Respondent Pacific Maritime Association (PMA), a collective
bargaining agent for a multiemployer bargaining unit composed of
various employers of Pacific coast dockworkers, entered into a
collective bargaining agreement with respondent Union regarding
nonmember use of dockworkers jointly registered and dispatched
through PMA-Union hiring halls whereby the nonmembers would
participate in all fringe benefit programs, pay the same dues and
assessments as PMA members, use "steady" men in the same way as
members, and be treated as members during work stoppages. Various
nonmember public ports, which had previously competitively made
separate (and assertedly in several respects more advantageous)
agreements with the Union and the PMA, filed a petition with
petitioner Federal Maritime Commission (FMC) asserting that the
collective bargaining agreement was subject to filing and approval
under § 15 of the Shipping Act, 1916 (Act), which requires the
filing of agreements between a common carrier by water (or "other
person" furnishing facilities in connection with such a carrier)
and another such carrier or person, including those agreements
"controlling, regulating, preventing, or destroying competition."
The FMC is empowered to "disapprove, cancel, or modify" any such
agreement that it finds to be unjustly discriminatory or to be
detrimental to commerce or the public interest. Before FMC approval
or after disapproval, agreements subject to filing are unlawful,
and may not be implemented. Lawful agreements are excepted from the
antitrust laws. The FMC severed for initial determination the
issues of its jurisdiction over the challenged agreement and
whether there were considerations in the national labor policy that
would nevertheless exempt the agreement from the filing and
approval requirements of § 15. The FMC found that the purpose of
the agreement was to place nonmembers on the same basis as members
of the PMA, and that its effect was to control or affect
competition between members and nonmembers. Applying the standards
articulated in United Stevedoring Corp. v. Boston Shipping
16 F.M.C. 7, the FMC found the agreement to be outside
the protection of an FMC-recognized labor exemption, and therefore
subject to filing
Page 435 U. S. 41
under § 15. The Court of Appeals reversed, ruling that any
collective bargaining agreement, regardless of its impact on
competition, was exempt from the § 15 filing requirements. Though
recognizing that its holding precluded for collective bargaining
agreements the antitrust immunity that § 15 approval provides, even
in cases where shipping considerations would support an exemption,
the court felt its holding necessary to implement the collective
bargaining system established by the federal statutes dealing with
labor-management relations, including those in the shipping
industry. Alternatively, the court held that, if its per
rule was infirm, the FMC had erred in refusing to exempt
the challenged agreement.
1. Collective bargaining agreements, as a class, are not
categorically exempt from § 15's filing requirements. Pp.
435 U. S.
(a) Because § 15 provides that an approved agreement will not be
subject to the antitrust laws, it is clear that Congress (1)
assigned to the FMC, not the courts, the task of initially
determining which anticompetitive restraints are to be approved and
which are to be disapproved under the general statutory guidelines,
and (2) anticipated that various anticompetitive restraints,
forbidden by the antitrust laws in other contexts, would be
acceptable in the shipping industry. Pp. 435 U. S.
(b) The Court of Appeals' conclusion that prompt implementation
of lawful collective bargaining agreements could not be realized
under the § 15 procedure overlooked the fact that, under the Act's
terms, the vast majority of collective bargaining arrangements
would not be candidates for disapproval under § 15, and would be
routinely approved even if filed. The FMC has determined that it
will recognize a "labor exemption" from § 15 filing requirements
for collective bargaining contracts falling within the boundaries
of the exemption defined by announced criteria like those
applicable to the labor exemption from the antitrust laws. Pp.
435 U. S.
(c) The FMC's procedure for conditional approval of filed
agreements pending a final decision as to their legality is
adequate to overcome the Court of Appeals' concern that the § 15
procedures would prevent "the maintenance or prompt restoration of
industrial peace." Pp. 435 U. S.
2. The Court of Appeals also erred in its alternative ground of
decision that, even under a balancing test weighing Shipping Act
and labor relations considerations, the challenged agreement should
be exempt from filing, in support of which view the court suggested
that the FMC had failed to realize that the agreement was an effort
to force the public ports into a multiemployer bargaining unit
against their will, an issue exclusively within the domain of the
National Labor Relations Board. Here,
Page 435 U. S. 42
there was no effort to change bargaining units, but to impose
bargaining unit terms on employers outside the units. Pp.
435 U. S.
3. The FMC made the requisite findings to sustain its decision.
Pp. 435 U. S.
177 U.S. App. D.C. 248, 543 F.2d 395, reversed.
WHITE, J., delivered the opinion of the Court, in which BURGER,
C.J., and STEWART, REHNQUIST, and STEVENS, JJ., joined. POWELL, J.,
filed a dissenting opinion, in which BRENNAN and MARSHALL, JJ.,
p. 435 U. S. 64
BLACKMUN, J., took no part in the consideration or decision of the
MR. JUSTICE WHITE delivered the opinion of the Court.
Section 15 of the Shipping Act, 1916, 39 Stat. 733, as amended,
46 U.S.C. § 814, [Footnote 1
requires the filing with the
Page 435 U. S. 43
Federal Maritime Commission (Commission) of seven categories of
agreements between a common carrier by water, or "other person
subject to this chapter" and another such carrier
Page 435 U. S. 44
or person. [Footnote 2
Among those agreements that must be filed are those "controlling,
regulating, preventing, or destroying competition." The Commission
is empowered to "disapprove, cancel, or modify" any such agreement
that it finds to be
"unjustly discriminatory or unfair as between carriers,
shippers, exporters, importers, or ports, . . . or to operate to
Page 435 U. S. 45
of the commerce of the United States, or to be contrary to the
public interest . . . ,"
and is directed to approve all filed agreements that do not
transgress these standards. Before approval or after disapproval,
agreements subject to filing are unlawful, and may not be
implemented. [Footnote 3
Agreements that are "lawful under this section" are excepted from
those provisions of the antitrust laws contained in §§ 1-11 and 15
of Title 15 of the United States Code. Violations of the section
are punishable by civil fines of not more than $1,000 per day.
The issue in this case is whether § 15 of the Shipping Act
requires the filing and the Commission's approval or disapproval of
a collective bargaining agreement between respondent Pacific
Maritime Association (PMA), a collective bargaining agent for a
multiemployer bargaining unit made up of various employers of
Pacific coast dockworkers, [Footnote 4
] and respondent International Longshoremen's
and Warehousemen's Union (Union).
This case arose when eight municipal corporations, owners and
operators of Pacific coast port facilities and not members of the
PMA, [Footnote 5
] filed a
petition with the Commission asserting that a 1972 agreement
between PMA and the Union was subject to filing and approval under
§ 15 and was violative of §§ 15, 16, and 17 of the Shipping Act
] because it was
Page 435 U. S. 46
discriminatory, and contrary to the public interest. Prior to
this time, the nonmember ports had negotiated separate agreements
with the Union which contained terms and conditions that in some
respects differed from those contained in the collective bargaining
contracts between PMA and the Union. Fringe benefit provisions
varied, depending on the result of individual negotiations.
] In some respects,
the ports enjoyed more flexible work rules than did PMA; the ports,
for example, were often permitted to use "steady crews," whereas,
under the PMA contract, rotation of workers among employers was the
general rule. [Footnote 8
existence of separate agreements between the Union and the public
ports also enabled the Union to exert negotiating pressure on PMA
by striking PMA while continuing to work for the individual ports.
The ports, nevertheless, were permitted by virtue of separate
agreements with PMA to secure their workforce through the PMA-Union
hiring halls [Footnote 9
to make the particular fringe benefit payments
Page 435 U. S. 47
called for by their individual contracts by contributing to the
fringe benefit funds maintained by PMA. [Footnote 10
During contract negotiations between PMA and the Union beginning
in November, 1970, one of the issues raised was whether nonmembers
should continue to be allowed to participate in PMA hiring hall and
fringe benefit plans. These privileges PMA desired to eliminate.
the parties arrived at a Supplemental Memorandum of Understanding
described as follows by the court below:
"In the Supplemental Memorandum, the parties agreed that PMA
would accept contributions from all nonmembers who executed a
uniform participation agreement. This standard agreement, included
in the Supplemental Memorandum, would require nonmembers, as a
condition of using the joint dispatching halls for jointly
registered employees, to participate in all fringe benefit
programs, pay the same dues and assessments as PMA members, use
steady men 'in the same way a member may do so,' and be treated as
a member during work stoppages."
177 U.S.App.D.C. 248, 25251, 543 F.2d 395, 397-398 (1976)
(footnotes omitted). [Footnote
Page 435 U. S. 48
It was this agreement that the public ports asserted was subject
to filing and Commission action under § 15.
