Petition for Writ of Certiorari — Northern Illinois Illinois Chapter Chapter of Associated Builders and Builders and Contractors, Inc. v. Lavin (No. 05-1421)

F I

) yO 51421 MAY 8 = 2008

NT FFIGE OF THE CLERK

SUPREME COURT OF THE UNITED STATES

ut, U.S.

al a

NORTHERN ILLINOIS CHAPTER

OF ASSOCIATED BUILDERS AND

CONTRACTORS, INC. AND LOBERG EXCAVATING,

INC.

Petitioners

Vv.

JACK LAVIN, in his official capacity

as DIRECTOR OF THE ILLINOIS

DEPARTMENT OF COMMERCE

AND ECONOMIC OPPORTUNITY

Respondent.

On Petition For Writ Of Certiorari To The

United States Court Of Appeals For The Seventh Circuit

PETITION FOR WRIT OF CERTIORARI

Maurice Baskin

Counsel of Record

Venable LLP

575 7™ St., N.W.

Washington, D.C. 20004

(202) 344-4000

Counsel for Petitioners

QUESTIONS PRESENTED FOR REVIEW

l. Whether the National Labor Relations Act

preempts a state law that compels private employers to enter

into agreements with labor organizations as a condition of

receiving state funds.

rE Whether the test for distinguishing between

proprietary and regulatory state activity, for purposes of

preemption analysis, should be that adopted by the Fifth,

Ninth, and Second Circuits based upon this Court's holding

in the Boston Harbor case, or the new and conflicting test

adopted by the Seventh Circuit in the present case.

il

STATEMENT PURSUANT TO SUPREME COURT

RULE 29.6

Petitioners Northern Illinois Chapter of Associated

Builders and Contractors, Inc. and Loberg Excavating, Inc.

are privately owned entities. They have no_ parent

corporations and no publicly held company owns 10% or

more of their stock.

lil

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW...........00000008 i

STATEMENT PURSUANT TO S.CT. RULE29.6........ cdi

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CONSTITUTIONAL AND STATUTORY PROVISIONS .2

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REASONS-FOR ALLOWING THE WRIT.......... eee 7

I. This Court’s Review Is Required To

Resolve A Conflict Among Federal Courts

As To Whether The NLRA Preempts A

State Law Forcing Private Employers To

Enter Into Labor Agreeements on State-

Subsidized Projects, Where The State Is

Not Acting As a Market Participant............ 7

Il. The Court of Appeals Has Invented A New

And Erroneous Test For Determining

When Use of State Spending Power

Constitutes Regulation Under The NLRA,

In Direct Conflict With Established

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1V

TABLE OF AUTHORITIES

Cases

Bldg. & Const. Trades Council v. Associated Builders and

Cont.'s of Mass./R.1., Inc., 507 U.S. 218 (1993)......passim

Cardinal Towing v. & Auto Repair, Inc. v. City of Bedford,

RF SE ae TI II oso vninensiernecsicdecinec passim

Colfax Corp. v. Illinois Tollway Authority, 79 F. 3d 631 (7"

Rs PIN soisie dic cers ccig sions eck eethcanccatuecnes 11

Columbus Bldg. & Const. Trades Council (Kroger Co.), 149

PE ee Fr aiidkokcey evcsicndeninnnnaien 4,10

Healthcare Ass'n of NY State, Inc. v. Pataki, 388 F. Supp. 2d

6, 23 (N.D. NY 2005), app. pending (2d Cir.)........... 3

Machinists v. Wisconsin Employment Relations Comm’n,

Pt EE ed | 7, | Mise ermenence cremunnrr ce mp meNe io ne ke eeaey 4

Metropolitan Milwaukee Ass'n of Commerce v. Milwaukee

County, 431 F. 3d 277 (7" Cir. 2005)...........:0:c0000 9,10

National Endowment of the Arts v. Finley, 524 U.S. 569

Ee Rictias isk ccucecasaiciaacbioaaadatimassecciaadeanahseachdaneenclees Fae OM

Northern Illinois Chapter of Associated Builders and

Contractors, Inc. v. Lavin, 431 F. 3d 1004

(Fr te PN oocara oe ou tcences ence passim

Olympic Pipe Line Co. v. City of Seattle, 437 F. 3d 872 (9"

CR SI aa re ee 7%

Rust v. Sullivan, 500 U.S. 173 (1991)..........6, 11, 12, 13, 14

San Diego Bidg. Trades Council v. Garmon, 359 U.S. 236

EOI E cLicossirsiecsskcunaaiin’sancihinsbdssadeadettieasammndahiaucksamsscaiacnantommant 4

South Dakota v. Dole, 483 U.S. 203 (1987)...6. 11, 12, 13, 14

Sprint Spectrum L.P. d/b/a Sprint PCS v. Mills, 283 F. 3d

We Te Gals SOE) rcavecccviceit iii ucdaseninen 7, 8

Wisconsin Dept. of Ind., Labor and Human Relations v.

CHOU, 7S UL. Sie Ch ii cch apd stcdsaunccacoeaees passim

Constitutional and Statutory Provisions

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Be AERA TAO bristaiioecaciicne kaise oun 2

RAE a ti RSE EI sissives Gis ans dakasiomh sas aiacioaaaidan 2

Be Nees SOF dns srcduleatavcdspussohsind cdo necard es wearin 2

Fe NAA a BE OR isch cis in vodie selves oe teenie 2,4

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BP AAs A AE sisi shin tasters cade cena 2, 4, 10

Oe hls OO hg 0 DOR ceritissssassciseos serine passim

Other

Corporation for Enterprise Development, Ten Questions on

Development Incentives, www.cfed.org (2002). .............4. 8

Lockie, Economic Development Incentive Wars,

Wwww.cba.uni.eduPeconomics(2004)......c.eeecsceseeeeseeeeeeeees 8

No.

IN THE

SUPREME COURT OF THE UNITED STATES

NORTHERN ILLINOIS CHAPTER OF ASSOCIATED

BUILDERS AND CONTRACTORS, INC. AND LOBERG

EXCAVATING, INC.,

Petitioners

v.

JACK LAVIN, DIRECTOR OF THE ILLINOIS

DEPARTMENT OF COMMERCE AND ECONOMIC

OPPORTUNITY,

Respondent.

On Petition For Writ Of Certiorari To The

U.S. Court Of Appeals For The Seventh Circuit

PETITION FOR WRIT OF CERTIORARI

OPINIONS BELOW

The ruling of the United States Court of Appeals for

the Seventh Circuit as to which the writ is being sought is

reported as Northern Illinois Chapter of Associated Builders

and Contractors, Inc. v. Lavin, 431 F. 3d 1004 (7" Cir.

