Marrowbone Develop v. District 17, UMWA ( 1998 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
MARROWBONE DEVELOPMENT
COMPANY,
Plaintiff-Appellant,
v.
No. 97-1642
DISTRICT 17, UNITED MINE
WORKERS OF AMERICA; LOCAL UNION
93, UNITED MINE WORKERS OF
AMERICA,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of West Virginia, at Huntington.
Robert J. Staker, Senior District Judge.
(CA-95-243-3)
Argued: December 3, 1997
Decided: June 8, 1998
Before NIEMEYER and WILLIAMS, Circuit Judges, and
JONES, United States District Judge for the
Western District of Virginia, sitting by designation.
_________________________________________________________________
Reversed by published opinion. Judge Niemeyer wrote the majority
opinion, in which Judge Williams joined. Judge Jones wrote a dissent-
ing opinion.
_________________________________________________________________
COUNSEL
ARGUED: Ronald E. Meisburg, HEENAN, ALTHEN & ROLES,
Washington, D.C., for Appellant. Kevin F. Fagan, DISTRICT 17,
UMWA, Charleston, West Virginia, for Appellees. ON BRIEF: Wil-
liam I. Althen, HEENAN, ALTHEN & ROLES, Washington, D.C.;
Donna C. Kelly, HEENAN, ALTHEN & ROLES, Charleston, West
Virginia, for Appellant. Charles F. Donnelly, HOSTLER & DON-
NELLY, L.C., Charleston, West Virginia, for Appellees.
_________________________________________________________________
OPINION
NIEMEYER, Circuit Judge:
The issue presented in this case is whether a national collective-
bargaining agreement, which requires an employer to assign to
employees of a local union work previously done by contractors, vio-
lates § 8(e) of the National Labor Relations Act (prohibiting agree-
ments that require the employer to cease doing business with other
persons). We hold that, despite the fact that the national union's mem-
bers may have traditionally performed such work for other employers,
the employees in the local bargaining unit did not perform such work,
and application of the national agreement to the local unit would
aggrandize the work of the unit in violation of§ 8(e). We therefore
reverse the judgment of the district court.
I
Since 1976, Marrowbone Development Company has been operat-
ing a coal mining complex in Mingo County, West Virginia. The
complex consists of five separate mines and numerous support facili-
ties, including a preparation plant, a warehouse, a repair facility, and
other support units. To transport and deliver materials and supplies
among the various facilities at its mining complex, Marrowbone has
always engaged contractors or used its salaried employees.
In May 1993, pursuant to the organizing campaign of the United
Mine Workers of America ("UMW" or "the Union") to represent non-
supervisory employees at the mining complex for collective bargain-
ing purposes, the National Labor Relations Board ("NLRB")
conducted an election. The NLRB defined the potential bargaining
unit as:
2
All full-time and regular part-time production and mainte-
nance employees employed by the Employer at its mines
and preparation plant in Mingo County, West Virginia,
excluding all office clerical employees, warehouse employ-
ees, laboratory technicians and employees of contractors,
and all professional employees, guards and supervisors as
defined in the Act.
The Union won the election, and the NLRB certified Local 93, UMW,
as the exclusive bargaining representative of Marrowbone's classified
employees.
Pending the ratification of the National Bituminous Coal Wage
Agreement, which the parties anticipated would take place later in
1993, Marrowbone and the Union entered into an interim agreement
under which they agreed that all terms and conditions of employment
at Marrowbone's mining complex would remain the same until the
national agreement was ratified. The parties also agreed that, upon
ratification, the national agreement would bind them. The interim
agreement thus applied to Local 93 for the period from July 16, 1993
until December 16, 1993, at which time the national agreement was
ratified.
The national agreement provided for particularized assignments of
work. Article IA(a) of the agreement states that:
The production of coal, including removal of overburden
and coal waste, preparation, processing and cleaning of coal
and transportation of coal (except by waterway or rail not
owned by the Employer), repair and maintenance work nor-
mally performed at the mine site or at a central shop of the
Employer and maintenance of gob piles and mine roads, and
work of the type customarily related to all of the above shall
be performed by classified Employees of the Employer cov-
ered by and in accordance with this Agreement . . . .