In October 1972, the Commission severed for initial
Page 435 U. S. 49
the issues of its jurisdiction over the challenged agreement,
and, if the Supplemental Memorandum of Understanding was otherwise
covered by § 15, whether there were considerations rooted in the
national labor policy that would nevertheless exempt the agreement
from the filing and approval requirements of the section.
Thereafter, on June 24, 1973, PMA and the Union arrived at a new
collective bargaining agreement, which included a revised nonmember
participation agreement replacing the Supplemental Memorandum of
Understanding. By additional order, the Commission extended its
jurisdictional inquiry to include the new contract with its
nonmember participation provisions, which, although revised, were
deemed by the Commission to have essentially the same impact for
present purposes as the Supplemental Memorandum of
In its subsequent report and order, Pacific Maritime Assn.
-- Cooperative Working Arrangements,
18 F.M.C.196 (1975), the
Commission first rejected the suggestion that, because the case
called for accommodating the Shipping Act and the labor statutes,
as well as determining whether the parties had exceeded the scope
of legitimate bargaining, the Commission should not itself decide
the issue, but should defer to the courts or to the National Labor
Relations Board. [Footnote
] The Commission
Page 435 U. S. 50
also rejected the argument, as it had rejected similar arguments
in New York Shipping Assn. -- NYSA-ILA Man-Hour/Tonnage Method
16 F.M.C. 381 (1973), aff'd,
1215 (CA2), cert. denied,
419 U.S. 964 (1974), that § 15's
filing requirement was not triggered because some members of PMA
were neither carriers nor "other persons subject to the act" or
because PMA's contract was with a labor union, which also was
neither a carrier nor "other person." [Footnote 14
] The Commission went on to find that the
purpose of the nonmember participation agreement was to place
nonmembers on the same competitive basis as members of the PMA. and
that its effect was to control or affect competition between
members and nonmembers. The Commission concluded that the agreement
was thus subject to filing and approval or disapproval under § 15,
unless, because it was part of a collective bargaining contract, it
fell within that category of contracts that the national labor
policy placed beyond the reach of the Shipping Act. The Commission
had recognized this so-called "labor exemption" in United
Stevedoring Corp. v. Boston Shipping Assn.,
16 F.M.C. 7
(1972), and it proceeded
Page 435 U. S. 51
to adjudicate the status of the instant agreement under the
criteria announced in that case. [Footnote 15
The Commission's ultimate conclusion was that the nonmember
participation agreement was not entitled to exemption from filing
under § 15, primarily because its thrust was to
Page 435 U. S. 52
bring nonmembers into parity with members by requiring employers
outside the bargaining unit to submit to bargaining unit terms. The
result had "a potentially severe and adverse effect upon
competition," 18 F.M.C. at 208, and only a superficial effect on
the collective bargaining process. The agreement was thus subject
to filing and approval under § 15.
The Court of Appeals for the District of Columbia Circuit set
aside the Commission's order, holding that the disputed agreement
was wholly beyond the Commission's jurisdiction under § 15. 177
U.S.App.D.C. 248, 543 F.2d 395 (1976). The Commission's approach,
which extends to labor agreements an exemption from Shipping Act
requirements roughly equivalent to the exemption from the antitrust
laws that the courts hold the labor statutes require for collective
bargaining contracts, was deemed an inadequate response to the
demands of the national labor policy. Without disturbing the
Commission's conclusion that the purpose and effect of the
nonmember participation agreement at issue here were "to control or
affect competition between members and nonmembers," 18 F.M.C. at
201, and hence that it was within the literal terms of § 15, and
without holding that the agreement would qualify for an antitrust
exemption under the relevant cases, the Court of Appeals ruled that
any collective bargaining contract, whatever its impact on
competition, was exempt from filing with the Commission.
Alternatively, the Court of Appeals held that, even if its per
rule excluding collective bargaining agreements from the
reach of § 15 was infirm, the Commission had erred in refusing to
exempt from filing the particular nonmember participation agreement
in question here.
We granted the petition for certiorari filed by the United
States and the Commission, 430 U.S. 905 (1977), which raises two
issues: whether the national labor policy requires exempting
collective bargaining contracts as a class from the filing
Page 435 U. S. 53
requirements of § 15 and, if not, whether the agreement at issue
here is nevertheless exempt from those requirements.
We cannot agree with the holding below that, whatever their
effect on competition might be, collective bargaining contracts are
categorically exempt from the filing requirements of § 15 of the
Shipping Act. Section 15, on its face, reaches any contract between
carriers "controlling, regulating, preventing, or destroying
competition." If a contract is of that nature, it is within the
reach of § 15 and subject to the Commission's jurisdiction, and it
is quite untenable to suggest that collective bargaining contracts
control, regulate, prevent, or destroy competition.
See Mine Workers v. Pennington, 381 U.
(1965); Allen Bradley Co. v. Electrical
Workers, 325 U. S. 797
(1945). If subject to § 15, a filed agreement must be approved by
the Commission unless it is discriminatory or unfair, operates to
the detriment of the commerce of the United States, or is contrary
to the public interest. Because § 15 provides that an approved
agreement will not be subject to the antitrust laws, it is apparent
that Congress assigned to the Commission, not to the courts, the
task of initially determining which anticompetitive restraints are
to be approved and which are to be disapproved under the general
statutory guidelines. It is equally apparent that, as a substantive
matter, Congress anticipated that various anticompetitive
restraints, forbidden by the antitrust laws in other contexts,
would be acceptable in the shipping industry.
That the Commission is the public arbiter of competition in the
shipping industry is reflected in prior holdings that, in reaching
its decision under § 15, the Commission must "consider the
antitrust implications of an agreement before approving it,"
FMC v. Seatrain Lines, Inc., 411 U.
, 411 U. S. 739
(1973), and should approve an anticompetitive agreement only if it
"'required by a serious transportation need, necessary
Page 435 U. S. 54
to secure important public benefits or in furtherance of a valid
regulatory purpose of the Shipping Act.'"
FMC v. Svenska Amerika Linien, 390 U.
, 390 U. S. 24
(1968). The Commission, nevertheless, may approve agreements "even
though they are violative of the antitrust laws. . . ."
at 411 U. S.
The removal of the task of initially overseeing private
restraints on competition from the regime of the antitrust laws and
the courts is not a historical anachronism that we are entitled to
ignore. Congress responded to Federal Maritime Board v.
Isbrandtsen Co., 356 U. S. 481
(1958), which held that a particular system of dual rates adopted
by a shipping conference violated § 14 of the Shipping Act, by
suspending the effect of that decision pending full study and
permanent legislation. After extensive investigation, important
amendments were forthcoming in 1961, Pub.L. 87-346, 75 Stat. 763;
but the Act's basic approach -- that the regulation of competition
in the shipping industry is to be an administrative function,
subject to judicial review -- was reaffirmed. Indeed, § 15 was
amended "by enlarging and clarifying the [Commission's] powers over
agreements filed thereunder" by, among other things, the addition
of the public interest standard to § 15. H.R.Rep. No. 498, 87th
Cong., 1st Sess., 17-18 (1961). Section 15 was declared by the
Antitrust Subcommittee of the House Judiciary Committee, which
undertook a three-year study of "the entire gamut of antitrust
problems in the ocean freight industry . . . ," to be "the heart of
the Shipping Act." H.R.Rep. No. 1419, 87th Cong., 2d Sess., 2, 15
It is appropriate, therefore, that the Court has recognized the
broad reach of § 15 and resisted improvident attempts to narrow it.
In Volkswagenwerk v. FMC, 390 U.
(1968), a collective bargaining agreement between
PMA and the Union included a provision requiring PMA to create a
sizable fund to be used to mitigate the impact of technological
unemployment upon employees. PMA reserved the right to
Page 435 U. S. 55
determine how the fund was to be raised, and thereafter it
settled upon a particular method by which its members would
contribute to the fund. The issue then arose whether this latter
agreement was within the Commission's jurisdiction under § 15. The
Commission held that, although the assessment formula arrived at
was within the literal language of the section, it was exempt from
filing, since § 15 should be applied only to those agreements that
affect competition among the carriers in their dealings with the
shipping and traveling public. [Footnote 16
] The Court of Appeals affirmed, but we
reversed, rejecting the Commission's "extremely narrow view of a
statute that uses expansive language." 390 U.S. at 390 U. S. 273
In response to the Commission's expressed desire to read § 15
narrowly in order to minimize the antitrust exemption, we noted
that "antitrust exemption results not when an agreement is
submitted for filing, but only when the agreement is actually
approved . . . ," 390 U.S. at 390 U. S. 273
and that, "in deciding whether to approve an agreement, the
Commission is required under § 15 to consider antitrust
at 390 U. S.
