Amicus Curiae Brief — Brown v. Pro Football, Inc.

KOR ARGUMEND ia FIEED

((p) { FER 16 1996

No. 95-388 oe

IN THE

Supreme Court Of Che United States

October Term, 1995

ANTONY BROWN, et al.,

Petitioners,

PRO FOOTBALL, INC. d/b/a

WASHINGTON REDSKINS, et al.,

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the District of Columbia Circuit

BRIEF OF AMICUS CURIAE THE NATIONAL

ELECTRICAL CONTRACTORS ASSOCIATION, INC.

IN SUPPORT OF RESPONDENTS

Gary L. Lieber

Counsel of Record

Katherine Brewer

SCHMELTZER, APTAKER &

SHEPARD, P.C,

2600 Virginia Avenue, N.W.

Suite 1000

Washington, D.C. 20037-1905

(202) 333-8800

Attorneys for Amicus Curiae

The National Electrical

Contractors Association, Inc.

February 16, 1996

Balmar Legal Publishing Department Services, Washington, D.C. (202) 682-9800

BEST AVAILABLE COPY!

Il.

i

TABLE OF CONTENTS

THIS COURT HAS NEVER EXPOSED

PARTICIPANTS IN COLLECTIVE BAR-

GAINING TO ANTITRUST LIABILITY

FOR COLLECTIVE BARGAINING CON-

DUCT DIRECTED AT THE OTHER

PARTY TO THE COLLECTIVE BAR-

GAINING RELATIONSHIP WHERE

THERE IS NO CONTENTION THAT THE

CONDUCT HAS AN ANTICOMPETI-

TIVE EFFECT ON THIRD PARTIES .........

FEDERAL LABOR LAW REGARDING

THE OPERATION OF MULTIEM-

PLOYER BARGAINING WOULD BE

SEVERELY UNDERMINED BY APPLI-

CATION OF THE ANTITRUST LAWS TO

POST-CONTRACT OR POST-IMPASSE

CONDUCT IN EVERYDAY COLLEC-

TIVE BARGAINING BETWEEN THE

TWO PARTIES TO THE COLLECTIVE

BARGAINING RELATIONSHIP ................

PAGES

A. Application of the Antitrust Laws to

Collective Bargaining Conduct Would

Strike at the Heart of Federal Labor

Law and Destroy the Balance of Rights

and Privileges Created By the NLRB to

Effectuate Federal Labor Policy............. 9

B. Federal Labor Policy to Promote

Multiemployer Bargaining Would

Certainly Be Undermined if Either the

Petitioners’ or the Government’s

TROGHY Be ABO RIIG ci ccescettincsintittnisiensienees 14

C. The Threat of Antitrust Liability for

Collective Bargaining Conduct Will

Drive Electrical Contractors Away

from Multiemployer Bargaining............ 16

CUNO TIEN sncicssncsnssensahessidiiitieesesisddenbinapbiniialibnnniennens 19

ili

TABLE OF AUTHORITIES

CASES PAGES

AMF Bowling Co., 314 N.L.R.B. 969 (1994), enforce-

ment denied, 63 F.3d 1293 (1995).......c.csccsesecssssesseseseees 13

Apex Hosiery v. Leader, 310 U.S. 469 (1940)........ccsc000000. 6

Brown v. Pro Football, Inc., 50 F.3d 1041, cert. granted,

ee IE UIE Disietsssasscioueanacdcobsnnibenaneiveoncaseneocses 6, 7, 10

Charles D. Bonanno Linen Service v. NLRB, 454 U.S.

8 | NESSES ae een 8, 10, 14, 18

Colorado-Ute Electric Ass’n, 295 NLRB 607 (1989)....... 10

Connell Construction Co. v. Plumbers and Steamfitters

Local Union No. 100, 421 U.S. 616 (1975)......:cccs0ss000. 7,8

Control Services, 315 N.L.R.B. 431 (1994) .......ccccceseseeeee. 13

El Cerrito Mill & Lumber Co., 316 N.L.R.B.1005 (1995). 15

Fairhaven Properties, Inc., 314 N.L.R.B. 763 (1994)...... 13

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987)... 11

H.K. Porter Co. v. NLRB, 397 U.S. 99 (1970) ......s0ecceeeeses 9, 16

Hi-Way Billboards, 206 N.L.R.B. 22 (1973),

enforcement denied, 500 F.2d 181 (1974) .........cc0.0000-. 10, 12

Metropolitan Life ins. Co. v. Massachusetts, 471 U.S.

