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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1993
- **Citation:** 507 U.S. 218

## Text

\ 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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0177%3A27. Public record. Not legal advice.