"[t]o limit § 15 agreements that 'affect competition,' as the
Commission used that phrase . . . , simply [did] not square with
the structure of the statute,"
at 390 U. S. 275
and "would [render] virtually meaningless" major parts of § 15's
filing provisions. 390 U.S. at 390 U. S. 275
dealt only with the agreed-upon
assessment formula, the Court noted that no question had been
raised about the validity of the underlying collective bargaining
contract. The opinion does not, therefore, determine one way or the
other whether collective bargaining contracts are ever within the
reach of § 15; but the Court did
Page 435 U. S. 56
emphasize the breadth of the statutory language and the
determination of Congress, reflected in § 15, to "subject to the
scrutiny of a specialized governmental agency the myriad of
restrictive agreements in the maritime industry." 390 U.S. at
390 U. S. 276
At the very least, the opinion counsels against implying broad
exemptions for agreements, collective bargaining contracts or
otherwise, whose impact on competition is "neither de
nor routine." Id.
at 390 U. S.
In the present case, the Court of Appeals' removal from the
Commission's jurisdiction of all collective bargaining contracts,
regardless of how anticompetitive they might be, and whether or not
exempt under the antitrust laws, would appear to be contrary to the
plain terms of § 15. The Court of Appeals was not unaware that it
was depriving the Commission of the power to approve or disapprove
anticompetitive contracts that § 15 on its face clearly confers,
but it thought its holding necessary to implement the collective
bargaining system established by the federal statutes dealing with
labor-management relations, including those in the shipping
industry. While there is no doubt that the courts must give all due
effect to each of two seemingly overlapping statutes, we think the
Court of Appeals misconceived its task here.
The principal objection to Commission jurisdiction over any
bargaining agreement was that, under § 15, agreements subject to
filing cannot be implemented prior
to approval or after
disapproval. This alone was enough to exempt collective bargaining
contracts from filing under § 15, for, as the Court of Appeals
understood the collective bargaining system mandated by the
National Labor Relations Act, one of its essential elements is for
the parties to be legally free "to implement promptly the
compromise agreements worked out in eleventh-hour bargaining
sessions. . . ." 177 U.S.App.D.C. at 25, 543 F.2d at 406.
Subjecting negotiated labor agreements to filing and approval
"would make nearly impossible the maintenance or prompt restoration
of industrial peace." Ibid.
Page 435 U. S. 57
Prompt implementation of lawful collective bargaining agreements
is indeed an important consideration, but the fears of the Court of
Appeals as to the possible impact of the Commission's decision on
the collective bargaining process are exaggerated, and do not
justify the major surgery performed on § 15 by the decision below.
In the first place, the Commission's decision would not require the
filing of all, or even most, of the collective bargaining contracts
entered into in the shipping industry. Because § 15 applies only to
agreements between at least two parties subject to the Act,
collective bargaining contracts between the Union
and a single employer would not have to be filed. Moreover, not all
collective bargaining agreements between the Union and PMA would be
subject to the requirements of § 15. Under § 15, filed agreements
must be approved unless they operate to the detriment of commerce,
are contrary to the public interest, or otherwise fail to satisfy
the specified standards. Under these standards, it would be
difficult to conclude that ordinary collective bargaining
agreements establishing wages, hours, and working conditions in a
bargaining unit could or would be disapproved as contrary to the
public interest or detrimental to commerce. Such contracts are the
product of bargaining compelled by the labor laws, which themselves
were enacted pursuant to the power of Congress to regulate commerce
in the public interest. They are also the kind of contracts that
the courts, because of the collective bargaining regime established
by the labor laws, in the main have declared to be beyond the reach
of the antitrust laws, the statutes specifically designed to
protect the commerce of the United States from anticompetitive
The Commission has recognized that the vast majority of
collective bargaining arrangements cannot be deemed candidates for
disapproval under § 15, and that they would be routinely approved
even if filed. Consistent with its power under § 35 of the Shipping
Act, 39 Stat. 738, as added, 80 Stat.
Page 435 U. S. 58
1358, 46 U.S.C. § 833a, in appropriate circumstances, to exempt
from § 15 filing requirements "any class of agreements between
persons subject to this chapter or any specified activity of such
persons . . . ," [Footnote
] the Commission, by adjudication, has determined that it
will recognize a "labor exemption" from the filing requirements of
§ 15 for collective bargaining contracts falling within the
boundaries of the exemption defined by its announced criteria.
] In doing so,
the Commission has been guided by its understanding of our cases,
and those of other courts, that recognize and define an exemption
from the antitrust laws for certain contracts between management
and labor. It appears to be the intention of the Commission to
exercise jurisdiction over only those collective bargaining
contracts that, in its view, would not be exempt from examination
under antitrust laws, and that should be reviewed under Shipping
Act standards. We therefore doubt that the Commission's decision
will have a broad impact on labor-management relations. At least it
has not been demonstrated at this juncture that the collective
bargaining concerns cited by the Court of Appeals are sufficient to
require complete exemption for labor agreements and the consequent
partial emasculation of the statutory scheme for administrative
review of anticompetitive agreements.
Page 435 U. S. 59
Second, the Commission, in any event, claims the authority,
which it has exercised, see New York Shipping Assn. -- NYSA-ILA
Man-Hour/Tonnage Method of Assessment,
16 F.M.C. 381 (1973),
495 F.2d 1215 (CA2), cert. denied,
U.S. 964 (1974), to issue conditional approval of filed agreements
pending final decision as to their legality; and it is not clear
why this mechanism is not amply responsive to the fears of undue
delay or why its adequacy should now be debated, since the parties
could have, but did not, request early, conditional approval. The
Court of Appeals did not deny that the Commission could permit
implementation of filed agreements prior to a final decision, but
it thought the mechanism only a partial alleviation of the problem,
since the parties still would face the "specter" of a later
administrative invalidation of perhaps a crucial part of a
collective bargaining contract. But it is not immediately obvious
why provisions of a collective bargaining contract that appear
obviously illegal to the Commission should be immediately
implemented pending final decision. Furthermore, if a collective
bargaining contract having serious anticompetitive aspects is not
subject to filing under § 15, as the Court of Appeals would have
it, the parties would, in any event, face the uncertainty of
possible invalidation and of treble damages after long and
difficult litigation in an antitrust court. At least under § 15, it
would be possible that an anticompetitive collective bargaining
contract that would not survive scrutiny under the antitrust laws
could be approved by the Commission, if it served important
regulatory goals, and hence would be insulated from antitrust
attack. Indeed, a critical aspect of the regulatory plan devised by
Congress is the requirement of administrative judgment with respect
to all of the specified contracts required to be filed. It was
therefore error for the Court of Appeals to hold that the legality
of collective bargaining contracts, challenged as anticompetitive
and nonexempt, must be judicially determined under the antitrust
laws without interposition of the administrative
Page 435 U. S. 60
judgment and without regard for Shipping Act considerations.
The Court of Appeals also ruled that, even absent a blanket
exemption from § 15 for collective bargaining agreements, the
Commission should not have exercised § 15 jurisdiction in this
case, but should have exempted the nonmember participation
agreement from filing. In doing so, the court appeared to disagree
with the Commission's weighing of the impact on shipping interests
of holding the agreement exempt against the impact on collective
bargaining interests of requiring filing and approval under § 15.
Perhaps because, under the Act, this kind of comparison must be the
business of the Commission if all collective agreements are not
exempt, the Court of Appeals offered little to support this
alternative judgment. It suggested that the Commission had failed
to realize that the nonmember participation agreement, in the last
analysis, was merely an effort to force the public ports into a
multiemployer bargaining unit against their will, an issue clearly
within the National Labor Relations Board's authority and one in
which the Commission should not intermeddle. The argument is wide
of the mark. The Commission has not challenged the power of the
Board to determine bargaining units; neither the Commission nor the
parties have authority to change a unit certified by the Board.
Rather than relying on the Board to resolve any bargaining unit
problem, if there was one, PMA and the Union agreed to impose
bargaining unit terms on employers outside the unit.
Furthermore, the Court of Appeals recognized that the "Supreme
Court has ruled against primary jurisdiction in the NLRB for
anticompetitive agreements," 177 U.S.App.D.C. at 263, 543 F.2d at
410, but went on to conclude that we had removed from all primary
administrative cognizance the entire question of accommodating
collective bargaining considerations and the public interest in
competition. We doubt that our
Page 435 U. S. 61
opinions should be so broadly read. Congress has not authorized
the NLRB to police, modify, or invalidate collective bargaining
contracts aimed at regulating competition or to insulate bargaining
agreements from antitrust attack. But here, as we have said,
Congress took the different course of committing to the Commission
the initial task of approving or disapproving all agreements that
control, regulate, prevent, or destroy competition. However much
the courts might consider this to be a judicial function,
particularly when it is necessary to accommodate the possibly
conflicting policies of the labor and shipping laws, we have no
warrant to ignore congressional preferences written into § 15 of
the Shipping Act.