NIT Nabitssthicilitieiliinineulaensibbttbactadichianinoninesbnen 11

NBA v. Williams, 45 F.3d 684 (1995), petition for cert.

SN IN, WN cians nsaiicaictciaesticerssinimeiaibinnnes 8, 10, 19

NLRB v. Katz, 369 U.S. 736 (1962).........cccccccessssssosscesessese 12

NLRB v. Plainville Ready Mix Concrete Co., 44 F.3d

1320 (6th Cir. 1995), cert. denied, 116 S.Ct. 474

Sa Wa iascpitehicLettniscasablchsseinihsilancataamiaticsetossacitiohisnenione 12

NLRB v. Truck Drivers, 353 U.S. 87 (1957) (Buffalo

__ EAA See a ae 14, 18

North American Soccer League v. NLRB, 613 F.2d 1379

(Sth Cir. 1980), reh’g denied, 616 F.2d 568 (1980)....... 9

iv

CASES PAGES

Powell v. NFL, 930 F.2d 1293 (8th Cir. 1989), cert.

Gented, 496 US. 106) (1991) .ceccccevecrsscsecvesveseoeennces 8, 10, 19

Retail Associates, 120 N.L.R.B. 388 (1958) ........csscesseeee 8

Richards v. Neilsen Freight Lines, 810 F.2d 898 (1987).. 8

The Evening News Ass’n, 154 N.L.R.B. 1494 (1965)....... 8

Unbelievable, Inc., 318 N.L.R.B. No. 60 (August 30,

PEP svvccntnsnisannepreaeenininesatinsinipininniaaianghebaea canada 13

United States v. Hutcheson, 312 U.S. 219 (1941) ..........0. 6

STATUTES

National Labor Relations Act, as amended, Section 8(d),

BF ttn BOE te pecertnsins cchdasrinadippnanieabpainaiantbedatinn 9, 10, 16

No. 95-388

IN THE

Supreme Court of the United States

October Term, 1995

ANTONY BROWN, et al.,

Petitioners,

v.

PRO FOOTBALL, INC. d/b/a

WASHINGTON REDSKINS, et al.,

Respondents.

On Writ Of Certiorari To The

United States Court Of Appeals

For The District Of Columbia Circuit

BRIEF OF AMICUS CURIAE THE NATIONAL

ELECTRICAL CONTRACTORS ASSOCIATION, INC.

IN SUPPORT OF RESPONDENTS

This brief in support of respondents is submitted in ac-

cordance with Rule 37 of the Rules of this Court. Pursuant to

Rule 37.3, The National Electrical Contractors Association,

Inc. has obtained and has filed herewith the written consent of

the petitioners and the respondents to the submission of this

brief.

INTEREST OF THE AMICUS CURIAE

Petitioners seek to have the Court rule that the nonstatu-

tory labor exemption to the antitrust laws is no longer

applicable either (a) when the collective bargaining agreement

expires, or (b) when the parties reach impasse in their

2

negotiations for a new agreement. The United States and the

Federal Trade Commission as amici curiae urge the Court to

hold that the non-statutory exemption ceases to apply upon

impasse. If either the position of the petitioners or the

modified position of the United States and the Federal Trade

Commission (hereinafter “the Government”) is adopted,

multiemployer bargaining will cease to exist in its current

State. It may cease to exist entirely.

Petitioners and their supporting amici suggest that many

options will remain available to multiemployer groups even if

they are subjected to antitrust scrutiny at either the time that

the collective bargaining agreement expires or at impasse. In

truth, subjecting the collective bargaining conduct of

multiemployer groups to antitrust scrutiny will most certainly

create too much risk and uncertainty for the vast majority of

employers to participate in collective bargaining on a

multiemployer basis. The reason for this is simple: If

employers can lawfully implement unilaterally terms and

conditions of employment under the National Labor Relations

Act (hereinafter “NLRA”) yet be faced with antitrust claims if

they do the same thing on a group basis, they will opt to

bargain separately.

The National Electrical Contractors Association, Inc.

