Respondent union, representing the plumbing and mechanical
trades in Dallas, was a party to a multiemployer collective
bargaining agreement with a mechanical contractors association. The
agreement contained a "most favored nation" clause, by which the
union agreed that, if it granted a more favorable contract to any
other employer, it would extend the same terms to all association
members. Respondent picketed petitioner, a general building
contractor which subcontracted all plumbing and mechanical work and
had no employees respondent wished to represent, to secure a
contract whereby petitioner agreed to subcontract such work only to
firms that had a current contract with respondent. Petitioner
signed under protest and, claiming that the agreement violated §§ 1
and 2 of the Sherman Act and state antitrust laws, brought suit
against respondent seeking declaratory and injunctive relief. By
the time this case went to trial, respondent had secured identical
agreements from other general contractors and was selectively
picketing those who resisted. The District Court held (1) that the
subcontracting agreement was exempt from federal antitrust laws
because it was authorized by the first proviso in § 8(e) of the
National Labor Relations Act (NLRA), which exempts jobsite
contracting agreements in the construction industry from the
statutory ban on secondary agreements requiring employers to cease
doing business with other persons, and (2) that federal labor
legislation preempted the State's antitrust laws. The Court of
Appeals affirmed.
Held:
1. Respondent union's agreement with petitioner is not entitled
to the nonstatutory exemption from the federal antitrust laws
Page 421 U. S. 617
recognized in
Meat Cutters v. Jewel Tea Co.,
381 U. S. 676,
because it imposed direct restraints on competition among
subcontractors that would not have resulted from the elimination of
competition based on differences in wages and working conditions.
Pp.
421 U. S.
621-626.
(a) The agreement indiscriminately excluded nonunion
subcontractors from a portion of the market, even if their
competitive advantages were derived from efficient operating
methods, rather than substandard wages and working conditions. P.
421 U. S.
623.
(b) The "most-favored nation" clause in the multiemployer
bargaining agreement, by insuring that no union subcontractor would
have a competitive advantage on any matters covered by the
agreement, gave respondent's agreements with petitioner and other
general contractors the effect of creating a sheltered market for
union subcontractors in that portion of the subcontracting market
controlled by signatory general contractors. Pp.
421 U. S.
623-624.
(c) Since the agreement did not simply prohibit subcontracting
to any nonunion firm, but to any firm that did not have a contract
with respondent, it gave the union complete control over
subcontract work offered by general contractors that had signed the
agreement and empowered the union to exclude certain subcontractors
from that portion of the market by refusing to deal with them. Pp.
421 U. S.
624-625.
2. The first proviso to § 8(e) of the NLRA does not shelter the
challenged agreement from the federal antitrust laws, since that
proviso was not intended to authorize subcontracting agreements
that are neither within the context of a collective bargaining
relationship nor limited to any particular jobsite. Here
respondent, which has never sought to represent petitioner's
employees or bargain with petitioner on their behalf, makes no
claim to be protecting those employees from working with nonunion
men; the agreement was not limited to any particular jobsite; and
respondent concededly sought the agreement solely as a means of
pressuring Dallas mechanical subcontractors to recognize it as
their employees' representative. Pp.
421 U. S.
626-633.
3. There is no indication that Congress in the Taft-Hartley
amendments or later meant to make NLRA remedies for "hot cargo"
agreements exclusive, thus precluding liability for such agreements
under the antitrust acts. Pp.
421 U. S.
633-634.
4. The agreement is not subject to the state antitrust laws, the
use of which to regulate union activities in aid of union
organization
Page 421 U. S. 618
would risk substantial conflict with policies central to federal
labor law. Pp.
421 U. S.
635-637.
5. Whether the subcontracting agreement violated the Sherman
Act, an issue not fully briefed or argued in this Court, must be
decided on remand. P.
421 U. S.
637.
483 F.2d 1154, reversed in part, affirmed in part, and
remanded.
POWELL, J., delivered the opinion of the Court, in which BURGER,
C.J., and WHITE, BLACKMUN, and REHNQUIST, JJ., joined. DOUGLAS, J.,
filed a dissenting opinion,
post, p.
421 U. S. 638.
STEWART, J., filed a dissenting opinion, in which DOUGLAS, BRENNAN,
and MARSHALL, JJ., joined,
post, p.
421 U. S.
638.
MR. JUSTICE POWELL delivered the opinion of the Court.
The building trades union in this case supported its efforts to
organize mechanical subcontractors by picketing certain general
contractors, including petitioner. The union's sole objective was
to compel the general contractors to agree that, in letting
subcontracts for mechanical work, they would deal only with firms
that were
Page 421 U. S. 619
parties to the union's current collective bargaining agreement.
The union disclaimed any interest in representing the general
contractors' employees. In this case, the picketing succeeded, and
petitioner seeks to annul the resulting agreement as an illegal
restraint on competition under federal and state law. The union
claims immunity from federal antitrust statutes, and argues that
federal labor regulation preempts state law.
I
Local 100 is the bargaining representative for workers in the
plumbing and mechanical trades in Dallas. When this litigation
began, it was party to a multiemployer bargaining agreement with
the Mechanical Contractors Association of Dallas, a group of about
75 mechanical contractors. That contract contained a "most favored
nation" clause by which the union agreed that, if it granted a more
favorable contract to any other employer, it would extend the same
terms to all members of the Association.
Connell Construction Co. is a general building contractor in
Dallas. It obtains jobs by competitive bidding and subcontracts all
plumbing and mechanical work. Connell has followed a policy of
awarding these subcontracts on the basis of competitive bids, and
it has done business with both union and nonunion subcontractors.
Connell's employees are represented by various building trade
unions. Local 100 has never sought to represent them or to bargain
with Connell on their behalf.
In November, 1970, Local 100 asked Connell to agree that it
would subcontract mechanical work only to firms that had a current
contract with the union. It demanded that Connell sign the
following agreement:
"WHEREAS, the contractor and the union are engaged in the
construction industry, and "
Page 421 U. S. 620
"WHEREAS, the contractor and the union desire to make an
agreement applying in the event of subcontracting in accordance
with Section 8(e) of the Labor-Management Relations Act;"
"WHEREAS, it is understood that, by this agreement, the
contractor does not grant, nor does the union seek, recognition as
the collective bargaining representative of any employees of the
signatory contractor; and"
"WHEREAS, it is further understood that the subcontracting
limitation provided herein applies only to mechanical work which
the contractor does not perform with his own employees, but
uniformly subcontracts to other firms;"
"THEREFORE, the contractor and the union mutually agree with
respect to work falling within the scope of this agreement that is
to be done at the site of construction, alteration, painting or
repair of any building, structure, or other works, that [if] the
contractor should contract or subcontract any of the aforesaid work
falling within the normal trade jurisdiction of the union, said
contractor shall contract or subcontract such work only to firms
that are parties to an executed, current collective bargaining
agreement with Local Union 100 of the United Association of
Journeymen and Apprentices of the Plumbing and Pipefitting
Industry."
When Connell refused to sign this agreement, Local 100 stationed
a single picket at one of Connell's major construction sites. About
150 workers walked off the job, and construction halted. Connell
filed suit in state court to enjoin the picketing as a violation of
Texas antitrust laws. Local 100 removed the case to federal court.
Connell then signed the subcontracting agreement under protest. It
amended its complaint to claim that the
Page 421 U. S. 621
agreement violated §§ 1 and 2 of the Sherman Act, 26 Stat. 209,
as amended, 15 U.S.C. §§ 1 and 2, and was therefore invalid.
Connell sought a declaration to this effect and an injunction
against any further efforts to force it to sign such an
agreement.
By the time the case went to trial, Local 100 had submitted
identical agreements to a number of other general contractors in
Dallas. Five others had signed, and the union was waging a
selective picketing campaign against those who resisted.
The District Court held that the subcontracting agreement was
exempt from federal antitrust laws because it was authorized by the
construction industry proviso to § 8(e) of the National Labor
Relations Act, 49 Stat. 452, as added, 73 Stat. 543, 29 U.S.C. §
158(e). The court also held that federal labor legislation
preempted the State's antitrust laws. 78 L.R.R.M. 3012 (ND
Tex.1971). The Court of Appeals for the Fifth Circuit affirmed, 483
F.2d 1154 (1973), with one judge dissenting. It held that Local
100's goal of organizing nonunion subcontractors was a legitimate
union interest, and that its efforts toward that goal were
therefore exempt from federal antitrust laws. On the second issue,
it held that state law was preempted under
San Diego Building
Trades Council v. Garmon, 359 U. S. 236
(1959). We granted certiorari on Connell's petition. 416 U.S. 981
(1974). We reverse on the question of federal antitrust immunity
and affirm the ruling on state law preemption.