Although the Court of Appeals did not otherwise challenge the
content or application of the Commission's guidelines for resolving
issues as to its jurisdiction over collective bargaining
agreements, the respondents urge that the Commission has misread
the relevant cases. In particular, they fault the Commission's
findings with respect to the competitive impact of the nonmember
participation agreement and the failure to find that the terms
under challenge constituted serious antitrust violations. These
submissions are unsound. It is plain from our cases that an
antitrust case need not be tried and a violation found before a
determination can be made that a collective bargaining agreement is
not within the labor exemption, just as it is clear that denying
the exemption does not mean that there is an antitrust violation.
] Insofar as the
asserted exemption for collective bargaining contracts is
Page 435 U. S. 62
the Commission found all it needed to find to assume
jurisdiction and proceed with the case under § 15 when it concluded
that PMA and the Union had undertaken to impose employment terms
and conditions on employers outside the bargaining unit. As we have
"[T]here is nothing in the labor policy indicating that the
union and the employers in one bargaining unit are free to bargain
about the wages, hours and working conditions of other bargaining
units, or to attempt to settle these matters for the entire
"[A] union forfeits its exemption from the antitrust laws when
it is clearly shown that it has agreed with one set of employers to
impose a certain wage scale on other bargaining units."
Mine Workers v. Pennington,
381 U.S. at 381 U. S.
Here, both the Commission and the Court of Appeals understood
the nonmember participation agreement to require nonmembers to
participate in all fringe benefit plans agreed upon between the PMA
and the Union, to observe PMA-determined labor policies in the
event of a work stoppage, and to observe the same work rules with
respect to the hiring hall workforce. The result, the Commission
found, would be higher costs for nonmembers and the elimination of
what the PMA considered to be "a competitive disadvantage" to its
members. [Footnote 20
Accordingly, the Commission was warranted in finding that "the
purpose of the supplemental agreement
Page 435 U. S. 63
[was] . . . to place nonmembers on the same competitive'
basis as members of the PMA."
18 F.M.C. at 201.
We are thus unpersuaded that the Commission did not make the
requisite findings to sustain its view. Nor are we impressed with
other arguments that, in one guise or another, are contentions that
the Commission, for lack of ability and experience, should not
purport to deal with any collective bargaining agreement, but
should leave the entire matter of anticompetitive labor-management
contracts to the courts and the antitrust laws. As we have said,
Congress has made the Commission the arbiter of competition in the
shipping industry; and if there are labor agreements so
anticompetitive that they are vulnerable under the antitrust laws,
it is difficult to explain why the Commission should not deal with
them in the first instance, and either approve or disapprove them
under the standards specified in § 15.
In summary, we think the Commission was true to § 15, and that
it has also demonstrated its sensitivity to the national labor
policy by exempting from the filing requirements all collective
bargaining contracts that, in its view, would also be exempt from
the antitrust laws. Because the Commission also has the power to
approve filed agreements, even though anticompetitive, the
Commission may also take into account any special needs of
labor-management relationships in the shipping industry. We should
add that, since the Shipping Act contains its own standards for
exempting and for approving and disapproving agreements between
carriers, and because the ultimate issue in cases such as this is
the accommodation of the Shipping Act and the labor laws, rather
than the labor laws and the antitrust laws, it will not necessarily
be a misapplication of the statutes if the exemption for collective
bargaining contracts from Shipping Act requirements is not always
exactly congruent with the so-called labor exemption from the
antitrust laws as understood by the courts.
Page 435 U. S. 64
The judgment of the Court of Appeals is reversed.
It is so ordered.
MR. JUSTICE BLACKMUN took no part in the consideration or
decision of this case.
Section 15, as set forth in 4 U.S.C. § 814, provides as
"Every common carrier by water, or other person subject to this
chapter, shall file immediately with the Commission a true copy,
or, if oral, a true and complete memorandum, of every agreement
with another such carrier or other person subject to this chapter,
or modification or cancellation thereof, to which it may be a party
or conform in whole or in part, fixing or regulating transportation
rates or fares; giving or receiving special rates, accommodations,
or other special privileges or advantages; controlling, regulating,
preventing, or destroying competition; pooling or apportioning
earnings, losses, or traffic; allotting ports or restricting or
otherwise regulating the number and character of sailings between
ports; limiting or regulating in any way the volume or character of
freight or passenger traffic to be carried; or in any manner
providing for an exclusive, preferential, or cooperative working
arrangement. The term 'agreement' in this section includes
understandings, conferences, and other arrangements."
"The Commission shall by order, after notice and hearing,
disapprove, cancel or modify any agreement, or any modification or
cancellation thereof, whether or not previously approved by it,
that it finds to be unjustly discriminatory or unfair as between
carriers, shippers, exporters, importers, or ports, or between
exporters from the United States and their foreign competitors, or
to operate to the detriment of the commerce of the United States,
or to be contrary to the public interest, or to be in violation of
this chapter, and shall approve all other agreements,
modifications, or cancellations. No such agreement shall be
approved, nor shall continued approval be permitted for any
agreement (1) between carriers not members of the same conference
or conferences of carriers serving different trades that would
otherwise be naturally competitive, unless in the case of
agreements between carriers, each carrier, or in the case of
agreement between conferences, each conference, retains the right
of independent action, or (2) in respect to any conference
agreement, which fails to provide reasonable and equal terms and
conditions for admission and readmission to conference membership
of other qualified carriers in the trade, or fails to provide that
any member may withdraw from membership upon reasonable notice
without penalty for such withdrawal."
"The Commission shall disapprove any such agreement, after
notice and hearing, on a finding of inadequate policing of the
obligations under it, or of failure or refusal to adopt and
maintain reasonable procedures for promptly and fairly hearing and
considering shippers' requests and complaints."
"Any agreement and any modification or cancellation of any
agreement not approved, or disapproved, by the Commission shall be
unlawful, and agreements, modifications, and cancellations shall be
lawful only when and as long as approved by the Commission; before
approval or after disapproval, it shall be unlawful to carry out in
whole or in part, directly or indirectly, any such agreement,
modification, or cancellation; except that tariff rates, fares, and
charges, and classifications, rules, and regulations explanatory
thereof (including changes in special rates and charges covered by
section 813a of this title which do not involve a change in the
spread between such rates and charges and the rates and charges
applicable to noncontract shippers) agreed upon by approved
conferences, and changes and amendments thereto, if otherwise in
accordance with law, shall be permitted to take effect without
prior approval upon compliance with the publication and filing
requirements of section 817(b) of this title and with the
provisions of any regulations the Commission may adopt."
"Every agreement, modification, or cancellation lawful under
this section, or permitted under section 813a of this title, shall
be excepted from the provisions of sections 1 to 11 and 15 of Title
15, and amendments and Acts supplementary thereto."
"Whoever violates any provision of this section or of section
813a of this title shall be liable to a penalty of not more than
$1,000 for each day such violation continues, to be recovered by
the United States in a civil action. Provided, however,
That the penalty provisions of this section shall not apply to
leases, licenses, assignments, or other agreements of similar
character for the use of terminal property or facilities which were
entered into before the date of enactment of this Act, and, if
continued in effect beyond said date, submitted to the Federal
Maritime Commission for approval prior to or within ninety days
after the enactment of this Act, unless such leases, licenses,
assignments, or other agreements for the use of terminal facilities
are disapproved, modified, or canceled by the Commission and are
continued in operation without regard to the Commission's action
thereon. The Commission shall promptly approve, disapprove, cancel,
or modify each such agreement in accordance with the provisions of
Section 1 of the Act, as set forth in 46 U.S.C. § 801, defines
the term "other person subject to this chapter" as
"any person not included in the term 'common carrier by water,'
carrying on the business of forwarding or furnishing wharfage,
dock, warehouse, or other terminal facilities in connection with a
common carrier by water."
There are exceptions to this rule, see n
not relevant to this
PMA's membership includes steamship lines, steamship agents,
stevedoring companies, and marine terminal companies operating at
Pacific coast ports of the United States.
The complaining public ports were Anacortes, Bellingham,
Everett, Grays Harbor, Olympia, Port Angeles, Portland, and Tacoma.
The Port of Seattle subsequently intervened on their side.
Section 16, 39 stat. 734, as amended, 46 U.S. C. § 815, forbids
discriminatory or preferential rates or other acts; and § 17, 39
Stat. 734, as amended, 46 U.S.C. § 816, empowers the Commission to
prescribe reasonable nondiscriminatory rates.
For present purposes, the term "fringe benefits" refers to
bargained-for plans for vacation pay, pay guarantees, pensions,
welfare, and holidays.