2006). (App. la). A Petition for Rehearing filed with that

court was denied on February 6, 2006. (/d. at 7a). The Court

of Appeals’ decision affirmed a decision of the U.S. District

Court for the Northern District of Illinois, albeit on new

grounds not relied on by the District Court. (/d. at 8a).

JURISDICTION

The jurisdiction of this Court is invoked under 28

U.S.C. § 1254.

CONSTITUTIONAL AND STATUTORY PROVISIONS

INVOLVED IN THIS CASE

Supremacy Clause of the United States Constitution,

article 6, clause 2

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

seq., and more specifically §§ 157, 158(d), 158(e),

and 158(f) (relevant excerpts reprinted at App. 18a).

Illinois Renewable Fuels Program Development Act,

20 LC.S. § 689/1, et seq. (reprinted in its entirety at

App. 12a).

STATEMENT OF THE CASE

At issue in the present case is the Illinois Renewable

Fuels Program Development Act (“IRFPDA” or "the Act"),

set forth at, 20 LC.S. § 689/1, et seq. (App. 12a). This

statute expresses the regulatory policy of the State of Illinois

to force private entities to enter into agreements with labor

organizations as a prerequisite to working on all renewable

fuels projects subsidized by the State.

The IRFPDA provides up to fifteen million dollars in

grants to entities constructing, modifying, altering, or

retrofitting ethanol plants in Illinois. However, to be eligible

for a grant under Act, recipients must “enter into a project

labor agreement” (a “PLA”) with a labor organization that

must include the following:

(1) provisions establishing the minimum

hourly wage for each class of labor

organization employee;

(2) provisions establishing the benefits

and other compensation or each class

of labor organization employee; and

(3) provisions establishing that no strike

or disputes will be engaged in by the

-labor organization employees. The

owner of the plant and the labor

organizations shall have the authority

to include other terms and conditions

as they deem necessary.

20 ILCS §689/15(a)(3) and 25(a).

As the Seventh Circuit found, the State has no

proprietary interest in the proposed fuel plants, which are to

be privately owned and operated. (App. 2a). The new labor

mandate also bears no relationship to the sole state interest

set forth in the legislation's "Findings and State Policy," i.e.,

"to promote and encourage the production and use of

renewable fuels as a means ... to improve air quality ...

[and] to grow the agricultural sector of the [Illinois

economy.” (App. 12a). Nothing in the statute limits the

mandated project labor agreements to construction workers

or to the site of construction of fuel plants. In addition, the

mandated labor agreements are not confined to grantees who

are employers in the construction industry, as would be

required for such "pre-hire" agreements to be lawful under

Sections 8 (d), (e) and (f) of the NLRA.'

On August 27, 2004, the Northern Illinois Chapter of

the Associated Builders & Contractors, Inc. (“ABC”) and

Loberg Excavating, Inc. (“Loberg”) filed a declaratory

judgment action seeking a declaration that Sections 15 and

25 of the IFRPDA are preempted by the National Labor

Relations Act by virtue of the Supremacy Clause of the

United States Constitution.

More specifically, ABC contended that the

challenged provisions are preempted under the holdings of

San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 3

L.Ed.2d 775, 79 S. Ct. 773 (1959) and Wisconsin Dept. of

Ind., Labor and Human Relations v. Gould, 475 U.S. 282

(1986), because they condition access to state funds on

grantees’ agreeing to submit to a scheme of labor relations

different from the National Labor Relations Act, including

the imposition of actual contract terms intruding upon

Section 7 and 8 rights of private employees and employers.

ABC further argued that the statute's provisions are

preempted under Machinists v. Wisconsin Employment

Relations Comm’n, 427 U.S. 132, 150 (1976), in that they

interfere with the private balance of labor relations intended

' Section 8(d) of the NLRA states that no party to collective bargaining

can be required to agree to a proposal. Section 8(e) prohibits employers

from entering into agreements with labor unions that compel other

employers to bargain with such unions. Section 8(f) prohibits employers

from bargaining or reaching agreements with unions that do not first

demonstrate that they represent the majority of the employer's

employees. Sections 8(e) and 8(f) create exemptions from these general

rules solely for “employers in the construction industry," a term that has —

been narrowly defined by the NLRB. See Columbus Bldg. & Const.

Trades Council (Kroger Co.), 149 NLRB 1224, 1225-6 (1964) and

subsequent cases. Each of the above-referenced statutory provisions is

reprinted in the Appendix to this Petition. (App. 18a).

to be left unregulated by the NLRA. Applying principles

established by this Court in Building & Construction Trades

Council v. Associated Builders and Contractors of

Massachusetts/Rhode Island, Inc. 507 U.S. 218, 226-27

(1993) ("Boston Harbor"), ABC demonstrated that the state

had not acted as a "market participant" in a manner narrowly

tailored to a proprietary interest and in the same manner as a

similarly situated private actor could act.

On March 24, 2005, the District Court ruled in favor

of the State on cross motions for summary judgment, finding

that Illinois was acting as a proprietor/market participant

when it enacted Sections 15 & 25, within the meaning of

Boston Harbor. (App. 12a). ABC appealed to the Seventh

Circuit.

On December 9, 2005 the Court of Appeals affirmed

the District Court's grant of summary judgment, but on

grounds not advanced by either the District Court or by any

of the parties to the appeal. (App. 1a). At the outset, the

Court of Appeals opinion rejected the District Court’s

conclusion (and the State's contention) that Illinois was

acting in a proprietary capacity when it enacted the IRFPDA.

(/d. at 2a). As the appeals court observed:

The problem with this view is that the state is

not the proprietor of anything. It does not own

any renewable-fuels project, either before or

after granting a subsidy. The project's owner,

not the state, is its proprietor. Boston hired the

general contractors for the project; Illinois

does not hire contractors. Nor does it invest in

the projects through bonds.

The Seventh Circuit further found that the state

"likely" enacted the law because "state officials want to

assist organized labor." (/d. at 5a). The Court of Appeals

nevertheless determined that Sections 15 and 25 were not

regulatory acts and were not preempted by the NLRA.

In order to reach this result, the appeals court relied

almost entirely on cases construing federal grants to state

governments, particularly Rust v. Sullivan, 500 U.S. 173

(1991), and South Dakota v. Dole, 483 U.S. 203 (1987).