(hereinafter “NECA”) has a vital stake in the continued health

of multiemployer bargaining. Moreover, because of its status

as the largest organization of unionized electrical contractors

in the United States, NECA is in a unique position to

contribute to the Court’s understanding of the practical harm

that would occur if this petition is granted and the antitrust

laws are applied to traditional collective bargaining.

NECA is a construetion trade association composed of

approximately 4000 electrical contractors served through 119

chapters in the United States chartered by and affiliated with

the National Association. The primary purpose of these

3

chapters is to act as multiemployer bargaining agents for the

negotiation and administration of collective bargaining

agreements on behalf of electrical contractors who authorize

the local chapters to act as their collective bargaining agent

with the appropriate local union of the International Brother-

hood of Electrical Workers, AFL-CIO. The number of

contractors, including both members and nonmembers of

NECA, that authorize NECA chapters to bargain on their

behalf is approximately 15,000. Chapters frequently negotiate

more than one collective bargaining agreement with a local

union or local unions of the IBEW, depending upon the type

of work being performed. In all, collective bargaining

agreements between NECA chapters and IBEW local unions

cover more than 160,000 employees.

Multiemployer bargaining in the electrical construction

industry has been a resounding success. The industry is

largely strike-free. Productivity within the trade is excellent

and increasing. Journeymen electricians are among the

highest paid craftsmen. Much of this stability can be traced to

the fact that labor and management bargain and engage in

contract administration during the term of the labor agreement

on a multiemployer basis. If this petition is granted, the

landscape of collective bargaining in this industry, which

relies nearly exclusively upon multiemployer bargaining, will

be drastically affected.

It is NECA’s intention in this brief to address the peti-

tioners’ contention that their position is consistent with

federal labor policy and does not threaten multiemployer

bargaining. This analysis from the perspective of the

unionized side of the electrical construction industry is not

represented by any of the parties and, therefore, would prove

useful to the Court.

4

SUMMARY OF ARGUMENT

1. There is no place for application of the antitrust laws to

conduct contained within the collective bargaining process.

The nonstatutory labor exemption must apply to all aspects of

the collective bargaining process as long as the parties do not

seek to impose restraints upon third parties.

Consistent with that principle, neither this Court nor the

Courts of Appeal have sought to impose the antitrust laws on

either labor or management for conduct confined to the

collective bargaining relationship. Only when one or both of

the parties to the collective bargaining relationship seek

directly to impose terms and conditions of employment upon

third parties or to control the product market under the guise

of collective bargaining have the federal courts stepped in to

apply the antitrust laws.

2. Multiemployer bargaining operates in virtually all

industries in the United States. In the construction industry,

where employees may work for one employer one week and

another employer another week, and where most employers

are not large businesses, multiemployer bargaining is

dominant. Both the Congress and the Court have indicated

that multiemployer bargaining is not just a lawful means by

which to engage in collective bargaining, but a process of

bargaining that is worthy of protection to further the national

labor policy of promoting peaceful and positive labor

relations.

If traditional collective bargaining is going to thrive, it

can only do so without the imposition of the antitrust laws as

another layer of regulation atop the existing framework

established under the National Labor Relations Act. Allowing

recourse to the antitrust laws to enable one party to a

multiemployer collective bargaining relationship to affect

directly terms and conditions of employment that are the

5

subject of that relationship will destroy the legal framework

carefully constructed under the National Labor Relations Act

to promote good faith collective bargaining.

3. The threat of antitrust exposure to the average small

business contractor for participating in multiemployer

bargaining will cause many employers to abandon it. Even

those who stay may ultimately leave because of the ever-

growing weakness of the multiemployer group caused by the

first wave of contractors opting out of multiemployer

bargaining. Petitioners and the Government are plainly wrong

that the antitrust exposure of post-contract termination

conduct in a multiemployer setting will still leave the

employers and the multiemployer bargaining agent with

sufficient options to preserve multiemployer bargaining.

With all due respect to the proponents of that argument, it

demonstrates a clear lack of understanding or appreciation for

the nature of collective bargaining, the alternative available to

employers, especially outside of professional sports, to

bargain individually, and the simple fact that employers by

the droves will opt out of multiemployer bargaining if the

mere participation in it exposes them to antitrust liability.

6

ARGUMENT

I.