The Union favors the centralized, rotational hiring system,
because such a system equalizes job opportunities by insuring that
available work is spread among the registered workforce. Employers,
however, prefer to use steady gangs, believing that system to be
more efficient, since new workers are not constantly having to be
familiarized with the employer's operations.
Since 1935, PMA employers have been required to hire exclusively
from hiring halls jointly financed by PMA and the Union. This
hiring hall system was created in an effort to reconcile the
fluctuating demand for labor in the Pacific coast longshore
industry with the need for stable employment. Union members
register for jobs at the halls, and from there are dispatched to
work assignments. Despite the rotational hiring method used within
the industry, registered Union workers receive a single paycheck
from PMA. This requires PMA to maintain a central payroll and
recordkeeping system for these longshoremen.
The ports paid a participation fee for this privilege. In PMA's
view, allowing nonmembers to participate in the fringe benefit
plans was a great benefit to the nonmembers, for it permitted them
to participate in programs funded for thousands of employees,
rather than having to establish their own plans for very few
employees. On the other hand, PMA thought that having nonmembers
participate in some, but not necessarily all, of the benefit plans
created additional administrative burdens for it.
When contract negotiations began in late 1970, the Union
proposed that the contract provide that PMA would accept all fringe
benefit contributions from any employer, whether or not a PMA
member. In response, PMA proposed that all nonmember participation
under the collective bargaining agreement be eliminated except as
applied to those employers who were not permitted by law to become
members of PMA.
To support this description, the Court of Appeals quoted the
following paragraphs from a revision of the Supplemental Memorandum
of Understanding, to be mentioned in the text, which the Commission
found was substantially the same as the Supplemental Memorandum of
Understanding, 177 U.S.App.D.C. at 250-251, nn. 6-9, 543 F.2d at
397-398, nn. 6-9:
"6. 7. The nonmember participant shall participate in the
ILWU-PMA Pension Plan, the ILWU-PMA Welfare Plan, the PMA Vacation
Plans (longshoremen and clerks, and walking bosses/foremen) and the
ILWU-PMA Guarantee Plans (longshoremen and clerks/ and walking
bosses/foremen) in accordance with the terms applicable to such
participation. Such nonmember shall make payments into these Plans
at the same rates and at the same times as members of PMA are to
make the respective payments. Attached are statements of terms and
conditions currently in effect with respect to such participation.
Non-member Participants shall be subject to the same audits as
members of PMA."
"7. 9. Each nonmember participant shall pay to the PMA an amount
equal to the dues and assessments on the same basis that a PMA
member would pay. Payments shall be made at the same time the
member would pay."
"8. 5. A nonmember participant may obtain and employ a man in
the joint workforce on a steady basis in the same way a member may
do so. When such participant employs a man to work on a steady
basis, it shall notify PMA immediately. On request from PMA, each
such participant shall furnish to PMA a list of men it is using on
a steady basis. Steady men shall participate in the Pay Guarantee
Plan in accordance with the rules that are adopted by PMA and
"9. 3. A nonmember participant will share in the use of the
joint workforce upon the same terms as apply to members of PMA. For
"a) the nonmember participant shall obtain men on the same basis
as a PMA member from the dispatch hall operated by ILWU and PMA
through the allocation system operated by PMA,"
"b) if a work stoppage by ILWU shuts off the dispatch of men
from the dispatch hall to PMA members, nonmember participants shall
not obtain men from the dispatch hall,"
"c) if during a work stoppage by ILWU, PMA and ILWU agree on
limited dispatch of men from the dispatch hall for PMA members,
such limited dispatch shall be available to nonmember
"The essence of b) and c) of this section is the acceptance by
nonmember participants of the principle that a work stoppage by
ILWU against PMA members is a work stoppage against nonmember
The Court of Appeals went on to point out:
"The Revised Agreement also required uniform terms regarding
selection of men in the joint workforce, continuance of obligation
to pay PMA assessments, and use of uniform payment and record
at 251 n. 9, 543 F.2d at 398 n. 9.
The Commission noted that the complaint before it alleged, not
that PMA or the Union had refused to bargain, but rather that they
had entered into an agreement in violation of the shipping and
antitrust laws. The Commission concluded that the NLRB would be
without available procedure to investigate the legality of the
nonmember participation agreement.
The suggestion that it defer the matter to the courts was also
deemed unmeritorious, since the Commission had already intervened
in a counterpart. antitrust case brought by the ports and had
requested a stay of those proceedings, which had been granted
pending the Commission's resolution of the Shipping Act
The Commission's view is that, although the Union is neither a
carrier nor "other person," the agreement nevertheless constitutes
an agreement among the contracting carriers -- in this case, as to
how the public ports were to be dealt with -- and is therefore a §
15 contract insofar as the identity of the parties is concerned.
The Court of Appeals for the Second Circuit agrees with the
Commission. New York Shipping Assn. v. FMC,
495 F.2d 1215,
1220-1221, cert. denied,
419 U.S. 964 (1974). Nor did the
Court of Appeals in this case disagree; it simply noted the
approach of the Commission and suggested that this Court might have
approved it in Volkswagenwerk v. FMC, 390 U.
(1968). 177 U.S.App.D.C. at 26 n. 31, 543 F.2d at
The Commission said, 16 F.M.C. at 12-13:
"Hence, from these cases have evolved the various criteria for
determining the labor exemption from the antitrust laws and which
we herewith adopt for purposes of assisting us in determining the
labor exemption from the shipping laws with this caveat. These
criteria are by no means meant to be exclusive, nor are they
determinative in each and every case. Just as in the accommodation
of the labor laws and the antitrust laws the courts have resolved
each case on an ad hoc
basis, so too will we. Each of the
following criteria deserves consideration, but it is obvious that
each element is not, in and of itself, controlling. They are rather
guidelines or 'rules of thumb' for each factual situation. These
criteria are as follows:"
"1. The collective bargaining which gives rise to the activity
in question must be in good faith. Other expressions used to
characterize this element are 'arm's-length' or 'eyeball to
"2. The matter is a mandatory subject of bargaining,
wages, hours or working conditions. The matter must
be a proper subject of union concern, i.e.,
intimately related or primarily and commonly associated with a bona
fide labor purpose."
"3. The result of the collective bargaining does not impose
terms on entities outside of the collective bargaining group."
"4. The union is not acting at the behest of or in combination
with nonlabor groups, i.e.,
there is no conspiracy with
"In the final analysis, the nature of the activity must be
scrutinized to determine whether it is the type of activity which
attempts to affect competition under the antitrust laws or the
Shipping Act. The impact upon business which this activity has must
then be examined to determine the extent of its possible effect
upon competition, and whether any such effect is a direct and
probable result of the activity or only remote. Ultimately, the
relief requested or the sanction imposed by law must then be
weighed against its effect upon the collective bargaining
agreement. In balancing the equities, the above criteria will no
doubt be of value. We cannot, however, subscribe to the view that
collective bargaining agreements be granted a blanket labor
exemption from the Shipping Act."
The Commission concluded that the agreement in question did not
affect "outsiders," because there was no express agreement among
the PMA members to pass on all or a portion of the assessments to
the carriers and shippers served by the terminal operators.
Volkswagenwerk Aktiengesellschaft v. Marine Terminals
9 F.M.C. 77, 82-83 (1965).
Section 35, as set forth in 46 U.S.C. § 833a, provides:
"The Federal Maritime Commission, upon application or on its own
motion, may by order or rule exempt for the future any class of
agreements between persons subject to this chapter or any specified
activity of such persons from any requirement of this chapter, or
Intercoastal Shipping Act, 1933, where it finds that such exemption
will not substantially impair effective regulation by the Federal
Maritime Commission, be unjustly discriminatory, or be detrimental
"The Commission may attach conditions to any such exemptions and
may, by order, revoke any such exemption."
"No order or rule of exemption or revocation of exemption shall
be issued unless opportunity for hearing has been afforded
In Connell Construction Co. v. Plumbers &
Steamfitters, 421 U. S. 616
(1975), for example, the Court, after concluding that the agreement
in question was not entitled to the nonstatutory labor exemption
from the antitrust laws, remanded for consideration whether the
agreement violated the Sherman Act. See also Meat Cutters v.
Jewel Tea Co., 381 U. S. 676
381 U. S.
-689 (1965) (opinion of WHITE, J.).
The PMA thought that the nonmembers enjoyed an advantage in that
they were able to
"pick and choose fringe benefits on a piecemeal basis . . . [and
could] get favored treatment in regard to the utilization of the
workforce, the employment of steady men, the privilege of working
when members [could not], and [that the nonmembers] even [went] so
far as to take advantage of that latter situation and handle cargo
which would otherwise be handled by members during strike or
MR. JUSTICE POWELL, with whom MR. JUSTICE BRENNAN and MR.
JUSTICE MARSHALL join, dissenting.
