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

\ FILED

7 eo

Nos. 91-261 and 91-274

nd

SEP 8 999

Orricc UF fhe CLERK

In The Lpisceentenieeegnemeemnemeeen

Supreme Court of the United States

October Term, 1992

BUILDING AND CONSTRUCTION TRADES COUNCIL

OF THE METROPOLITAN DISTRICT,

Petitioners,

v.

ASSOCIATED BUILDERS AND CONTRACTORS

OF MASSACHUSETTS/RHODE ISLAND, INC., ET AL.,

Respondents.

MASSACHUSETTS WATER RESOURCES AUTHORITY

AND KAISER ENGINEERS,

Petitioners,

v.

ASSOCIATED BUILDERS AND CONTRACTORS

OF MASSACHUSETTS/RHODE ISLAND, INC., ET AL.,

Respondents.

On Writ of Certiorari To The

United States Court of Appeals for the First Circuit

BRIEF OF AMICUS CURIAE

UTILITY CONTRACTORS ASSOCIATION

OF NEW ENGLAND, INC.

IN SUPPORT OF RESPONDENTS

RICHARD D. WAYNE STEPHEN S. OSTRACH

Hinckley, Allen Snyder & (Counsel of Record)

Comen PATRICK W. HANIFIN

One Financial Center New England Legal

Boston MA 02111 Foundation

Of Counsel 150 Lincoln Street

Boston, MA 02111

September, 1992 (617) 695-3660

BEST AVAILABLE COPYE™

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TABLE OF CONTENTS

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I.

II.

MWRA’S ACTION, IF UPHELD, WOULD HAVE A

DEVASTATING REGULATORY IMPACT ON

2 a ee er ee

A. MWRA’s Action Will Adversely Affect

Construction Contractors. ..............

B. Upholding MWRA’s Action Would Permit

Excluding Non-Union Contractors from All

Public Works Contracts. ...............

MWRA’S ACTION IS CONTRARY TO STATE LAW

AND SO CANNOT BE JUSTIFIED AS ADVANCING

SPECIAL STATE INTERESTS. ...............4--

A. This Case Arises in the Context of A Pervasive

State Regulatory Scheme Governing Contracts

for Public Works Projects that Is the Exclusive

Source of MWRA’s Authority to Set Bidding

i. Ee ee yee ee

B. MWRA is Violating the Massachusetts

eee ee ee

C. MWRA is Violating the Massachusetts Fair

Competitive Bidding Laws. ............

1. MWRA Lacks Authority to Reject the

Lowest Responsible and Eligible Bidders

Who Decline to Execute the Agreement.

2. The “Harmony Clause" Does Not

Empower MWRA_ to Impose _ the

Agreement on Contractors. ........

3. MWRA is Violating the Pre-Qualification

6

8

8

10

id

13

ill

Provisions of the Fair Competitive

ee re

D. MWRA is Violating the Massachusetts Filed

CE eee ee

III. EVEN IF MWRA IS ACTING WITHIN ITS STATUTORY

DISCRETION, IT CANNOT DISGUISE ITS ATTEMPT TO

DICTATE THE TERMS OF COLLECTIVE BARGAINING

AS MERELY “PROPRIETARY.” ..............

A. A_ State Infringes Federally Guaranteed

Liberties When it Dictates a _ Collective

Bargaining Agreement to Private Parties, Even

if it Enforces its Commands by Threatening to

WERROUs SONNE FUREB. . ccc ccccccceces

1. Because the State Simultaneously Acts as

"Regulator" and '"Proprietor” the

Distinction Between the Two Roles Has

No Place in Federal Labor Law. ;

Under the NLRA, State Action is

Preempted if its Effect is to Dictate

Collective Bargaining Terms to Private

Employers and Employees. .......

B. Under Massachusetts Law, the Agreement is

Not Between Kaiser and BCTC and So Does

Not Fit into the Exemptions in §8(e) and (f) of

Gee Hs 6 0c 646600 4e ee

nN

CRURMMIES co ccccccescwess

Io

14

16

18

TABLE OF AUTHORITIES

CASES

A.L. Adams Construction Co. v. Georgia Power Co.,

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

I ween cece sce e cece 24

Brown v. Hotel Employees Union Local 54,

Ce Sa cake asec ese csceseces 24

Builders Realty Corp. of Mass. v. Newton,

348 Mass. 64, 201 N.E.2d 825 (1964) ................ 11

Building & Construction Trades Council (Kaiser

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

I Se eee ee cc ees bese cces 2

Bureau of Old Age Assistance of Natick v. Commission

of Public Welfare,

326 Mass. 121, 93 N.E.2d 267 (1950) ................. Y

Carpet Linoleum & Soft Tile Local Union No. 1247,

Painters (Indio Paint and Rug Center),

156 NLRB 951, 61 L.R.R.M. 1191 (1966) ............. 24

Cass v. Lord, 236 Mass. 430,

Nene cw cece sceses SD

Commonwealth v. Gill, 5 Mass. App. Ct. 337 (1977) .... 9, 13

Datatrol, Inc. v. State Purchasing Agent,

379 Mass. 679, 400 N.E.2d 1218 (1980) ............ 9, 12

East Side Constr. Co. v. Adams.

329 Mass. 347, 108 N.E.2d 659 (1952) ............... 12

Elrod v. Burns, 427 U.S. 347 (1976) ................. 22

Gade v. National Solid Waste Management Assn.,

CP ee SE CUED nv ccs nndcncenwedisacescoer 21

Gifford v. Commissioner of Public Health,

328 Mass. 608, 105 N.E.2d 476 (1952) ............. 9, 12

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

475 U.S. 608 (1986), 493 U.S. 103 (1989) ........ 4, 18, 21

Goodenough v. Thayer, 132 Mass. 152 (1882) .......... 23

Grande & Son, Inc. v. School Housing

Comm. of N. Reading, 334 Mass. 252,

Se SI 6 etn Gi es 12

Interstate Engineering Corp. v. City of Fitchburg,

367 Mass. 751, 329 N.E.2d 128 (1975) .............. 9-12

IRS v. Blais, 612 F.Supp. 700 (D. Mass. 1985) .......... 23

James J. Welch & Co. v. Dep. Comm’ r of Capital

Planning and Operations,

387 Mass. 662, 443 N.E.2d 382 (1982) ............... 12

Lodge 76, International Association of Machinists

v. Wis. Employment Relations Commission, .

ee Ws OED kudos cube eweece eu. 6, 7, 18, 20, 25

McMurdo vy. Getter,

298 Mass. 363, 10 N.E.2d 138 (1937) ................ 24

vi

Modern Continental Construction Co., Inc. v.

