enter into such agreements, regulates the provisions that

such agreements may contain, controls the rights of employees

to challenge such agreements, and limits the actions which may,

or may not, be taken by a union seeking to enter into such

agreements.

Petitioners concede, as they must, that the MWRA is not

subject to the National Labor Relations Act. As an agency of

the Commonwealth of Massachusetts, it is explicitly excluded

from the definition of employer in Section 2(2) of the NLRA.

Thus, although the “market” in w hich the MWRA seeks to be a

“participant” is heavily regulated by the NLRA, the MWRA

itself is not subject to regulation by that statute. This lack of

corresponding regulation on both the participant and the market

itself destroys the parity which underpins the basic “market

participant” assumption, i.e. all parties subject to the same

regulation.

The importance of the integrated and all encompassing

scheme of regulation under the NLRA is clearly demonstrated

by the Court’s decision in Woelke & Romero Framing Inc. v.

NLRB, et al., 456 U.S. 645 (1982). In concluding that Congress

anticipated the “top down” organizing effect on the employer's

involved in that case, the Court specifically noted:

“The “top down” organizing effect of subcontracting

clauses suught or obtained in the context of a collective

bargaining relationship is limited in a number of ways

by other provisions of the National Labor Relations

Act.”

456 U.S. at 663-664.

23 ~

The Court specifically contrasted the situation in Woelke &

Romero with that in Connell Construction C ‘ompany*® where

“many of these protections would not have been available to

limit the ‘top down’ organizing effect of the clauses at issue.”

456 U.S. at 664 note 1¢

Similarly, in the instant case, where the provisions of the

National Labor Relations Act are inapplicable to the MWRA.

there is no limitation on the “top down organizing effect” that

the subcontracting provisions at issue in this case could ac-

complish. This absence of regulatory oversight on one of the

parties in the “market participant” equation forcefully militates

against a finding that Petitioners are privileged to enter into the

project agreement herein and in the process escape NLRA

pre-emption which would otherwise apply

Moreover, it should be noted that the MWRA is not driven

by the same market forces as private sector participants.

Specifically, government officials, unlike their private sector

counterparts, are uniquely subject to political pressure from

Organized Labor and other special interest groups. Because

their tenure in office is subject to the shifting views of the

electorate, government officials are particularly sensitized to

political pressures from such special voter groups. Thus, the

economic viability of a particular business judgment may well

prove to be of secondary importance to a government official's

instinct foxself-preservation. By contrast, in the private sector,

special interest groups and members of the public at large

typically do not have the power to directly influence the job

security of corporate decision makers. Rather, private sector

decisions as to whether to negotiate, execute and implement a

project agreement are more likely to be based upon economic

factors and other legitimate business considerations than upon

sheer political pressure. *

Connell Construction Co. v. Plumbers & Steamfitters Union Local No

100,421 U.S. 616 (1975)

24

Finally, in contrast to private sector employers, the MWRA

is spending taxpayer-generated funds. For this reason alone, it

should be held to a different standard than its private sector

counterparts. Where a state agency, such as the MWRA,

decides to exclude certain contractors/employers and employees

from public works projects based solely upon legally protected

labor relations choices of the contractors’ employees, it not only

interferes with the regulatory scheme of the NLRA, as discussed

above, but it also unreasonably and unfairly precludes taxpayers

from participating in a project they are-required to fund. Why

should employees who exercise their right to remain union-free

be excluded by the state from gainful employment on those very

projects which they helped to fund, solely because of their

exercise of federally-protected rights’

In summary, when it comes to dictating the labor relations

decisions of third-party contractors, the MWRA simply is not a

“market participant” as that term is generally defined. It is

neither subject to the same legal regulations as private sector

participants, nor is it subject to the same market forces. It also

has the power to exclude otherwise qualified taxpayers from

participation in state-funded projects solely because of their

exercise of federally protected rights. Accordingly, the so-

called “market participant” doctrine is totally inapplicable to the

instant situation and cannot serve as a defense for avoiding the

NLRA and its pre-emption principles.

B. Petitioners’ “Market Participant” Argument Is Based

Upon An Unsupported Premise.

