Amicus Curiae Brief — Sid Harvey, Inc. v. Local 810, Steel, Metals, Alloys & Hardware Fabricators & Warehousemen, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers

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7g, IN THE OCT 20 1°7?

Supreme Court of the Cited Siates, oo. se.c1

OcrToBer TERM, 1972.

No. 72-556

SID HARVEY, INC. ano SID HARVEY BROOKLYN

CORP., Petitioners,

Us.

LOCAL 810, METALS, ALLOYS, HARDWARE FABRI-

CATORS AND WAREHOUSEMEN, INTERNATION-

AL BROTHERHOOD OF TEAMSTERS, CHAUF-

FEURS, WAREHOUSEMEN AND HELPERS OF

AMERICA, ET AL., Respondents.

BRIEF AMICUS CURIAE ON BEHALF OF THE CHAM.

BER OF COMMERCE OF THE UNITED STATES

IN SUPPORT OF THE PETITION FOR

WRIT OF CERTIORARI

ALPERT HALES

MILTON A. SMITH,

General Counsel,

OTTO F. WENZLER,

Labor Relations Counsel,

Chamber of Commerce of the United States

of America,

1615 H Street, N. W..

Washington, D. C. 20006,

LAWRENCE M. COHEN,

S. RICHARD PINCUS,

Lederer, Fox and Grove,

111 West Washington Street,

Chicago, Illinois 60602.

GERARD C. SMETANA,

925 South Homan Avenue,

Chicago, Illinois 60607,

Attorneys for the Chamber of Commerce of

the United States of America

Of Counsel;

ALAN RAYWID,

Cole. Zyistra & Raywid,

2011 Eye Street. N. W..

Washington, 1D. C. 20006,

THE GUNTHORP-WARREN PRINTING COMPANY, CHICAGO

INDEX.

PAGE

Interest of the Amicus Curiae....................... 1

Reasons for Granting the Writ...................... 3

GentbasGa « cccccccecccccccccsccccccescoseccccscces 9

Tasie or Cases.

Bachman Machine Company v. N. L. R. B., 266 F. 2d 599

Bi Cin. TERED oc cc ccctecccccccccccccsccsccecseces 3

Carpet, Linoleum Layers’ Union No. 419 v. N. L. R. B.,

429 F. 2d 747 (D. C. Cir. 1970)... ............0005. 6

Carpet, Linoleam Layers’ Union No. 419 v. N. L. R. B.,

F.2d , 80 LRRM 3254 (D. C. Cir. 1972). .4,5,6

Douds v. Metropolitan Federation of Architects, 75 F.

Bape. GS GE. BD. Hh. FW. BBGED. .cccccccccccccsccccces 5

‘ibreboard Paper Products Corp. v. N. L. BR. B., 379

DO Oa ae 8

Haughton v. Woodworkers Local 5-40, 294 F. 2d 766

CRG, Bn 6.00.08 066ctconcnctecensccecesse<scs 5

Local 742, Carpenters v. N. L. R. B., 444 F. 2d 895

(D. C. Cir. 1971) cert. den., 404 U. S. 985 (1972)... .. 6

Les Angeles Newspaper Guild v. N. L. R. B., 443 F. 2d

1173 (9th Cir. 1971) cert. den., 404 U. S. 1018 (1972) 3,5

Miami Newspaper Pressmen’s Local No. 46 v.

X. L. R. B., 322 F. 2d 405 (D. C. Cir. 1963).......... 3

Milk Drivers Local 584 (Old Dutch Farms, Inc.), 146

NLRB 509 (1964) enf’d 341 F. 2d 29 (2d Cir. 1965).. 5

X. L. R. B. v. Business Machines Mechanics Local 459,

228 F. 2d 553 (2nd Cir. 1955), cert. den. 351 U. 8.

N. L. B. B. v. Carpenters Dist. Council, 184 F. 2d 6

(10th Cir. 1950), cert. den., 341 U. S. 947 (1951)..... 7

N. L. RB. B. v. Denver Building and Construction Trades

Council, 341 U. 8S. 675 (1951)... ......- 6-6 eee eee. 245

National Woodwork Manufacturers Assn. v. N. L. RB. B.,

S06 U. B. GIB (20GT)... 0. cc cccccccccccccccccccsess a8

Roy, J. G. & Sons Uo. v. N. L. R. B., 251 F. 2d 771 (ist

Cle, BBB) oc ccccccccccccccccccccccccccccccccccoes 3

Sheet Metal Workers Local 233 v. Atlas Sheet Metal

Co., 384 F. 2d 101 (Sth Cir. 1967) ........-- 66-600. 3

Teamsters Local 639 (Poole’s Warehousing, Inc.), 158

Teamsters’ Union v. Oliver, 358 U. 8S. 283 (1959)...... 8

Television and Radio Artists v. NLRB, 462 F. 2d 887

Truck Drivers Local 726 v. Empire State Express, Inc.,

293 F. 2d 414 (Sth Cir. 1961)...........-- 6-6. cee 5

Truck Drivers Local 107 (Sterling Wire Products Co.),

137 3. La. BR. BD. 29BD (IBGB).... 2. ccccccccccccccccc. 5

MisceLLas gous.