Massachusetts Port Authority,

369 Mass. 825.343 N.E.2d 362 (1976) ........ 10, 11, 13, 14

Modern Continental Construction Co., Inc.

v. City of Lowell,

391 Mass. 829. 465 N.E.2d 1173 (1984) ..........-....-. Y

Morse v. Boston, 253 Mass. 247,

148 N.E. 813 (1925) re Te ee ae ee 12

New England Medical Center, Inc. v. Rate Setting

Commission, 384 Mass. 46, 423 N.E.2d 786 (1981) ........ 9

NLRB y. International Assn. of Bridge & Iron Workers,

Gk RR OF, ee rere a ree re ee 6

NLRB vy. W_L. Rives Co.. 328 F.2d 464 (Sth Cir., 1964) .... 24

Northern Securities Co. v. U.S., 193 U.S. 197 (1904) ....... 7

Opinion of the Justices to the Senate,

337 Mass. 796, 151 N.E.2d 631 (1958) ..........-445- 24

Paterson-Leitch Co., Inc. v. Massachusetts Municipal

Wholesale Electric Co., 840 F.2d 985 (ist Cir. 1988) ..... 23

Perez y. Campbell, 402 U.S. 637 (1971)... . 2... ee ee ees 21

Phipps Products Corp. v. Mass. Bay Transp. Authority,

387 Mass. 687, 443 N.E.2d 115 (1982) .......... 9, 11, 12

Porshin v. Snider, 349 Mass. 653,

pooh | kT, nn eer a a 23°

Richmond v. JA. Croson Co., 488 U.S. 469 (1989) ........ s

Vil

Rudolph vy. City Manager of Cambridge,

341 Mass. 31, 167 N.E.2d 151 (1960) ................ 15

San Diego Building Trades Council v. Garmon,

I i a as 8 eS eats 21, 24

UCANE v. DPW, 29 Mass. App. Ct. 726,

ee ED one scaveece deed ced eas eede's > 3

White v. Mass. Council of Construction Employers, Inc..,

I 16, 20

Wis. Dept. of Industry v. Gould, Inc..,

ok ee 8, 16, 18, 20, 22

STATUTES

powe memes. Agis MO. S72 . www ccc ccc ces 8, 16, 18, 19, 25

Se a 4 6 op ere nuvuesesceeeeeectsaseses 14

eas Bb ED 06 6 600s we ce ehoeeseder 10-14, 19, 25

ee EE oo 2s ida ed oh aadeseiass wend 19

M.G.L. c. 149, §44A et seq. ........... coe we Ae

Pees My PS ED cdc tewcesceccsvces 10, 13, 25

Pees Ge A EE 0 6 6's 6 46 00 Seber ewes ccec. 19

M.GL. ES ot as Sid oe eS kc eadn a awa 14

M.G'L. OE ab 60.440b 660s 40460w ines 13, 15

DESDE. G, FHS ccc c ess eseeeneersnosecseses 966 ee

National Labor Relations Act, 29 U.S.C. §151 et seq. .... 2,3

Ferrer err err rere PEC Eee aS 14, 26

Eee rary ors ee ee er ee ee passim

— Perr rey yr ee TET TET oT et eS passim

REGULATIONS

,et | er ee eeeetee eae ee ce 19

la: rrr errr: see et ete ss 19

OTHER AUTHORITIES

C. NOBLE & J. MYERS, MASSACHUSETTS

CONSTRUCTION LAW 1990 (1990) ..........25 45 ee eee &

H.R. Rep. No. 741, 86th Cong., Ist Sess. 19 (1959) ....... 6

Nos. 91-261 and 91-274

In The

Supreme Court of the United States

October Term, 1992

BUILDING AND CONSTRUCTION TRADES COUNCIL

OF THE METROPOLITAN DISTRICT,

Petitioners,

Vv.

ASSOCIATED BUILDERS AND CONTRACTORS

OF MASSACHUSETTS/RHODE ISLAND, INC., ET AL.,

Respondents.

MASSACHUSETTS WATER RESOURCES AUTHORITY

AND KAISER ENGINEERS,

Petitioners,

Vv.

ASSOCIATED BUILDERS AND CONTRACTORS

OF MASSACHUSETTS/RHODE ISLAND, INC., ET AL.,

Respondents.

On Wnit of Certiorari To The

United States Court of Appeals for the First Circuit

BRIEF OF AMICUS CURIAE

UTILITY CONTRACTORS ASSOCIATION

OF NEW ENGLAND, INC.

IN SUPPORT OF RESPONDENTS

INTEREST OF AMICUS

The Utility Contractors Association of New England, Inc. —

(UCANE) is a non-profit corporation with a principal place of

business in Quincy, Massachusetts. UCANE is a trade association;

its members include union and non-union contractors, materialmen,

suppliers and others who are engaged in public construction in

5

<

Massachusetts and other New England States. UCANE represents

its members in dealings with governments and in litigation

challenging governmental actions that iliegally interfere with its

members, nghts to do business.

UCANE members have been awarded construction contracts

for the Massachusetts Water Resources Authority (MWRA) valued

in the tens of millions of dollars, including contracts for work on

the Boston Harbor Cleanup Project. Its members have been award-

ed and have successfully completed hundreds of other contracts for

the Commonwealth of Massachusetts valued at many hundreds of

millions of doilars. In the future, its members intend to bid on

other contracts advertised by the Commonwealth and MWRA.

in March 1990, UCANE filed an unfair labor practice charge

with the National Labor Relations Board (NLRB) challenging the

legality of the Project Labor Agreement (the "Agreement") between

MWRA'’s representative, Kaiser Engineers, Inc. (Kaiser) and the

Building and Construction Trades Council (BCTC). The NLRB’s

Regional Director for Region I declined to issue a complaint,

concluding that the Agreement was legal. Building & Construction

Trades Council (Kaiser Engineers, Inc.), Case 1-CE-71, GC Advice

Memo (June 25, 1990) (Pet. App. 88a-93a).'

UCANE is the plaintiff in a civil action in Massachusetts

Superior Court, UCANE v. Commissioner of the Massachusetts

Dept. of Public Works, ("DPW") Mass. Super. Ct. C.A. No. 90-

3035, challenging a union-only requirement for the five-billion-

dollar Central Artery-Third Harbor Tunnel Project that is similar to

the MWRA’s Agreement and Bid Specification 13.1. UCANE’s

Suit primarily challenges the bid specification as a violation of

‘The NLRB examined the matter on the assumption that Kaiser was not

the agent of MWRA but was an independent “employer” within the

meaning of the National Labor Relations Act (NLRA), 29 U.S.C. §151 ef

seq. Pet. in BCTC v. ABC, 84a n.3. As shown below at pp. 22-25, this

assumption is false. The NLRB Regional Director specifically declined

to decide any state law issues on the merits. /d. at 87a n. 13. UCANE

chose not to appeal

3

Massachusetts law. The Massachusetts Appeals Court dismissed as

moot UCANE’s appeai from the denial of injunctive relief because

the DPW conceded that it was bound by the First Circuit's decision

in the instant case; DPW promised not to enforce its union-only

requirement as long as the First Circuit’s decision remains law.

UCANE vy. DPW, 29 Mass. App. Ct. 726, 565 N.E.2d 459 (1991).

The Massachusetts Superior Court has delayed further action on

UCANE'’s suit pending the outcome of the instant suit. Order for

Modification of Tracking Schedule, Aug. 13, 1992. Thus, this case

may decide the rights of UCANE and many of its members. All

parties have consented to the filing of this amicus brief.

STATEMENT OF THE CASE

UCANE accepts and adopts the Respondents’ Statement of the

Case.

SUMMARY OF ARGUMENT

MWRA’s Bid Specification 13.1 would force all general

contractors and sub-contractors on the Boston Harbor Clean-up

Project to execute the Agreement; that, in turn, would require them

to be bound by the BCTC’s collective bargaining agreements.

MWRA’s requirement would have a devastating impact on con-

struction contractors in Massachusetts. In practical effect,

MWRA's scheme would seriously disturb the balance between

labor and management that Congress struck in the NLRA. The

multi-billion Harbor Project is so large that the MWRA’s scheme

will disrupt the entire Massachusetts construction industry.

Moreover, upholding MWRA’s strategy would set a precedent for

excluding from ali public sector contracts all contractors who

choose to negotiate their own collective bargaining agreements and

all non-union contractors.

MWRA’s forced unionization strategy is not saved from

preemption by the theory that it is a legitimate response to state

procurement constraints or to local economic needs. To the

contrary, MWRA is acting well beyond its state law authority and

contrary to Massachusetts procurement laws.