Article IA(c) of the agreement states that:
Supervisory employees shall perform no classified work
covered by this Agreement except in emergencies and
3
except if such work is necessary for the purpose of training
or instructing classified Employees . . . the burden is on the
Employer to prove that classified work has not been per-
formed by supervisory personnel.
And finally, Article XXVI(b) of the agreement states that:
This Agreement supersedes all existing and previous con-
tracts except as incorporated and carried forward herein by
reference; and all local agreements, rules, regulations and
customs heretofore established in conflict with this Agree-
ment are hereby abolished.
In April 1994, four months after the national agreement became
controlling, members of Local 93 filed grievances with Marrowbone,
contending that Marrowbone was using nonunion employees to trans-
port and deliver materials throughout the mining complex, in viola-
tion of the national agreement. One of these grievances addressed
work performed by contractors and the others addressed work per-
formed by salaried employees.
Because the parties were unable to resolve the grievances, they
submitted their dispute to arbitration, as required by the national
agreement. The arbitrator held that the agreement required Marrow-
bone to assign all transportation and delivery work to represented
employees and accordingly ordered Marrowbone to"cease from uti-
lizing exempt personnel or subcontractors from performing the dis-
puted work; when done, such work is to be assigned to a classified
employee."
Marrowbone thereafter filed this action in the district court to
vacate the arbitrator's award, arguing that the agreement, as applied
by the arbitrator, violated § 8(e) of the National Labor Relations Act
("NLRA"), 29 U.S.C. § 158(e), and therefore was unenforceable
against Marrowbone. On motions for summary judgment, the district
court ruled that, as applied by the arbitrator, the contract did not vio-
late § 8(e) because it operated to preserve work for the UMW and not
to acquire it. To reach this conclusion, the court determined that the
relative group of employees for comparison was other locals of the
UMW. Since other locals had typically performed transportation and
4
delivery work at other mine sites, the court concluded that the clause
as it operated in this case was a work-preservation clause and there-
fore did not violate § 8(e).
Marrowbone noticed this appeal, challenging only that part of the
district court's ruling which requires Marrowbone to cease its custom-
ary relations with contractors.
II
At the outset, we must address the Union's contention that the
courts are required to uphold the arbitrator's award in this case
because the award "draws its essence" from the collective-bargaining
agreement. See United Paperworkers Int'l Union v. Misco, Inc., 484
U.S. 29, 36-38 (1987); Upshur Coals Corp. v. United Mine Workers
of America, Dist. 31, 933 F.2d 225, 228-29 (4th Cir. 1991). While
Marrowbone does not challenge the deference due arbitrator's awards
and, indeed, does not challenge the arbitrator's interpretation of the
collective-bargaining agreement itself, it argues that when this inter-
pretation is applied against Marrowbone to reassign work, this appli-
cation renders the contract unenforceable under§ 8(e) of the NLRA.
The enforceability of contracts, it argues, is a legal question that goes
to the arbitrator's power to act and therefore is for the courts and not
the arbitrator to decide. Cf. Kaiser Steel Corp. v. Mullins, 455 U.S.
72, 83-84, 86 (1982). The district court agreed with Marrowbone that
the issue presented in this case is collateral to the arbitration challenge
because Marrowbone is not attacking the arbitrator's report but rather
the collective-bargaining agreement as applied. For the following rea-
sons, we affirm this conclusion.
We begin with § 301 of the Labor Management Relations Act,
which provides that suits for violation of collective-bargaining agree-
ments may be filed in federal courts. See 29 U.S.C. § 185(a). It is well
established that § 301 provides federal courts not only with jurisdic-
tion but also with the duty of developing a federal common law of
labor rights in connection with the enforcement of collective-
bargaining agreements. See Allis-Chalmers Corp. v. Lueck, 471 U.S.
202, 209 (1985); Textile Workers Union v. Lincoln Mills, 353 U.S.
448, 456 (1957).