(App. 3a-5a). The Seventh Circuit misinterpreted these cases

as establishing a general principle that conditions on

government subsidies are not "forbidden regulation,” at least

so long as such conditions do not "affect conduct other than

the financed project." (id at Sa). From this erroneous

premise, the Court of Appeals proceeded to find that Boston

Harbor's carefully elaborated market participant doctrine

was "just one illustration of the proposition that states may

act in commerce without regulating commerce. The situation

in this litigation is another illustration." (/d. at 4a-5a).

The Seventh Circuit did not acknowledge the Fifth

Circuit's conflicting decision in Cardinal Towing v. & Auto

Repair, Inc. v. City of Bedford, 180 F.3d 686, 693 (5™ Cir.

1999), or the numerous decisions in other circuits that have

relied on the Cardinal Towing test for distinguishing

between proprietary and regulatory activity:

First, does the challenged action

essentially reflect the entity's own interest in its

efficient procurement of needed goods and

services, aS measured by comparison with the

typical behavior of private parties in similar

circumstances? Second, does the narrow scope

of the challenged action defeat an inference that

its primary goal was to encourage a general

policy rather than address a specific proprietary

problem?

Cited with approval in Olympic Pipe Line Co. v. City of

Seattle, 437 F. 3d 872, 881 (9 Cir. 2005); and Sprint

Spectrum L.P. a/b/a Sprint PCS v. Mills, 283 F. 3d 404 (2d

Cir. 2002); see also Healthcare Ass'n of New York State, Inc.

v. Pataki, 388 F. Supp. 2d 6, 23 (N.D. NY 2005), appeal

pending (2d Cir.).

In the present case, the appeals court made neither of

the findings set forth above, as called for by Cardinal

Towing and by Boston Harbor itselt. Instead, the Seventh

Circuit declared that as long as a state law is "project

specific," even though applying on its face to multiple

projects and even in the absence of any state proprietary

interest in such projects, the state is free to "assist organized

labor" by compelling private grant recipients to enter into

union agreements.

A petition for rehearing was denied by the Court of

Appeals on February 18, 2006.

REASONS FOR ALLOWING THE WRIT

I. This Court’s Review Is Required To Resolve A

Conflict Among Federal Courts As To Whether

The NLRA Preempts A State Law Forcing Private

Employers To Enter Into Labor Agreeements on

State-Subsidized Projects, Where The State Is Not

Acting As Market Participant.

By creating a new and unprecedented exemption

from NLRA preemption for state laws beyond the previously

limited scope of market participation, the Court of Appeals

Opinion threatens to undermine the Supremacy Clause and

the federal role in protecting the rights of private employers

and employees. State and local governments spend many

billions of dollars annually throughout the country on

business development incentive programs. See Lockie,

Economic Development Incentive Wars,

www.cba.uni.edu9economics (2004); see also Corporation

for Enterprise Development, Jen Questions on Development

Incentives, www.cfed.org (2002). If each state and local

government is free to impose labor agreements on private

recipients of such subsidies in order to "shower benefits on

workers who were the incumbents’ political supporters," as

stated in the Court of Appeals opinion (App. at 5a), then

little will remain of private sector labor law under the

NLRA. Review by this Court is required to address

fundamental errors in the Court of Appeals decision, which

directly conflict with important precedents of this Court and

other federal courts.

In particular, the Court of Appeals erred in failing to

adhere to well-settled precedent establishing that "the

spending power may not be used as a pretext for regulating

labor relations." Gould, 475 U.S. at 287 and 291; see also

Boston Harbor, 507 U.S. 218, 226-27. As further noted

above, other circuits have interpreted this Court's decisions

as requiring specific findings that were not made by the

Seventh Circuit, in order for a state law to escape the

inference that state impositions on private employers are

regulatory in nature. Cardinal Towing & Auto Repair, Inc. v.

City of Bedford, 180 F.3d 686, 693 (5" Cir. 1999); Olympic

Pipe Line Co. v. City of Seattle, 437 F. 3d 872, 881 (9" Cir.

2005); and Sprint Spectrum L.P. d/b/a Sprint PCS v. Mills,

283 F. 3d 404 (2d Cir. 2002); see also Healthcare Ass'n of

New York State, Inc. v. Pataki, 388 F. Supp. 2d 6, 23 (N.D.

NY 2005), appeal pending (2d Cir.).

Specifically, the Fifth, Ninth, and Second

circuits have each held that state laws must be found to be

regulatory in nature unless they are found to “essentially

refle’. the [public] entity's own interest in its efficient

procurement of needed goods and services, as measured by

comparison with the typical behavior of private parties in

similar circumstances" and to "have a narrow scope ... [to]

defeat an inference that its primary goal was to encourage a

general policy rather than address a specific proprietary

problem." Cardinal Towing, supra, 180 F.3d at 693, quoted

in each of the other circuit decisions cited above.

Had the Seventh Circuit applied this test to the

challenged Illinois statute, as it should have done, then it

would have been compelled to find preemption. Plainly, the

IRFPDA's labor provisions do not reflect any State

proprietary interest in its own efficient procurement of

needed goods and services. Nor is the State's action

comparable to typical behavior of private parties in similar

circumstances; indeed private parties who are not "employers

in the. construction industry" are prohibited from imposing

labor agreements on others by virtue of the "hot cargo"

prohibitions of Section 8(e) of the NLRA. Finally, far from

having a "narrow scope," the challenged provisions of the

IRFPDA place no restrictions whatsoever on the scope of the

mandated labor agreements. Certainly, uniike Boston

Harbor, the Illinois statute is not limited in its impact to a

single construction project but instead applies across the

board to all renewable fuels projects subsidized by the state.

The Court of Appeals Decision also conflicts with

the recent holding of the Seventh Circuit itself in

Metropolitan Milwaukee Ass'n of Commerce v. Milwaukee

County, 431 F. 3d 277 (7" Cir. 2005). In Metropolitan

Milwaukee, the Court of Appeals struck down a county

ordinance imposing labor neutrality requirements on certain

county contractors. The court there interpreted Boston

Harbor to mean that "if a private purchaser of construction

services required his contractors to negotiate pre-hire

agreements, there would be no violation of the National

Labor Relations Act (the Act authorizes such agreements, 29

U.S.C. § 158(f) *** We take from Boston Harbor the rule

10

that public entities can impose pre-hire agreements on their

contractors, just as private entities can." Jd. at 282.

In the present case, however, the Court of Appeals

conceded that Illinois is not contracting with the grantee

owners of the fuel piants. (App. at 2a). Moreover, because

the grantee owners are not employers in the construction

industry, they are not covered by Section 8(f) and are not

allowed by the NLRA to enter into the type of labor

agreements being mandated in Illinois. See Columbus Bldg.