The Court today holds that collective bargaining agreements in
the maritime industry are subject to the filing and prior approval
requirements of § 15 of the Shipping Act, 1916 (Act), 46 U.S.C. §
814. Neither statutory language nor legislative history offers
specific support for this result. For well over a half a century,
the agency responsible for enforcing the Act did not consider § 15
previews of maritime labor contract to be within its mission,
] even though
Page 435 U. S. 65
bargaining is hardly a recent development in the major ports of
the Nation. [Footnote 2/2
intervening legislation explains the Court's willingness to
recognize this belated assertion of jurisdiction. [Footnote 2/3
This decision would be debatable but unexceptional were it not
for the presence of a competing statute. The task confronting the
Court is one of reconciling the broad language of § 15 with the
distinct policy of federal labor law embodied in the Labor
Management Relations Act, 1947, 29 U.S. . § 141 et seq.
seems to me that today's ruling undercuts federal labor policy,
imposing undue burdens on collective bargaining, without advancing
significantly any Shipping Act objective. I therefore dissent.
Page 435 U. S. 66
The sweeping generality of § 15 arguably would enable the
statute to be applied to almost any agreement involving a party
subject to the Act. But this merely accents the importance of
construing its general language in light of the Act's purposes and
the policies of other pertinent statutes. Section 15 has not been
interpreted as reaching all agreements related to maritime
transportation. See FMC v. Seatrain Lines, Inc.,
411 U. S. 726
411 U. S.
-734 (1973). Although Volkswagenwerk v. FMC,
390 U. S. 261
(1968), referred to today, ante
at 435 U. S. 55
emphasized the breadth of the statutory language, the Court was
careful to limit its holding to avoid any suggestion that
collective bargaining agreements must comply with the requirements
of § 15.
In subjecting collective bargaining agreements to prior
clearance by the Commission under § 15, the Court goes well beyond
the limits established in Volkswagenwerk.
earlier agreement between respondent Pacific Maritime Association
(PMA) and respondent International Longshoremen's and
Warehousemen's Union (Union) provided for the introduction of
labor-saving devices and the elimination of certain work practices.
The agreement required the creation of a "Mechanization and
Modernization Fund" (Mech Fund) of $29 million to be used to
mitigate the impact of technological unemployment upon employees.
It reserved to the PMA alone the right to determine how to raise
the fund from its members. The question before the Court was
whether § 15 applied to a subsequent agreement among members of the
PMA setting forth various formulas for collecting the Mech Fund.
The Court held that the employers' "side agreement" would have a
substantial impact on stevedoring and terminal charges, and
required the prior approval of the Commission. Following the
suggestion of the United States, [Footnote 2/4
] the Court
Page 435 U. S. 67
restricted its holding to the "side agreement," explicitly
disclaiming any intention to reach the underlying collective
"It is to be emphasized that the only agreement involved in this
case is the one among members of the Association allocating the
impact of the Mech Fund levy. We are not concerned here with the
agreement creating the Association or with the collective
bargaining agreement between the Association and the ILWU. No claim
has been made in this case that either of those agreements was
subject to the filing requirements of § 15. Those agreements,
reflecting the national labor policy of free collective bargaining
by representatives of the parties' own unfettered choice, fall in
an area of concern to the National Labor Relations Board, and
nothing we have said in this opinion is to be understood as
questioning their continuing validity.
But, in negotiating
with the ILWU, the Association insisted that its members were to
have the exclusive right to determine how the Mech Fund was to be
assessed, and a clause to that effect was included in the
collective bargaining agreement. That assessment arrangement,
affecting only relationships among Association members and their
customers, is all that is before us in this case."
390 U.S. at 390 U. S. 278
Page 435 U. S. 68
The italicized language makes clear that the
Court perceived a distinction, material to
Commission authority under § 15, between a collective bargaining
agreement and implementing agreements among carriers, stevedoring
contractors, and marine terminal operators.
In this case, I would follow what seems to have been the lead of
the Court in Volkswagenwerk.
A proper accommodation of the
conflicting signals of the Shipping Act and federal labor policy
requires that bona fide collective bargaining agreements, arrived
through arm's-length negotiations, [Footnote 2/5
] do not fall within § 15. As in other
collective bargaining contexts, labor and management in the
maritime industry would be free to reach agreement without prior
Government approval or control over the substantive terms of the
bargain, while the agreement itself or its implementation would be
subject to scrutiny under the antitrust laws and the specific
prohibitions of §§ 16 [Footnote
] and 17 [Footnote 2/7
Page 435 U. S. 69
The prospects for peaceful resolution of labor disputes in an
industry marked by a history of industrial strife, see
Larrowe, Shape Up and Hiring Hall 1-48, 83-138 (1955);
Volkswagenwerk v. FMC,
390 U.S. at 390 U. S.
-299 (Douglas, J., dissenting in part), are not
enhanced by the Court's imposition of a system of administrative
prior restraints. Collective bargaining works best when the parties
are free to arrive at negotiated solutions to problems without
first having to secure the approval of Government regulators. The
legal consequences of a bargain may be assessed after the fact, but
the parties should be free to negotiate an agreement within the
framework of procedures prescribed by the National Labor Relations
Board (Board). Often, negotiations are conducted under substantial
constraints of time, and agreement is reached at the eleventh hour.
If there is no agreement by the expiration date of the previous
contract, or if an accord may not be executed because of a
requirement of prior governmental approval, labor's "no contract,
no work" tradition suggests the likelihood of a disruptive work
stoppage. Moreover, the bargaining process itself may suffer where
the parties know that any agreement is simply a tentative accord,
subject to pre-implementation review by an administrative agency.
As the Board noted in New York Shipping Assn. v. FMC,
F.2d 1215 (CA2), cert. denied,
419 U.S. 964 (1974):
"It is extremely difficult for the parties to make a meaningful
judgment as to the kind of bargain they are negotiating if one or
more of the key provisions on which agreement turns is subject to
invalidation by the Commission.
Page 435 U. S. 70
This kind of administrative supervision will impede the process
of collective bargaining, and could inhibit negotiators' attempts
to arrive at novel solutions to troublesome labor problems. The
superimposition of the approval of the FMC over [matters that are]
crucial to the agreement is likely to disrupt the process of
collective bargaining and deter the speedy resolution of industrial
disputes in the maritime industry."
Brief for National Labor Relations Board as Amicus
in Nos. 73-1919 and 73-1991 (CA2), p. 14.
Section 15 jurisdiction also entails recognition of a revisory
power in the Commission over the substantive terms of collective
bargaining agreements. The Commission is empowered, after notice
and hearing, to "disapprove, cancel or modify any agreement" that
it finds to be "unjustly discriminatory or unfair," detrimental to
commerce, contrary to the public interest, or otherwise violative
of the Act. If -- as the Court holds -- this power is applicable to
collective bargaining agreements, it would exceed even the broad
remedial authority of the Board itself, which falls short of any
substantial interference with the "freedom of contract" of the
parties. In Porter Co. v. NLRB, 397 U. S.
(1970), the Court held that the Board could not order
an employer to grant the union a contract checkoff clause as a
remedy for an acknowledged violation of the statutory duty to
bargain in good faith.
"It is implicit in the entire structure of the Act that the
Board acts to oversee and referee the process of collective
bargaining, leaving the results of the contest to the bargaining
strength of the parties. . . . The Board's remedial powers under §
10 of the Act are broad, but they are limited to carrying out the
policies of the Act itself. One of these fundamental policies is
freedom of contract. While the parties' freedom of contract is not
absolute under the Act, allowing the Board to compel agreement
Page 435 U. S. 71
when the parties themselves are unable to agree would violate
the fundamental premise on which the Act is based -- private
bargaining under governmental supervision of the procedure alone,
without any official compulsion over the actual terms of the
at 107-108. The parties cannot agree to terms that
violate the law, but the remedy that is generally applied is
post-execution invalidation and assessment of damages, rather than
"official compulsion over the actual terms of the contract."
] Hence, the Court's
recognition of such a power reposing in the Commission is
fundamentally at odds with national labor policy.
The Court insists that concern over
"the possible impact of the Commission's decision on the
collective bargaining process [is] exaggerated, and [does] not
justify the major surgery performed on § 15 by the decision
at 435 U. S. 57
is suggested that few labor agreements will have to be filed,
because § 15 does not apply to contracts between a union and a
single employer, and the Commission has forsworn jurisdiction over
agreements falling within the uncertain contours of a "labor
exemption" to be developed in the course of agency adjudications.
at 435 U. S.