II
The basic sources of organized labor's exemption from federal
antitrust laws are §§ 6 and 20 of the Clayton Act, 38 Stat. 731 and
738, 15 U.S.C. § 17 and 29 U.S.C. § 52, and the Norris-La Guardia
Act, 47 Stat. 70, 71, and 73, 29 U.S.C. §§ 104, 105, and 113. These
statutes declare
Page 421 U. S. 622
that labor unions are not combinations.or conspiracies in
restraint of trade, and exempt specific union activities, including
secondary picketing and boycotts, from the operation of the
antitrust laws.
See United States v. Hutcheson,
312 U. S. 219
(1941). They do not exempt concerted action or agreements between
unions and nonlabor parties.
Mine Workers v. Pennington,
381 U. S. 657,
381 U. S. 662
(1965). The Court has recognized, however, that a proper
accommodation between the congressional policy favoring collective
bargaining under the NLRA and the congressional policy favoring
free competition in business markets requires that some
union-employer agreements be accorded a limited nonstatutory
exemption from antitrust sanctions.
Meat Cutters v. Jewel Tea
Co., 381 U. S. 676
(1965).
The nonstatutory exemption has its source in the strong labor
policy favoring the association of employees to eliminate
competition over wages and working conditions. Union success in
organizing workers and standardizing 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
at
381 U. S. 666;
Jewel Tea, supra at
381 U. S.
692-693 (opinion of WHITE, J.). Labor policy clearly
does not require, however, that a union have freedom to impose
direct restraints on competition among those who employ its
members. Thus, while the statutory exemption allows unions to
accomplish some restraints by acting unilaterally,
e.g.,
Federation of Musicians v. Carroll, 391 U. S.
99 (1968), the nonstatutory exemption offers no similar
protection when a union and a nonlabor
Page 421 U. S. 623
party agree to restrain competition in a business market.
See Allen Bradley Co. v. Electrical Workers, 325 U.
S. 797,
325 U. S.
806-811 (1945); Cox, Labor and the Antitrust Laws -- A
Preliminary Analysis, 104 U.Pa.L.Rev. 252 (1955); Meltzer, Labor
Unions, Collective Bargaining, and the Antitrust Laws, 32
U.Chi.L.Rev. 659 (1965).
In this case, Local 100 used direct restraints on the business
market to support its organizing campaign. The agreements with
Connell and other general contractors indiscriminately excluded
nonunion subcontractors from a portion of the market, even if their
competitive advantages were not derived from substandard wages and
working conditions, but rather from more efficient operating
methods. Curtailment of competition based on efficiency is neither
a goal of federal labor policy nor a necessary effect of the
elimination of competition among workers. Moreover, competition
based on efficiency is a positive value that the antitrust laws
strive to protect.
The multiemployer bargaining agreement between Local 100 and the
Association, though not challenged in this suit, is relevant in
determining the effect that the agreement between Local 100 and
Connell would have on the business market. The "most favored
nation" clause in the multiemployer agreement promised to eliminate
competition between members of the Association and any other
subcontractors that Local 100 might organize. By giving members of
the Association a contractual right to insist on terms as favorable
as those given any competitor, it guaranteed that the union would
make no agreement that would give an unaffiliated contractor a
competitive advantage over members of the Association. [
Footnote 1] Subcontractors in the
Association thus
Page 421 U. S. 624
stood to benefit from any extension of Local 100's organization,
but the method Local 100 chose also had the effect of sheltering
them from outside competition in that portion of the market covered
by subcontracting agreements between general contractors and Local
100. In that portion of the market, the restriction on
subcontracting would eliminate competition on all subjects covered
by the multiemployer agreement, even on subjects unrelated to
wages, hours, and working conditions.
Success in exacting agreements from general contractors would
also give Local 100 power to control access to the market for
mechanical subcontracting work. The agreements with general
contractors did not simply prohibit subcontracting to any nonunion
firm; they prohibited subcontracting to any firm that did not have
a contract with Local 100. The union thus had complete control over
subcontract work offered by general contractors that had signed
these agreements. Such control could result in significant adverse
effects on the market and on consumers effects unrelated to the
union's legitimate goals of organizing workers and standardizing
working conditions. For example, if the union thought the interests
of its members would be served by having fewer subcontractors
competing for the available work,
Page 421 U. S. 625
it could refuse to sign collective bargaining agreements with
marginal firms.
Cf. Mine Workers v. Pennington, supra. Or,
since Local 100 has a well defined geographical jurisdiction, it
could exclude "traveling" subcontractors by refusing to deal with
them. Local 100 thus might be able to create a geographical enclave
for local contractors, similar to the closed market in
Allen
Bradley, supra.
This record contains no evidence that the union's goal was
anything other than organizing as many subcontractors as possible.
[
Footnote 2] This goal was
legal, even though a successful organizing campaign ultimately
would reduce the competition that unionized employers face from
nonunion firms. But the methods the union chose are not immune from
antitrust sanctions simply because the goal is legal. Here Local
100, by agreement with several contractors, made nonunion
subcontractors ineligible to compete for a portion of the available
work. This kind of direct restraint on the business market has
substantial anticompetitive effects, both actual and potential,
that would not follow naturally from the elimination of competition
over wages and working conditions. It contravenes antitrust
policies to a degree not justified by congressional labor policy,
and therefore cannot claim a nonstatutory exemption from the
antitrust laws.
There can be no argument in this case, whatever its force in
other contexts, that a restraint of this magnitude
Page 421 U. S. 626
might be entitled to an antitrust exemption if it were included
in a lawful collective bargaining agreement.
Cf. Mine Workers
v. Pennington, 381 U.S. at
381 U. S.
664-665;
Jewel Tea, 381 U.S. at
381 U. S.
689-690 (opinion of WHITE, J.);
id. at
381 U. S.
709-713,
381 U. S.
732-733 (opinion of Goldberg, J.). In this case, Local
100 had no interest in representing Connell's employees. The
federal policy favoring collective bargaining therefore can offer
no shelter for the union's coercive action against Connell or its
campaign to exclude nonunion firms from the subcontracting
market.
III
Local 100 nonetheless contends that the kind of agreement it
obtained from Connell is explicitly allowed by the construction
industry proviso to § 8(e), and that antitrust policy therefore
must defer to the NLRA. The majority in the Court of Appeals
declined to decide this issue, holding that it was subject to the
"exclusive jurisdiction" of the NLRB. 483 F.2d at 1174. This Court
has held, however, that the federal courts may decide labor law
questions that emerge as collateral issues in suits brought under
independent federal remedies, including the antitrust laws.
[
Footnote 3] We conclude that §
8(e) does not allow this type of agreement.
Local 100's argument is straightforward: the first proviso to §
8(e) allows
"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
Page 421 U. S. 627
work. [
Footnote 4]"
Local 100 is a labor organization, Connell is an employer in the
construction industry, and the agreement covers only work "to be
done at the site of construction, alteration, painting or repair of
any building, structure, or other works." Therefore, Local 100
says, the agreement comes within the proviso. Connell responds by
arguing that, despite the unqualified language of the proviso,
Congress intended only to allow subcontracting agreements within
the context of a collective bargaining relationship; that is,
Congress did not intend to permit a union to approach a "stranger"
contractor and obtain a binding agreement not to deal with
nonunion
Page 421 U. S. 628
subcontractors. On its face, the proviso suggests no such
limitation. This Court has held, however, that § 8(e) must be
interpreted in light of the statutory setting and the circumstances
surrounding its enactment:
"It is a 'familiar rule, that a thing may be within the letter
of the statute and yet not within the statute, because not within
its spirit, nor within the intention of its makers.'
Holy
Trinity Church v. United States, 143 U. S.
457,
143 U. S. 459."
National Woodwork Mfrs. Assn. v. NLRB, 386 U.
S. 612,
386 U. S. 619
(1967).
Section 8(e) was part of a legislative program designed to plug
technical loopholes in § 8(b)(4)'s general prohibition of secondary
activities. In § 8(e), Congress broadly proscribed using
contractual agreements to achieve the economic coercion prohibited
by § 8(b)(4).
See National Woodwork Mfrs. Assn., supra at
386 U. S. 634.
The provisos exempting the construction and garment industries were
added by the Conference Committee in an apparent compromise between
the House bill, which prohibited all "hot cargo" agreements, and
the Senate bill, which prohibited them only in the trucking
industry. [
Footnote 5] Although
the garment industry proviso was supported by detailed explanations
in both Houses, [
Footnote 6]
the construction industry proviso was explained only by bare
references to "the pattern of collective
Page 421 U. S. 629
bargaining" in the industry. [
Footnote 7] It seems, however, to have been adopted as a
partial substitute for an attempt to overrule this Court's decision
in
NLRB v. Denver Building Construction Trades Council,
341 U. S. 675
(1951). [
Footnote 8] Discussion
of "special problems" in the construction industry, applicable to
both the § 8(e) proviso and the attempt to overrule
Denver
Building Trades, focused on the problems of picketing a single
nonunion subcontractor on a multiemployer building project, and the
close relationship between contractors and subcontractors
Page 421 U. S. 630
at the jobsite. [
Footnote 9]
Congress limited the construction industry proviso to that single
situation, allowing subcontracting agreements only in relation to
work done on a jobsite. In contrast to the latitude it provided in
the garment industry proviso, Congress did not afford construction
unions an exemption from § 8(b)(4)(b) or otherwise indicate that
they were free to use subcontracting agreements as a broad
organizational weapon. In keeping with these limitations, the Court
has interpreted the construction industry proviso as
"a measure designed to allow agreements pertaining to certain
secondary activities on the construction site because of the close
community of interests there, but to ban secondary objective
agreements concerning non-jobsite work, in which respect the
construction industry is no different from any other."