& Const. Trades Council (Kroger Co.), 149 NLRB 1224,

1225-6 (1964), and subsequent cases. The Court of Appeals

opinion gave no notice to these important facts.

Also in Metropolitan Milwaukee, the appeals court

closely examined the likely "spillover effects" of the

challenged ordinance, finding that the law there at issue was

not sufficiently narrow to avoid affecting labor relations of

private contractors beyond their government contracts. 431

F. 3d at 279. The court in the present case mischaracterized

and therefore improperly distinguished the Milwaukee

ordinance as "prescrib[ing] how employers must handle

labor relations in all aspects of their business." (App. 4a). In

reality, the present Illinois statute, which contains no limits

on the scope of the mandated project labor agreements and

affects not just one project but every subsidized renewable

fuels project in the state, has every bit as much potential for

"spillover effects" as the ordinance struck down in

Metropolitan Milwaukee.

The inconsistency between Metropolitan Milwaukee

and the presently challenged decision is a direct result of the

Seventh Circuit's failure to make the findings required by the

Cardinal Towing test. A state law that forces all recipients of

state funds for renewable fuels development projects to enter

into labor agreements simply cannot be said to have a

"narrow scope” and can only be understood as encouraging a

11

general labor policy rather than addressing any specific

proprietary problem of the state.

Finally, the Court of Appeals opinion conflicts with

the Seventh Circuit's previous interpretation of Boston

Harbor in Colfax Corp. v. Illinois Tollway Authority, 79 F.

3d 631 (7" Cir. 1996). In Colfax, the appeals court upheld a

single-project labor agreement requirement, while expressly

limiting its holding as follows: "Illinois has not enacted a

statute. The Authority has not passed a general rule. The

Authority was contracting for services on a specific project.

*** So long as that is true and the frontier is pushed no

farther from Boston Harbor than it is here, we will not [find

preemption]." Colfax, supra, 79 F. 3d at 634-5. In the present

case, Illinois has now enacted a statute that is extremely

broad and general in its scope, and the state is not

contracting for services. The present Court of Appeals

opinion has "pushed the frontier" so far from Boston Harbor

as to create a direct conflict which must be resolved by this

Court.

Il. The Court of Appeals Has Invented A New

And Erroneous Test For Determining When

Use of State Spending Power Constitutes

Regulation Under The NLRA, In Direct Conflict

With Established Precedent.

In finding that Illinois' new labor mandates are not

preempted by the NLRA, the Court of Appeals improperly

relied on Supreme Court cases having nothing to do with

federal labor preemption of state law. Instead, the cases cited

by the Court of Appeals address exclusively the federal

government's exercise of its own spending powers. App. 3a-

Sa, citing Rust v. Sullivan, 500 U.S. 173 (1991); South

Dakota v. Dole, 483 U.S. 203 (1987); and National

Endowment of the Arts v. Finley, 524 U.S. 569 (1998). As

12

noted above, neither the district court nor any of the parties

to this appeal relied on or briefed the Court of Appeals on

any of these cases, because their holdings simply. do not

apply to labor law preemption issues.’ Constitutional limits

on federal spending “is an entirely different question from

what States may do with the [National Labor Relations] Act

in place.” Wisconsin Dept. of Ind, Labor and Human

Relations v. Gould, supra, 475 U.S. at 290.

Even if Rust, Dole, and Finley somehow were

deemed to have any application to the present appeal,

however, they do not stand for the propositions ascribed to

them by the Court of Appeals opinion. Rather, the Seventh

Circuit misapplied the cases and misstated their holdings. In

each of these cases, this Court merely recognized that the

federal government may choose to fund one program to the

~ exclusion of others. Therefore, it may impose conditions on

grant recipients which prohibit them from spending grant

money on unauthorized purposes. Finley, 524 U.S. 569

(1998); Rust, 500 U.S. 173 (1991). —_ But, as explained in

Rust:

In contrast, our ‘unconstitutional conditions’

cases involve situations in which the

Government has placed a condition on the

recipient of the subsidy rather than on a

* Rust v. Sullivan, 500 U.S. 173 (1991) held that the federal government

does not violate the First Amendment when it restricts clinics from using

federal grant money to provide post-pregnancy abortion counseling.

National Endowment or the Arts v. Finley, 524 U.S. 569 (1998), likewise

found the federal government did not violate the First Amendment when

it imposed decency standards in the criteria for an NEA grant. South

Dakota v. Dole, 483 U.S. 203 (1987) held that the Constitution does not

restrict the federal government from conditioning a State’s receipt of -

highway funds on adoption of the drinking age of 21.

13

particular program or service, thus effectively

prohibiting the recipient from engaging in the

protected conduct outside the scope of the

federally funded program.

Id. at 197. Based upon this holding, Rust and its

progeny offer no support for a state law which makes

employer adoption of a union agreement a condition

of the receipt of state grants or funds.

The subsidy condition imposed by the Illinois statute

should have been recognized by the Court of Appeals as

exactly the type of subsidy condition which even the Rust

analysis prohibits. The IRFPDA plainly conditioned receipt

of the state's funding grants upon the owners relinquishing

their rights, as guaranteed by the NLRA, to decline to

impose labor agreements on their own companies and/or on

unwilling employees or contractors.

Similarly, the Court of Appeals opinion erroneously

cited South Dakota v. Dole for the assertion that state

imposition of conditions on subsidies are not a form of

forbidden regulation. (App. at 4a). That is not the holding of

Dole. The Dole decision actually referenced multiple

restrictions on even the federal government’s exercise of its

spending power, ignored by the Court of Appeals opinion.

The Illinois labor mandate fails every one of the Dole tests.

The labor conditions were plainly not pursued for "the

general welfare" and were not "reasonably related to the

* The Dole Court identified four restrictions on federal spending powers,

none of which are addressed by the Seventh Circuit Opinion: (1) the

spending conditions must be in pursuit of “the general welfare,” as

opposed to special interests; (2) the spending conditions must be

unambiguous; (3) the spending conditions must be related to the federal

interest in particular national projects or programs; and (4) the conditions

must not conflict with constitutional provisions. 483 U.S. at 208.

14

purpose of the expenditure" (483 U.S. at 208), given that the

Court of Appeals itself found it "likely" that the challenged

provisions of the law were passed so that state officials could

"assist organized labor." (App. at 5a). The statute is also

fraught with ambiguity as to the scope, coverage and parties

to any project labor agreements. Finally, the statute conflicts

directly with a constitutional provision, i.e., the Supremacy

Clause, another violation of the Dole standard. See 483 U.S.

at 208.