It is by no means clear to me that the Court's optimism is
justified. Labor unions and management groups, following the course
of caution, are likely to respond to today's decision by filing all
labor agreements with the Commission. Respondents can take little
comfort in the assertion that "routine," Brief for Petitioners 28,
or "ordinary collective bargaining
Page 435 U. S. 72
agreements" will not "be subject to the requirements of § 15,"
at 435 U. S. 57
] Few agreements
negotiated between a union and a multiemployer bargaining
association for the purpose of governing working relations at a
major port are likely to be so "routine" that the parties safely
may assume that they enjoy an exemption from § 15. A degree of
uncertainty and delay, then, would seem an inevitable byproduct of
§ 15 jurisdiction over maritime labor relations.
Similarly, the possibility that the Commission may find that a
particular agreement qualifies for a "labor exemption" does not
offer a realistic palliative for the probable impact of the Court's
decision on free collective bargaining. The Court suggests that the
Commission may apply its special understanding of the requirements
of anticompetitive policy, [Footnote
] but there is no well developed corpus of maritime
labor-antitrust decisions to guide the formulation of labor
agreements in the industry. The Commission has identified four
nonexclusive, nondeterminative criteria to inform its "labor
Page 435 U. S. 73
rulings. [Footnote 2/11
brief history of the Commission' entry into the maritime labor
field, however, see 435 U.S.
fn2/1|>n. 1, supra,
offers little basis for hope
that it assertion of § 15 jurisdiction will not impair the
collective bargaining process. In the final analysis, the
substantial penalties provided by the Act [Footnote 2/12
] for "guessing wrong" make it unlikely
that the disruption and uncertainty inherent in this prior
restraint scheme will be allayed significantly by the rulings of a
federal agency inexpert in labor and labor-antitrust matters.
I cannot agree that either the statutory language or the
Page 435 U. S. 74
legislative history [Footnote
] of § 1 requires that it be made applicable to collective
bargaining agreements. Neither contains any reference to labor
agreements. Although § 15 reaches a broad spectrum of arrangements,
its terms apply only to agreements among "common carriers by water"
or "other persons subject to this chapter." [Footnote 2/15
] Unions are not persons subject to the
Act. One would have thought that, if Congress had wished to include
collective bargaining agreements within the scope of § 15, it would
have done so specifically or, at least,
Page 435 U. S. 75
it would have provided or jurisdiction over the indispensable
party to such an agreement -- the labor union. [Footnote 2/16
The terms of § 15 must be construed in light of the
considerations that led to federal regulation of the maritime
industry [Footnote 2/17
encouraged Congress to empower the Commission to immunize
restrictive agreements among shippers and others subject to the Act
from all antitrust scrutiny. [Footnote 2/18
] The Court's ruling abstracts this power
of approval from the particular context that prompted Congress to
accord certain agreements an immunity premised on Shipping Act
policies which did not necessarily reflect antitrust principles.
Page 435 U. S. 76
the Court recognized § 15 jurisdiction
over an agreement among members of respondent Association, to which
a grant of immunity, after Commission study and approval, would
have been understandable. That agreement presented only Shipping
Act considerations. As the Government pointed out in that case, the
assessment formula was "not a part of [the labor] contract,
involve[d] no question of labor relations, and [was] not subject to
the jurisdiction of the Labor Board." See 435 U.S.
fn2/4|>n. 4, supra.
I find it difficult to
believe, however, that Congress, in 1916, intended to empower the
Commission to approve, and thereby immunize from the reach of the
antitrust laws, the varied terms of collective bargaining
The Commission in this case found that the agreement fell within
the third category of § 15 -- which concerns agreements
"controlling, regulating, preventing, or destroying competition."
Pacific Maritime Assn. -- Cooperative Working
18 F.M.C.196 (1975). Undoubtedly, some maritime
labor agreements will pose antitrust problems. But we must
recognize, as we did in FMC v. Seatrain Lines, Inc.,
a broad "reading of the Commission's jurisdiction would increase
the number of cases subject to potential antitrust immunity," and
"conflict with our frequently expressed view that exemptions from
antitrust laws are strictly construed, see, e.g., United States
v. McKesson & Robbins, Inc., 351 U.
, 351 U. S. 316
(1956). . . ." 411 U.S. at
411 U. S. 733
, and n. 8.
Plenary review by the Commission of all maritime labor
agreements that now will have to be filed in their entirety may be
avoided only by retroactive, piecemeal grants of a "labor
exemption." [Footnote 2/20
better course would be to recognize that
Page 435 U. S. 77
bona fide collective bargaining agreements, as a class, do not
come within § 15.
An exemption from the filing and prior clearance regime of § 15
would not shield collective bargaining agreements from all scrutiny
under the Shipping Act. It would remain open to the Commission to
determine that a particular agreement was not the product of
arm's-length negotiations, but rather was an effort to circumvent §
15 by clothing a restrictive arrangement otherwise subject to the
filing requirement with the trappings of a labor accord. Moreover,
even a bona fide collective bargaining agreement, or at least
action taken in its implementation, may be reviewed under §§ 16 and
17. Petitioners have not demonstrated that vindication of Shipping
Act policies requires the application of § 15, in the first
instance, to genuine collective bargaining agreements. Indeed, the
Commission's recognition of a "labor exemption" and its unreviewed
assertion of power to accord "interim approval" to labor
agreements, see 435 U.S.
fn2/13|>n. 13, supra,
suggest that the proposed
remedy for an occasional evasion of the Shipping Act through the
device of the collective bargaining agreement may be likened to
using "a sledge hammer to fix a watch." Volkswagenwerk v.
390 U.S. at 390 U. S. 296
(Douglas, J., dissenting in part). [Footnote 2/21
I respectfully dissent.
Prior to 1968, the Federal Maritime Commission (Commission) and
its predecessors resisted the idea that § 15 reached agreements
affecting employer-employee relationships. Three years after this
Court's ruling in Volkswagenwerk v. FMC, 390 U.
(1968), however, the Commission held that § 15
applied to work-gang allocation and employee recall provisions
developed among members of a multiemployer association. The recall
provision had been embodied in a collective bargaining agreement.
United Stevedoring Corp. v. Boston Shipping Assn.,
F.M.C. 33 (1971). On appeal, the United States, as statutory
respondent, incorporating the positions of the Department of Labor
and the National Labor Relations Board, objected to the
Commission's decision. The opposition of the United States prompted
the Commission to move for a remand for further consideration. The
Court of Appeals granted the motion, expressing "astonishment" at
the Commission's failure to recognize the difference
"between attaching a separate, Section 15, agreement, in which
the union had little interest, to a collective bargaining
agreement, and making a multiemployer agreement with a union,
eyeball to eyeball, but which, by the very fact that it is
multi-employer, has some effect on employer competition."
Boston Shipping Assn. v. United States,
8 SRR 20,828,
20,830 (CA1 1972). On remand, the Commission found that both
provisions were entitled to a "labor exemption" derived, by
analogy, from this Court's labor antitrust decisions. United
Stevedoring Corp. v. Boston Shipping Assn.,
16 F.M.C. 7, 14-15
Aside from the present controversy, the Commission's only other
foray into the labor arena involved an assessment formula for
funding a fringe benefit program that was incorporated in a
collective bargaining agreement. New York Shipping Assn. --
NYSA-ILA Man-Hour/Tonnage Method of Assessment,
16 F.M.C. 381
(1973). On appeal, the United States supported the Commission,
while the Department of Labor and the National Labor Relations
Board urged reversal. The Court of Appeals upheld the decision.
New York Shipping Assn. v. FMC,
495 F.2d 1215 (CA2),
419 U.S. 964 (1974).
New York longshoremen were sufficiently organized by 1874 to
conduct a five-week strike for higher wages. By 1914, New York
locals formed the International Longshoremen's Association (ILA)
and, by 1916, the union secured a port-wide agreement. On the west
coast, District Council 38 of the ILA, in 1915, entered into an
agreement providing for wage increases with all employers in the
Puget Sound-British Columbia area. C. Larrowe, Shape-Up and Hiring
Hall 7-9, 87-89 (1955).
The Court notes that the Shipping Act, including § 15, was
extensively revised in 1961, Pub.L. 87-346, 75 Stat. 763, see
at 435 U. S. 54
but offers no evidence that this reexamination of "the entire gamut
of antitrust problems in the ocean freight industry," H.R.Rep. No.
1419, 87th Cong., 2d Sess., 2 (1962), touched upon the possibility
of § 15's application to collective bargaining agreements.
"For purposes of deciding this case, we may assume that
agreements which relate solely to collective bargaining or labor
relations are excepted from the scope of Section 15 of the Shipping
Act. Cf. Kennedy v. Long Island R. Co., 211 F.
319 F.2d 366 (C. A.
2), certiorari denied,
375 U.S. 830. The basic
agreement to provide a mechanization fund in a certain amount for
the benefit of the longshoremen would appear to be of this
And after the Association agreed to create the
fund, it had an ancillary obligation to collect it somehow. But at
issue here is only the side agreement among the Association's
members prescribing a special assessment on the cargo handled by
them. Such an agreement among employers apportioning the cost of
the labor contract is not a part of that contract, involves no
question of labor relations, and is not subject to the jurisdiction
of the Labor Board."