5
It is also well established that the obligation to arbitrate is a crea-
ture of contract and that a party cannot be required to submit to arbi-
tration unless he has agreed to do so in a contract. See United
Steelworkers of America v. Warrior & Gulf Navig. Co. , 363 U.S. 574,
582 (1960). Accordingly, the court decides, as issues of contract law,
the threshold questions of whether a party is contractually bound to
arbitrate and whether, if so bound, the arbitration provision's scope
makes the issue in dispute arbitrable. See John Wiley & Sons, Inc. v.
Livingston, 376 U.S. 543, 546-47 (1964). Thus,"[i]t [is] for the court,
not the arbitrator, to decide in the first instance whether the dispute
was to be resolved through arbitration." AT&T Techs., Inc. v. Commu-
nications Workers of America, 475 U.S. 643, 651 (1986).
A dispute committed by contract to arbitration is resolved essen-
tially by the arbitrator and not the court. An arbitrator's award that
"draws its essence" from the collective-bargaining agreement is
accorded great deference and must be upheld. See Upshur, 933 F.2d
at 228-29. But, while a court challenge to the merits of an arbitrable
award faces a formidable burden, a challenge to the arbitrator's power
to legally make the award presents a straightforward question of law
for the court to decide.
As a corollary to the principle that the court decides issues of
arbitrability, the court also decides questions about the legality of the
underlying contract because such questions go to the basis of the arbi-
trator's power. See Kaiser Steel, 455 U.S. at 83 ("It is also well estab-
lished, however, that a federal court has a duty to determine whether
a [collective-bargaining] contract violates federal law before enforc-
ing it."). As the Court noted in Kaiser Steel , a court, and not the
National Labor Relations Board (or in our case, an arbitrator), must
decide whether a collective-bargaining agreement violates § 8(e)
before it can be enforced, because § 8(e) renders certain contracts
"unenforcible [sic] and void." See 29 U.S.C. § 158(e). This is the type
of question that courts decide and review de novo. See Mountaineer
Gas Co. v. Oil, Chem. & Atomic Workers Int'l Union , 76 F.3d 606,
608 (4th Cir. 1996); Island Creek Coal Co. v. District 28, United
Mine Workers of America, 29 F.3d 126, 129 (4th Cir. 1994).
In this case, Marrowbone does not dispute that the collective-
bargaining agreement requires it to cease using exempt employees in
6
the transportation and delivery of materials and supplies at its Mingo
County complex. Rather, it argues that § 8(e) of the NLRA prohibits
the agreement from having legal force to require such a cessation.
Marrowbone's assertion thus goes to the authority of the arbitrator to
legally make its award and to the ability of the courts to enforce that
award under § 8(e). These are legal questions for the court that we
review de novo.
III
On its § 8(e) claim, Marrowbone argues that because its nonsuper-
visory employees at the Mingo County complex have never done
transportation and delivery work, to require them to do this work now
would be "work-acquisitive" rather than "work-preservative" and
would thereby constitute a "secondary" limitation, illegal under § 8(e)
of the NLRA. The Union responds in two ways. It argues first that the
relevant group of employees to consider, in determining by compari-
son whether the contract is work-acquisitive or work-preservative, is
similarly-situated employees in other locals of the UMW. The Union
argues that because these employees in other locals have long done
such work, the national agreement does not illegally expand the work
of the employees at the cost of third parties, but rather legally pre-
serves the traditional work of UMW employees. Second, the Union
argues that there is no evidence of illegal motive or secondary boy-
cotting, and that when all circumstances are taken into account, it
becomes clear that the work assignment clauses of the national agree-
ment are not the sort prohibited by § 8(e).
In order to evaluate these competing claims, we must review the
scope of § 8(e). Section 8(e) of the NLRA, which was added to the
Act in 1959 as part of the Landrum-Griffin amendments, provides
that:
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 prod-
ucts of any other employer, or to cease doing business with
any other person, and any contract or agreement entered into
7
heretofore or hereafter containing such an agreement shall
be to such extent unenforcible [sic] and void . . . .
29 U.S.C. § 158(e). The language of § 8(e) is broad, and taken at face
value, it would appear to prohibit any agreement that forces an
employer to cut off business dealings with an outside party. At the
time of its passage, commentators wondered whether§ 8(e)'s broad
language would operate to outlaw all clauses that place limitations on
an employer's right to subcontract. See, e.g. , Benjamin Aaron, The
Labor-Management Reporting and Disclosure Act of 1959, 73 Harv.