National Woodwork Mfrs. Assn., 386 U.S. at
386 U. S.
638-639 (footnote omitted). Other courts have suggested
that it serves an even narrower function:
"[T]he purpose of the section 8(e) proviso was to alleviate the
frictions that may arise when union men work continuously alongside
nonunion men on the same construction site."
Drivers Local 696 v. NLRB, 124 U.S. App. D.C. 93, 99,
361 F.2d 547, 553 (1966).
See also Denver Building Trades,
341 U.S. at
341 U. S.
692-693 (DOUGLAS, J., dissenting);
Essex County
& Vicinity
Page 421 U. S. 631
District Council of Carpenters v. NLRB, 332 F.2d 636,
640 (CA3 1964).
Local 100 does not suggest that its subcontracting agreement is
related to any of these policies. It does not claim to be
protecting Connell's employees from having to work alongside
nonunion men. The agreement apparently was not designed to protect
Local 100's members in that regard, since it was not limited to
jobsites on which they were working. Moreover, the subcontracting
restriction applied only to the work Local 100's members would
perform themselves and allowed free subcontracting of all other
work, thus leaving open a possibility that they would be employed
alongside nonunion subcontractors. Nor was Local 100 trying to
organize a nonunion subcontractor on the building project it
picketed. The union admits that it sought the agreement solely as a
way of pressuring mechanical subcontractors in the Dallas area to
recognize it as the representative of their employees.
If we agreed with Local 100 that the construction industry
proviso authorizes subcontracting agreements with "stranger"
contractors, not limited to any particular jobsite, our ruling
would give construction unions an almost unlimited organizational
weapon. [
Footnote 10] The
unions
Page 421 U. S. 632
would be free to enlist any general contractor to bring economic
pressure on nonunion subcontractors, as long as the agreement
recited that it only covered work to be performed on some jobsite
somewhere. The proviso's jobsite restriction then would serve only
to prohibit agreements relating to subcontractors that deliver
their work complete to the jobsite.
It is highly improbable that Congress intended such a result.
One of the major aims of the 1959 Act was to limit "top-down"
organizing campaigns, in which unions used economic weapons to
force recognition from an employer regardless of the wishes of his
employees. [
Footnote 11]
Congress accomplished this goal by enacting § 8(b)(7), which
restricts primary recognitional picketing, and by further
tightening § 8(b)(4)(b), which prohibits the use of most secondary
tactics in organizational campaigns. Construction unions are fully
covered by these sections. The only special consideration given
them in organizational campaigns is § 8(f), which allows "prehire"
agreements in the construction industry, but only under careful
safeguards preserving workers' rights to decline union
representation. The legislative history accompanying § 8(f) also
suggests that Congress may not
Page 421 U. S. 633
have intended that strikes or picketing could be used to extract
prehire agreements from unwilling employers. [
Footnote 12]
These careful limit on the economic pressure unions may use in
aid of their organizational campaigns would be undermined seriously
if the proviso to § 8(e) were construed to allow unions to seek
subcontracting agreements, at large, from any general contractor
vulnerable to picketing. Absent a clear indication that Congress
intended to leave such a glaring loophole in its restrictions on
"top-down" organizing, we are unwilling to read the construction
industry proviso as broadly as Local 100 suggests. [
Footnote 13] Instead, we think its
authorization extends only to agreements in the context of
collective bargaining relationship, and, in light of congressional
references to the
Denver Building Trades problem, possibly
to common situs relationships on particular jobsites as well.
[
Footnote 14]
Finally, Local 100 contends that, even if the subcontracting
agreement is not sanctioned by the construction
Page 421 U. S. 634
industry proviso and therefore is illegal under § 8(e), it
cannot be the basis for antitrust liability because the remedies in
the NLRA are exclusive. This argument is grounded in the
legislative history of the 1947 Taft-Hartley amendments. Congress
rejected attempts to regulate secondary activities by repealing the
antitrust exemptions in the Clayton and Norris-LaGuardia Acts, and
created special remedies under the labor law instead. [
Footnote 15] It made secondary
activities unfair labor practices under § 8(b)(4), and drafted
special provisions for preliminary injunctions at the suit of the
NLRB and for recovery of actual damages in the district courts. §
10(1) of the NLRA, 49 Stat. 453, as added, 61 Stat. 149, as
amended, 29 U.S.C. § 160(
l), and § 303 of the Labor
Management Relations Act, 61 Stat. 158, as amended, 29 U.S.C. §
187. But whatever significance this legislative choice has for
antitrust suits based on those secondary activities prohibited by §
8(b)(4), it has no relevance to the question whether Congress meant
to preclude antitrust suits based on the "hot cargo" agreements
that it outlawed in 1959. There is no legislative history in the
1959 Congress suggesting that labor law remedies for § 8(e)
violations were intended to be exclusive, or that Congress thought
allowing antitrust remedies in cases like the present one would be
inconsistent with the remedial scheme of the NLRA. [
Footnote 16]
Page 421 U. S. 635
We therefore hold that this agreement, which is outside the
context of a collective bargaining relationship and not restricted
to a particular jobsite, but which nonetheless obligates Connell to
subcontract work only to firms that have a contract with Local 100,
may be the basis of a federal antitrust suit because it has a
potential for restraining competition in the business market in
ways that would not follow naturally from elimination of
competition over wages and working conditions.
IV
Although we hold that the union's agreement with Connell is
subject to the federal antitrust laws, it does not follow that
state antitrust law may apply as well. The Court has held
repeatedly that federal law preempts state remedies that interfere
with federal labor policy or with specific provisions of the NLRA.
E.g., Motor Coach Employees v. Lockridge, 403 U.
S. 274 (1971);
Teamsters v. Morton,
377 U. S. 252
(1964);
Teamsters v. Oliver, 358 U.
S. 283 (1959). [
Footnote 17] The use of state antitrust law to
Page 421 U. S. 636
regulate union activities in aid of organization must also be
preempted because it creates a substantial risk of conflict with
policies central to federal labor law.
In this area, the accommodation between federal labor and
antitrust policy is delicate. Congress and this Court have
carefully tailored the antitrust statutes to avoid conflict with
the labor policy favoring lawful employee organization, not only by
delineating exemptions from antitrust coverage, but also by
adjusting the scope of the antitrust remedies themselves.
See
Apex Hosiery Co. v. Leader, 310 U. S. 469
(1940). State antitrust laws generally have not been subjected to
this process of accommodation. If they take account of labor goals
at all, they may represent a totally different balance between
labor and antitrust policies. [
Footnote 18] Permitting state antitrust law to operate in
this field could frustrate the basic federal policies favoring
employee organization and allowing elimination of competition among
wage earners, and interfere with the detailed system Congress has
created for regulating organizational techniques.
Page 421 U. S. 637
Because employee organization is central to federal labor policy
and regulation of organizational procedures is comprehensive,
federal law does not admit the use of state antitrust law to
regulate union activity that is closely related to organizational
goals. Of course, other agreements between unions and nonlabor
parties may yet be subject to state antitrust laws.
See
Teamsters v. Oliver, supra, at
358 U. S.
295-297. The governing factor is the risk of conflict
with the NLRA or with federal labor policy.
V
Neither the District Court nor the Court of Appeals decided
whether the agreement between Local 100 and Connell, if subject to
the antitrust laws, would constitute an agreement that restrains
trade within the meaning of the Sherman Act. The issue was not
briefed and argued fully in this Court. Accordingly, we remand for
consideration whether the agreement violated the Sherman Act.
[
Footnote 19]
Reversed in part, affirmed in part, and remanded.
Page 421 U. S. 638
[
Footnote 1]
The primary effect of the agreement seems to have been to
inhibit the union from offering any other employer a more favorable
contract. When asked at trial whether another subcontractor could
get an agreement on any different terms, Local 100's business agent
answered:
"No. The agreement says that no one will be given a more
favorable agreement. I couldn't, if I desired, as an agent, sign an
agreement other than the ones in existence between the local
contractors and the Local 100."
"
* * * *"
"Q. I see. So that's -- in other words, once you sign that
contract with the Mechanical Contractors' Association, that sets
the only type of agreement which your Union can enter into with any
other mechanical contractors; is that correct, sir?"
"A. That is true."
Tr. 446.