Brief for United States in Volkswagenwerk v. FMC,
1967, No. 69, pp. 31-32 (emphasis supplied); see
Memorandum for United States in Volkswagenwerk,
Petitioners do not challenge the bona fides
agreement in question. Indeed, they concede that the Union has a
legitimate interest in the integrity and work opportunities of the
registered workforce and in the fringe benefits covered by the
agreement. Reply Brief for Petitioners 6.
Section 16 of the Act, as set forth in 46 U.S.C. § 815, provides
in relevant part:
"It shall be unlawful for any common carrier by water, or other
person subject to this chapter, either alone or in conjunction with
any other person, directly or indirectly -- "
"First. To make or give any undue or unreasonable preference or
advantage to any particular person, locality, or description of
traffic in any respect whatsoever, or to subject any particular
person, locality, or description of traffic to any undue or
unreasonable prejudice or disadvantage in any respect whatsoever. .
See 435 U.S.
fn2/16|>n. 16, infra.
Section 17 of the Act, as set forth in 46 U.S.C. § 816, provides
in relevant part:
"Every such carrier and every other person subject to this
chapter shall establish, observe, and enforce just and reasonable
regulations and practices relating to or connected with the
receiving, handling, storing, or delivering of property. Whenever
the Commission finds that any such regulation or practice is unjust
or unreasonable, it may determine, prescribe, and order enforced a
just and reasonable regulation or practice."
This provision may not reach the collective bargaining
agreement, but it would appear to be applicable to the
implementation of the agreement by persons subject to the Act.
For example, although § 8(e) of the National Labor Relations
Act, 29 U.S.C. § 158(e) (1970 ed., Supp. V), prohibits entering
into a "hot cargo" agreement, there is no requirement that the
parties submit a proposed agreement to the Board for prior
clearance. The Board's remedial authority is limited to the
obtaining of a preliminary injunction under § 10(1), 29 U.S.C. §
160(1), and the ultimate issuance of a cease and desist order,
requiring enforcement by a court of appeals.
The Court's discussion on this point is somewhat unclear. The
argument appears to be, as observed in the text, that "ordinary
collective bargaining agreements" would not "be subject to the
requirements of § 15," ante
at 435 U. S. 57
apparently because their conformity with antitrust and Shipping Act
policies may be presumed. If the Court is simply saying, however,
that such agreements are likely to be "routinely approved even if
this is no answer to respondents'
contention that compliance with § 15 prevents the prompt
implementation of compromise agreements worked out in eleventh-hour
bargaining sessions that often is necessary to the preservation of
"We should add that, since the Shipping Act contains its own
standards for exempting and for approving and disapproving
agreements between carriers, and because the ultimate issue in
cases such as this is the accommodation of the Shipping Act and the
labor laws, rather than the labor laws and the antitrust laws, it
will not necessarily be a misapplication of the statutes if the
exemption for collective bargaining contracts from Shipping Act
requirements is not always exactly congruent with the so-called
labor exemption from the antitrust laws as understood by the
at 435 U. S.
"These criteria are by no means meant to be exclusive, nor are
they determinative in each and every case. Just as, in the
accommodation of the labor laws and the antitrust laws, the courts
have resolved each case on an ad hoc
basis, so too will
we. Each of the following criteria deserves consideration, but it
is obvious that each element is not, in and of itself, controlling.
They are rather guidelines or 'rules of thumb' for each factual
United Stevedoring Corp. v. Boston Shipping Assn.,
F.M.C. at 12.
Although the Commission has promised to undertake a rulemaking
proceeding to promulgate more precise standards for its "labor
at 15, no regulations have been
Noncompliance with § 15 exposes the offending party to a civil
penalty of not more than $1,000 for each day of violation. If the
agreement, or its implementation, is ultimately held to violate §
16 as well, the party also may be guilty of a misdemeanor
punishable by a fine of not more than $5,000 for each offense.
The power of the Commission to grant temporary approvals under §
15, e.g., New York Shipping Assn. v. FMC,
495 F.2d at
1218, has not been passed on by a federal court, see Marine
Cooks & Stewards v. FMC,
No. 75-2013 (CADC Feb. 4, 1977)
(dismissing appeal). In any event, this dispensation is a matter of
administrative grace. The problems of uncertainty and delays are
not likely to disappear because there is a chance that the
Commission may be persuaded to issue a temporary approval. And, as
the Court of Appeals recognized, even if such a power and its
frequent exercise are assumed, interim approval "does not remove
the possibility of later unilateral modification by the Commission.
. . ." 177 U.S.App.D.C. 248, 260, 543 F.2d 395, 407 (1976).
Petitioners concede that
"[t]he legislative history of the Shipping Act is unilluminating
concerning Congress' specific intent where a labor union is a
signatory to an agreement otherwise subject to the Act. . . ."
Brief for Petitioners 24 n. 25.
Legislative developments after the passage of the Shipping Act
highlight the improbability of § 15 jurisdiction over labor
agreements. In 1938, Congress created a Maritime Labor Board (MLB)
for the purpose of encouraging collective bargaining and assisting
in the peaceful settlement of disputes through mediation. A
provision of the 1938 measure, § 1005, 52 Stat. 967, required every
maritime employer to file with the MLB a copy of every contract
with any group of its employees covering wages, hours, and working
conditions. A 1941 House Committee Report on a bill providing for a
two-year extension of the 1938 machinery noted:
"This is the only Government agency with which copies of all
labor agreements are required to be filed, and these have been
studied by the Board with a view to promoting stable labor
relations in the maritime industry."
"One of the most unique provisions . . . requires the filing
with the Board of all maritime labor agreements. The 4,303
collective agreements filed with the Maritime Labor Board represent
the most complete file of collective agreements in the maritime
industry, as employers are not required to file agreements,
covering their maritime employees, with any other Federal
H.R.Rep. No. 354, 77th Cong., 1st Sess., 5 (1941) (emphasis
supplied). The MLB ultimately was discontinued.
The term "other person subject to this chapter"
"means any person not included in the term 'common carrier by
water,' carrying on the business of forwarding or furnishing
wharfage, dock, warehouse, or other terminal facilities in
connection with a common carrier by water."
46 U.S.C.§ 801.
By contrast, § 16 bars certain discriminatory acts engaged in by
"any common carrier by water, or other person subject to this
chapter, either alone or in conjunction with any other person. . .
." The term "person"
"includes corporations, partnerships, and associations, existing
under or authorized by the laws of the United States, or any State,
Territory, District or possession thereof, or of any foreign
46 U.S.C. § 801.
The guiding force in the development of the Shipping Act was the
House Committee that issued the "Alexander Report." House Committee
on Merchant Marine and Fisheries, Report on Steamship Agreements
and Affiliations, H.R.Doc. No. 805, 63d Cong., 2d Sess. (1914).
See Federal Maritime Board v. Isbrandtsen Co.,
356 U. S. 481
356 U. S. 490
(1958). The Alexander Committee principally addressed the methods
for control of competition employed by steamship lines and water
carriers that had cartelized much of the industry. Alexander Report
409-412, 415, 421-422. To ensure Government surveillance of these
practices, the Committee recommended that all carriers engaged in
the foreign and domestic trade of the United States file with the
Government all agreements entered into with any other carrier,
shipper, railroad, or other transportation agencies. Id.
at 419-420, 422-423.
Concluding that outright prohibition of steamship agreements and
conference arrangements would result only in rate wars and
anticompetitive mergers, the Alexander Committee
"chose to permit continuation of the conference system, but to
curb its abuses by requiring government approval of conference
FMC v. Seatrain Lines, Inc., 411 U.
, 411 U. S. 738
At least until 1961, it was an open question whether the
Commission could take antitrust policies into account when ruling
on proposed agreements. Id.
at 411 U. S. 739
Apparently, the approval of an agreement, premised on a
consideration of Shipping Act policies alone, was sufficient to
confer an immunity from the antitrust laws.
The Commission's assertion of power to accord a "labor
exemption" after filing to particular collective bargaining
agreements, or portions thereof, does not fit neatly within the
authorization of § 35 of the Act, 46 U.S.C. § 833a. That provision
contemplates action "for the future," after opportunity for a
hearing, exempting "any class of agreements between persons subject
to this chapter or any specified activity of such persons. . .
Because of my conclusion that § 15, properly read, does not
apply to bona fide collective bargaining agreements, I do not reach
the question of whether the Commission interpreted correctly
Mine Workers v. Pennington, 381 U.
(1965), to deny a "labor exemption" from the
Shipping Act to the agreement in question.