THIS COURT HAS NEVER EXPOSED PARTICI-

PANTS IN COLLECTIVE BARGAINING TO ANTI-

TRUST LIABILITY FOR COLLECTIVE BARGAIN-

ING CONDUCT DIRECTED AT THE OTHER PARTY

TO THE COLLECTIVE BARGAINING RELATION-

SHIP WHERE THERE IS NO CONTENTION THAT

THE CONDUCT HAS AN ANTICOMPETITIVE

EFFECT ON THIRD PARTIES

Petitioners have characterized the decision below as “a

bold and unrestrained expansion of what was once a carefully

limited judge-made exemption from the antitrust laws.”

Petitioners’ Brief (hereinafter “Pt. Br.”) at 14. At the same

time, the Government declares that “the Court of Appeals

extended the exemption far beyond its proper scope.” Brief of

the United States and the Federal Trade Commission

(hereinafter “U.S. Br.”) at 6. To the contrary, as the Court

below recognized, in the more than fifty years since the Court

first enunciated standards for applying the antitrust laws in the

labor relations context,’ mo court has ever ruled that employer

collective bargaining conduct that is both contemplated and

endorsed by federal labor law may constitute an antitrust

violation, unless it is aimed at restricting the ability of a third

party to compete. See Brown v. Pro Football, Inc., 50 F.3d

1041, cert. granted, 116 S.Ct. 593 (1995).

Petitioners argue that the sine qua non for application of

the nonstatutory labor exemption is the union’s consent to the

terms and conditions of employment implemented or

' See Apex Hosiery v. Leader, 310 U.S. 469 (1940), and United States

v. Hutcheson, 312 U.S. 219 (1941).

“

maintained by the multiemployer group. In arguing that the

nonstatutory labor exemption is coextensive with the union’s

consent, petitioners place undue reliance on language in prior

cases of this Court linking the nonstatutory exemption to the

existence of a union employer agreement. As the Court of

Appeals below correctly noted, this Court has never addressed

the application of antitrust laws to employer conduct (as

distinct from agreement) in collective bargaining. Since the

Court has considered only union employer agreements in

nonstatutory exemption cases, it is “hardly surprising” that the

Court’s holdings have been couched in terms of union

employer agreements. Brown, 50 F.3d at 1050.

Specific union consent, as opposed to the noncompetitive

effect of union organizing, has never been the rationale for the

nonstatutory labor exemption. The Court’s formulation of the

nonstatutory exemption in Connell Construction Co. v.

Plumbers and Steamfitters Local Union No. 100, 421 U.S.

616 (1975), did not turn on the existence of an agreement, but

on the recognition that the goals of federal labor law cannot

be reached unless the anticompetitive effect of unionization is

exempt from the antitrust laws:

Union success in organizing workers and standard-

izing wages ultimately will affect price competition

among employers, but the goals of federal labor law

never could be achieved if this effect on business

competition were held a violation of the antitrust

laws. The Court therefore has acknowledged that

labor policy requires tolerance for the lessening of

business competition based on differences in

wages and working conditions. See Mine Workers

v. Pennington, supra, 381 U.S. at 666, 85 S.Ct. at

1591; Jewel Tea, supra, 381 U.S. at 692-693, 85

S.Ct. at 1603-1604 (opinion of White, J.) (emphasis

supplied).

8

Connell, 421 U.S. at 622-623. “The governing factor” in

determining the application of antitrust law, this Court stated,

“is the risk of conflict with the NLRA or with federal

labor policy.” Connell, 421 U.S. at 637 (emphasis supplied).

In addition to the Court of Appeals below and the Sec-

ond and Eighth Circuits, which have expressly rejected

petitioners’ theories,’ the Ninth Circuit, in a decision by

Justice Kennedy, has interpreted Connell to mean that the

nonstatutory exemption applies to the full panoply of

collective bargaining and not just to the collective bargaining

agreement:

In Connell, before finding that the nonstatutory

exemption did not apply, the Court made extensive

analysis of the anticompetitive effect of the chal-

lenged contract, which was not a collective bargain-

ing agreement. Such analysis would have been un-

necessary if the nonstatutory exemption were lim-

ited to restraints imposed by collective bargaining

agreements.

Richards v. Neilsen Freight Lines, 810 F.2d 898, 905 (1987).