’ The new standard created by the Seventh Circuit in

this case, if allowed to stand, would render irrelevant this

Court's holding in Boston Harbor. Whereas Boston Harbor

created a narrow exemption from labor law preemption for

public entities engaged in market participation on individual

projects, the Seventh Circuit opinion here would give license

to the states to pass laws setting labor policy for private

employers on multiple projects without any pretense of state

proprietary interest. Clearly, [Illinois is no longer

"exemplifying" market forces in renewable fuels

development (Boston Harbor, 507 U.S. at 227); rather, the

state is regulating labor policy. The Court of Appeals’

improper reliance on the inapposite authority of Rust, Dole,

and Finley, in conflict with the settled application of Boston

Harbor and Gould in other circuits, fatally undermines the

decision below and urgently calls for review by this Court.

15

CONCLUSION

For each of the reasons set forth above, the Petition

for Writ of Certiorari should be granted on an issue of

exceptional importance, in order to resolve direct conflicts

between the Court of Appeals Opinion and decisions of other

courts and of this Court.

Respectfully submitted,

/s/

Maurice Baskin

Counsel of Record

Venable LLP ©

575 7" St., N.W.

Washington, D.C. 20004

(202) 344-4000

Counsel for Petitioners

APPENDIX

APPENDIX

Northern Illinois Chapter of Associated Builders and

Contractors, Inc. v. Lavin, 431 F. 3d 1004 (7" Cir.

Northern Illinois Chapter of Associated Builders and

Contractors, Inc. v. Lavin, denial of rehearing en banc

(unreported) (7" Cir. Feb. 6, 2006)..........00ceeseeeeeeeee Ta

Northern Illinois Chapter of Associated Builders and

Contractors, Inc. v. Lavin, Case No. 04-C-50357 (N.D.

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Illinois Renewable Fuels Development Program Act,

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National Labor Relations Act (excerpts), 29 U.S.C.

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In the

United States Court of Appeals

For the Seventh Circuit

No. 05-2174

NORTHERN ILLINOIS CHAPTER OF ASSOCIATED

BUILDERS AND CONTRACTORS, INC., and

LOBERG EXCAVATING, INC.,

Plaintiffs-Appellants,

v.

JACK LAVIN, Director of the Illinois Department

of Commerce and Economic Opportunity,

Defendant-Appellee.

Appeal from the United States District Court for the

Northern District of Illinvis, Western Division.

No. 04 C 50357—Philip G. Reinhard, Judge.

ARGUED OCTOBER 28, 2005-

DECIDED DECEMBER 9, 2005

Before EASTERBROOK, MANION, and ROVNER,

Circuit Judges.

EASTERBROOK, Circuit Judge. Illinois subsidizes the

construction or renovation of renewable-fuel plants—

principally facilities that make ethanol. One condition of a

grant is that the recipient “enter into a project labor

agreement”. 20 ILCS 689/15(a)(3). The agreement must

establish wages and benefits and must include a no-strike

clause. 20 ILCS 689/25(a). As a practical matter such

agreements can be achieved only by employers that

recognize and bargain with labor unions. An association of

non-union contractors (and one of its members) filed this suit

under 42 U.S.C. §1983, seeking a declaratory judgment that

the requirement of a project labor agreement is preempted by

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federal law. See Golden State Transit Corp. v. Los Angeles,

493 U.S. 103 (1989). Relying on Building & Construction

Trades Council v. Associates Builders & Contractors of

Massachusetts, 507 U.S. 218 (1993) (Boston Harbor), the

district court entered judgment for Illinois.

Boston required its contractors to negotiate project labor

agreements under which all workers would be referred by

union hiring halls and would be obliged to pay dues under

union-security clauses; in exchange the unions would agree

to forego strikes. Federal law permits such _prehire

agreements in the construction industry. See 29 U.S.C.

§158(e), (f). See also Jim McNeff, Inc. v. Todd, 461 U.S. 260

(1983); Woelke & Romero Framing, Inc. v. NLRB, 456 U.S.

645 (1982). Boston Harbor holds that a public owner has the

Same entitlement as a private owner to decide how it will

manage a construction project. Federal law preempts all state

regulation of those aspects of labor relations that are

arguably protected, arguably prohibited, or left to the domain

of market forces. See San Diego Building Trades Council v.

Garmon, 359 U.S. 236 (1959); Machinists v. Wisconsin

Employment Relations Comm'n, 427 U.S. 132 (1976). A city

or state acting as proprietor, however, is a market participant

rather than a market regulator. Boston Harbor, 507 U.S. at

230-31.

The district court concluded that Illinois is acting as a

proprietor in its renewable-fuels program. The problem with

this view is that the state is not the proprietor of anything. It

does not own any renewable-fuels project, either before or

after granting a subsidy. The project’s owner, not the state, is

its proprietor. Boston hired the general contractors for the

project; Illinois does not hire contractors. Nor does it invest

in the projects through bonds. Contrast Hotel Employees v.

Sage Hospitality Resources, LLC, 390 F.3d 206 (3d Cir.

2004). All it has done is set a condition on grants to private

proprietors.

To say that Illinois is not acting as a proprietor is not,

however, to resolve the main question. Boston Harbor holds

that if a state acts as a proprietor, then it may insist on the

sort of prehire agreements that federal labor law permits

private owners to adopt. It does not hold that only ifa state

acts in this capacity is its decision compatible with federal

law. The Court stated the rule this way: “[T]he NLRA

prevents a State from regulating within a protected zone,

whether it be a zone protected and preserved for market

freedom, see Machinists, or for NLRB jurisdiction, see

Garmon. A State does not regulate, however, simply by

acting within one of those protected areas. .. . We have held

consistently that the NLRA was intended to supplant state

labor regulation, not all legitimate state activity that affects

labor.” Boston Harbor, 507 U.S. at 226-27 (emphasis in

original). The need to distinguish regulation from other

governmental activity is the Court’s theme in Boston

Harbor.

So is the conditional offer of a subsidy for renewable-fuels

plants a form of regulation? It is hard to see how it could be:

Illinois does not seek to affect labor relations generally. Both

labor and management are free to make independent

decisions with respect to all activities other than those for

which the state pays. The question “is a condition on the

receipt of a grant a form of regulation?” comes up

frequently, and the answer almost always is negative.