L. Rev. 1086, 1118-19 (1960). The legislative history of § 8(e), how-
ever, makes clear that its purpose was not to prevent all subcontract-
ing clauses, but rather to prohibit only those clauses that had the
effect of creating secondary pressure on a bargaining situation. These
clauses are commonly known as "hot cargo clauses," because unions
initially used such clauses to limit the cargo that employees would
handle. See, e.g., S. Rep. No. 86-187 (1959), reprinted in 1959
U.S.C.C.A.N. 2318, 2382-84; H.R. Rep. No. 86-741 (1959), reprinted
in 1959 U.S.C.C.A.N. 2424, 2443-44, 2478-79, 2494-95; Conf. Rep.
No. 86-1147 (1959), reprinted in 1959 U.S.C.C.A.N. 2503, 2510-12.
Traditionally understood, the problem with such secondary pres-
sure is twofold. First, "the use of secondary pressure tends to enlarge
the primary labor dispute between the union and the`unfair' employer
by involving neutral employers in the controversy, thereby magnify-
ing the disruptive effects of the altercation on the economy." David
M. Ebel, Comment, Subcontracting Clauses and Section 8(e) of the
National Labor Relations Act, 62 Mich. L. Rev. 1176, 1177 (1964)
(footnote omitted); see also Brown v. Local No. 17, Amalgamated
Lithographers of America, 180 F. Supp. 294, 297 (N.D. Cal. 1960).
And second, it is generally perceived as inequitable for a union to be
able to force a neutral party to exit a profitable relationship for rea-
sons extrinsic to the employer's relationship with that party. See
National Woodwork Mfrs. Ass'n v. NLRB, 386 U.S. 612, 624-627
(1967); S. Rep. No. 86-187 (1959), reprinted in 1959 U.S.C.C.A.N.
2318, 2382-84.
Because hot cargo clauses traditionally required an employer to
cease doing business with another employer when a certain set of cir-
cumstances were met, they became a useful method of applying sec-
8
ondary pressure on employers. Before § 8(e) was passed, § 8(b) of the
NLRA, 29 U.S.C. § 158(b), prohibited secondary boycotts of employ-
ers, but unions could effect the same results as a secondary boycott
by forcing employers to include hot cargo clauses in their contracts
with unions. Congress enacted § 8(e) to close this loophole in the law,
and thereby eliminate secondary pressure in whatever form it might
take. See H.R. Rep. No. 86-741 (1959), reprinted in 1959
U.S.C.C.A.N. 2424, 2478-79; National Woodwork , 386 U.S. at 634.
Understanding that the purpose of § 8(e) was to eliminate second-
ary pressure tactics, even when disguised as subcontracting clauses,
the Supreme Court has crafted a test that helps to identify when a
clause has secondary effects and when it is merely primary in nature.
In National Woodwork, the Court held that where a union's objective
in contracting for a subcontracting clause is to preserve the work of
its members, and not to satisfy other union goals, such as to acquire
new work, the clause does not violate § 8(e). 386 U.S. at 644-46.
"The touchstone," the Court explained, "is whether the agreement or
its maintenance is addressed to the labor relations of the contracting
employer vis-a-vis his own employees." Id. at 645. Although the
National Woodwork Court explicitly failed to decide "the questions
which might arise where the workers carry on a boycott to reach out
to monopolize jobs or acquire new job tasks when their own jobs are
not threatened . . .," id. at 630-31, later Court decisions have indicated
that where a union seeks to aggrandize its position through a subcon-
tracting clause, the clause violates § 8(e). In NLRB v. International
Longshoremen's Ass'n ("Longshoremen I"), 447 U.S. 490, 504
(1980), the Court explained that "[a]mong the primary purposes pro-
tected by the Act is `the purpose of preserving for the contracting
employees themselves work traditionally done by them.'" It therefore
noted that "a lawful work preservation agreement must pass two tests:
First, it must have as its objective the preservation of work tradition-
ally performed by employees represented by the union. Second, the
contracting employer must have the power to give the employees the
work in question . . . ." Id. In making such an analysis, the Supreme
Court has counseled that courts "must focus on the work of the bar-
gaining unit employees, not on the work of other employees who may
be doing the same or similar work." Id. at 507.
