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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2006

## Text

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

Lyte. SO: ARS VE Moe. 2 ska aticncsccav donate 14
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
BP DBS. GE TR) vicsnienivissnectacinisvmrsiconnapannabnaats 2,4, 9
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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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

10a

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.

17a

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].

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386008_0747%3A1. Public record. Not legal advice.