4

Considering the pervasive state regulatory scheme in which

MWRA operates and from which this case arose, MWRA’s claim

that it is a mere "proprietor" operating pursuant to’ state law is

patently false. Massachusetts has created a web of state laws

governing public works contracts in meticulous detail. These laws

inextricably intertwine proprietary and regulatory effects and

purposes. Under state law, MWRA’s bid specification is a

regulation. In this state law context, the only rule of federal

preemption that safeguards Congress’s intent to bar state regulation

of certain economic weapons is the rule implicit in this Court’s

precedents: state action is preempted when it directly and

substantially interferes with the protected activities, even if the state

Claims to be acting as a proprietor. Moreover, state law prevents

MWRA from using Kaiser Engineers as its agent and then

contending that Kaiser’s participation exempts the scheme under

NLRA §8(e) and (f) from preemption.

Accordingly, the First Circuit correctly decided that the NLRA

preempts MWRA’'s scheme.

ARGUMENT

I. MWRA’S ACTION, IF UPHELD, WOULD HAVE A DEVASTATING

REGULATORY IMPACT ON CONTRACTORS.

A. MWRA’s Action Will Adversely Affect Construction

Contractors.

MWRA’s requirement that successful bidders execute its

Agreement interferes with the free collective bargaining guaranteed

by the NLRA and disturbs the balance of economic power between

labor and management that Congress has struck. This violation of

a federally protected right, Golden State Transit Corp. v. City of

Los Angeles, 475 U.S. 608 (1986), 493 U.S. 103 (1989), would

have several ruinous effects on contractors such as the members of

UCANE, effects that would extend far beyond the Harbor Project.

Most obviously, non-union contractors would be hurt. They

have exercised their federal right not to sign pre-hire agreements.

MWRA would compel them to choose between their right to nego-

tiate with their employees the terms and conditions of employment

5

and their right to a contract to which they are otherwise entitled.

The injury extends to union contractors as well. Contractors

who have previously signed collective bargaining agreements with

unions governing the geographic area regulated by the Agreement

would be forced by MWRA to either sign the Agreement (which

would then supersede their own agreements) or forfeit their contract

awards. MWRA would effectively usurp the union contractors’

right to negotiate the terms and conditions of their collective

bargaining agreements.

The Agreement and Bid Specification would tili the federally

defined balance between labor and management in collective

bargaining in the private sector strongly in favor of unions.

MWRA will spend more than six billion dollars on the Harbor

Project. The state will spend another five billion dollars on the

Central Artery Project which has a similar union-only project labor

agreement that will stand or fall with MWRA’s Agreement.

UCANE v. Commissioner of DPW. These two "mega-projects” will

provide a large proportion of the construction industry jobs in

Massachusetts for the next decade.

Although both agreements ban strikes on the two projects in

retum for the union-only strictures, they do not prevent signatory

unions from striking private sector employers on private projects.

Indeed, the agreements would encourage such strikes. MWRA’s

Agreement incorporates by reference two dozen collective bargain-

ing agreements between unions and multi-employer organizations.

All increases in wages and other benefits the unions win in future

collective bargaining agreements are automatically incorporated by

reference as well. The Harbor and Artery Agreements guarantees

the unions thousands of jobs for their members, jobs they can use

as a base to finance strikes against private contractors. In such

strikes BCTC’s unions could assess their non-striking members em-

ployed on the two mega-projects to subsidize benefits for the strik-

ers. This would increase the likelihood and length of strikes. It

would require contractors who are compelled to sign the Agreement

to finance strikes against themselves on the private sector projects.

This disturbs the labor-management balance struck by Congress in

6

the NLRA. Lodge 76, International Association of Machinists v.

Wis. Employment Relations Commission, 427 U.S. 132, 146 (1976).

It would increase the probability of costly wage and benefit

concessions and the chance of onerous work rules being included

in future private collective bargaining agreements negotiated during

the ten-year life of the project.

Thus, each time the unions use their increased clout against

local employer trade associations to get increased wages and other

improvements in the terms of employment, these increases will be

extended automatically to their members working on the Harbor

Project. The result would be an open-ended feedback cycle tipping

the balance further and further toward labor and inflating the costs

of labor on both private and public works projects.? Consequently,

the Agreement fails to achieve the purpose of the typical private

“pre-hire" agreement of enabling each contractor to "know his labor

costs before making the estimate on which his bid will be based."°

U.S. Br. 11 quoting NLRB v. International Assn. of Bridge & Iron

Workers, 434 U.S. 335, 348 (1978). Pet. Br. 10, quoting H.R. Rep.

No. 741, 86th Cong., Ist Sess. 19 (1959).

B. Upholding MWRA’s Action Would Permit Excluding

Non-Union Contractors from All Public Works Contracts.

There is no distinction under the NLRA between large and

small construction projects. The Petitioners suggest that MWRA

"Furthermore, Kaiser, the alleged “employer” that signed the Agreement

will pay none of these increased costs except perhaps in those rare

instances when Kaiser briefly steps beyond its management role and hires

a few craft workers to deal with temporary emergencies.

*Construction industry labor agreements typically run only one to three

years (as illustrated by the agreements incorporated into the Project Labor

Agreement as Schedules A and B). As each contract expires, each union

will then automatically get the raises that it has negotiated in other private

contracts. There is no way that MWRA or anyone else can predict how

high the feedback cycle it has created will drive up wages. Hence, there

is no way that it can predict, let alone cap, labor costs over the life of the

Harbor Project.

7

needs extraordinary flexibility to manage the extraordinary

complexity of the multi-billion-dollar Harbor Project. Pet. Br. 4-

525-26. But great projects, like great cases, can make bad law.

See Northern Securities Co. v. U.S., 193 U.S. 197, 400 (1904)

(Holmes, J., dissenting). If MWRA can condition public works

contracts on sacrificing the right to bargain collectively, then every

town, school board and water board in the country can demand the

same sacrifice whenever it pleases. This action directly addresses

a six-billion-dollar project but it may set a precedent for every pot-

hole filling and sewer repair in the nation.‘

A decision reversing the court below would set a precedent for

politicizing the collective bargaining process. Congress intended

to leave that process "unregulated" and "controlled by the free play

of economic forces." Machinists, 427 U.S. at 144. If each agency

could impose union-only requirements, then collective bargaining,

which Congress intended to be an economic contest between

private parties, would be replaced by a political contest between

public officials. Moreover, the balance of political power could tip

against unions elsewhere. If a state can impose a union-only

requirement, as MWRA has done, then another state can impose a

no-union rule. No matter what the outcome, such maneuvers

substitute political patronage for the "free play of economic forces”

“Supposing that a legal distinction could be drawn between the Harbor

Project and smaller projects it would cut against applying the limited

exemption from preemption under NLRA §8(f) to MWRA's scheme. As

Petitioners and the United States concede, §8(f) was intended to address

the special needs of the construction industry arising from the brevity of

employer-employee relations on construction projects. Petitioners’ Br. at

9-10; U.S. Br. at 11, 28. But the Harbor Project is far from brief: it will

last at least 10 years and many of the major contracts awarded will run

for at least several years; some will run for the life of the Project. Thus,

there is sufficient time to follow the NLRB’s usual, non-construction

industry rules for certifying a union as the employees’ collective

bargaining agent.

8

that Congress has mandated in the NLRA.°

Il. MWRA’S ACTION IS CONTRARY TO STATE LAW AND SO

CANNOT BE JUSTIFIED AS ADVANCING SP&CIAL STATE

INTERESTS.

Petitioners’ argument, Pet. Br. 35, that MWRA’s actions can

be “defended as a legitimate response to state procurement

constraints or to local economic needs,” Wis. Dept. of Industry v.