Thus, where a subcontracting clause is merely preservative of the
work traditionally done by bargaining unit employees, it does not vio-
9
late § 8(e). But where a subcontracting clause acquires work not tradi-
tionally done by those employees, it amounts to an unlawful
secondary boycott clause. See NLRB v. International Longshoremen's
Ass'n ("Longshoremen II"), 473 U.S. 61, 79-80 n.19 (1985);
Humphrey v. International Longshoremen's Ass'n, 548 F.2d 494, 497
(4th Cir. 1977).
With these principles in hand, we turn to the agreement before us
to determine whether the application of the UMW's national agree-
ment to Marrowbone's employees at the Mingo County complex is
work-preservative or work-acquisitive. If it is work preservative, then
we must uphold the arbitrator's award. If it is work acquisitive, then
we must refuse to enforce it as violative of § 8(e).
To determine whether the agreement before us preserves or
acquires work for the bargaining unit -- that is, whether the work at
issue was traditionally done by the employees before the agreement
-- we must determine which group of employees is the relevant
group for comparison. Stated otherwise, in deciding whether a con-
tract aims to acquire "new jobs," we need to know which employees
to look at in determining what the "old jobs" are. Specifically, in the
case of a newly formed local union, we must decide whether to com-
pare the contract's work jurisdiction with the jobs historically done by
the employees who are now members of the local, or with the jobs
generally done by the union's other employees throughout all of its
locals. If the employees of the newly-formed local are the group on
which to focus, then the agreement acquires for them work which
they traditionally have not performed, i.e., transportation and delivery
of materials and supplies at the Marrowbone mining complex in
Mingo County.
For the reasons that follow, we hold that the appropriate group for
comparison is the group of employees constituting Local 93, and not
the members of the UMW's other locals. Our conclusion best accords
with general labor law principles and with the premises of § 8(e).
First, § 8(e) has as its basic premise that the goal of labor relations
is to keep labor disputes within the bounds of the employer-employee
relationship. Because a primary reason for preventing secondary boy-
cotts is to keep individual labor disputes from spilling over into other
10
areas of the economy, § 8(e)'s prohibition on hot cargo clauses may
in one sense be understood as expressing a congressional preference
that only those employers and employees directly affected by the dis-
pute should be involved in the bargaining process. To include the
interests of persons beyond the dispute in the calculation of a dis-
pute's terms would run contrary to Congress' desire to keep labor dis-
putes confined to bargaining between particular employers and
employees. Therefore, § 8(e) evinces a preference for comparing only
the jobs of the particular employer's employees directly affected by
the dispute, and not all job descriptions represented in all of a union's
various locals.
Second, the local union's employees, not the national union's
employees, are the beneficiaries of whatever work jurisdiction clauses
they have arranged with their employer. The work conditions of
employees in other UMW locals are by and large incidental to the
negotiations and work situation at Marrowbone's complex. To
include the job descriptions of non-Marrowbone employees in a
determination of whether a clause is work-preservative or work-
acquisitive would import into the analysis a range of work situations
and job descriptions that have no relevance to the situation of Mar-
rowbone employees or to the way the Marrowbone mines are oper-
ated. Thus, the employees at Marrowbone are the most appropriate
actors in determining whether a contract with Marrowbone has altered
employees' work jurisdiction at that complex.
And third, pragmatically, the union's suggestion that we consider
all of the job descriptions represented by the national union would be
an unmanageable task. National unions are composed of numerous
locals, each with its own history of job relations and its own capacity
to negotiate its work jurisdiction. If we were to consider other locals
in our determination of what work is typically performed, we would
be faced with the intractable questions of "what other locals?" and
"what other work?" A national union could represent, for example,
mine-workers, haberdashers, and truckers. Different local unions
could negotiate different terms of employment with their respective
employers. Using a national union's employees in other locals would
require courts to choose which locals to compare and which terms to
compare without any meaningful legal grounds on which to base that
choice. We decline to undertake such a task.