The second flaw in Petitioners’ “market participant” argu-

ment is its reliance upon an underlying premise which is not

supported by judicial precedent. In order to endorse the “market

participant” argument, this Court must first conclude that a

private sector property owner, which does not directly employ

atfy construction employees, is nonetheless permitted to enter

into agreements protected under Section &(f) and (e) of Act. Not

25

only is such an underlying supposition unwarranted, it is directly

contrary to the decision of the NLRB General Counsel in

Plumbers Union, Local 246 (Marlin Mechanical, Inc.), NLRB.

Case No. 32-CE-52 (NLRB-GC January 31, 19X9) (original

complaint reprinted as Appendix A hereto).

The fundamental premise underpinning Petitioners’ entire

argument 1s that a private property owner, which does not itself

employ construction employees, is free to enter into collective

bargaining agreements under Section &( f) and (e) of the National

Labor Relations Act. However. Petitioners fail to cite any

judicial precedent to Support such a conclusion. The sole

“authority” cited by Petitioners is a 1986 decision of the General

Counsel of the NLRB dismissing a challenge to a prehire

agreement covering the construction of the Saturn plant in

fennessee. Morrison-Knudsen. |3 Advice Mem. Rep.

Par.23,061 (NLRB-GC 1986) (reprinted as Appendix F of the

Appendix to the certiorari petition in No. 91-261 (“BCTC Pet.

App.’’), at 97a-102a).9

An administrative decision of the NLRB General Counsel, unsup

ported by either NLRB or judicial approval, hardly constitutes compelling or

persuasive authority upon which this Court should premise its decision in the

instant case. The NLRB General Counsel is a “prosecutorial” official whose

administrative decisions not to issue complaints are unreviewable by any

court. NLRB v. United Food & Commer, tal Workers Unian, Local 23

AFL-CIO, 484 U.S. 112 (1987). As the NLRB held long ago,

| The General Counsel's} primary function is to investigate charges

and prosecute cases before the Board. The ‘ask of making binding

interpretations of the meaning of the Act isa judicial function.

vested in the Board Members with ultimate power of review in the

Courts.

Betts Cadillac Olds, Inc. 96 NLRB 26%, 272 (1951). emphasis added: see

also McBride's of Naylor Road. 229 NLRB 795, 797 n.2 (1977). and F cron

Company, U.S.A_,253 NLRB 213 (1980).

Indeed, any precedential value of an administrative refusal to issue a

complaint i# refuted by this Court's decision in Connell Construction Com.

26

The failure of the General Counsel to challenge the private

sector project agreement in Morrison-Knudsen, supra, does not

establish that the Saturn agreement was lawful. Furthermore, it

should be noted that Morrison-Knudsen was not the owner of

the construction site, and it actually employed construction

employees at the Saturn site. BCTC Pet. App at 97a.-98a.

Moreover, the property owner was not a party to the project

agreement. BCTC Pet. App at 10la. Accordingly, General

Counsel's failure to challenge the Saturn agreement certainly

does not serve as a judicial precedent supporting Petitioners’

underlying premise that a private property owner, which does

not itself employ any construction employees, may enter into

collective bargaining agreements under Section &(f) and (e) of

the National Labor Relations Act.

Petitioners’ underlying premise was specifically con-

sidered by the General Counsel in Plumbers Union, Local 246

(Marlin Mechanical, Inc.), NURB Case No. 32-CE-52 (NLRB-

GC January 31, 1989).'° Contrary to Petitioners’ argument, the

a -

pany. Inc. v. Plumbers and Steamfitters Local Union 100, etal. ,421U.S.616,

89 LRRM 2401 (1975). In Connell, the Court ruled that Section &(e) does

not protect agreements sought outside a collective bargaining relauionship

notwithstanding the fact that the General Counsel previously had refused to

challenge a similar agreement. See, Connell Construction Company, Inc. v

Plumbers and Steamfitters Local Union 100, et al, 483 F.2d 1154 (Sth Cir.

1973).

{ .

os Marlin Mechanical is referenced at note 12 in Building & Trades

Council, NLRB Case No. 1-CE-71 (NLRB-GC June 25, 1990) (NLRB

Division of Advice Memorandum on the Project Agreement) (reprinted as

Appendix D at BCTC Pet. App. 83a-88a). Although Petitioner cites this

Advice Memorandum in a related argument, noticeably absent from

Petitioner's argument is any discussion of the comments of the NLRB

General Counsel in Case No. 1-CE-71 concerning the significance of a private

sector employer's failure to employ any construction employees. Specifical-

ly, the decision states “[t}he General Counsel has authonzed &(c) proceedings

where the employer did not hire and did not intend to hire any construction

employees.” /d at 87, note i2. at

27

General Counsel rejected the identical argument and issued a

complaint alleging that a construction industry employer who

did not hire and did not intend to hire any construction

employees was prohibited from entering into a collective bar-

gaining agreement under Section 8(f) and (e) of the NLRA.!!