Gould, Inc. 475 U.S. 282, 291 (1986), is wrong. MWRA has

Stretched its state authority far beyond the breaking point. It has

no authority to authorize, ratify, or incorporate the Agreement into

its bid specifications. Rather than responding to state procurement

comstraints it is violating them.

A. This Case Arises in the Context of A Pervasive State

Regulatory Scheme Governing Contracts for Public

Works Projects that Is the Exclusive Source of MWRA’'s

Authority to Set Bidding Procedures.

Although this case so far has been fought almost entirely on

issues Of federal law, it arises in the context of a pervasive state

regulatory scheme. Massachusetts has the distinction of having the

most regulated public construction contracting processes in the

country. C. NOBLE & J. MYERS, MASSACHUSETTS CONSTRUCTION

LAW 1990 74 (1990). Its statutes override the ordinary rules of

private contract law regarding public bidding and public works

contracts. /d. This state law background undercuts MWRA’s

Claim that this is a states’ rights case in which a state "proprietor"

is being unfairly denied the right to do what all other proprietors

can do. A survey of the state regulatory scheme and the ways in

"Compare. Richmond v. JA. Croson Co., 488 U.S. 469, 495-96

(O’Connor, J.) (1989) (in racial context "the concern that a political

majority will more easily act to the disadvantage of a minority . . . would

seem to militate for, not against, the application of heightened judicial

scrutiny”), 523-24 (Scalia, J., concurring). Although there is no racial

aspect to this action, the MWRA’s compelling employees to join unions

is State action which may intrude on their First Amendment freedom of

association.

9

which MWRA has distorted it supports the First Circuit’s decision.

As an instrumentality of the Commonwealth, MWRA’ obtains

its authority from its enabling act, 1984 Mass. Acts No. 372,

codified at M.G.L. c. 92 App., §1-1 et seq. (hereinafter "Act 372”

or "Enabling Act"). That act defines MWRA as "a public agency”

subject (with certain limited exceptions) to the pervasive regulatory

scheme goveming public contracts. /d. at §8(g), 7(g). MWRA

asserts that these laws empower it to issue its Bidding Specification

13.1 that commands all general contractors and sub-contractors to

execute the Agreement as a condition of obtaining contracts to

which they would otherwise be entitled under state law. However,

as discussed below, Massachusetts law does not permit MWRA to

impose the Project Labor Agreement through its bid specifications.

B. MWRA is Violating the Massachusetts Constitution.

Article XXX of the Declaration of Rights of the Massachusetts

Constitution provides that "the Executive shall never exercise the

legislative and judicial powers or either of them . . . to the end it

may be a government of laws and not of men.” When an admini-

Strative agency acts beyond the scope of its delegated authority its

conduct is unlawful. New England Medical Center, Inc. v. Rate

Setting Commission, 384 Mass. 46, 423 N.E.2d 786 (1981); Bureau

of Old Age Assistance of Natick v. Commission of Public Welfare,

326 Mass. 121, 93 N.E.2d 267 (1950).

The Massachusetts Supreme Judicial Court has strictly

construed the Commonwealth’s public bidding laws, requiring

administrative agencies to comply with all details of the

comprehensive scheme. Modern Continental Construction Co., Inc.

v. City of Lowell, 391 Mass. 829, 840, 465 N.E.2d 1173 (1984);

Phipps Products Corp. v. Mass. Bay Transp. Authority, 387 Mass.

687, 443 N.E.2d 115 (1982); Datatrol, Inc. v. State Purchasing

Agent,+379 Mass. 679, 695 400 N.E.2d 1218 (1980); /nterstate

Engineering Corp. v. City of Fitchburg, 367 Mass. 751, 757, 329

N.E.2d 128 (1975); Gifford v. Commissioner of Public Health, 328

Mass. 608, 616, 105 N.E.2d 476 (1952); Commonwealth v. Gill, 5

Mass. App. Ct. 337, 363 N.E.2d 267 (1977). Neither this statutory

scheme nor MWRA’s enabling act authorizes MWRA to require

10

contractors to execute a collective bargaining agreement as a

comdition of being awarded a public contract. See Modern

Continental Construction Co., Inc. v. Massachusetts Port Authority,

369 Mass. 825, 829-30 343 N.E.2d 362 (1976).

C. MWRA is Violating the Massachusetts Fair Competitive

Bidding Laws.

1. MWRA Lacks Authority to Reject the Lowest

Responsible and Eligible Bidders Who Decline to

Execute the Agreement.

Advertising and awarding of public construction projects are

governed by two statutes. One covers the construction of

highways, bridges, tunnels and similar structures. M.G.L. c. 30,

§39M. The other govems construction or renovation of public

buildings, M.G.L. c. 149, §44A et seg. Because the Harbor Project

requires the construction of both public works and public buildings,

both statutes apply. Both statutes share the overriding purpose of

opening the competitive bidding process to all contractors to award

the contract to the lowest responsible and eligible bidder to

construct public projects. Interstate Engineering Corp. v. Fitch-

burg, 367 Mass. 751, 757-58 (1975). M.G.L. c. 30, §39M, c. 149,

§44A. A "responsible" bidder is one "possessing the skill, ability

and integrity necessary for the faithful performance of the work"

and who "shall certify that he is able to furnish labor that can work

in harmony with all other elements of labor employed .. . in the

work" and who meets certain other technical requirements. M.G.L.

c. 30, §39M(c) and c. 149, §44A. Bidders must submit a bond

promising faithful performance of the agreements contained in the

bid, including compliance with all bid specifications. Again,

neither statute distinguishes between union and non-union con-

tractors nor refers to collective bargaining agreements.

MWRA has attempted to use the Massachusetts Competitive

Bidding Law as its legal basis for imposing the Agreement on all

Harbor Project contractors. Pet. Br. 8. Petitioners concede that

without Bid Specification 13.1, the Agreement would bind only

Kaiser and not the hundreds of contractors who actually will do the

work. /d. at 7-8; U.S. Br. 10. Under MWRA’s Specification 13.1,

1]

failure to execute the Agreement would be a breach of

performance, and MWRA could claim all or part of the bond.

However, MWRA’s scheme violates the statutes. Automatic-

ally rejecting the lowest responsible and eligible bidders if they

decline to execute the Agreement as a condition of working for

MWRA violates the competitive bidding laws As the Massachu-

setts Supreme Judicial Court said in Modern Continental

Construction Co., Inc., 369 Mass. at 829:

[U}nionism is not a statutory requirement to be deemed

"responsible"’ or "eligible" as those terms are used in M.G.L.

c. 30, §39M and the statute itself would bar automatic

exclusion of any bidder on the sole ground that the bidder

employs nonunion workers. -

The court emphasized that an agency may not restrict bidding to

unionized firms and that coercion of public officials to stop an

award of a contract to a non-union bidder would be against public

policy. /d. at 830. Yet MWRA is doing exactly what Modern

Continental prohibits: requiring that the lowest qualified bidder

unionize as a condition of receiving the contract.

While an awarding agency may impose limited requirements

beyond those set forth in the bidding statutes it may not impose

illegal or unreasonable requirements, See Builders Realty Corp. of

Mass. v. Newton, 348 Mass. 64, 67, 201 N.E.2d 825 (1964).

Contracts that are inconsistent with the controlling statute or go

beyond its scope are void. Phipps Products Corp. v. MBTA, 387

Mass. at 692.

The legislature designed the statutory bidding procedures of

M.G.L. c. 149 §44A et seq., to substantially reduce the discretion

of the awarding agencies and to accomplish

two fundamental, complementary legislative objectives[:] . . .