Moreover, petitioners’ reliance on the absence of union

consent to support its position here ignores the fact that

multiemployer bargaining itself is consensual. E.g. Retail

Associates, 120 N.L.R.B. 388 (1958); The Evening News

Ass’n, 154 N.L.R.B. 1494 (1965). The union representing

employees must have been notified of the formation of the

multiemployer group and have assented to bargaining on a

multiemployer basis. Charles D. Bonanno Linen Service, 454

U.S. 404, 420-421 (1982) (concurring opinion of Justice

2

NBA v. Williams, 45 F.3d 684 (1995), petition for cert. pending, No.

95-137; Powell v. NFL, 930 F.2d 1293 (8th Cir. 1989), cert. denied, 498

U.S. 1040 (1991).

= az

9

Stevens). The union’s consent to participate in the

multiemployer bargaining process should be enough to invoke

the protection of the nonstatutory labor exemption.

II.

FEDERAL LABOR LAW REGARDING THE OPERA-

TION OF MULTIEMPLOYER BARGAINING WOULD

BE SEVERELY UNDERMINED BY APPLICATION OF

THE ANTITRUST LAWS TO POST-CONTRACT OR

POST-IMPASSE CONDUCT IN EVERYDAY COLLEC-

TIVE BARGAINING BETWEEN THE TWO PARTIES

TO THE COLLECTIVE BARGAINING RELATIONSHIP

A. Application of the Antitrust Laws to Collective

Bargaining Conduct Would Strike at the Heart of

Federal Labor Law and Destroy the Balance of

Rights and Privileges Created By the NLRB to Effec-

tuate Federal Labor Policy

“It is implicit in the entire structure of the [National La-

bor Relations] Act that the [National Labor Relations] Board

acts to oversee and referee the process of collective bargain-

ing, leaving the results of the contest to the bargaining

strengths of the parties.” H.K. Porter Co. v. NLRB, 397 U.S.

99, 107-08 (1970). The framework of rules the Board has

developed to reinforce the bargaining process would be

severely undermined if a union or employees could readily

* In North American Soccer League v. NLRB, 613 F.2d 1379 {Sth Cir.

1980), reh’g denied, 616 F.2d 568 (1980), the Court of Appeals upheld

the National Labor Relations Board’s determination that member clubs of

the North American Soccer League were “joint employers” and that a

single leaguewide bargaining unit was appropriate. The union petitioned

for an election in the leaguewide unit. The case turned on the Board’s

finding that the soccer clubs were, in essence, one employer and does not

stand for the proposition that multiemployer bargaining may be imposed

on separate employers, or on unions under any circumstances.

10

invoke the operation of the antitrust laws after the contract

expires or, alternatively, when impasse is reached.

Federal labor law and policy permits each party to em-

ploy a variety of economic tools to achieve its bargaining

objectives. Unions can strike and/or picket. Employers can

lock out. If and when impasse is reached, the NLRA permits

the employer to implement unilaterally terms and conditions

of employment consistent with its final pre-impasse proposal.

See Brown, 50 F.3d at 1051-1054; Powell v. NFL, 930 F.2d

1302-1303; NBA v. Williams, 45 F.3d at 690-691 and cases

cited therein. The Board has recognized unilateral imple-

mentation of contract proposals after impasse as a legitimate

form of economic pressure that can often break the impasse

and revive collective bargaining. See Hi-Way Billboards, 206

N.L.R.B. 22, 23 (1973), enforcement denied, 500 F.2d 181

(1974). See also Bonanno Linen, 454 U.S. at 727 n.9

(employer ability to implement unilateral changes counterbal-

ances inability to withdraw from multiemployer bargaining

upon impasse).

In addition, the impasse doctrine reflects ststutory policy.

Section 8(d) of the NLRA [29 U.S.C. §158(d)] provides that

the obligation to bargain requires the parties to meet and

confer in good faith concerning terms and conditions of

employment but “does not compel either party to agree to a

proposal or require the making of a concession.” The Board

has given effect to this proviso by permitting employers to

make unilateral changes if and when they have fulfilled their

obligation to bargain in good faith but failed to reach

agreement. In Colorado-Ute Electric Ass’n, 295 NLRB 607,

609 (1989), the Board stated:

That the employer is free to implement changes af-

ter reaching good-faith impasse is another way of

expressing the axiom that the employer’s duty to

bargain over proposed changes does not imply a

iil

11

duty to agree to the union’s counterproposals or to

make a concession. See Section 8(d) of the Act.

The employer’s duty to bargain does not give the

union a right to veto the proposed changes by with-

holding consent.