John M. Blair, Economic Concentration, Harcourt

Brace Jovanovich 1972, pp. 257, et seq. ...........- 6,7

Borus & Warshal, Neutrality and Secondary Boycotts:

An Economic Evaluation of a Legal Question, 17 Lab.

Dn J. (IDB) nc cccccccccccccccccccvccccccccccess 7

Burck, The Merger Movement Runs High, Fortune,

Fob. 1960, p. 79 ..... 2. cc ccc cccccccccccccccccccees 6

Federal Trade Commission Report, Large Mergers in

Manufacturing and Mining, 1948-1971, May 1972,

Bp. THB 20... ccccccccccccccccsccccccscccocosccs 6

ee ee eee eee

iii

Federal Trade Commission Report on Corporate Merg-

ers and Acquisitions, May 1955, at pp. 116, et seq. . ..

[I Legislative History of the Labor-Management Re-

lations Act, 1947, 1047-1048 (Comments of Senator

Murphy) and id. at 1106 (Comments of Senator Taft)

Vaughn, Franchising Today (Farnsworth Publishing

Be Bah TEED ccccccscsccccccccscogocccosccsocse

Supreme Court of the Gnited States

Octoser Term, 1972.

No. 72-556.

SID HARVEY, INC. axp SID HARVEY BROOKLYN

CORP.,

Petitioners,

vs.

LOCAL 810, METALS, ALLOYS, HARDWARE FABRI-

CATORS AND WAREHOUSEMEN, INTERNATION-

AL BROTHERHOOD OF TEAMSTERS, CHAUF-

FEURS, WAREHOUSEMEN AND HELPERS OF

AMERICA, eT a,

Respondents.

BRIEF AMICUS CURIAE ON BEHALF OF THE CHAM.

BER OF COMMERCE OF THE UNITED STATES

IN SUPPORT OF THE PETITION FOR

WRIT OF CERTIORARI*

INTEREST OF THE AMICUS CURIAE.

The Chamber of Commerce of the United States of

America (hereafter the **Chamber"’) files this brief amicus

curiae to present its views upon a case of great im-

portance in the administration of the National Labor Re-

This brief ix filed with the written consent of all parties

pursuant to Supreme Court Rule 42(1).

SOE ta None OOM ato

lations Act.’ The question raised in this case—whether

potential, as opposed to actire, common control is suff.

cient to destroy the Act's secondary boycott protections—

is a matter of vital concern to the Chamber.

The decision of the Court of Appeals in this case sig.

nificantly dilutes the secondary boycott safeguards afforded

by Section 8(b)(4) of the Act. First. the court below

not only rejected the active common management criterion

of neutrality that heretofore has been utilized by the Na.

tional Labor Relations Board and other courts of appeals,

but, in lieu thereof, resurrected a congressionally dis.

carded and unworkable ‘‘unity of interest’’ doctrine.

Second, the ramifications of this new and unwarranted ap-

proach are far-reaching. A vast array of businesses, like

the employers here, depend upon a variety of integrated

business relationships to effectively compete. The result

of sanctioning union pressures against related divisions

or subsidiaries of a corporation, or even its outside suppliers

or customers with whom it has substantial dealings, will

inevitably be a failure to shield ‘‘unoffending employers

and others from pressures in controversies not their own.”

N. L. R. B. v. Denrer Building and Construction Trades

Council, 341 U. S. 675, 692 (1951). Finally, the decision

below represents the most recent in a series of opinions

severely circumscribing the neutrality concept of Denver

Building Trades allegedly predicated upon this Court's

decision in National Woodwork Manufacturers’ Ass'n. v.

N. L. R. B.. 386 U. S. 612 (1967). The time is now ripe

for a needed reconciliation of Denrer Building Trades

and National Woodwork. This case is a uniquely appro-

priate vehicle for that purpose.

1. The Chamber ix a business federation with a membership of

over 3700 state and local chambers of commerce and trade a

sociations, and an underlying membership of more than five mil-

lion individual business men and business firms. It is the largest

association of business and professional organizations in the United

States.