[
Footnote 2]
There was no evidence that Local 100's organizing campaign was
connected with any agreement with members of the multiemployer
bargaining unit, and the only evidence of agreement among those
subcontractors was the "most favored nation" clause in the
collective bargaining agreement. In fact, Connell has not argued
the case on a theory of conspiracy between the union and unionized
subcontractors. It has simply relied on the multiemployer agreement
as a factor enhancing the restraint of trade implicit in the
subcontracting agreement it signed.
[
Footnote 3]
Meat Cutters v. Jewel Tea Co., 381 U.
S. 676,
381 U. S.
684-688 (1965) (opinion of WHITE, J.);
id. at
381 U. S. 710
n. 18 (opinion of Goldberg, J.);
Cf. Vaca v. Sipes,
386 U. S. 171,
386 U. S.
176-188 (1967);
Smith v. Evening News Assn.,
371 U. S. 195
(1962).
[
Footnote 4]
Section 8(e) provides:
"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
to 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 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:
Provided further, That for the purposes of this subsection
and subsection (b)[(4)(B)] of this section the terms 'any
employer,' 'any person engaged in commerce or an industry affecting
commerce,' and 'any person' when used in relation to the terms 'any
other producer, processor, or manufacturer,' 'any other employer,'
or 'any other person' shall not include persons in the relation of
a jobber, manufacturer, contractor, or subcontractor working on the
goods or premises of the jobber or manufacturer or performing parts
of an integrated process of production in the apparel and clothing
industry:
Provided further, That nothing in this
subchapter shall prohibit the enforcement of any agreement which is
within the foregoing exception."
29 U.S.C. § 158(e).
[
Footnote 5]
See H.R.Conf.Rep. No. 1147, 86th Cong., 1st Sess.,
39-40 (1959).
[
Footnote 6]
105 Cong.Rec. 17327 (1959) (remarks by Sen. Kennedy);
id. at 17381 (remarks by Sens. Javits and Goldwater);
id. at 15539 (memorandum by Reps. Thompson and Udall);
id. at 16590 (memorandum by Sen. Kennedy and Rep.
Thompson). These debates are reproduced in 2 NLRB, Legislative
History of the Labor-Management Reporting and Disclosure Act of
1959, pp. 1377, 1385, 1576, 1708 (1959) (hereinafter Leg.Hist. of
LMRDA).
[
Footnote 7]
105 Cong.Rec. 17899 (1959) (remarks by Sen. Kennedy);
id. at 18134 (remarks by Rep. Thompson); 2 Leg.Hist. of
LMRDA 1432, 1721.
[
Footnote 8]
President Eisenhower's message to Congress recommending labor
reform legislation urged amendment of the secondary boycott
provisions to permit secondary activity "under certain
circumstances, against secondary employers engaged in work at a
common construction site with the primary employer."
S.Doc. No. 10, 86th Cong., 1st Sess., 3 (1959) (emphasis added).
Various bills introduced in both Houses included such provisions,
see 2 Leg.Hist. of LMRDA 1912-1915, but neither the bill
that passed the Senate nor the one that passed the House contained
a
Denver Building Trades provision. The Conference
Committee proposed to include such an amendment to § 8(b)(4)(b) in
the Conference agreement, along with a closely linked construction
industry exemption from § 8(e). 105 Cong.Rec. 17333 (1959)
(proposed Senate resolution), 2 Leg.Hist. of LMRDA 1383. But a
parliamentary obstacle killed the § 8(b)(4)(B) amendment, and only
the § 8(e) proviso survived.
See 105 Cong.Rec.
17728-17729, 17901-17903, 2 Leg.Hist of LMRDA 1397-1398, 1434-1436.
References to the proviso suggest that the Committee may have
intended the § 8(e) proviso simply to preserve the
status
quo under
Carpenters v. NLRB (Sand Door),
357 U. S. 93
(1958), pending action on the
Denver Building Trades
problem in the following session.
See H.R.Rep. No. 1147,
supra, n 5, at 39-40;
105 Cong.Rec. 17900 (1959) (report of Sen. Kennedy on Conference
agreement), 2 Leg.Hist. of LMRDA 1433. Although Senator Kennedy
introduced a bill to amend § 8(b)(4), S. 2643, 86th Cong., 1st
Sess. (1959), it was never reported out of committee.
[
Footnote 9]
See 105 Cong.Rec. 17881 (1959) (remarks by Sen. Morse);
id. at 15541 (memorandum by Reps. Thompson and Udall);
id. at 15551-15552 (memorandum by Sen. Elliott);
id. at 15852 (remarks by Rep. Goodell);
see also
id. at 20004-20005 (post-legislative remarks by Rep. Kearns);
2 Leg.Hist. of LMRDA 1425, 1577, 1588, 1684, and 1861.
[
Footnote 10]
Local 100 contends, unsoundly we think, that the NLRB has
decided this issue in its favor. It cites
Los Angeles Building
& Construction Trades Council (B & J Investment Co.),
214 N.L.R.B. No. 86, 87 L.R.R.M. 1424 (1974), and a memorandum from
the General Counsel explaining his decision not to file unfair
labor practice charges in a similar case,
Plumbers Local 100
(Hagler Construction Co.), No. 16-CC-447 (May 1, 1974). In
B & J Investment, the Board approved, without comment,
an administrative law judge's conclusion that the § 8(e) proviso
authorized a subcontracting agreement between the Council and a
general contractor who used none of his own employees in the
particular construction project. The agreement in question may have
been a prehire contract under § 8(f), and it is not clear that the
contractor argued that it was invalid for lack of a collective
bargaining relationship. The General Counsel's memorandum in Hagler
Construction is plainly addressed to a different argument -- that a
subcontracting clause should be allowed only if there is a
preexisting collective bargaining relationship with the general
contractor or if the general contractor has employees who perform
the kind of work covered by the agreement
[
Footnote 11]
105 Cong.Rec. 6428-6429 (1959) (remarks of Sen. Goldwater);
id. at 6648-6649 (remarks of Sen. McClellan);
id.
at 6664-6665 (remarks of Sen. Goldwater);
id. at 14348
(memorandum of Rep. Griffin); 2 Leg.Hist. of LMRDA 1079, 1175-1176,
1191-1192, 1523.
[
Footnote 12]
H.R.Rep. No. 1147,
supra, n 5, at 42; 105 Cong.Rec. 10104 (1959) (memorandum of Sen.
Goldwater);
id. at 18128 (remarks by Rep. Barden); 2
Leg.Hist. of LMRDA 1289, 1715. The NLRB has taken this view.
Operating Engineers Local 54, 142 N.L.R.B. 1132 (1963),
enforced, 331 F.2d 99 (CA3),
cert. denied, 379
U.S. 889 (1964).
[
Footnote 13]
As noted above,
supra at
421 U. S.
628-630, the garment industry proviso reflects different
considerations. The text of the proviso and the treatment in
congressional debates and reports suggest that Congress intended to
authorize garment workers' unions to continue using subcontracting
agreements as an organizational weapon.
See Danielson v. Joint
Board, 494 F.2d 1230 (CA2 1974) (Friendly, J.).
[
Footnote 14]
Connell also has argued that the subcontracting agreement was
subject to antitrust sanctions because the construction industry
proviso authorizes only voluntary agreements. The foundation of
this argument is a contention that § 8(b)(4)(b) forbids picketing
to secure an otherwise lawful "hot cargo" agreement in the
construction industry. Because we hold that the agreement in this
case is outside the § 8(e) proviso, it is unnecessary to consider
this alternative contention.
[
Footnote 15]
See H.R.Conf.Rep. No. 510, 80th Cong., 1st Sess. (House
Managers' statement), 65-67 (1947); 93 Cong.Rec. 4757, 4770,
4834-4874 (1947) (debates over Sen. Ball's proposal for antitrust
sanctions and Sen. Taft's compromise proposal for actual damages,
which became § 303 of the NLRA).
[
Footnote 16]
The dissenting opinion of MR. JUSTICE STEWART argues that § 303
provides the exclusive remedy for violations of § 8(e), thereby
precluding recourse to antitrust remedies. For that proposition,
the dissenting opinion relies upon "considerable evidence in the
legislative materials."
Post at
421 U. S. 650.
In our view, these materials are unpersuasive. In the first place,
Congress did not amend § 303 expressly to provide a remedy for
violations of § 8(e).
See Labor-Management Reporting and
Disclosure Act of 1959, §§ 704(d), (e), 73 Stat. 544-545. The
House, in 1959, did reject proposals by Representatives Hiestand,
Alger, and Hoffman to repeal labor's antitrust immunity.
Post at
421 U. S.
650-654. Those proposals, however, were much broader
than the issue in this case. The Hiestand-Alger proposal would have
repealed antitrust immunity for any action in concert by two or
more labor organizations. The Hoffman proposal apparently intended
to repeal labor's antitrust immunity entirely. That the Congress
rejected these extravagant proposals hardly furnishes proof that it
intended to extend labor's antitrust immunity to include agreements
with nonlabor parties, or that it thought antitrust liability under
the existing statutes would be inconsistent with the NLRA. The bill
introduced by Senator McClellan two years later provides even less
support for that proposition. Like most bills introduced in
Congress, it never reached a vote.