In support of their argument that antitrust liability for

post-impasse conduct does not undermine federal labor

policy, petitioners characterize impasse as the end of federally

regulated collective bargaining. The foundation of petition-

ers’ argument is dicta in Fort Halifax Packing Co. v. Coyne,

482 U.S. 1, 21 (1987), suggesting that the right of an

employer to impose its final offer at impasse is a product of

state common law. Based on this dicta, petitioners reason

that prohibiting multiemployer groups from implementing

their final offers after impasse does not create any conflict

with federal labor law. Mere dicta cannot support such a

radical departure from existing labor law jurisprudence.

Petitioners’ theory would mean that a state could freely

prohibit the unilateral implementation of final offers by any

employer after impasse, not just employers involved in

multiemployer bargaining. It is doubtful that any court would

consider this a permissible infringement on collective

bargaining.’

Petitioners also argue that the Sherman Act is the type of

“backdrop” statute of general applicability which has been held by this

Court not to conflict with the NLRA, relying on Fort Halifax and

Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 757 (1985).

Fort Halifax held that a state law requiring payment of severance benefits

was not preempted by federal labor law. Metropolitan Life held that

federal labor law did not preempt a statute requiring insurance policies to

include mandatory minimum benefits. The Sherman Act cannot

legitimately be analogized to a minimum employment standard. Unlike a

minimum standard, application of the Sherman Act as proposed by

petitioners would do much more than establish some limitations on the

12

Moreover, petitioners’ assertion that federal labor !aw is

not concerned with post-impasse conduct is simply wrong.

Impasse and post-impasse unilateral changes are part of the

collective bargaining process governed by the NLRA, not the

end of it. As the Board stated in Hi-Way Billboards, Inc., 206

N.L.R.B. at 23:

[A] genuine impasse is akin to a hiatus in negotia-

tions. In the overall ongoing process of collective

bargaining, it is merely a point at which the parties

cease to negotiate and often resort to forms of eco-

nomic persuasion to establish the primacy of their

negotiating position. Moreover, the occurrence of a

genuine impasse cannot be said to be an unex-

pected, unforeseen, or unusual event in the process

of negotiations .... Therefore, it is clear that an im-

passe is but one thread in a complex tapestry of

collective bargaining, rather than a bolt of a differ-

ent hue. In short, a genuine impasse is not the end

of collective bargaining.

The employer’s ability to make unilateral changes during

an impasse in bargaining is delimited by the statutory

obligation to bargain. An employer may not make unilateral

changes more favorable than the terms of its pre-impasse

proposal because this “is necessarily inconsistent with a

sincere desire to reach agreement with the union.” NLRB vy.

Katz, 369 U.S. 736, 745 (1962). An employer may not make

unilateral changes less favorable than the terms of its pre-

impasse proposal because this derogates the union’s status as

collective bargaining representative. NLRB v. Plainville

Ready Mix Concrete Co., 44 F.3d 1320, 1340 (6th Cir. 1995),

cert. denied, 116 S.Ct. 474 (1975).

universe of substantive terms available for bargaining. It would directly

affect the collective bargaining process.

13

Antitrust exposure for making post-impasse changes will

upset the checks and balances the Board has devised over the

years to foster vigorous collective bargaining. The prospect

of impasse encourages unions to bargain in good faith. If

post-impasse unilateral changes are outlawed, unions engaged

in multiemployer bargaining will be able, at the very least, to

freeze the status quo in terms and conditions of employment

merely by inaction. Unions will have little incentive to

engage in true give and take at the bargaining table because

there will be no risk that the union may lose ground if it fails

to negotiate an agreement.

Petitioners also argue that imposing antitrust liability on

post-impasse concerted action of a multiemployer group will

actually further federal labor policy because it will eliminate an

incentive for employers to bargain in bad faith with the goal of

forcing an impasse. Pt. Br. at 41-42. It hardly furthers federal

labor policy to supplant federal labor law aimed specifically at

promoting collective bargaining with the Sherman Act. The

NLRA already contains remedies for “surface bargaining,” (i.e.

going through the motions of bargaining with no intent to reach

agreement), and for prematurely declaring impasse and

unilaterally implementing changes when no lawful impasse has

been reached.” These remedies are designed to enforce

collective bargaining without destroying the collective

bargaining relationship. Injecting the considerable penalties

available under the antitrust laws into the collective bargaining

relationship would frustrate this statutory scheme.