Consider, for example, the many conditions on grants to

states. The national government lacks the authority to

regulate how states behave; it cannot direct them to pass or

enforce laws. See Printz v. United States, 521 U.S. 898

(1997). But it can set conditions on grants, and a state’s

decision to take the money obliges it to respect the

conditions. Thus South Dakota v. Dole, 483 U.S. 203 (1987),

held that states that accept federal highway construction

money must set and enforce speed limits specified by

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Congress. That condition on the subsidy was not, the Court

held, a form of forbidden regulation.

Similarly Congress lacks the authority to regulate

what physicians say about abortion but may set conditions on

federal grants and require those who accept the money to

follow federal rules for family-planning advice. Rust v.

Sullivan, 500 U.S. 173 (1991). The condition differs from

regulation because any physician or clinic may decline the

offer. The list of similar decisions is lengthy. See, e.g.,

National Endowment for the Arts v. Finley, 524 U.S. 569

(1998); Buckley v. Valeo, 424 U.S. 1, 57 & n.65 (1976).

Conditions on spending may become regulation if they

affect conduct other than the financed project. Wisconsin

Department of Industry v. Gould Inc., 475 U.S. 282 (1986),

illustrates this limit. Wisconsin refused to purchase goods or

services from firms that had violated the National Labor

Relations Act three or more times during the preceding five

years. The Supreme Court understood this as an effort to

control how employers behave when zot dealing with the

state, and thus as a form of regulation. “Because Wisconsin’s

debarment law functions unambiguously as a supplemental

sanction for violations of the NLRA, it conflicts with the

Board’s comprehensive regulation of industrial relations in

precisely the same way as would a state statute preventing

repeat labor law violators from doing any business with

private parties within the State.” Jd. at 288. See also the

discussion of Gould in Boston Harbor, 507 U.S. at 228-30.

Our decision in Metropolitan Milwaukee Association of

Commerce v. Milwaukee County, 2005 U.S. App. LEXIS

26467 (7th Cir. Dec. 5, 2005) likewise concludes that a

purchasing rule prescribing how employers must handle

labor relations in all aspects of their business is preempted

by federal labor law. Illinois is concerned exclusively with

how subsidized renewable-fuels projects contract for labor;

its condition is project-specific.

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Boston Harbor is just one illustration of the proposition

that states may act in commerce without regulating

commerce. The situation in this litigation is another

illustration. See also Colfax Corp. v. Illinois State Toll

Highway Authority, 79 F.3d 631 (7th Cir. 1996). Any owner

or contractor that does not want to deal with organized labor

may indulge that preference. The lure of a subsidy may lead

firms at the margin to reach labor agreements that they

would not otherwise have signed, but if an incentive to

change one’s conduct is a form of “regulation” then South

Dakota v. Dole, Rust v. Sullivan, and many other cases were

wrongly decided. Federal labor laws give both workers and

employers a right to avoid unions, but states may pay them

to surrender that right even though states can’t confiscate it

by sumptuary legislation. See also Building & Construction

Trades Department v. Allbaugh, 295 F.3d 28 (D.C. Cir.

2002) (executive order specifying conditions under which

project-labor agreements are appropriate for federally

subsidized construction projects is compatible with federal

labor law).

If (as seems likely) Illincis has taken the approach in this

law because state officials want to assist organized labor as

well as the farmers who supply the grain to be made into

ethanol and the owners of ethanol plants, that is neither a

surprise nor a reason for invalidity. Most legislation is the

product of coalitions among interest groups. Boston wanted

to clean up its harbor, but there can be little doubt that it also

wanted to shower benefits on workers who were the

incumbents’ political supporters. Many a public project is

bigger or more expensive than it need be, in order to enlist

the support of multiple interest groups. Federal preemption

doctrine evaluates what legislation does, not why legislators

voted for it or what political coalition led to its enactment.

This statute does not affect people who spurn the state’s

largesse. Because Illinois has limited its condition to the

project financed by the subsidy, it has not engaged in

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“regulation” under the approach of Boston Harbor or Gould,

and its conditions are not preempted by federal labor law.

AFFIRMED

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

7a

In the

United States Court of Appeals

For the Seventh Circuit

February 6. 2006

Before

Hon. FRANK H. EASTERBROOK, Circuit

Judge .

Hon. DANIEL A. MANION, Circuit Judge

Hon. ILANA DIAMOND ROVNER, Circuit

Judge

NORTHERN ILLINOIS CHAPTER OF * Appeal from the

ASSOCIATED BUILDERS AND United

CONTRACTORS, INC., and LOBERG *_ States District

Court EXCAVATING, INC., for the Northern

Plaintiffs-Appellants * District of Illinois,

Western Division

No. 05-2174 Vv. °

JACK LAVIN, Director of the * No. 04 C 50357

ILLINOIS DEPARTMENT OF Philip G. Reinhard,

COMMERCE AND ECONOMIC * Judge.

OPPORTUNITY,

Defendant-A ppellee. .

Order

Plaintiffs-appellants filed a petition for rehearing and

rehearing en banc on December 23, 2005. No judge in

regular active service has requested a vote on the petition for

rehearing en banc, and all of the judges on the panel have

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voted to deny rehearing. The petition for rehearing is

therefore DENIED.

9a

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

NORTHERN IL CHAPTER BUILDERS _ )

)

Plaintiff, )

) 04 C 50357

V. )

)

JACK LAVIN, )

)

Defendant, )

)

DOCKET ENTRY TEXT:

For the reasons stated below, defendant's motion to dismiss

is granted with prejudice. Plaintiffs’ motion for summary

judgment is denied. This case is hereby dismissed in its

~ entirety.

STATEMENT

Plaintiffs, Northern Illinois Chapter of Associated

Builders and Contractors, Inc. ("Northern") and Loberg

Excavating, Inc. ("Loberg") bring this action against Jack

Lavin, in his official capacity as Director of the Illinois

Department of Commerce & Economic Opportunity, seeking

a declaration that Sections 15 and 25 of the [Illinois

Renewable Fuels Development Program Act, 20 ILCS

689/15, 689/25 ("IRFDPA") are preempted by the National

Labor Relations Act, 29 U.S.C. § 151 et seq. ("NLRA") and

are therefore, unconstitutional pursuant to the Supremacy

Clause of the U.S. Constitution. Defendant moves to dismiss

for lack of Article III standing, lack of prudential standing,

and because the challenged IRFDPA sections are not

preempted as a matter of law. Plaintiffs move for summary

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judgment declaring Sections 15 and 25 of the IRFDPA are

preempted by the NLRA.