Thus, contrary to Petitioners’ argument, it would appear

that the NLRB General Counsel has previously determined that

a private sector employer which does not employ any construc-

tion employees may not avail itself of the protection afforded

under under Section 8(f) and (e) of the NLRA !2

C. Since The NLRA Is Inapplicable To The States.

There Is No Basis For Limiting The “Market

Participant” Analysis To Construction Industry

Project Agreements As Petitioners Contend.

Petitioners have indicated that their analysis would permit

only such contracts as are allowed in the private seetor. How-

ever, Petitioners ignore the practical effect of such arule. If the

MWRA is permitted to do what the Act condones for private

employers, and is not permitted to engage in conduct that the

Act prohibits to private employers, then the MWRA would be

| ——_

| This portion of the complaint Subsequently was withdrawn by the

General Counsel as a result of additional evidence that the Employer did

employ an employee who pertormed work covered by the agreement and who

was In fact covered by the agreement. See Appendix B hereto. Thus, neither

the Beard nor the courts were given the opportunity to consider the NLRB

General Counsel's analysis of Section &(f) and (e) of the NLRA. Neverthe-

less, Marlin Mechanical Clearly demonstrates that the NRLB General Coun-

sel has specifically rejected Petitioner's underlying premise that a private

sector employer similar to the MWRA would be permitted to enter into the

agreement at issue in this case

Although the General Counsel dismissed the charge in Case No.

|-CE-71, it must be noted that his decision specifically stated “[t}here is no

contention that the [Kaiser] acted as an agent of MWRA rather than as 2

principal when it signed the Agreement.” Building & Trades Council, supra

note 3. As we now know, it is undisputed that Kaiser acted as an agent of

MWRA when it negotiated and signed the instant Proyect Agreement.

28

de facto subject to the National Labor Relations Act. This would

be contrary to the explicit exclusion of “any State or political

subdivision thereof” from the definition of employer in Section

2(2) of NLRA. Petitioners make no attempt to address the

inherent contradictions posed by their analysis.

Moreover, the detailed analysis of the motivations and

actions of the MWRA set forth in Petitioners’ brief demonstrates

the critical flaw in their analysis. In excluding the states from

coverage under the NLRA, it was the intention of Congress to

preclude such detailed scrutiny of state actions and motives. If

the analysis advocated by Petitioners were to be adopted, every

pre-emption case involving state action would trigger a com-

parison of the motivations of the state with similar motivations

of private sector employers. The ultimate litmus test of pre-

emption in such cases would be measured by the rights and

obligations of private sector employers. Clearly, this was not

the result which Congress intended when it excluded the states

from coverage under the NLRA.

The purposeful design of the NLRA was to exclude state

agencies such as the MWRA and to further insure that their

actions do not interfere with the Act's “integrated scheme of

regulation.” This is true whether that interference occurs

through the exercise of state regulatory power or state spending

power. If Petitioners wish to subject state action to scrutiny

under the National Labor Relations Act, or to allow state action

to interfere with or contradict its regulatory framework, their

petition should be directed to Congress, not to this Court.

9

CONCLUSION

For the reasons set forth above. the judgment of the court

of appeals should be sustained.

Respectfully submitted,

FRANCIS T. COLEMAN*

WILLIAM B. COWEN

Coleman, Coxson, Penello.

Fogleman & Cowen,

A Professional Corporation

655 Fifteenth Street

Suite 860

Washington, DC 20005

(202) 783-5250

Counsel! for the Master Printers of

America

* Counsel of Record

a- |

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR

RELATIONS BOARD

REGION 32

Case 32-CE-52

UNITED ASSOCIATION OF JOURNEY MEN AND

APPRENTICES OF THE PLUMBING AND PIPI

FITTING INDUSTRY OF THE UNITED STATES

AND CANADA, AFL-CIO, LOCAL UNION No. 24¢

and

MARLIN MECHANICAL, INC.