[
Footnote 17]
In most cases, a decision that state law is preempted leaves the
parties with recourse only to the federal labor law, as enforced by
the NLRB.
See Motor Coach Employees v. Lockridge,
403 U. S. 274
(1971);
San Diego Building Trades Council v. Garmon,
359 U. S. 236
(1959). But in cases like this one, where there is an independent
federal remedy that is consistent with the NLRA, the parties may
have a choice of federal remedies.
Cf. Vaca v. Sipes,
386 U. S. 171,
386 U. S.
176-18 (1967);
Smith v. Evening News Assn.,
371 U. S. 195
(1962).
[
Footnote 18]
Texas law is a good example. Texas Rev. Civ.Stat.Ann., Arts.
5152 and 5153 (1971), declare that it is lawful for workers to
associate in unions and to induce other persons to accept or reject
employment. Article 5154, however, referring to the preceding
articles, provides:
"Nothing herein shall be construed to repeal, affect or diminish
the force and effect of any statute now existing on the subject of
trusts, conspiracies against trade, pools and monopolies."
The Texas antitrust statutes prohibit, among other specified
agreements, trusts, and monopolies, any combination of two or more
persons to restrict "the free pursuit of a lawful business."
Tex.Bus. & Comm.Code §§ 15.02-15.04 (1968).
[
Footnote 19]
In addition to seeking a declaratory judgment that the agreement
with Local 100 violated the antitrust laws, Connell sought a
permanent injunction against further picketing to coerce execution
of the contract in litigation. Connell obtained a temporary
restraining order against the picketing on January 21, 1971, and
thereafter executed the contract -- under protest -- with Local 100
on March 28, 1971. So far as the record in this case reveals, there
has been no further picketing at Connell's construction sites.
Accordingly, there is no occasion for us to consider whether the
Norris-LaGuardia Act forbids such an injunction where the specific
agreement sought by the union is illegal, or to determine whether,
within the meaning of the Norris-LaGuardia Act, there was a "labor
dispute" between these parties. If the Norris-LaGuardia Act were
applicable to this picketing, injunctive relief would not be
available under the antitrust laws.
See United States v.
Hutcheson, 312 U. S. 219
(1941). If the agreement in question is held on remand to be
invalid under federal antitrust laws, we cannot anticipate that
Local 100 will resume picketing to obtain or enforce an illegal
agreement.
MR. JUSTICE DOUGLAS, dissenting.
While I join the opinion of MR. JUSTICE STEWART, I write to
emphasize what is, for me, the determinative feature of the case.
Throughout this litigation, Connell has maintained only that Local
100 coerced it into signing the subcontracting agreement. With the
complaint so drawn, I have no difficulty in concluding that the
union's conduct is regulated solely by the labor laws. The question
of antitrust immunity would be far different, however, if it were
alleged that Local 100 had conspired with mechanical subcontractors
to force nonunion subcontractors from the market by entering into
exclusionary agreements with general contractors like Connell. An
arrangement of that character was condemned in
Allen Bradley
Co. v. Electrical Workers, 325 U. S. 797
(1945), which held that Congress did not intend "to immunize labor
unions who aid and abet manufacturers and traders in violating the
Sherman Act,"
id. at
325 U. S. 810.
Were such a conspiracy alleged, the multiemployer bargaining
agreement between Local 100 and the mechanical subcontractors would
unquestionably be relevant.
See Mine Workers v.
Pennington, 381 U. S. 657,
381 U. S. 673
(1965) (concurring opinion);
Meat Cutters v. Jewel Tea
Co., 381 U. S. 676,
381 U. S. 737
(1965) (dissenting opinion). But since Connell has never alleged or
attempted to show any conspiracy between Local 100 and the
subcontractors, I agree that Connell's remedies, if any, are
provided exclusively by the labor laws.
MR. JUSTICE STEWART, with whom MR. JUSTICE DOUGLAS, MR. JUSTICE
BRENNAN, and MR. JUSTICE MARSHALL join, dissenting.
As part of its effort to organize mechanical contractors in the
Dallas area, the respondent Local Union No. 100
Page 421 U. S. 639
engaged in peaceful picketing to induce the petitioner Connell
Construction Co., a general contractor in the building and
construction industry, to agree to subcontract plumbing and
mechanical work at the construction site only to firms that had
signed a collective bargaining agreement with Local 100. None of
Connell's own employees were members of Local 100, and the
subcontracting agreement contained the union's express disavowal of
any intent to organize or represent them. The picketing at
Connell's construction site was therefore secondary activity,
subject to detailed and comprehensive regulation pursuant to §
8(b)(4) of the National Labor Relations Act, as added, 61 Stat.
141, 29 U.S.C. § 158(b)(4), and § 303 of the Labor Management
Relations Act, 61 Stat. 158, as amended, 29 U.S.C. § 187.
Similarly, the subcontracting agreement under which Connell agreed
to cease doing business with nonunion mechanical contractors is
governed by the provisions of § 8(e) of the National Labor
Relations Act, 29 U.S.C. § 158(e). The relevant legislative history
unmistakably demonstrates that, in regulating secondary activity
and "hot cargo" agreements in 1947 and 1959, Congress selected with
great care the sanctions to be imposed if proscribed union activity
should occur. In so doing, Congress rejected efforts to give
private parties injured by union activity such as that engaged in
by Local 100 the right to seek relief under federal antitrust laws.
Accordingly, I would affirm the judgment before us.
I
For a period of 15 years, from passage of the Norris-LaGuardia
Act, 47 Stat. 70, in 1932 [
Footnote
2/1] until enactment of
Page 421 U. S. 640
the Labor Management Relations Act (the Taft-Hartley Act), 61
Stat. 136, in 1947, union economic pressure directed against a
neutral, secondary employer was not subject to sanctions under
either federal labor law or antitrust law, at least in the absence
of proof that the union was coercing the secondary employer in
furtherance of a conspiracy with a nonlabor group.
See United
States v. Hutcheson, 312 U. S. 219;
Allen Bradley Co. v. Electrical Workers, 325 U.
S. 797.
"Congress abolished, for purposes of labor immunity, the
distinction between primary activity between the 'immediate
disputants' and secondary activity in which the employer disputants
and the members of the union do not stand 'in the proximate
relation of employer and employee. . . .'"
National Woodwork Mfrs. Assn. v. NLRB, 386 U.
S. 612,
386 U. S.
623.
In
Hunt v. Crumboch, 325 U. S. 821, for
example, the Court found that union conduct in forcing a freight
carrier out of business was protected activity beyond the reach of
the federal antitrust laws even though it involved secondary
pressure that culminated in the union's compelling the carrier's
principal patron to break its contract with the carrier and to
discharge the carrier from further service. "That which Congress
has recognized as lawful," the Court noted, "this Court has no
constitutional power to declare unlawful, by arguing that Congress
has accorded too much power to labor organizations."
Id.
at
325 U. S. 825
n. 1.
Congressional concern over labor abuses of the broad immunity
granted by the Norris-LaGuardia Act was one of the considerations
that resulted in passage of the Taft-Hartley
Page 421 U. S. 641
Act in 1947, which, among other things, prohibited specified
union secondary activity.
See National Woodwork Mfrs. Assn. v.
NLRB, supra at
386 U. S. 623.
The central thrust of that statutory provision was to forbid
"a union to induce employees to strike against or to refuse to
handle goods for their employer when an object is to force him or
another person to cease doing business with some third party."
Carpenters' Union v. NLRB, 357 U. S.
93,
357 U. S. 98.
[
Footnote 2/2] In condemning
"specific union conduct directed to specific objectives,"
ibid., however, Congress deliberately chose not to subject
unions engaging in prohibited secondary activity to the sanctions
of the antitrust laws.
Section 12(a)(3) of the Hartley bill, H.R. 3020, 80th Cong., 1st
Sess., as initially passed by the House, defined "unlawful
concerted activities" to include an "illegal boycott." 1 NLRB
Legislative History of the Labor Management Relations Act, 1947, p.
205 (hereinafter Leg.Hist. of LMRA). Section 12(c) provided that
the Norris-LaGuardia Act should have no "application in any action
or proceeding in a court of the United States involving any
activity defined in this section as unlawful."
Page 421 U. S. 642
1 Leg.Hist. of LMRA 206-207. The Committee on Education and
Labor explained in its report on the Hartley bill:
"Illegal boycotts take many forms. . . . Sometimes they are
direct restraints of trade, designed to compel people against whom
they are engaged in to place their business with some other than
those they are dealing with at the time. . . . Under [§ 12], these
practices are called by their correct name, 'unlawful concerted
activities.' It is provided that any person injured in his person,
property, or business by an unlawful concerted activity affecting
commerce may sue the person or persons responsible for the injury
in any district court having jurisdiction of the parties and
recover damages. The bill makes inapplicable in such suits the
Norris-LaGuardia Act, which heretofore has protected parties to
industrial strife from the consequences of their lawlessness, no
matter how violent their disputes became. Persons who engage in
unlawful concerted activities are subject to losing their rights
and privileges under the act."