* Fairhaven Properties, Inc., 314 N.L.R.B. 763, 769-772 (1994);

Unbelievable, Inc., 318 N.L.R.B. No. 60 (August 30, 1995).

* AMF Bowling Co., 314 N.L.R.B. 969, 969 (1994), enforcement

denied, 63 F.3d 1293 (1995); Control Services, 315 N.L.R.B. 431 (1994).

14

B. Federal Labor Policy to Promote Multiemployer

Bargaining Would Certainly Be Undermined if Ei-

ther the Petitioners’ or the Government’s Theory Is

Adopted

This Court has recognized that “in many industries,”

including construction, multiemployer bargaining is “a vital

factor in the effectuation of the national labor policy of

promoting labor peace through strengthened collective

bargaining.” NLRB v. Truck Drivers, 353 U.S. 87, 95 (1957)

(Buffalo Linen). In Buffalo Linen, this Court upheld a Board

decision permitting the seven remaining members of a

multiemployer group to lock out employees in response to a

strike against the eighth member because the goal of the

concerted lockout was to protect bargaining on a multiem-

ployer basis. Buffalo Linen, 353 U.S. at 93, 96. In Charles D.

Bonanno Linen Service v. NLRB, 454 U.S. 404 (1982), this

Court approved the Board’s conclusion that neither impasse

nor the ability of employers in a multiemployer group to

execute individual interim agreements permits an employer to

withdraw from multiemployer bargaining unilaterally. The

Court noted that the Board had developed this rule “in the

interest of the proper and pre-eminent goal [of] maintaining

the stability of the multiemployer unit.” Bonanno Linen, 454

USS. at 419.

Petitioners’ argument is that, once having consented to

multiemployer bargaining, the union can resort to the antitrust

laws to compel agreement on its terms if the collective

bargaining framework established under the NLRA does not

yield the results it wants. This ability to pick and choose

between the NLRA and the Sherman Act completely

undermines the statutory mandate of the Board to promote

multiemployer bargaining. The Board has recently reaffirmed

the rule that impasse is insufficient to permit withdrawal from

multiemployer bargaining because it would destabilize

15

multiemployer bargaining in much the same way as the

application of antitrust laws urged by petitioners in this case.

The Board stated:

Allowing any of the negotiating parties to withdraw

from the unit after an impasse the length of the one

at issue here would be to put the multiemployer

bargaining process in jeopardy whenever bargaining

reached an impasse phase and one of the partici-

pants was unsatisfied with its prospects for getting

all that it wished in a multiemployer contract.

El Cerrito Mill & Lumber Co., 316 N.L.R.B. 1005 (1995).

Similarly, the briefs of petitioners and their amici are

punctuated by examples in professional sports of the complete

disintegration of multiemployer bargaining into antitrust

litigation when bargaining “got tough,” i.e., upon the first

impasse in negotiations. The availability of an antitrust cause

of action resulted, not in the temporary suspension of

bargaining, but in the complete breakdown of the collective

bargaining relationship.’

The Government contends that suspending the nonstatu-

tory exemption at impasse can be reconciled with federal

labor policy because the employer members of multiemployer

bargaiuing groups are permitted under the NLRA to enter into

” These examples resulted from cases holding that employees could

escape the nonstatutory labor exemption if they decertified the union. See

Pt. Br. At 42-44. Petitioners argue that their theory would promote labor

policy by eliminating decertification as a prerequisite to antitrust

litigation. NECA submits that a rule allowing an antitrust action based on

conduct initiated during the collective bargaining relationship if the

employees decertify the union is not the way to reconcile federal labor

policy with the antitrust laws. Nor is eliminating decertification as a

prerequisite to antitrust litigation. Stability in collective bargaining is best

assured by applying the nonstatutory exemption to the entire collective

bargaining process envisioned by federal labor law.

16

individual interim agreements with the union once impasse is

reached. By entering into interim agreements, the Govern-

ment contends, the employers can both satisfy federal labor

law and avoid antitrust liability arising either from mainte-

nance of the status quo post-impasse or the joint unilateral

implementation of pre-impasse contract proposals. § The

obvious flaw in the Government’s analysis is that the it offers

the employers no option other than reaching agreement with

the union. This is patently contrary to the policies of the

NLRA, which are to promote collective bargaining, not to

compel agreement. See Section 8(d) [29 U.S.C. § 158(d)]

(NLRA does not require either party to agree); H.K. Porter

Co., 397 U.S. at 106-07 (NLRA grounded on the premise of

freedom of contract). Neither the policies of the NLRA nor

the Sherman Act would be furthered by allowing one party’s

control over the other party’s antitrust immunity to be used as

an economic weapon in collective bargaining.