First, the statute enables the public contracting authority to

obtain the lowest price for its work that competition among

responsible contractors can secure. . . . Second, the statute

establishes an honest and open procedure for competition for

public contracts and, in so doing, places all general contractors

and subbidders on an equal footing in the competition to gain

12

the contract. The statutory procedure facilitates the elimination

of favoritism and corruption as factors in the awarding of

public contracts and emphasizes the part which efficient, low-

cost operation should play in winning public contracts.

Interstate Engineering, 367 Mass at 757-58. Accord, James J.

Welch & Co. v. Dep. Comm’ r of Capital Planning and Operations,

387 Mass. 662, 666, 443 N.E.2d 382 (1982); Phipps Products

Corp. v. MBTA, 387 Mass. at 691-92; Datatrol, Inc. v. State

Purchasing Agent, 379 Mass. 679, 696-97; Morse v. Boston, 253

Mass. 247, 252, 148 N.E. 813 (1925).

While the first objective is one that would be shared by any

private proprietor, the state’s second objective -- fostering equal

opportunity in the construction industry -- is_ peculiarly

governmental. It is a kind of affirmative action program, opening

the bidding process to ali firms, union and non-union alike. The

possible advantage to any one private owner of so opening the

market would not be worth the risk of dealing with an unknown

and inexperienced firm when a known and experienced firm is

bidding to do the work for nearly the same price. The state,

however, has chosen to adopt opening the market as a public

policy. Given this special state goal, state agencies, such as

MWRA, are unlike private proprietors.

An agency’s failure to follow the statutory bidding require-

ments voids the contract, even if the violation does not harm the

public agency, Phipps Products v. MBTA, 387 Mass. at 691:

Bowditch v. Superintendent of Streets of Boston, 168 Mass. 239,

243-44 (1897); or reduces the costs to the public, /nterstate

Engineering, 367 Mass 751; Grande & Son, Inc. v. School Housing

Comm. of N. Reading, 334 Mass. 252, 258, 135 N.E.2d 6 (1956);

East Side Constr. Co. v. Adams, 329 Mass. 347, 351, 108 N.E.2d

659 (1952); Gifford v. Comm’r of Pub. Health, 328 Mass. at 616;

or did not involve bad faith or corruption, id. at 617.

MWRA'’s rejection of bidders who decline to execute the

Agreement cannot be justified by the provision of M.G.L. c. 30,

§39M(a) that permits the awarding agency to “reject any and all

bids, if it is in the public interest so to do." The Massachusetts

13

Appeals Court has interpreted this provision with appropriate

narrowness:

Except where all bids are rejected, this statute requires the

awarding of the contract to the lowest responsible and eligible

bidder determined after competitive bids have been filed

pursuant to a publicized invitation. The same is true of

contracts governed by G.L. c. 149, §§44A-44L. Although it

might appear that the word "any" .. . would allow rejection

of the low bid so as to result in the awarding of the contract

to a person not the lowest responsible and eligible bidder, a

long line of cases has determined that contracts subject to

those provisions cannot properly be awarded to one other than

the lowest responsible and eligible bidder.

Commonwealth v. Gill, 5 Mass. App. Ct. at 339-40.

2. The "Harmony Clause” Does Not Empower MWRA

to Impose the Agreement on Contractors.

Both M.G.L. c. 30, §39M(c) and c. 149, §44F(2)(1), require

bidders to certify that their workers can "work in harmony with all

other elements of labor employed . . . in the work." As the

Supreme Judicial Court noted in Modern Continental, 369 Mass. at

830, "The ‘harmony’ clause . . . clearly contemplates a situation in

which the union and non-union workers work in some type of

proximity to one another." By enacting this provision, the Legis-

lature chose, consistent with the NLRA, not to require public works

contractors to sign a collective bargaining agreement to obtain a

State contract. Rather, the Legislature contemplated that some

contractors will be unionized and others will not be. Thus, MWRA

Cannot persuasively argue that the harmony clause should be stood

on its head to authorize it to negotiate a collective bargaining

agreement for private sector employees and force unwilling sub-

contractors to sign.

Moreover, the harmony clause is a request for certification, not

an invitation to extortion. A bidder satisfies it by submitting the

Statutory certification that his workers are willing to work in

harmony with others. A qualified lowest bidder’s right to receive

the contract should not be frustrated by threats from third parties

14

to disrupt the project unless they are given exclusive

arrangements.°

3. MWRA is Violating the Pre-Qualification

. Provisions of the Fair Competitive Bidding Laws.

Under the Pre-Qualification provisions, M.G.L. c. 30, §39M(c),

c. 29, §8B, c. 149, §44D, of the Fair Competitive Bidding Laws,

contractors wishing to obtain state construction work worth more

than $50,000, must "pre-qualify" under M.G.L. c. 29, §8B. This

requires submitting corporate and financial information and data

conceming its experience. Neither the statute nor applicable

regulations say anything about willingness to execute a collective

bargaining agreement as a condition of the award of a contract. A

general bidder who submits a valid certificate of eligibility issued

pursuant to these provisions is legaliy presumed qualified. Bidder

pre-qualification "is a comerstone of the competitive bidding

Statute.” Modern Continental Construction Co., Inc. v. Lowell, 391

Mass. at 840. Nothing in the law suggests that unwillingness to

execute a collective bargaining agreement is a permissible ground

for deciding that a contractor is unqualified. See id. The only

relevant factor is the contractor’s ability to do the work.

D. MWRA is Violating the Massachusetts Filed Sub-Bid

Law.

The Massachusetts public contracting system is distinctly

‘Contrary to Petitioners suggestions, Pet. Br. at 6-8, 25-26, Bid

Specification 13.1, J.A. 71 et seq., the Harmony Clause has nothing to do

with strikes at the end of labor agreements or disputes between labor and

management. It deals only with disputes between groups of employees.

However, even before the Agreement was negotiated, the pre-existing

trade collective bargaining agreements for the various trades (which are

incorporated by reference into the Agreement as Schedules A and B)

already prohibited strikes and work stoppages during the terms of those

agreements. This is consistent with NLRA §8(b)(4) and (7), which

generally prohibits unions from striking to protest the presence of non-

union workers. Thus, the “labor strife” that MWRA says it fears seems

to be illegal and potentially extortionate.

15

different from those used by the federal government and most

States. | Massachusetts insists on dealing directly with each

subcontractor, rather than simply hiring a general contractor and

letting him hire whatever sub-contractors he wishes. Massachusetts

regulates the details of sub-contractors’ bids and contracts directly

with the primary sub-contractors in each of seventeen statutorily

defined trades. Filed Sub-Bid Law, M.G.L. c. 149, §§44A et seq.

As MWRA itself noted in its Petition, p. 18 n.8, "Massachusetts’

competitive bidding laws, to which the Authority’s Enabling Act

explicitly subjects it, make clear that the competitive bidding

process must be carried out by the awarding authority.”

The Filed Sub-Bid Law requires would-be sub-contractors on

a project to file their bids with the state agency before a general

contractor is selected. Each awarding agency must publish

specifications for sub-bids in each of seventeen named classes of

work and certain sub-trades. M.G.L. c. 149, §44F. Each bidder

must submit a detailed sub-bid.

MWRA has executed contracts with each of several general

contractors for different aspects of the project and has signed

contracts with sub-contractors in most of the seventeen statutcry

sub-contract classifications. Kaiser has not signed contracts with

any of the general contractors or sub-contractors. Kaiser is not the

general contractor of the Harbor Project. It is an agent of MWRA

and a management consultant. Pet. Br. 4.