and

FRU-CON CONSTRUCTION

Party to the Contract

and

BUD BAILEY CONSTRUCTION

Party to the Contracts

COMPLAINT AND NOTICE OF HEARING

It having been charged by Marlin Mechanical Inc., herein

called Marlin, that United Association of Journeymen and Ap

prentices of the Plumbing and Pipefitting Industry of the United

States and Canada, AFL-CIO, Local Union No. 246, herein

called Respondent, has engaged in, and Is engaging in, certain

unfair labor practices effecting commerce as set forth and

defined in the National Labor Relations Act, as amended, 29

U.S.C. Sec. 151, et. seg., herein cailed the Act, the General

Counsel! of the National Labor Relations Board, herein called

the Board, on behalf of the Board, by the undersigned, pursuant

to Section 10(b) of the Act and Section 102.15 of the Board's

Rules and Regulations, Series 8, as amended, hereby issues this

Complaint and Notice of Hearing and alleges as follows:

|

lhe charge was filed by Marlin on October 26, 1987, and

a copy thereof was served on Respondent by certified mail on

the same date

>

(a) At all times material herein, Marlin has been a

contractor with an office ind place of business located in Visalia,

California, where it is engaged in the business of installing

heating, cooling and sprinkler systems

(b) At all times material herein, Bud Bailey Construc

tion (herein called Bailey) has been a contractor with an office

ind place of business located in Salt Lake City, Utah, where 1

is engaged in business as a construction contractor

( At all tumes material herein, FRU-CON Construc

tion (herein called FRU-CON), has been a contractor with a

principal office and place of business located in Ballwin, Mis

yuri, where it is engaged in business as a general construction

mMtractol

(d) During the past twelve months, FRU-CON, in the

course and conduct of its business operations, performed set

vices valued in excess of $50,000 directly for customers located

outside the State of Missouri,

(d) During the past twelve months, Bailey, in the

course and conduct of its business operations, performed ser

vices valued in excess of $50,000 directly for customers located

outside the State of Utah

,

4

(a) FRU-CON and Bailey are each now, and have been

at all times material herein, employers engaged in commerce

within the meaning of Section 2(2), (6) and (7) of the Act

(b) Marlin is now, and has been at all times materia!

herein, a person within the meaning of Section 2(1) of the Act

4

(a) Respondent is now, and has been at all times

material herein, a labor organization within the meaning of

Section 2(5) of the Act.

(b) At all times material herein, Bob Ward occupied

the position of Respondent's Business Agent and has been, and

IS now, an agent of Respondent within the meaning of Section

2(13) of the Act

)

(a) On or about April 6, 1987, FRU-CON entered into

an agreement with Respondent and other building trade unions

(herein called the Project Agreement), to be effective April 14,

1987, relating to the contracting and subcontracting of on-site

construction work at a new snack plant at Visalia, California

(herein called the Project).

(b) Article Il, paragraph D of the Project Agreement

(herein called the Union Signatory Clause) states:

D In theevent the Employer subcontracts out any

work covered by this Agreement such subcontractor

shall become signatory to this Agreement for such

work. It being understood that the subcontractors

presently employed by the Employer are not subject to

this Agreement but may, by executing this Agreement,

become party to and beneficiary of this Agreement.

Attached hereto and marked@Exhibit A and incor-

porated by reference herein is the List of Subcontrac-

tors excluded from this Agreement.

It is understood that there a may be instances when

suitable, competitive union subcontractors may not be

available for certain subcontracts. In such instances,

a-4

the Employer will notify the Union 10 days prior to the

bid, and the Union will endeavor to locate suitable,

competitive union subcontractors to bid for the work.

If the Employer and the Union are unable to locate such

suitable subcontractors, it is understood and agreed

that the Employer will be relieved of the requirements

of this paragraph D for such subcontracts

*

Marlin did not become aware of the conduct alleged in

paragraphs 5(a) and (b) above until a date after April 26, 1987

~

j

In or about June, 1987, FRU-CON solicited subcontracting

bids for an interior phase of the Project (herein called the Interior

Work)

é.

(a) In or about June, 1987, Bailey submitted a bid

(herein called the Bid) for the Interior Work, which Bid included

a list of Bailey’s proposed subcontractors, including Marlin.

(b) Sometime in or about June,1987, Bailey was

awarded the Interior Work by FRU-CON.

Q

In or about the last week of June, 1987, Respondent, by its

Business Agent Bob Ward, informed Bailey that Marlin was not

signatory to any collective bargaining agreement with Respon

dent

1Q.