3

As a prineipal spokesman for the American business

community, the Chamber believes that its views and ex-

ience may be of assistance to the Court. It is for this

weason that the Chamber respectfully submits this brief

amicus curiae.

REASONS FOR GRANTING THE WRIT.

1. Prior to the instant case, the Board and courts uni-

formly required that ‘‘actual common control of labor poli-

cies,” not merely the potential control implicit in common

ownership or economic interdependence, was required be- -

fore two employers could be deemed a single enterprise for

secondary boycott purposes.? Any broader rule would fail

to achieve the dual congressional objectives—to ‘‘confine

labor conflicts to the employer in whose labor relations the

conflict has arisen, and to wall off the pressures generated

by that conflict from unallied employers.’’ Miami News-

paper Pressmen's Local No, 46 v.N.L. R. B., 322 F. 2d 405,

310 (D. C. Cir. 1963).

The decision helow substitutes for a criterion of active

common management* an unpredictable ‘‘common sense”

2 J.G. Roy & Sons Co. v. N. L. R. B., 251 F. 2d 771, 773 (Ist

(ir. 1958). See also Los Angeles Newspaper Guild v. N. L. R. B.,

443 F. 24 1173 (9th Cir. 1971), cert. den. 404 U.S. 1018 (1972) ;

Television and Radio Artists v. N. L. R. B., 462 F. 2d 887 (D. C.

Cir. 1972) : Bachman Machine Company v. N. L. R. B., 266 F. 2a

599 (8th Cir. 1959) : Shect Mctal Workers Local 233 v. Atlas Sheet

Metal Co.. 384 F. 24 101 (5th Cir. 1967); Teamsters Local 639

(Poole’s Warehousing, Inc.), 158 NLRB 1281.

3. If the Court of Appeals here had applied an active common

management test, the result below would have been different. In

this ease. the picketed secondary employers (‘*Ine.”’ and the

three sales companies) exercised no actual control over the labor

policies of the primary employer (‘‘Supply ompany’’). The

Board's finding that ‘‘each corporate president’’ of the separate

corporations ‘‘was in sole charge of,”’ and ‘‘actually conduct [ed |

the day-to-day management of the corporation's business, inelud-

4

analysis of the ‘‘relationship between the two employers

who are being picketed.’’ App. B, p. 37a. Under this ap.

proach, the Court of Appeals, whenever there exists either

‘*centralized or overlapping’’ ownership or significant ‘ee.

nomic interdependence’’ between two employers, would

treat the concerns as a single employer for secondary boy.

cott purposes. This view of the law, in addition to differing

markedly from that followed by the Board and other courts,

is a revival of the common law ‘‘unity of interest’’ doctrine

which Congress rejected when it enacted Section 8(b)(4),

Indeed, that Section was specifically added to the Aet in

1947 to ‘‘reverse [the] trend’’ in which parties who

were found ‘‘to possess a ‘unity of interest’ with the disput-

ing employer’’ were embroiled in labor disputes in which

they were ‘‘not immediately involved.’”*

2. The decision below also cannot be reconciled with

Denver Building Trades. That case involved the question

of whether a general contractor and his subcontractors on

the same construction project should be treated as a single

unified enterprise for secondary boycott purposes based on

the close functional integration and economic interdepen-

dence inherent in their relationship. This Court resolved

that issue by finding such factors insufficient to defeat the

parties’ separate neutrality status or to ‘‘make the em-

ployees of one the employees of the other.’’ 341 U. S. at

690. Such ‘business relationships’’ are, as this Court

ing its relations with its sources of supplies, its customers, its

management of its personnel, and its labor relations’’, was not

disturbed by the Court of Appeals. App. A. p. 7a: App. B. p. 34a.

In fact, the picketed secondary companies were not involved in any

respect in the decision to discharge the Supply Company supervisor

—the incident which gave rise to the picketing. App. A, p. 3.

ae ee ieee debs

4. II Legislative History of the Labor-Management Relations

Act, 1947, at 1047-1048 (Comments of Senator Murphy). See also

id. at 1106 (Comments of Senator Taft) and Carpet, Linoleum Lay-

ers’ Union No. 419 v.N. L. R. B., ........ * eae , 80 LRRM 3254,

3256-7 (D. C. Cir. 1972).

EES SPL SEG BG PS EY Rk SRR OT HO a in ane pe St

5

observed, ‘‘too well established . . . to be overrridden with-

out clear language doing so.’’ Jd. at 690. The Denver Build-

ing Trades rule—that functional integration is insufficient

to involve separate employing entities in the disputes of

the other—has subsequently been applied to a variety of

interrelated’ business relationships of both a horizontal®

and vertical (‘‘straight line’’) nature.’