H.R.Rep. No. 245, 80th Cong., 1st Sess., 24, 44, 1 Leg.Hist. of
LMRA 315, 335.
The Senate, however, refused to adopt the House's removal of
antitrust immunity for prohibited secondary activity, choosing
instead to make the remedies available under federal labor law
exclusive. The Senate Committee on Labor and Public Welfare
approved S. 1126, 80th Cong., 1st Sess., which provided that
proscribed secondary conduct would be an unfair labor practice and
could be enjoined on application of the National Labor Relations
Board. No private remedy for an injured employer was authorized in
the bill approved by the Committee.
See S.Rep. No. 105,
80th Cong., 1st Sess., 7-8, 22, 1 Leg.Hist. of LMRA 413-414,
428.
Four members of the Senate Committee, although
Page 421 U. S. 643
supporting the provisions of S. 1126 as reported by the
Committee, felt that a number of the provisions of the bill could
be stronger. S.Rep. No. 105,
supra at 50, 1 Leg.Hist. of
LMRA 456. In particular, the minority Senators proposed:
"An amendment reinserting in the bill a section making secondary
boycotts and jurisdictional strikes unlawful and providing for
direct suits in the courts by any injured party. . . ."
"
* * * *"
"The amendment proposes that [the injured party] be entitled to
file a suit for damages and obtain a temporary injunction while
that suit is being heard. . . ."
"
* * * *"
"The amendment, furthermore, removes the protection of the
Clayton Act from monopoly agreements to fix prices, allocate
customers, restrict production, distribution, or competition, or
impose restrictions or conditions on the purchase, sale, or use of
material, machines, or equipment. While the existence of the union
should not be a combination in restraint of trade, we see no reason
why unions should not be subject in this field to the same
restriction as are competing employers."
S.Rep. No. 105,
supra at 54-55, 1 Leg.Hist. of LMRA
460-461.
Senator Ball, one of the four minority Senators on the Labor and
Public Welfare Committee, did, in fact, offer an amendment on the
Senate floor that was
"designed to correct the interpretation of the Norris-LaGuardia
and Clayton acts made by the Supreme Court in the Hutchinson
[
sic] case, and a number of other cases brought by former
Assistant Attorney General Thurman Arnold, when he attempted to
break up monopolistic practices on
Page 421 U. S. 644
the part of labor unions, sometimes acting on their own,
sometimes in conspiracy with employers."
93 Cong.Rec. 4838, 2 Leg.Hist. of LMRA 1354. [
Footnote 2/3]
Although stating that he personally agreed with the changes
proposed by Senator Ball, Senator Taft argued for defeat of the
Ball amendment, explaining that resistance to providing a private
injunctive remedy in cases of secondary boycotts was so strong that
an attempt to eliminate the labor exemption from the antitrust laws
would lead to the defeat of any effort to provide for a private
damages remedy for injured parties. Senator Taft proposed as a
substitute that private parties be given only the right to sue for
actual damages. 93 Cong.Rec. 4843-4844, 2 Leg.Hist. of LMRA 1365.
The Ball amendment was thereafter defeated, 93 Cong.Rec. 4847, 2
Leg.Hist. of LMRA 1369-1370, and Senator Taft introduced his
proposal "to restore to people who lose something because of
boycotts and jurisdictional strikes the money which they have
lost." 93 Cong.Rec. 4858, 2 Leg.Hist. of LMRA 1370-1371.
In response to Senator Morse's claim that the proposal would
impose virtually unlimited liability on unions, Senator Taft made
plain that he was not advocating the use of antitrust sanctions
against prohibited secondary activity.
"Under the Sherman Act, the same question of boycott damage is
subject to a suit for [treble] damages
Page 421 U. S. 645
and attorneys' fees. In this case, we simply provide for the
amount of the actual damages."
93 Cong.Rec. 4872-4873, 2 Leg.Hist. of LMRA 1398;
see
Teamsters v. Morton, 377 U. S. 252,
377 U. S. 260
n. 16. Senator Taft's proposal for a private damages remedy under
federal labor law as adopted by the Senate. 93 Cong.Rec. 4874-4875,
2 Leg Hist. of LMRA 1399-1400.
In Conference, the House members agreed to eliminate the
provisions of the Hartley bill which, like the Ball amendment,
provided that the Norris-LaGuardia Act should have no application
to private suits for unlawful secondary activity.
See
H.R.Conf.Rep. No. 510 80th Cong., 1st Sess. (House Managers'
statement), 58-59, 1 Leg.Hist. of LMRA 562-563. With only
"clarifying changes," H.R.Conf.Rep. No. 510,
supra at 67,
1 Leg.Hist. of LMRA 571, the House-Senate Conferees and then both
Houses of Congress agreed to regulate Union secondary activity by
making specified activity an unfair labor practice under § 8(b)(4)
of the National Labor Relations Act, authorizing the Board to seek
injunctions against such activity, 29 U.S.C. § 160(
l), and
providing for recovery of actual damages in a suit by a private
party under Senator Taft's compromise proposal, which became § 303
of the Labor Management Relations Act, 29 U.S.C. § 187. [
Footnote 2/4] Congress in 1947 did not
prohibit all
Page 421 U. S. 646
secondary activity by labor unions,
see Carpenters v.
NLRB, 357 U. S. 93; and
those practices which it did outlaw were to be remedied only by
seeking relief from the Board or by pursuing the newly created,
exclusive federal damages remedy provided by § 303.
Teamsters
v. Morton, supra.
II
Contrary to the assertion in the Court's opinion,
ante
at
421 U. S. 634,
the deliberate congressional decision to make § 303 the exclusive
private remedy for unlawful secondary activity is clearly relevant
to the question of Local 100's antitrust liability in the case
before us. The Court is correct, of course, in noting that § 8(e)'s
prohibition of "hot cargo" agreements was not added to the Act
until 1959, and that § 303 was not then amended to cover § 8(e)
violations standing alone. But as part of the 1959 amendments
designed to close "technical loopholes" perceived in the
Taft-Hartley Act, Congress amended § 8(b)(4) to make it an unfair
labor practice for a labor organization to threaten or coerce a
neutral employer, either directly or through his employees, where
an object of the secondary pressure is to force the employer to
enter into an agreement prohibited by § 8(e). [
Footnote 2/5] At the same
Page 421 U. S. 647
time, Congress expanded the scope of the § 303 damages remedy to
allow recovery of the actual damages sustained as a result of a
union's engaging in secondary activity to force an employer to sign
an agreement in violation of § 8(e). [
Footnote 2/6] In short, Congress has provided an
employer like Connell with a fully effective private damages remedy
for the allegedly unlawful union conduct involved in this case.
The essence of Connell's complaint is that it was coerced by
Local 100's picketing into "conspiring" with the union by signing
an agreement that limited its ability
Page 421 U. S. 648
to subcontract mechanical work on a competitive basis. [
Footnote 2/7] If, as the Court today holds,
the subcontracting agreement is not within the construction
industry proviso to § 8(e), then Local 100's picketing to induce
Connell to sign the agreement constituted a § 8(b)(4) unfair labor
practice, and was therefore also unlawful under § 303(a), 29 U.S.C.
§ 187(a). [
Footnote 2/8]
Accordingly, Connell has the right to sue Local 100 for damages
sustained as a result
Page 421 U. S. 649
of Local 100's unlawful secondary activity pursuant to § 303(b),
29 U.S.C. § 187(b). Although "limited to actual, compensatory
damages,"
Teamsters v. Morton, 377 U.S. at
377 U. S. 260,
Connell would be entitled under § 303 to recover all damages to its
business that resulted from the union's coercive conduct, including
any provable damage caused by Connell's inability to subcontract
mechanical work to nonunion firms. Similarly, any nonunion
mechanical contractor who believes his business has been harmed by
Local 100's having coerced Connell into signing the subcontracting
agreement is entitled to sue the union for compensatory damages;
for § 303 broadly grants its damages action to "[w]hoever shall be
injured in his business or property" by reason of a labor
organization's engaging in a § 8(b)(4) unfair labor practice.
[
Footnote 2/9]
Page 421 U. S. 650
Moreover, there is considerable evidence in the legislative
materials indicating that, in expanding the scope of § 303 to
include a remedy for secondary pressure designed to force an
employer to sign an illegal "hot cargo" clause and in restricting
the remedies for violation of § 8(e) itself to those available from
the Board, Congress in 1959 made the same deliberate choice to
exclude antitrust remedies as was made by the 1947 Congress.