11
Supreme Court dicta fortify our conclusions. In National
Woodwork, the Court explained that § 8(e) does not prohibit agree-
ments that are designed to require an employer to preserve for its
employees the work "traditionally done by them." 386 U.S. at 635
(emphasis added). "The touchstone is whether the agreement or its
maintenance is addressed to the labor relations of the contracting
employer vis-a-vis his own employees." Id. at 645 (emphasis added).
Thus, regardless of whether the agreement is national in scope, in
determining whether it preserves or acquires work, the analysis must
focus on the work of the local employees and not those elsewhere. As
the Supreme Court instructed in Longshoremen I :
[T]he inquiry must be carefully focused: to determine
whether an agreement seeks no more than to preserve the
work of bargaining-unit members, the Board must focus on
the work of the bargaining unit employees, not on the work
of other employees who may be doing the same or similar
work, and examine the relationship between the work as it
existed before the innovation and as the agreement proposes
to preserve it.
447 U.S. at 507 (emphasis added) (footnote omitted); see also
Longshoremen II, 473 U.S. at 77-78.
The Union argues, however, that if only Local 93 employees are
used as the basis for comparison, then new locals would never be able
to form because any new local would need, by definition, to expand
its work jurisdiction. The determination of § 8(e) claims, however, is
a fact-bound endeavor. See National Woodwork, 386 U.S. at 644. In
the case at hand, we are not faced with a new local formed at a work-
site lacking employee history. Rather, the pool of employees out of
which the local bargaining unit was formed has an individual work
history, distinct from that of the newly-formed local and distinct from
that of Marrowbone's contractors. Furthermore, the NLRB clearly
defined the employees represented by the local in its direction of elec-
tion. In such a circumstance, the baseline job descriptions of the local
have a clear reference point. Moreover, Local 93 was formed in July
1993, and from July until December, its members did not perform
transportation and delivery work. Only with the ratification of the
12
national agreement in December was Marrowbone required to assign
that work to classified employees.
Thus, we find that, in the case at hand, Local 93 employees are the
appropriate group to consult in comparing the new work with the old.
Using the previous work of the members of the local bargaining unit,
as well as the work of bargaining unit employees from July until
December 1993, as the basis for comparison, we conclude that when
the arbitrator applied the national agreement to force Marrowbone to
cease its relationship with its contractors for transportation and deliv-
ery work, it applied the agreement in a work-acquisitive manner. The
bargaining unit employees never engaged in delivery and transporta-
tion work before the enforcement date of the national agreement. The
clauses in the national agreement that forced Marrowbone to turn over
this work to union employees would therefore be an aggrandizement
of the local employees' work. And because, in turning over such work
to employees, Marrowbone was required to cease its business rela-
tions with other parties, the clauses are secondary in nature. The arbi-
trator's application of the national agreement is therefore contrary to
the dictates of § 8(e).
Despite this fact, the Union argues that the national agreement, by
its terms, supersedes any customs that may already exist at Marrow-
bone. Article XXVI(b) of the national agreement, it argues, explicitly
states that the agreement abolishes all prior customs and rules. Sec-
tion 8(e), however, applies not just to the parts of the national agree-
ment that require the cessation of contractor work, but to the entire
agreement as applied. Thus, even if Article XXVI(b) would operate
to abolish the prior work situation at Marrowbone, because that aboli-
tion would be contrary to the dictates of § 8(e), we cannot give it legal
force.
The Union further maintains that because Marrowbone has pres-
ented no evidence of any improper Union motive, the national agree-
ment should not be interpreted to be work-acquisitive or secondary.
Marrowbone, however, need not demonstrate that the Union had an
illegal motive. Rather, it need only show that, under "all the surround-
ing circumstances," the agreement is work-acquisitive in nature.
National Woodwork, 386 U.S. at 644. In a situation like the case
before us, where a subcontracting clause forces an employer to cease
13
business relations with a contractor in a way that aggrandizes the
local's work jurisdiction, that circumstance alone is sufficient to find
that the agreement is secondary in effect and thus violative of § 8(e).