The IRFDPA establishes grants to recipients who are

constructing, modifying, altering or retrofitting renewable

fuel plants in Illinois. One of the requirements for the grant

recipient is that the recipient must enter into a "project labor

agreement." (PLA") 20 ILCS 689/15(a) (3). A project labor

agreement must include provisions establishing 1) minimum

hourly wages for each class of labor organization employee;

2) benefits and other compensation for each class of labor

organization employee; and 3) that no strike or dispute will

be engaged in by the labor organization employees. 20 ILCS

689/25 (a).

Defendant asserts plaintiffs lack standing to bring this

action because they have not established that Loberg or any

member of Northern ever bid on a project that was subject to

the PLA requirements of the IRFDPA. Defendant says

plaintiffs' claim they were deterred from bidding because of

the IRFDPA requirements is not enough of an "injury-in-

fact" to confer standing. Plaintiffs have alleged that they

were advised Illinois River Energy, LLC, which is building

an ethanol plant, has applied for a grant under IRFDPA.

They claim the requirement that subcontractors must enter

into a PLA is a violation of their federally granted right to

operate without entering agreements with a union and that

the existence of this requirement has deterred them from

bidding on the project. Plaintiffs' allegations are sufficient to

confer standing on them under Northeastern Florida Chapter

of the Associated General Contractors of America v. City of

Jacksonville, 508 U.S. 656, 666 (1973). As non-union

contractors, plaintiffs have alleged an injury that they must

enter a union contract in order to work on a project that has

received an IRFDPA grant. When the government erects a

barrier that makes it more difficult for a member of one

group to obtain a benefit than it is for members of another

lla

group, a member of the disadvantaged group has standing to

challenge the barrier.Id. Plaintiffs' allegations are sufficient

to allege constitutional standing for purposes of defeating a

motion to dismiss.

Defendant also argues plaintiffs lack prudential

standing to challenge the IRFDPA. To have prudential

standing "a plaintiff's grievance must arguably fall within the

zone of interests protected or regulated by the statutory

provision or constitutional guarantee invoked in the suit."

Bennett_v. Spear, 520 U.S. 154, 162 (1997). Defendant

contends The "NLRA was instituted as a pro-employee law"

and that plaintiffs, as employers, are not within the zone of

interest to be protected by the NLRA, Def. Reply Brief, p.2.

However, the NLRA regulates collective bargaining between

employers and employees. Plaintiffs, as employers, are

within the zones of interest regulated by the NLRA and have

prudential standing to challenge the IRFDPA as being

preempted by the NLRA.

Defendant argues that plaintiffs' claims must be

dismissed because the NLRA does not preempt the IRFDPA.

The NLRA does not expressly preempt state law but courts

have found preemption in two situations: 1) state regulation

of activities protected by section 7 of the NLRA, made an

unfair labor practice by section 8 of the NLRA or activities

arguably protected or prohibited by the NLRA ("Garmon

preemption"); and 2) state regulation of areas Congress

intended to leave to the free play of the market ("Machinists

preemption"). Bldg. & Constr. Trades Council of Metro.

Dist. v. Associated Builders & Contractors of Mass./R.L.,

Inc., 507 U.S. 218, 224 (1993). When a state takes action

affecting labor relations but does so for a proprietary rather

than regulator purpose its action is not preempted by the

NLRA. Id. At 232-33. "[T]he [g]overnment unquestionably

is the proprietor of its own funds, and when it acts to ensure

the most effective use of those funds, it is acting in a

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proprietary capacity." Bldg. & Constr. Trades Dept. AFL-

CIO v. Allbaugh, 295 F.3d 28, 35 (D.C. Cir. 2002), cert.

denied, 537 U.S. 1171 (2003). Whether the government "is a

lender to or benefactor of, rather than the owner of, a project

is not inconsistent with its acting just as would a private

entity; a private lender or benefactor also would be

concerned that its financial backing be used efficiently." Id.

Where a condition only applies to projects owned by or

funded by the state it goes to the state's proprietary interest

and, therefore, is not subject to NLRA preemption. See Id.

at 36; see also, Hotel Employees & Restaurant Employees

Union, Local 57 v. Sage Hospitality Resources, LLC, 390

F.3d 206 (3 Cir. 2004); Metro, Milwaukee Ass'n _of

Commerce v. Milwaukee County, NO. 01-C-0149, 2005 WL

433139 (E.D. Wisc. Feb. 11, 2005). Here, the statutory

requirements only apply to projects funded bythe IRFDPA.

The state is acting for a proprietary rather than regulatory

purpose. The challenged sections of the IRFDPA are not

preempted by the NLRA. ssa

For the foregoing reasons, defendant's motion to

dismiss is granted with prejudice. Plaintiffs’ motion for

summary judgment is denied.

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ILLINOIS RENEWABLE FUELS DEVELOPMENT

PROGRAM ACT, § 20 ILCS 689/1-30, P.A. 93-15.

Sec. 1. Short title. This Act may be cited as the Illinois

Renewable Fuels Development Program Act.

Sec. 5. Findings and State policy. The General Assembly

recognizes that agriculture is a vital sector of the Illinois

economy and that an important growth industry for the

Illinois agricultural sector is renewable fuels production.

Renewable fuels produced from Illinois agricultural products

hold great potential for growing the State's economy,

reducing our dependence on: foreign oil supplies, and

improving the environment by reducing harmful emissions

from vehicles. Illinois is the nation's leading producer of

ethanol, a clean, renewable fuel with significant

environmental benefits. The General Assembly finds that

reliable supplies of renewable fuels will be integral to the

long term energy security of the United States. The General

Assembly declares that it is the public policy of the State of

Illinois to promote and encourage the production and use of

renewable fuels as a means not only to improve air quality in

the State and the nation, but also to grow the agricultural

sector of the Illinois economy. To achieve these public

policy objectives, the General Assembly hereby authorizes

the creation and implementation of the Illinois Renewable

Fuels Development Program within the Department.

Sec. 10. Definitions. As used in this Act:

"Biodiesel" means a renewable diesel fuel derived from

biomass that is intended for use in diesel engines.

"Biodiesel blend" means a blend of biodiesel with

petroleum-based diesel fuel in which the resultant product

contains no less than 1% and no more than 99% biodiesel.

l4a

"Biomass" means non-fossil organic materiais that have an

intrinsic chemical energy content. "Biomass" includes, but is

not limited to, soybean oil, other vegetable oils, and ethanol.

"Department" means the Department of Commerce and

Community Affairs.

"Diesel fuel" means any product intended for use or offered

for sale as a fuel for engines in which the fuel is injected into

the combustion chamber and ignited by pressure without

electric spark.

"Director" means the Director of Commerce and Community

Affairs.