The critical inquiry in each case, as well as in those in-

stances involving the related ‘‘ally’* or ‘‘co-employer’”

concepts, has been consistent: that a labor union should be

entitled to bring pressure on only those persons who, in

addition to the offending employer, actually determine their

conditions of employment. Mere potential control has not,

prior to the present case, been sufficient to extend the area

of industrial conflict.

5. See, e.g., Haughton v. Woodworkers Local 5-40, 294 F. 2d

766, 767 (9th Cir. 1961) and Milk Drivers Local 584 (Old Dutch

Farms, Inc.) 146 N. L. R. B. 509 (1964), enf’d, 341 F. 2d 29

(2nd Cir. 1965).

6. See, e.g., Teamsters’ Local 639 (Poole’s Warehousing, Inc.),

and Los Angeles Newspaper Guild v. N. L. R. B., supra n. 2.

7. See, eg., Carpet, Linoleum Layers’ Union No. 419 v.

N.L. R. B., supra n. 4.

8. The ‘‘ally’’ doctrine applies where one employer agrees to

perform ‘‘struck work’’ for the primary employer. Since the result

of such activity is the same as if the primary employer had hired

strikebreakers, the employer performing such work, in effect.

stands in the shoes of the primary employer and is considered

to be ‘‘firmly allied’’ in the primary’s dispute. See, e.g., Douds v.

Metropolitan Federation of Architects, 75 F. Supp. 672, (S. D.

N. Y. 1948) and N. L. R. B. v. Business Machine Mechanics Local

459, 228 F. 2d 553 (2nd Cir. 1955), cert. den. 351 U. S. 962 (1956).

9. The ‘‘co-employer’’ doctrine applies where two or more cor-

porate entities have commonly controlled labor relations policies.

Again, since the ostensibly neutral employer actually has control

over the involved employees’ working conditions, he is, in effect.

an adjunct of the primary employer. See. e.g., Truck Drivers

Local 726 v. Empire State Express, Inc., 293 F. 2d 414, 423 (5th

Cir. 1961) and Truck Drivers Local 107 (Sterling Wire Products

Co.), 137 NLRB 1330 (1962).

6

3. The instant case is part of a recent effort to revive

the concept of ‘‘economic realism.’’ This trend, arising in q

multiplicity of contexts,’’ has caused a severe dislocation

in our national labor policy. Overlapping ownership" and

substantial business dealings between interrelated com.

10. See, eg., Carpet, Linoleum Layers’ Union No. 419 y,

N. L. R. B., 429 F. 2d 747 (D. C. Cir. 1970), a case relied on by

the decision below and subsequently revised (Carpet, Linoleum

Layers’ Union No. 419 v. N. L. R. B., supra n. 4), where the court

remanded for the Board’s consideration the neutrality status of

an alleged secondary retailer in light of its ‘*economiec interest’’ in

the outcome of a dispute involving employees of its independent,

functionally integrated installers; and Local 742, Carpenters vy.

N. L. R. B., 444 F. 2d 895 (D. C. Cir. 1971), cert. den. 404

U. S. 985 (1972), where the court’s remand to the Board con-

tained instructions to henceforth consider a boycotted employer,

notwithstanding his lack of control over the union's underlying

grievance. as an unprotected primary where he retains an ‘‘eco-

nomic interest ’’ in the subject of the dispute.

11. The consolidation of both related and unrelated business

enterprises through mergers or acquisitions has undoubtedly had

a greater impact in shaping our present-day modern industrial

structure than any other single factor. See J. Blair, Economic

Concentration (Harcourt Brace Jovanovich 1972) at 257 et seq.

Impelled by large scale marketing factors, including the need

for increased product diversification and sources of supply, the

trend towards greater consolidation has increased markedly in

the past deeade. Id., at 275 et seq. See also, Federal Trade Com-

mission Stat. Rep. No. 9, Large Mergers in Manufacturing and

Mining 1948-1971, May 1972, at 7-23. For example, the explosive

emergence of the corporate conglomerate, where the aquiring

company usually has very little in common with the acquired

companies, has resulted in a ten-fold increase in the number of

mergers from that extant in 1950. See Burek, The Merger Move-

ment Runs High, Fortune (Feb., 1969), 79.