C. The Threat of Antitrust Liability for Collective

Bargaining Conduct Will Drive Electrical Contrac-

tors Away from Multiemployer Bargaining

The position shared by petitioners and the Government

would leave multiemployer units and their constituent

members with the Hobson’s choice of risking treble damages

in an antitrust suit or foregoing the ability to make any

changes in the status quo while the collective bargaining

relationship exists. Unlike employers bargaining separately,

employers affiliated with a multiemployer group would lose

an important means of putting economic pressure on the union

to reach a compromise and the flexibility to make necessary

business changes if and while bargaining has stalled.

The vast majority of employers in the electrical con-

tracting industry now participating in multiemployer

bargaining will not risk such a choice. Multiemployer

bargaining in the electrical contracting industry is strictly

17

voluntary. While professional sports leagues may be forced

to adapt to the constraints of antitrust exposure because

participation in multiemployer bargaining is enforced by the

league, NECA contractors are subject to no such requirement.

Faced with even the possibility that their concerted collective

bargaining conduct could be scrutinized under the antitrust

laws as well as the labor laws and that the rules of the game

have been changed so as to limit what they can do as a group,

they will opt to withdraw from multiemployer units. Prudent

contractors who can be put out of business merely by having

to defend a frivolous antitrust suit will opt to bargain with the

union independently or, having lost the benefits of group

bargaining, may seek nonunion status.”

Any advantages of group bargaining will certainly cease

to exist. The fact that bargaining on a group basis limits your

choices will alone be sufficient to erode multiemployer

bargaining. Furthermore, the whole thrust of multiemployer

bargaining is to act as a united front. Even if the multiem-

ployer group survives in some fashion, the incentive will be

created for employers to avoid bargaining on a group basis

once the contract expires or the spectre of impasse has been

raised. At the point of either contract expiration or impasse,

employers acting out of fear of the antitrust laws will be

begging to be the first contractor to sign an interim agreement.

Once a number of interim agreements are signed, multiem-

Petitioners’ contention that the employers are only subject to

“unreasonable” restraints under the antitrust law fails to appreciate that the

threat of antitrust exposure is more than enough to undermine multiem-

ployer bargaining. Pt. Br. at 40. Additionally, the contention that most

industries can obtain an agreement from their unions not to sue would

serve to reduce the employer groups to subservient status at the feet of

their union counterparts every time negotiations commence. Employers

could easily find themselves bargaining wages in return for some form of

antitrust immunity.

18

ployer bargaining has collapsed and the “interim agreements”

have become final agreements.

These alternative scenarios all point to two conclusions.

First, the introduction of the antitrust weapon as a basis to

weigh the bona fides of the employer’s position drastically

alters the dynamics of the negotiation process to the

disadvantage of the employers, thereby undermining the

fundamental principles of the duty to bargain under the

NLRA. Second, contrary to the principles enunciated by this

Court in Bonanno Linen and Buffalo Linen, multiemployer

bargaining will cease to be a favored method of negotiations

simply because the risks associated with it will outweigh its

advantages.

19

CONCLUSION

For the foregoing reasons, NECA respectfully submits

that the Court below, consistent with the decision of the

Second Circuit in Williams and the Eight Circuit in Powell,

properly rejected the contention that traditional multiemployer

collective bargaining is or should be subject to the antitrust

laws. Adoption of this unsupported theory would drastically

alter the balance that has been crafted under the federal labor

laws and would seriously harm if not destroy traditional

multiemployer bargaining.

The judgment of the Court of Appeals should be af-

firmed.

Respectfully submitted,

Gary L. Lieber

Counsel of Record

Katherine Brewer

SCHMELTZER, APTAKER &

SHEPARD, P.C.

2600 Virginia Avenue, N.W.

Suite 1000

Washington, D.C. 20037-1905

(202) 333-8800

Attorneys for Amicus Curiae

The National Electrical

Contractors Association, Inc.

February 16, 1996