The sub-bidder is not required by c. 149 or any other law to

execute a collective bargaining agreement. As discussed above, the

Statute contemplates that union and non-union workers of different

sub-bidders can and will work in harmony. Before the Harbor and

Central Artery Projects, no Massachusetts agency had ever required

a sub-contractor to execute a collective bargaining agreement as a

condition of a contract award. In Rudolph v. City Manager of’ .

Cambridge, 341 Mass. 31, 167 N.E.2d 151 (1960), the Supreme

Judicial Court refused to permit an awarding agency to reject an

otherwise competent lowest filed sub-bidder on the basis of a local

preference. "The statute read as a whole shows an unmistakable

intent that the power of the awarding authority to require the

16

rejection of a subbid, which is in all formal aspects satisfactory, in

favor of a higher available bid, may be exercised only for lack of

competence, of the rejected bidder.” /d. at 35. Similarly, MWRA

cannot reject.the lowest qualified bidders because they decline to

sign the union-only Agreement.

In short, a review of the regulatory scheme for public contracts

and bidding that MWRA must obey shows that MWRA’s attempt

to set conditions of collective bargaining exceed its authority. No

Statute expressly authorizes MWRA to require union-only labor on

the Project or to authorize Kaiser to negotiate the Project Labor

Agreement. MWRA’s efforts to force the unionization of the

Harbor Project work force extend far beyond the limited objectives

of the Commonwealth's public contract laws. Those procurement

laws require awarding contracts to the lowest eligible and respon-

sible bidder, unionized or not. Consequently, MWRA cannot

defend its conduct “as a legitimate response to stale procurement

constraints or to local economic needs." Gould, 475 U.S. 282, 291

(1986). Rather, MWRA’s scheme is unconnected to the state

concems defined by the Legislature’s procurement laws.

Il. EVEN IF MWRA IS ACTING WITHIN ITS STATUTORY

DISCRETION, IT CANNOT DISGUISE ITS ATTEMPT TO DICTATE

THE TERMS OF COLLECTIVE BARGAINING AS MERELY

"PROPRIETARY."

This Court need not decide any disputed issue of state law to

resolve this case. Even if MWRA were to argue that its state law

authority could be strained to cover its labor law scheme its

argument would undermine its central thesis that it is acting in a

purely “proprietary” role exempt from federal regulation.

MWRA may contend that, while its Bid Specification is not

expressly authorized by statute, it is nonetheless acting within its

administrative discretion under its enabling act. Act 372, §§1, 3(a),

5(aX(ii), 6. MWRA’s basic argument does have a superficial sim-

plicity: it claims that private proprietors can insist on agreements

like the Agreement here; MWRA, although a state agency, is the

proprietor of the Harbor Project, with broad statutory discretion to

17

spend the ratepayers’ money to develop state property; so why

should MWRA not have the same proprietary economic rights that

private proprietors have? MWRA seeks to import into labor law

the “proprietary” versus "regulatory" distinction of Commerce

Clause cases such as White v. Mass. Council of Construction

Employers, Inc., 460 U.S. 204 (1983).

However, this is not a state’s rights case. UCANE agrees with

ABC’s analysis of why the "regulatory" versus "proprietary"

distinction has no place in federal labor law. A brief look at the

State law source of MWRA’s powers and function confirms this

analysis. First, under Massachusetts law, MWRA is not a mere

proprietor empowered to do whatever it sees fit but barred from

regulating. Rather, MWRA’s enabling act makes it an agency of

limited powers and functions but inextricably interweaves its

authority to regulate the water and sewer system with its authority

to renovate that system. The more sweeping the interpretation of

MWRA'’s authority, the more clearly impossible it is to distinguish

a "regulatory" from a "proprietary" role. Second, a survey of

MWRA’s position under state law illustrates the unworkability of

Petitioners’ proposed distinction between preempted regulatory

conduct and permissible proprietary conduct. A state agency, like

MWRA, impermissibly invades the protected sphere of collective

bargaining when its activities have a direct and substantial effect on

that sphere, however it labels its interference. Finally,

Massachusetts law prevents MWRA from using Kaiser as a mask

to disguise its scheme as one within the NLRA’s limited exception

for pre-hire agreements in the construction industry. Under

Massachusetts law, the Agreement is between MWRA and BCTC,

not between Kaiser and BCTC; MWRA is not a “construction

industry employer.” Therefore, the scheme falls outside the limited

exceptions in NLRA §8(e) and (f) for construction employers who

make pre-hire agreements that otherwise would be unfair labor

practice under §8(a) and (b).

18

A. A State Infringes Federally Guaranteed Liberties When

it Dictates a Collective Bargaining Agreement to Private

Parties, Even if it Enforces its Commands by Threatening

to Withhold State Funds.

1. Because the State Simultaneously Acts as "Regu-

lator” and “Proprietor” the Distinction Between the

Two Roles Has No Place in Federal Labor Law.

MWRA’s simplistic argument ignores the fundamental

principle of American government: our democratic government is

one of limited powers. When the public interest requires delegating

to a governmental agency great power to accomplish great public

ends, it becomes all the more important to require the agency to

respect individual rights. As this Court said in Gould, 475 U.S. at

290, “government occupies a unique position of power in our

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

special restraints." The First Circuit pointed out below that "the

entire Bill of Rights,” 935 F.2d at 358 n.26, is an example of those

special restraints imposed on state action, whether that action is

characterized as "regulatory" or "proprietary." The right to be "free

of governmental regulation of the ‘peaceful meihods of putting

economic pressure upon one another’ Machinists, 427 U.S. at 154,

is a right specifically conferred on employers and employees by the

NLRA.” Golden State Transit Corp. v. City of Los Angeles

(Golden State II) 493 U.S. at 112. It is a “guarantee of freedom

for private conduct that the State may not abridge." /d. Accord-

ingly, the NLRA "treats state action differently from private action

not merely because they frequently take different forms, but also

because in our system States simply are different from private

parties and have a different role to play." Gould, 475 U.S. at 290.

MWRA’s own role, mixing regulatory and proprietary acti-

vities as no private owner could and pursuing its regulatory mission

by regulator, means, illustrates this point. Unlike every private

proprietor, MWRA need not be concemed about the costs of its

Project. It is a state monopoly that can raise water and sewer rates

as high as it needs to in order to raise the money it spends. It does

not need the approval of any other agency to set the rates as it sees

19

fit. Act 372, §§6(k), 10. MWRA’s statutory mission, defined by

its enabling act, is the quintessential regulatory task of promoting

the general health and welfare, protecting the environment, id., §1,

and ensuring compliance with state and federal environmental laws,

§8(i). MWRA alleges that the scheme challenged here was adopted

to accomplish its statutory mission. The Massachusetts Legislature

has ordered MWRA both to “operate” and to "regulate" concerning

water and sewage systems. Act 372, §1. The act empowers the

agency to "develop its rules and regulations,” §5(a)(ii); "to adopt

and enforce procedures and regulations,” §6(e); "to enter into

contracts, arrangements and agreements with other persons in all

matters necessary or convenient to the operation of this act,” §6(0);

and "to do all things necessary, convenient or desirable for carrying

out the purposes of this act or the powers expressly granted or

necessarily implied by this act," §6(r). Moreover, "the exercise by

the Authority of the powers conferred" by the act are "deemed to

be the performance of an essential public function.” §3(a).

Under Massachusetts law the challenged Bid Specification is

a regulation. State law defines a "regulation" as a "requirement of

general application and future effect, adopted by an agency to

implement . . . the law enforced or administered by it." M.G.L. c.