"Ethanol" means a product produced from agricultural

commodities or by-products used as a fuel or to be blended

with other fuels for use in motor vehicles.

"Fuel" means fuel as defined in Section 1.19 of the Motor

Fuel Tax Law [35 ILCS 505/1.19].

"Gasohol" means motor fuel that is no more than 90%

gasoline and at least 10% denatured ethanol that contains no

more than 1.25% water by weight.

"Gasoline" means all products commonly or commercially

known or sold as gasoline (including casing head and

absorption or natural gasoline).

"Illinois agricultural product" means any agricultural

commodity grown in Illinois that is used by a production

facility to produce renewable fuel in Illinois, including, but

not limited to, corn, barley, and soy beans.

1Sa

"Labor Organization" means any organization defined as a

"labor organization" under Section 2 of the National Labor

Relations Act (29 U.S.C. 152).

"Majority blended ethanol fuel" means motor fuel that

contains no less than 70% and no more than 90% denatured

ethanol and no less than 10% and no more than 30%

gasoline.

"Motor vehicles" means motor vehicles as defined in the

Illinois Vehicle Code [625 ILCS 5/1-100 et seq.}] and

watercraft propelled by an internal combustion engine.

"Owner" means any individual, sole proprietorship, limited

partnership, co-partnership, joint venture, corporation,

cooperative, or other legal entity, including its agents, that

operates or will operate a plant located within the State of

Illinois.

"Plant" means a production facility that produces a

renewable fuel. “Plant” includes land, any building or other

improvement on or to land, and any personal properties

deemed necessary or suitable for use, whether or not now in

existence, in the processing of fuel from agricultural

commodities or by-products.

"Renewable fuel" means ethanol, gasohol, majority blended

ethanol fuel, biodiesel blend fuel, and biodiesel.

Sec. 15. Illinois Renewable Fuels Development Program.

(a) The Department must develop and administer the Illinois

Renewable Fuels Development Program to assist in the

construction, modification, alteration, or retrofitting of

renewable fuel plants in Illinois. The recipient of a grant

under this Section must:

l6a

(1) be constructing, modifying, altering, or retrofitting a

plant in the State of Illinois;

(2) be constructing, modifying, altering, or retrofitting a

plant that has annual production capacity of no less than

30,000,000 gallons of renewable fuel per year; and

(3) enter into a project labor agreement as prescribed by

Section 25 of this Act [20 ILCS 689/25].

(b) Grant applications must be made on forms provided by

and in accordance with procedures established by the

Department.

(c) The Department must give preference to applicants that

use Illinois agricultural products in the production of

renewable fuel at the plant for which the grant is being

requested.

Sec. 20. Grants. Subject to appropriation from the Build

Illinois Bond Fund, the Director is authorized to award

grants to eligible applicants. The annual aggregate amount of

grants awarded shall not exceed $ 15,000,000.

Sec. 25. Project labor agreements. (a) The project labor

agreement must include the following:

(1) provisions establishing the minimum hourly wage for

each class of labor organization employee;

(2) provisions establishing the benefits and _ other

compensation for each class of labor organization employee;

and

(3) provisions establishing that no strike or disputes will be

engaged in by the labor organization employees.

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The owner of the plant and the labor organizations shall have '

the authority to include other terms and conditions as they

deem necessary.

(b) The project labor agreement shall be filed with the

Director in accordance with procedures established by the

Department. At a minimum, the project labor agreement

must provide the names, addresses, and occupations of the

owner of the plant and the individuals representing the labor

organization employees participating in the project labor

agreement. The agreement must also specify the terms and

conditions required in subsection (a).

Sec. 30. Administration of the Act; rules. The Department

shall administer this Act and shall adopt any rules necessary

for that purpose.

Sec. 99. Effective Date. This Act takes effect upon

becoming law.

NOTES:

EFFECTIVE DATE.

P.A. 93-15 was approved June 11, 2003.

18a

NATIONAL LABOR RELATIONS ACT

UNFAIR LABOR PRACTICES

Sec. 8. [§ 158.]

* * *

(d) [Obligation to bargain collectively] For the purposes of

this section, to bargain collectively is the performance of the

mutual obligation of the employer and the representative of

the employees to meet at reasonable times and confer in

good faith with respect to wages, hours, and other terms and

conditions of employment, or the negotiation of an

agreement or any question arising thereunder, and the

execution of a written contract incorporating any agreement

reached if requested by either party, but such obligation does

not compel either party to agree to a proposal or require the

making of a concession....

(e) [Enforceability of contract or agreement to boycott

any other employer; exception] It shall be an unfair labor

practice for any labor organization and any employer to enter

into any contract or agreement, express or implied, whereby

such employer ceases or refrains or agrees to cease or refrain

from handling, using, selling, transporting or otherwise

dealing in any of the products of any other employer, or

cease doing business with any other person, and any contract

or agreement entered into heretofore or hereafter containing

such an agreement shall be to such extent unenforceable and

void: Provided, That nothing in this subsection (e) [this

subsection] shall apply to an agreement between a labor

organization and an employer in the construction industry

relating to the contracting or subcontracting of work to be

done at the site of the construction, alteration, painting, or

repair of a building, structure, or other work....

19a

(f) [Agreements covering employees in the building and

construction industry] It shall not be an unfair labor

practice under subsections (a) and (b) of this section for an

employer engaged primarily in the building and construction

industry to make an agreement covering employees engaged

(or who, upon their employment, will be engaged) in the

building and construction industry with a labor organization

of which building and construction employees are members

(not established, maintained, or assisted by any action |

defined in section 8(a) of this Act [subsection (a) of this

section] as an unfair labor practice) because (1) the majority

status of such labor organization has not been established

under the provisions of section 9 of this Act [section 159 of

this title] prior to the making of such agreement, or (2) such

agreement requires as a condition of employment,

membership in such labor organization after the seventh day

following the beginning of such employment or the effective

date of the agree-ment, whichever is later, or (3) such

agreement requires the employer to notify such labor

organization of opportunities for employment with such

employer, or gives such labor organization an opportunity to

refer qualified applicants for such employment, or (4) such

agreement specifies minimum training or experience

qualifications for employment or provides for priority in

opportunities for employment based upon length of service

with such employer, in the industry or in the particular

geographical area: Provided, That nothing in this subsection

shail set aside the final proviso to section 8(a)(3) of this Act

[subsection (a)(3) of this section]: Provided further, That any

agreement which would be invalid, but for clause (1) of this

subsection, shall not be a bar to a petition filed pursuant to

section 9(c) or 9(e) [section 159(c) or 159(e) of this title].