While the House was considering labor reform legislation in the
summer of 1959, specific proposals were made to apply the antitrust
laws to labor unions. Representative Hiestand of California
introduced a bill which
"would solve many of the problems attending unbridled union
power as it exists and operates in this country. My proposal is in
the nature of antitrust legislation, applied to labor unions."
105 Cong.Rec. 12135, 2 NLRB Legislative History of the
Labor-Management Reporting and Disclosure Act of 1959, p. 1507
(hereinafter Leg.Hist. of LMRDA). Representative Alger of Texas
joined in cosponsoring the legislation, stating that "[u]nion
monopoly power" manifests itself in
"restrictive trade practices such as price-fixing, restrictions
on use of new processes and technological improvements, exclusion
of products for the market, and so forth. . . . This bill deals
directly with [this aspect] of union monopoly power."
105 Cong.Rec. 12136, 2 Leg.Hist. of LMRDA 1507. Representative
Alger added the following explanation of the bill:
"Under the language of H.R. 8003, any attempt
Page 421 U. S. 651
by a union to induce an employer or a group of employers to
comply with a union demand which would result in restrictive trade
practices would be unlawful and an employer faced with such a
demand could seek legal remedies to restrain the union from
enforcing its demand. The consequent denial to unions of the right
to fix prices or impose other artificial market limitations would
not in any way interfere with normal and legitimate union functions
or with their proper collective bargaining powers. They would
merely be placed on an equal footing with all other groups in
society as was the case during the fifty years prior to the
Hutcheson decision."
105 Cong.Rec. 12137, 2 Leg.Hist. of LMRDA 1508.
The Landrum-Griffin bill, H.R. 8400, 86th Cong., 1st Sess.,
which, as amended, was enacted as the Labor-Management Reporting
and Disclosure Act of 1959, [
Footnote
2/10] by contrast, clearly provided that the new secondary
boycott
Page 421 U. S. 652
and "hot cargo" provisions were to be enforced solely through
the Board and by use of the § 303 damages remedy.
See 105
Cong.Rec. 14347-14348, 2 Leg.Hist. of LMRDA 1522-1523. Recognizing
this important difference, Representative Alger proposed to amend
the Landrum-Griffin bill by adding, as an additional title, the
antitrust provisions of H.R. 8003. 105 Cong.Rec. 15532-15533, 2
Leg.Hist. of LMRDA 1569. Representative Alger once again stated
that his proposed amendment would make it unlawful for an
individual local union to
"[e]nter into any arrangement -- voluntary or coerced -- with
any employer, groups of employers, or other unions which cause
product boycotts, price-fixing, or other types of restrictive trade
practices."
105 Cong.Rec. 15533, 2 Leg.Hist. of LMRDA 1569.
Representative Griffin responded to Representative Alger's
proposed amendment by observing:
"[It] serves to point out that the substitute [the
Landrum-Griffin bill] is a minimum bill. It might be well at this
point to mention some provisions that are not in it."
"There is no antitrust law provision in this bill."
"
* * * *"
"This is truly a minimum bill that a responsible Congress should
pass. I believe I speak for the gentleman from Georgia [MR.
LANDRUM], as well as myself when I say that, if amendments are
offered on the floor to add antitrust provisions or others that
have been mentioned, I, for one, will oppose them. The gentleman
from Georgia and I have tried to balance delicately the provisions
which we believe should be in a bill at this time and which a
majority of this body could support."
105 Cong.Rec. 15535, 2 Leg.Hist. of LMRDA 1571-1572. The Alger
amendment was rejected, as were additional
Page 421 U. S. 653
efforts to subject proscribed union activities to the antitrust
laws and their sanctions.
See, e.g., 105 Cong.Rec. 15853,
2 Leg.Hist. of LMRDA 1685 (amendment offered by Rep. Hoffman). The
House then adopted the Landrum-Griffin bill over protests that
it
"does not go far enough, that it needs more teeth, and that more
teeth are going to come in the form of legislation to bring labor
union activities under the antitrust laws."
105 Cong.Rec. 15858, 2 Leg.Hist. of LMRDA 1690 (remarks of Rep.
Alger);
see 105 Cong.Rec. 15859-15860, 2 Leg.Hist. of
LMRDA 1691-1692 (adoption of the Landrum amendment to H.R. 8342,
substituting in lieu of the text thereof the text of H.R. 8400 as
amended).
The House-Senate Conferees made some substantive changes in the
language of the amendments to § 8(b)(4), and also added the
construction and garment industry provisos to § 8(e).
See
generally Cox, The Landrum-Griffin Amendments to the National
Labor Relations Act, 44 Minn.L.Rev. 257. But no change was made in
the nature of the sanctions authorized for violations of either
section by the House-passed Landrum-Griffin bill: An injured party
could either seek relief from the Board or bring suit for damages
under § 303 against unions that violate the revised secondary
boycott prohibitions. No provisions were made for exposing
proscribed union secondary activity or "hot cargo" agreements to
antitrust liability.
See H.R.Conf.Rep. No. 1147, 86th
Cong., 1st Sess., 1 Leg.Hist. of LMRDA 934. [
Footnote 2/11]
Page 421 U. S. 654
Indeed, two years after enactment of the Landrum-Griffin Act,
Senator McClellan, whose committee hearings into abuses caused by
concentrated labor power had played a major role in generating
support for the 1959 labor reform legislation, together with five
other Senators, introduced a bill to provide antitrust sanctions
for illegal "hot cargo" agreements in the transportation industry,
despite the fact that such agreements were already expressly
prohibited by § 8(e). [
Footnote
2/12] As it had in 1947 and 1959, however, Congress in 1961
rejected this effort to subject illegal union secondary conduct to
the sanctions of the antitrust laws.
In sum, the legislative history of the 1947 and 1959 amendments
and additions to national labor law clearly demonstrates that
Congress did not intend to restore antitrust sanctions for
secondary boycott activity such as that engaged in by Local 100 in
this case, but rather
Page 421 U. S. 655
intended to subject such activity only to regulation under the
National Labor Relations Act and § 303 of the Labor Management
Relations Act. The judicial imposition of "independent federal
remedies" not intended by Congress, no less than the application of
state law to union conduct that is either protected or prohibited
by federal labor law, [
Footnote
2/13] threatens "to upset the balance of power between labor
and management expressed in our national labor policy."
Teamsters v. Morton, 377 U.S. at
377 U. S. 260.
See Carpenters v. NLRB, 357 U.S. at
357 U. S.
98-100;
National Woodwork Mfrs. Assn. v. NLRB,
386 U.S. at
386 U. S.
619-620. Accordingly, the judgment before us should be
affirmed.
[
Footnote 2/1]
Before 1932, this Court had held that secondary strikes and
boycotts were not exempt from the coverage of the antitrust laws.
E.g., Duplex Printing Press Co. v. Deering, 254 U.
S. 443;
Bedford Cut Stone Co. v. Journeymen Stone
Cutters' Assn., 274 U. S. 37.
Duplex and its progeny were overruled by Congress with
passage of the Norris-LaGuardia Act, 47 Stat. 70.
See Milk
Wagon Drivers' Union v. Lake Valley Farm Products, Inc.,
311 U. S. 91,
311 U. S.
100-103;
United States v. Hutcheson,
312 U. S. 219,
312 U. S.
229-231,
312 U. S.
235-237.
[
Footnote 2/2]
The Act added § 8(b)(4) to the National Labor Relations Act,
making it an unfair labor practice for a labor organization or its
agents
"to engage in, or to induce or encourage the employees of any
employer to engage in, a strike or a concerted refusal in the
course of their employment to use, manufacture, process, transport,
or otherwise handle or work on any goods, articles, materials, or
commodities or to perform any services, where an object thereof is:
(A) forcing or requiring any employer or self employed person to
join any labor or employer organization or any employer or other
person to cease using, selling, handling, transporting, or
otherwise dealing in the products of any other producer, processor,
or manufacturer, or to cease doing business with any other person.
. . ."
61 Stat. 141.
[
Footnote 2/3]
The amendment introduced by Senator Ball provided in part that
the Clayton Act and the Norris-LaGuardia Act
"shall not be applicable in respect of violations of subsection
(a) [defining prohibited secondary conduct], or in respect of any
contract, combination, or conspiracy, in restraint of commerce, to
which a labor organization is a party, if one of the purposes of
such contract, combination, or conspiracy is to fix prices,
allocate customers, restrict production, distribution, or
competition, or impose restrictions or conditions upon the
purchase, sale or use of any material, machines, or equipment."