30A §1(5). There is no question that the Bid Specification is a

requirement of general application and future effect! MWRA'’s

Board formally voted its approval of the Project Labor Agreement

as an official policy and directed that the Bid Specification shall

apply to every one of thousands of bidders on hundreds of contacts

over the life of the Harbor Project. Pet. Br. 7-8. MWRA claims

that the Bid Specification is a necessary or convenient method of

implementing its enabling act which directs it to complete the

Harbor Project. Pet. Br. 8 n.3, 25-26. Petitioners concede that the

Agreement would not itself be binding on any general contractor

or subcontractor but for the Bid Specification forcing each such

contractor to execute the Agreement. /d. at 7-8; U.S. Br. 4, 10.

Under the general bidding regulations any successful bidder who

fails to comply with Bid Specification 13.1 by unionizing his

workers would be severely penalized. He would automatically lose

20

a deposit equal to five percent of the contract price. M.G.L. c. 30,

§39M, c. 149, §44B(3),(4). MWRA has adopted regulations

authorizing it to impose additional civil penalties on anyone for

failing to comply with any of its regulations, orders, requirements,

or approvals. 360 C.M.R. §2.03, §2.05; MWRA apparently could

invoke this penalty provision against bidders who defy its union-

only requirement.

Whether one calls MWRA’s union-only requirement a "bid

specification” or a "regulation" makes no practical difference at all.

"The effect of such ‘conditions’ on the ability . . . to deal with

affected firms would be virtually identical to the effect of a

coventional market regulation requiring such practices.” White v.

Mass. Council of Construction Employees, 460 U.S. 204, 220

(Blackmun, J. dissenting). Mr. Justice Blackmun has explained

Clearly why this sort of requirement is, in practical effect,

regulatory:

The power to dictate to another those with whom he may deal

is viewed with suspicion and closely limited in the context of

purely private economic relations. When exercised by

government, such a power is the essence of regulation.

Attempts directly to constrict private economic choices

through contractual conditions are particularly akin to

regulation because, unlike simple refusals to deal but like

conventional market regulation, they threaten to extend their

regulatory impact well beyond the transaction in which the

State has an interest.

But when a State attempts to arrogate unto itself the

“independent discretion" of others to deal with whom they

please it exercises regulatory power .-. . .

Id., at 219-20, 221 (emphasis in original). While in the Commerce

Clause context, this practical effect was not held to be enough to

strike down the state action, "[wJhat the Commerce Clause would

permit States to do in the absence of the NLRA is. . . an entirely

different question from what States may do with the Act in place.”

Gould, 475 U.S. at 290. As discussed in Part I above, and

21

contrary to Petitioners’ claim, Pet. Br. 26, MWRA’s restriction on

private economic choice in collective bargaining does indeed

extend its regulatory impact well beyond MWRA’s own Harbor

Project contracts. This governmental interference with private

individual choice is precisely what the preemption doctrine under

Machinists 427 U.S. 132, is intended to avoid.

2. Under the NLRA, State Action is Preempted if its

Effect is to Dictate Collective Bargaining Terms to

Private Employers and Employees.

If federal labor law is to protect the individual rights that

Congress intended, the only practical test of preemption is the

objective effect of the state’s action, not the label the siate chooses

or the means the state uses. "Judicial concem has necessarily

focused on the nature of the activities which the States have sought

to regulate, rather than on the method of regulation adopted.”

Golden State Transit Corp v. Los Angeles, 475 U.S. 608, 614 n. 5

quoting San Diego Building Trades Council v. Garmon, 359 U.S.

236, 243 (1959). In other federal preemption contexts this Court

has decisively rejected

the aberrational doctrine . . . that state law may frustrate the

operation of federal law as long as the state legislature in

passing its law had some purpose in mind other than one of

frustration. . . . [S]Juch a doctrine would enable state

legislatures to nullify nearly all unwanted federal legislation by

simply publishing a legislative committee report articulating

some state interest or policy -- other than frustration of the

federal objective -- that would be tangentially furthered by the

proposed state law.

Perez v. Campbell, 402 U.S. 637, 651-52 (1971). So too, in iabor

law if a state infringes a protected federal right, good intentions do

not immunize the state’s actions.

When a state’s activities substantially and directly limit private

collective bargaining then it regulates collective bargaining and its

activities are preempted by the NLRA, even if the state asserts

another purpose or effect. See Gade v. National Solid Waste

Management Assn., 60 U.S.L.W. 4587 (1992) (state law

22

requirement that directly, substantially, and specifically regulates

occupational safety and health is an "occupational safety and health

standard” within meaning of Occupational Safety and Health Act

preemption clause, even if it has another non-occupational purpose

and/or effect).

MWRA'’'s use of the state’s spending power to control private

collective bargaining does not save its scheme. In areas of the law

“outside the area of Commerce Clause jurisprudence, it is far from

unusual for federal law to prohibit States from making spending de-

cisions that are permissible for private parties." Gould,475 U.S. at

290. A private employer can fire an at-will employee for express-

ing political opinions he dislikes, but the First Amendment pro-

hibits a state from doing so. Elrod v. Burns, 427 U.S. 347 (1976).

Because MWRA’s Bid Specification compels all successful

contractors to sign the specific collective bargaining Agreement

negotiated by Kaiser on behalf of MWRA, the Specification is

preempted.

B. Under Massachusetts Law, the Agreement is Not Between

Kaiser and BCTC and So Does Not Fit into the

Exemptions in $8(e) and (f) of the NLRA.

The Petitioners and the United States rest their case on their

Claim that MWRA is doing no more than any private proprietor

could do. Pet. Br. at p. (i) (Question Presented); U.S. Br. at p. (i).

Their argument can support the weight of their case only if MWRA

really is doing no more than a similarly situated private proprietor

could do under the NLRA. But a private proprietor could not carry

out MWRA’s scheme.

A private proprietor can obtain the §8(e) and (f) exemptions

from the NLRA’s prohibitions on unfair labor practices only if the

agreement in question is "between a labor organization and an

employer in the construction industry,” §8(e). Accord, §8(f)

(exemption for agreement between "employer primarily engaged in

the building and construction industry” and union having members

who are construction employees). The Petitioners claim that the

Agreement is within these exemptions because it is between Kaiser

and the BCTC; and Kaiser is a “construction industry employer.”

23

Pet. Br. 28. In tum, Bid Specification 13.1 allegedly is legal

because it carries out the terms of the Agreement by requiring all

contractors to execute the Agreement. /d. and at 7, 8 n.3.

It is undisputed that Kaiser negotiated and entered into the

Agreement as the authorized agent of MWRA. /d. at 7; U.S. Br.

3-4. The Agreement itself states in bold capital letters on the cover

that Kaiser is acting "ON BEHALF OF THE MASSACHUSETTS

WATER AUTHORITY.” MWRA ratified its agent’s action after

reviewing the Agreement. See Pet. Br. 7; U.S. Br. 4. For the

purposes of this litigation, the crucial provision of the Agreement

is §2. It‘limits MWRA’s “absolute right to select any qualified

bidder" by obliging MWRA to select only bidders "willing ready

and able to execute and comply with the Project Labor

Agreement." §2(a). All contractors "shall be required to accept

and be bound by the terms and conditions of this Project Labor

Agreement.” §2(b). Petitioners concede that only MWRA, not

Kaiser, could give these provisions any effect by imposing Bid

Specification 13.1. Pet. Br. 8; U.S. Br. 4. Surely Kaiser would not

have made a promise it knew it could not keep and BCTC would

not have made concessions in retum for a promise it knew was

worthless. The Agreement expressly binds Kaiser itself only

insofar as Kaiser may someday employ craft workers to do

construction work on the Project. Agreement, Introduction { 3. In

short, this is a classic instance of a contract entered into by an

agent on behalf of a disclosed principal.