On or about July 17, 1987, Bailey, by its Project Manager

Mike Evans, advised Respondent by letter of Bailey's intent to

award certain mechanical work encompassed in the Bid to

Marlin.

Be

7

1].

In or about July, 1987, Respondent, by its Business Agent

Bob Ward, notified FRU-CON that Marlin was not signatory to

any collective bargaining agreement with Respondent, and

would have difficulty becoming signatory to any collective

bargaining agreement because of prior labor disputes with

Respondent

| 5

-_.

On or about July 22, 1987, Bailey, by its Project Manager

Mike Evans, advised Marlin that Bailey would not sign a

subcontract for work on the Project with Marlin until Marlin

obtained the approval of Respondent.

13.

On or about July 27, 1987, Respondent, by its Business

Agent Bob Ward, advised Marlin that Respondent would con

tinue to oppose Marlin becoming signatory to any subcontract

involving work on the Project unless Marlin became signatory

to an area-wide, full-term collective bargaining agreement with

Respondent, and not simply the Project Agreement.

\ g£

—w

14.

On or about August 10, 1987, Bailey, by its Project

Manager Mike Evans, informed Marlin that Bailey would not

enter into a subcontract with Marlin for work on the Project

1S.

At no time material herein was a collective bargaining

relationship in existence or envisioned between Respondent or

the other labor organizations party to the Project Agreement,

and FRU-CON or Bailey, in that neither FRU-CON nor Bailey

then employed or intended to employ, or ever employed, any

employees covered by the Project Agreement.

16

The acts and conduct of Respondent described in para

vyraphs 9, 11, and 13 above constitute a reaffirmation, or a

re-entering into,” of the provisions of Union Signatory Clause

17

(a) Phe acts and conduct of Respondent and Bailey as

jescribed above in paragraphs 12, 13, and 14 constitute an

‘entering into” of an agreement relating to the subcontracting

of work to be done at a construction site.

(b) Sometime in or about June, 1987, Respondent and

Bailey entered into or adofyed the terms of the Project Agree

ment

1S

By the acts and conduct described above in paragraphs 5,

Y. 11, 12, 13, 16 and 17, Respondent has entered into, main

tained, and/or given effect to agreements whereby FRU-CON

and/or Bailey have ceased and refrained, and have agreed to

cease and refrain, from doing business with other employers or

persons, including Marlin

19

The acts of Responder described above in paragraphs 5,

Y. 11, 12, 13, 16, 17 and 1d, and each of said acts, constitute

unfair labor practices affecting commerce within the meaning

of Section &(e) and Section 2(6) and (7) of the Act

WHEREFORE, as part of the remedy for the unfair labor

practices alleged above, the General Counsel seeks an Order

requiring that Respondent, inter alia, not enter into, maintain,

give effect to, or enforce the Union Signatory Clause or other

agreement alleged here, to the extent the aforesaid agreements

violate Sectin 8(e) of the National Labor Relations Act.

PLEASE TAKE NOTICE that on the 21st day of March

1989, at 9:00 a.m. Pacific Standard Time, in Fresno, California,

at a place to be designated hereafter, and continuing on consecu

tive days thereafter until completed, a hearing will be conducted

before a duly designated Administrative Law Judge of the Board

on the allegations set forth in the above Complaint, at which

time and place you will have the right to appear in person, o1

otherwise, and give testimony. Form NLRB-4668, Statement

of Standard Procedures in Formal Hearings Held Before the

National Labor Relations Board in Unfair Labor Practice Cases,

is attached

YOU ARE FURTHER NOTIFIED that, pursuant to Sec

tions 102.20 and 102.21 of the Board’s Rules and Regulations,

Series 8, as amended, Respondent shall file with the under

signed, acting in this matter as agent of the Board, an original

and tour (4) copies of an Answer to said Complaint within

fourteen (14) days frem today and that unless it does so, all of

the allegations in the Complaint shall be deemed to be admitted

to be true and may be so found by the Board. Immediately upon

the filing of its Answer, Respondent shall serve a copy thereof

on each of the other parties.