93 Cong.Rec. 4757 (1947).
[
Footnote 2/4]
Section 303 of the Labor Management Relations Act of 1947, 61
Stat. 15159, provided:
"(a) It shall be unlawful, for the purposes of this section
only, in an industry or activity affecting commerce, for any labor
organization to engage in, or to induce or encourage the employees
of any employer to engage in, a strike or a concerted refusal in
the course of their employment to use, manufacture, process,
transport, or otherwise handle or work on any goods, articles,
materials, or commodities or to perform any services, where an
object thereof is -- "
"(1) forcing or requiring any employer or self-employed person
to join any labor or employer organization or any employer or other
person to cease using, selling, handling, transporting, or
otherwise dealing in the products of any other producer, processor,
or manufacturer, or to cease doing business with any other
person;"
"
* * * *"
"(b) Whoever shall be injured in his business or property by
reason o[f] any violation of subsection (a) may sue therefor in any
district court of the United States subject to the limitations and
provisions of section 301 hereof without respect to the amount in
controversy, or in any other court having jurisdiction of the
parties, and shall recover the damages by him sustained and the
cost of the suit."
[
Footnote 2/5]
Section 8(b)(4) of the National Labor Relations Act, as amended
by the Labor-Management Reporting and Disclosure Act of 1959, 73
Stat. 519, 542-543, now provides in part that it shall be an unfair
labor practice for a labor organization or its agents:
"(4)(i) to engage in, or to induce or encourage any individual
employed by any person engaged in commerce or in an industry
affecting commerce to engage in, a strike or a refusal in the
course of his employment to use, manufacture, process, transport,
or otherwise handle or work on any goods, articles, materials, or
commodities or to perform any services; or (ii) to threaten,
coerce, or restrain any person engaged in commerce or in an
industry affecting commerce, where in either case an object thereof
is -- "
"(A) forcing or requiring any employer or self employed person
to join any labor or employer organization or to enter into any
agreement which is prohibited by subsection (e) of this section. .
. ."
29 U.S.C. § 158(b)(4).
[
Footnote 2/6]
Section 303, as amended by the Labor-Management Reporting and
Disclosure Act of 1959, 73 Stat. 519, 545, now provides:
"(a) It shall be unlawful, for the purpose of this section only,
in an industry or activity affecting commerce, for any labor
organization to engage in any activity or conduct defined as an
unfair labor practice in section 158(b)(4) of this title."
"(b) Whoever shall be injured in his business or property by
reason o[f] any violation of subsection (a) of this section may sue
therefor in any district court of the United States subject to the
limitations and provisions of section 185 of this title without
respect to the amount in controversy, or in any other court having
jurisdiction of the parties, and shall recover the damages by him
sustained and the cost of the suit."
29 U.S.C. § 187.
[
Footnote 2/7]
Indeed, Connell's original state court complaint was filed
before Connell had signed any agreement with Local 100.
See
ante at
421 U. S. 620.
At that point, it was apparent that the primary reason for the
lawsuit was Connell's request for an injunction to stop the union's
picketing.
[
Footnote 2/8]
If, contrary to the Court's conclusion,
see ante at
421 U. S.
626-633, Congress intended what it said in the proviso
to § 8(e), then the subcontracting agreement is valid and, under
the view of the Board and those Courts of Appeals that have
considered the question, Local 100's picketing to obtain the
agreement would also be lawful.
See, e.g., Orange Belt District
Council of Painters v. NLRB, 117 U.S.App.D.C. 233, 236, 328
F.2d 534, 537;
Construction Laborers v. NLRB, 323 F.2d 422
(CA9);
Northeastern Indiana Bldg. Trades Council, 148
N.L.R.B. 854,
enforcement denied on other grounds, 122
U.S.App.D.C. 220, 352 F.2d 696. Connell would therefore have
neither a remedy under § 303 nor one with the Board.
It would seem necessarily to follow that conduct specifically
authorized by Congress in the National Labor Relations Act could
not, by itself, be the basis for federal antitrust liability unless
the Court intends to return to the era when the judiciary
frustrated congressional design by determining for itself "what
public policy in regard to the industrial struggle demands."
Duplex Printing Press Co. v. Deering, 254 U.
S. 443,
254 U. S. 485
(Brandeis, J., dissenting).
See United States v.
Hutcheson, 312 U. S. 219. In
my view, however, even if Local 100's conduct was unlawful, Connell
may not seek to invoke the sanctions of the antitrust laws.
Accordingly, I find it unnecessary to decide in this case whether
the subcontracting agreement entered into by Connell and Local 100
is within the ambit of the construction industry proviso to § 8(e),
and, if it is, whether it was permissible for Local 100 to utilize
peaceful picketing to induce Connell to sign the agreement.
[
Footnote 2/9]
If Connell and Local 100 had entered into a purely voluntary
"hot cargo" agreement in violation of § 8(e), an injured nonunion
mechanical subcontractor would have no § 303 remedy, because the
union would not have engaged in any § 8(b)(4) unfair labor
practice. The subcontractor, however, would still be able to seek
the full range of Board remedies available for a § 8(e) unfair
labor practice. Moreover, if Connell had truly agreed to limit its
subcontracting without any coercion whatsoever on the part of Local
100, the affected subcontractor might well have a valid antitrust
claim on the ground that Local 100 and Connell were engaged in the
type of conspiracy aimed at third parties with which this Court
dealt in
Allen Bradley Co. v. Electrical Workers,
325 U. S. 797. At
the very least, an antitrust suit by an injured subcontractor under
circumstances in which Congress had failed to provide any form of
private remedy for damage resulting from an illegal "hot cargo"
agreement would present a very different question from the one
before us -- a question which it is not now necessary to answer.
Cf. Meat Cutters v. Jewel Tea Co., 381 U.
S. 676,
381 U. S. 708
n. 9 (opinion of Goldberg, J.).
On the other hand, the signatory of a purely voluntary agreement
that violates § 8(e) is fully protected from any damage that might
result from the illegal "hot cargo" agreement by his ability simply
to ignore the contract provision that violates § 8(e). If the union
should attempt to enforce the illicit "hot cargo" clause through
any form of coercion, the employer may then bring a § 303 damages
suit or may file an unfair labor practice charge with the Board.
See 29 U.S.C. § 158(b)(4)(B). Since § 8(e) provides that
any prohibited agreement is "unenforceable and void," any union
effort to invoke legal processes to compel the neutral employer to
comply with his purely voluntary agreement would obviously be
unavailing.
[
Footnote 2/10]
The legislative proceedings leading to the passage of the
Labor-Management Reporting and Disclosure Act of 1959 (the
Landrum-Griffin Act), 73 Stat. 519, began in January, 1959, when
Senator John Kennedy introduced S. 505, 86th Cong., 1st Sess. In
March, 1959, Senator Kennedy introduced S. 1555, incorporating 46
amendments to S. 505 made by the Committee on Labor and Public
Welfare. S. 1555, with various additional amendments, was approved
by the Senate on April 25, 1959, and sent to the House, where it
was referred to the Committee on Education and Labor. On July 30,
1959, the House Committee favorably reported H.R. 8342, 86th Cong.,
1st Sess. One week earlier H.R. 8400 and H.R. 8401, identical
bills, were introduced in the House by Representatives Landrum and
Griffin, respectively. The House voted on August 13, 1959, to
substitute the text of H.R. 8400 for the text of the House
Committee bill, and the Landrum-Griffin bill was then inserted by
the House in S. 1555 in lieu of its provisions. The Conference made
several substantive changes in the Landrum-Griffin bill, which was
then passed by both the House and Senate and approved by the
President.
See generally 1 Leg.Hist. of LMRDA vii-xi.
[
Footnote 2/11]
Representative Hiestand, during House debate on the report of
the Conference Committee, recommended adoption of the bill as
amended by the Conference and complimented Representatives Landrum
and Griffin for their efforts in guiding the bill through Congress.
But in expressing concern over the fact that the legislation did
not restore antitrust sanctions for union secondary activity and
other anticompetitive restraints of trade, he warned:
"[W]e should act today with full knowledge that passage of the
Landrum-Griffin bill will not solve every problem. The heart of the
problem, the very heart, is the sheer power in the hands of labor
union leaders due to their above-the-law status with respect to our
anti-monopoly laws."
105 Cong.Rec. 18132; 2 Leg.Hist. of LMRDA 1719.
[
Footnote 2/12]
Section 2(b)(2) of Senator McClellan's bill, S. 2573, 87th
Cong., 1st Sess., provided that the Sherman Act be amended to read
in part:
"Notwithstanding any other provision of law, every contract,
agreement, or understanding, express or implied, between any labor
organization and any employer engaged in the transportation of
persons or property, whereby such employer undertakes to cease, or
to refrain from, purchasing, using, selling, handling,
transporting, or otherwise dealing in any of the products or
services of any producer, processor, distributor, supplier,
handler, or manufacturer which are distributed in trade or commerce
in any territory of the United States or the District of Columbia,
or between any such territory and another, or between any such
territory or territories and any State or States or the District of
Columbia or with foreign nations, or between the District of
Columbia and any State or States or foreign nations, or to cease
doing business with any other person shall be unlawful."
[
Footnote 2/13]
I fully agree with the Court's conclusion,
ante at
421 U. S.
635-637, that federal labor law preempts the state law
that Connell sought to apply to Local 100's secondary activity in
this case.