"The law is settled in Massachusetts that ‘{uJnless otherwise

agreed, a person making or purporting to make a contract for a

disclosed principal does not become a party to the contract.’

Porshin v. Snider, 349 Mass. 653, 655 (1965)." Paterson-Leitch

Co., Inc. v. Massachusetts Municipal Wholesale Electric Co., 840

F.2d 985, 993 (1st Cir. 1988) (construction manager that negotiated

and signed project labor agreement was agent for owner and as

such was not bound by the contract). This has been the law of

Massachusetts for over a century. /RS v. Blais, 612 F.Supp. 700,

706 (D. Mass. 1985); Cass v. Lord, 236 Mass. 430, 432, 128

N.E.2d 716 (1920), Goodenough v. Thayer, 132 Mass. 152 (1882).

24

Therefore, Kaiser is not in privity of contract with the BCTC

as to the provisions of the Agreement requiring unionization.

Therefore, the Agreement is not an agreement between a

“construction industry employer" and unions; it does not come

within the §8(e) and (f) exceptions and does not provide any cover

for MWRA’s bid specification.’ It would not come within those

exceptions even if MWRA were a private party.*

MWRA itself is not a "construction industry employer” but a

public water and sewer agency. Petitioners explicitly say that they

do not claim that MWRA is a "construction industry employer,” as

"Even if one were to assume arguendo that Kaiser is the "employer," then

MWRA’s delegating the power to negotiate to Kaiser and then imposing

Bid Specification 13.1 to enforce Kaiser’s union-only Agreement would

violate the Massachusetts constitutional rights of contractors and their

employees. Articles I, X and XII of the Declaration of Rights of the

Massachusetts Constitution protect all persons in the enjoyment of their

life, liberty and property, including the right to engage in a lawful

occupation. McMurdo v. Getter, 298 Mass. 363, 365-66, 10 N.E.2d 138

(1937). Delegating to private parties, such as Kaiser, the right to regulate

the terms and condition of employment of other persons deprives the

involuntarily regulated persons of their constitutional right to engage in a

lawful occupation. Opinion of the Justices to the Senate, 337 Mass. 796,

799, 151 N.E.2d 631 (1958). Even if NLRA §8(f) permits a private

proprietary or private construction industry employer to exercise such

power, the Massachusetts Constitution prohibits the MWRA from assisting

Kaiser in doing so by imposing the Agreement by means of Bid Specifi-

cation 13.1.

*Because MWRA’s action does not fall within the §8(e) and (f)

exemptions, it follows by the logic of the argument presented by the

United States, that MWRA’s conduct interferes with the federally

protected rights of employees under NLRA §7 to select their own

representatives and so is preempted under the Garmon preemption

doctrine. U.S. Br. n. 15, citing San Diego Building Trades Council v.

Garmon, 359 U.S. 236 (1959), and Brown v. Hotel Employees Union

Local 54, 468 U.S. 491, 501 (1984).

25

defined in §8(e) and (f). Pet. Br. 28. A private proprietor acting

as MWRA has done also would not be a "construction industry

employer." The NLRB and the federal courts have recognized two

tests to decide whether a firm is a “construction industry

employer": (1) whether it obtains most of its revenue from

performing construction work, Carpet Linoleum & Soft Tile Local

Union No. 1247, Painters (Indio Paint and Rug Center), 156

NLRB 951, 61 L.R.R.M. 1191 (1966); see NLRB v. W.L.Rives Co.,

328 F.2d 464, 469 (Sth Cir., 1964); or (2) whether, it is an owner

acting as its own general contractor, AL. Adams Construction Co.

v. Georgia Power Co., 733 F.2d 853, 858 (11th Cir. 1984), cert.

denied 471 U.S. 1074 (1985) MWRA does not obtain significant

revenue from doing construction work; rather, it obtains its revenue

from water and sewer ratepayers. Act 372, §10. Nor is MWRA

the general contractor on the Harbor Project; rather it has

contracted with several general contractors for the various phases

of the project.’ Pet. Br. at 4. Thus, a private party that did what

MWRA has done would not qualify for the exemptions in NLRA

§8(e) and (f). Petitioners’ central analogy fails and with it their

entire argument.’°

*Kaiser is not one of these general contractors. Rather, it is the project

manager. Pet. Br. 4. Kaiser has not entered into contracts with any of the

general contractors or sub-contractors. Under Massachusetts law, MWRA

itself is required to execute the contracts. M.G.L. c. 30 §39M, c. 149

§44A et seq.

'°MWRA can no more hide behind the general contractors than it can

hide behind Kaiser. It is undisputed that the general contractors and

subcontractors had nothing to do with negotiating the agreement but rather

are required by MWRA’s Bid Specification to execute the Agreement. Pet.

Br. 7-8. Moreover, as shown above at pp. 10-14, unlike a private

proprietor, MWRA is prohibited by state law from refusing to accept bids

from qualified bidders solely because they are not unionized. Petitioners

have impliedly conceded this when they stress that the bidding process is

open to all firms and workers (who are willing to unionize). Pet. Br. 8,

(continued...)

26

The correct analogy is not between MWRA and a hypothetical

private proprietor but between MWRA and NLRB. Like NLRB,

MWRA is a government agency that is prohibited from interfering

with economic competition among private parties. Machinists 427

U.S. at 144-151. The NLRB’s authority in labor law is much

greater than a state’s, but even the NLRB cannot impose the terms

of a collective bargaining agreement on private parties or force

them to agree. See NLRA §8(b). That is exactly what MWRA is

trying to do here and it is exactly what federal law preempts.

CONCLUSION

At bottom, this case is about a state agency that has

surrendered to union threats of strikes and picketing and has made

a political accommodation to reject all qualified lowest bidders who

decline to unionize on the unions’ terms. The losers are all those

firms that could save the public money by underbidding the firms

that have accepted the unions’ terms and all those employees who

choose to exercise their federal rights not to join unions. The

people of Massachusetts also lose. By denying qualified con-

tractors and employees work on the Harbor Project that they are

'°(__.continued)

26. Furthermore, MWRA has not insulated itself by hiring a general con-

tractor who in turn would hire subcontractors and then, acting as a

“construction industry employer” would force them to unionize pursuant

to NLRA §8(e) and (f). As explained above, state law requires MWRA

itself to contract directly with all of the general contractors and primary

subcontractors. M.G.L. c. 149 §§44A et seq.

Bizarrely, MWRA claims far more power to interfere with the

freedom of choice of the employees of third parties than it has regarding

its own employees. See M.G.L. c. 150A, §§ 2, 4, 12, prohibiting all state

agencies, including MWRA, from compelling unionization of their

employees, and from compelling payment of any sum by any employee

to a union except defined service fees to unions previously elected by a

majority of employees. Moreover, even these collective bargaining

agreements cannot run more than three years. /d. §7.

27

entitled to, the MWRA’s union-only scheme violates state law. It

denies contractors such as many of UCANE’s members their

federally guaranteed right to bargain collectively for themselves

rather than have the terms of employment dictated by the state.

Most basically, MWRA’s discriminatory scheme is grossly unfair

and is preempted by the National Labor Relations Act. For the

reasons stated above and in the Respondents’ Brief, the judgment

of the First Circuit en banc should be affirmed.

DATED: Boston, Massachusetts: September 8, 1992.

Respectfully submitted,

Utility Contractors Association

of New England, Inc.

By its attorneys,

RICHARD D. WAYNE STEPHEN S. OSTRACH

Hinckley, Allen Snyder & (Counsel of Record)

Comen PATRICK W. HANIFIN

One Financial Center New England Legal

Boston MA 02111 Foundation

Of Counsel 150 Lincoln St.

Boston, MA 02111

September, 1992 (617) 695-3660