DATED AT Oakland, California this 31st day of January,

1YXY

_/s/James S. Scott

JAMES S. SCOTT, Regional

Director

National Labor Relations Board

Region 32

2201 Broadway, 2nd Floor

P.O. Box 12983

Oakland, California 94604

h- |

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR

RELATIONS BOARD

REGION 32

LINITED ASSOCIATION OF JOURNEY MEN AND

APPRENTICES OF THE PLUMBING AND PIPI

FITTING INDUSTRY OF THE UNITED STATES

ANID CANADA. AFL-CIO. LOCAL UNION NO. 246

ind

MARLIN MECHANICAL, IN

ind

PERL -CON CONSTRUCTION

Party to the ¢

ind

BLD BAILEY CONSTRLCTION

Party to the (¢ ntracts

ORDER WITHDRAWING PORTIONS OF

COMPLAINT AND DISMISSING PORTION OF

UNFAIR LABOR PRACTICE CHARGE

On January 31, 1989 Complaint issued in the above case

alleging, inter alia, that United Association of Journeymen and

Apprentices of the Plumbing and Pipefitting Industry of the

United States and Canada, AFL-CIO, Local Union No. 24¢

herein called Respondent, and Bud Bailey Construction, here

called Bailey, entered into an agreement relating to the sul

contracting of work to be done at FRU-CON Construction s

snack plant construction project at Visalia, California, and that

said conduct on Respondent's part violated Section S(e) of the

National Labor Relations Act, as amended, herein called the

Act

h-2

Subsequent to the issuance of the Complaint, as a result of

additional evidence and information obtained during the course

of pre-trial preparation, it has been determined that the alleged

section S(e) agreement between Respondent and Bailey was

entered into in the context of the type of collective bargaining

relationship envisioned under Connel Construction Co. v. Plum

bers Local 100, 421 U.S. 616 (197) and Woelke & Romero

Framing Co. v. N.L.R.B., 456 U.S. 645 (1982), in that Bailey,

luring the life of that agreement, did employ an employee who

performed work covered by that agreement and who was in fact

vered under that agreement. See also Morrison-Knudsen Co

Cases 26-CE-S% et al Advice Memorandum dated March 27

Zoli \ccordingly, as Respondent's conduct concerning its

ubcontracting agreement with Bailey can no lonver be viewed

IT IS HEREBY ORDERED, pursuant to the provisions of

Section 102.18 of the National Labor Relations Board’s Rules

and Regulations, Series 8, as amended, that the references to

Bailey in paragraph 15; paragraph 17: and the references to

paragraphs Y, 12, and 17 in paragraphs 18 and 19 in the Com

plaint issued in Case 32-CE-52 be, and they hereby are

withdrawn

IT 1S HEREBY FURTHER ORDERED that to the extent

that the charge filed in Case 32-CE-52 alleges that Respondent

has violated and is violating Section &(e) of the Act by reason

i it having “entered into an agreement with Bailey regarding

the subcontracting of work to be done at the FRU-CON Con

strucuion Visalia, California snack plant project, all such allega

ns be, and they hereby are dismissed. The remaining

allegations in Case 32-CE-52, as well as the remaining allega

tions in the Complaint issued therein, are not being dismissed,

but remain the subject of turther proceedings

DATED AT Oakland, California this 16th day of October

1 Ut

S =

JAMES S. SCOTT, Regional

Director

National Labor Relations Board

Region 32

2201 Broadway, 2nd Floor

P.O. Box 12983

Oakland, Calitornia 94604

Pursuant to the National Labor Relations Board's Rules and Regula

tions, Series &, as amended, a review of this action may be obtained by filing

um appeal with the General Counsel, addressed to the Office of Appeal

National Labor Relations Board, Washington, D.C. 20570, with a copy to

the Regional Director. This appeal must contain a complete statement setung

for the facts and reasons upon which it ts based. The appeal must be received

by the General Counsel in Washington, D.C. by close of business on October

0. 1990. Upon good cause shown, however, the General Counsel! may grant

special permission for a longer penod of ume within which to file. Any

request for an extension of time must be submitted to the Office of Appeals

in Washington, D.C., and a copy of any such request should be submitted to

the Regional Director

lf you file an appeal, please complete the nouce forms | have enclosed

with this Order, and send one copy of the form to each of the other parties

involved in this case. Theuw names and addresses are listed on the attached

Affidavit of Service. The notice forms should be mailed at the same time vou

file the appeal, but mailing the notice forms does not relieve you of the

necessity for filing the appeal itself with the General Counsel, and a copy of

the appeal with the Regional Director within the time stated above