7

panies’? and independent concerns* are commonplace in

American industry. The decision in this case threatens to

radically alter the secondary boycott protection afforded

employers in each of these situations as well as analogous

areas." The instant case, in sum, does not represent a

unique phenomena. The question presented is one which,

12. Common ownership of both horizontally and vertically

integrated companies is characteristic of major segments of our

economy including the steel, lumber, textile and retail food in-

dustries. Blair, supra n. 11, at 31 and 270 et seq. The his-

tory of mass production is replete with examples of concerns

whose economic survival was depeadent upon their ability to

vertically integrate, backwards or forwards. Federal Trade Com-

mission, Report on Corporate Mergers and Acquisitions, May, 1955,

at 116, et seg. For example, a significant segment of the lumber

industry consists of large paper manufacturers who are inte-

grated backwards into logging and lumbering and, in some cases,

forward into retailing or distribution. Blair, supra n. 11, at 271.

These ‘‘captive’’ sources of supply or distribution represent major

capital enterprises whose day-to-day operations and labor policies

are independently established and administered free from the

control of their parent corporation. Jbid.

13. Although the lower court’s opinion occurred in the con-

text of commonly owned entities, its ‘‘economic interdependence”’

rationale would apparently extend to business dealings between

separately owned but closely related independent contractors which

deal exclusively or primarily with a single business. A prime ex-

ample is the burgeoning franchise industry where independent

business concerns serve as the distributive or sales arm of existing

manufacturing or retail concerns. See Vaughn, Franchising Today,

(Farnsworth Publishing Co., Inc., 1969).

14. The ‘‘interest’’ between interrelated or functionally in-

tegrated concerns in each employer’s labor disputes is often no

different than that which exists between unionized employers ina

horizontally organized industry (e.g., the trucking industry)

where a union’s success at one company will inevitably be followed

by parallel demands on others. Similarly, a primary’s customers

or competitors will never be ‘‘wholly unconcerned”’ in the pri-

mary’s labor disputes because of their direct economic stake in

its outeome. See Borus & Warshal, Neutrality and Secondary

Boycotts: An Economic Evaluation of a Legal Question, 17 Lab.

L. J. 310 (1966). The courts have not, of course, removed the

Act’s secondary boycott protections in such relationships. See,

eg. N. L. R. B. v. Carpenters Dist. Council, 184 F. 2d 60 (10th

Cir. 1950) cert. den. 341 U. S. 947 (1951).

wt : per Mgt ea ie 2° <4

UC Bn tab abate ab iRaLS we Se ne |

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S

as the petition correctly notes, is likely to recur in every

ease in which commonly owned companies perform com.

plimentary functions.

4. The present case also represents an improper and

far-reaching extension of National Woodwork. In that

case, a five to four majority of this Court legitimatized a

product boycott directed solely at an employing entity

which actually controlled the assignment of the disputed

work. The crux of the decision was the offending employer’s

statutory bargaining duty vis-a-vis his own employees; the

‘‘vortex ... of the labor dispute’’ embraced a contractual

restriction precluding the employer from subcontracting

work traditionally performed by his employees which did

not extend ‘‘to satisfy union objectives elsewhere.’’ 386

U. S. at 627, 644. Cf. Fibreboard Paper Prods. Corp. y.

N. L. R. B., 379 U. S. 203 (1964); Teamsters’ Union y.

Oliver, 358 U.S. 283 (1959).

A neutrality test of active common management com-

ports with National Woodwork by confining union pressure

to the employer who actually controls the labor policies

giving rise to the dispute. The decision below, on the other

hand, extends the ‘‘vortex’’ of the dispute to entities else-

where who have no contractual relationship with the in-

volved employees and who did not make the offending

managerial decision. The effect is to severely restrict

management’s contractual freedom. Such a result, coupled

with the other significant ramifications of the instant case

noted above, warrants review by this Court.

CONCLUSION.

For the foregoing reasons, as well as for the reasons

set forth by the Petitioner, the petition for writ of certiorari

should be granted.

Respectfully submitted,

MILTON SMITH,

General Counsel,

oO. F. WENZLER,

Labor Relations Counsel,

Chamber of Commerce of the United States

of America,

1615 H Street, N. W.,

Washington, D. C. 20006,

LAWRENCE M. COHEN,

S. RICHARD PINCUS,

Lederer, Fox and Grove,

111 West Washington Street,

Chicago, Ilinois 60602,

GERARD C. SMETANA,

925 South Homan Avenue,

Chicago, Illinois 60607,

Attorneys for The Chamber of Commerce oj

the United States of America.

Of Counsel:

ALAN RAYWID,

Cole, Zylstra & Raywid,

2011 Eye Street, N. W.,

Washington, D. C. 20006.