For the reasons given, we reverse the judgment of the district court
insofar as it requires that Marrowbone cease using contractors for the
transportation and delivery work traditionally performed for it by con-
tractors.
REVERSED
JONES, District Judge, dissenting:
The collective bargaining agreement ("CBA") between Marrow-
bone and the Union contains a "work preservation" provision, which,
as reasonably construed by an arbitrator, provides that Marrowbone
will use only bargaining unit employees to transport and deliver mate-
rials and supplies within its Mingo County complex. The primary
issue on appeal is whether the CBA, which indirectly prohibits Mar-
rowbone from using the outside contractors it previously employed to
do such work, is unenforceable under § 8(e) of the National Labor
Relations Act. The majority holds that because the CBA's effect is to
grant the local bargaining unit work it did not previously perform, the
relevant clause does not "preserve" work for the Union, but is rather
"work-acquisitive" and thus violative of § 8(e). However, just as
clauses that preserve work the local bargaining unit has long per-
formed are not necessarily lawful under § 8(e),1 I do not believe that
work acquisition clauses automatically violate § 8(e). In attempting to
determine whether a contract provision violates§ 8(e), we should not
rely solely on the distinction between work acquisition and work pres-
ervation, but should instead look at the totality of the circumstances
_________________________________________________________________
1 "[A]n agreement that reserves work for union members may also have
an unlawful secondary objective. The preservation/acquisition dichotomy
. . . can serve the useful purpose of aiding the inquiry regarding unlawful
secondary objectives when an agreement attempts to secure work but
`jobs are not threatened.'" NLRB v. Int'l Longshoremen's Ass'n., 473
U.S. 61, 79 n.19 (1985) (emphasis added) ("ILA II"). However, "[i]t
must not be forgotten that the relevant inquiry . . . is whether a union's
activity is primary or secondary." Id. at 81.
14
to determine if the provision in question was motivated by primary or
secondary intent.2 Accordingly, I dissent.
Admittedly, the language of § 8(e) is broad, and taken at face
value, would appear to prohibit any agreement that requires an
employer to cut off business dealings with an outside party. However,
§ 8(e) was intended to prohibit only those clauses that have the effect
of creating secondary pressure on a bargaining situation. In its semi-
nal opinion on the subject, the Supreme Court noted that "Congress
meant §§ 8(e) and 8(b)(4)(B) to prohibit only`secondary' objectives."
National Woodwork, 386 U.S. at 620. The Court has since further
explained that "[t]he `touchstone' and`central theme' of § 8(e) is the
protection of neutral employers . . . which are caught in the middle
of a union's dispute with a third party." Kaiser Steel Corp. v. Mullins,
455 U.S. 72, 84 (1982). Although little case law analyzes the limits
of § 8(e), the Supreme Court opinions on point make clear that § 8(e)
was enacted because Congress did not want a dispute between a sin-
gle business and its employees to draw neutral outside parties into its
ambit.
_________________________________________________________________
2 The NLRB's standard for determining if a contract clause violates
§ 8(e) is that "[c]ontract provisions are secondary and unlawful if they
are to have as their principal objective the regulation of the labor policies
of other employers and not the protection of the unit." General Truck
Drivers, Local Union 957, 298 N.L.R.B. 395, 399 (1990) (quoting Retail
Clerks Int'l Ass'n, Local Union 1288, 163 N.L.R.B. 817, 819 (1967)).
See also National Woodwork Mfrs. Ass'n v. NLRB, 386 U.S. 612, 635-
636 (1967) ("Although the language of § 8(e) is sweeping, . . . the legis-
lative history . . . consistently defined the evil to be prevented in terms
of agreements which obligated neutral employers not to do business with
other employers involved in labor disputes with the union.").
The Third Circuit put it well when it explained that"[i]f the purpose
is to benefit the employees of the bargaining unit, the agreement is `pri-
mary' and does not run afoul of § 8(e). If, however, the aim is to put
pressure on an outside employer to submit to union objectives, the provi-
sion is secondary and prohibited. . . . So long as the union has no forbid-
den secondary purpose to affect the employment relations of an outside
employer, the agreement is valid even though it adversely affects the
employment opportunities of non-represented workers." In Re Bitumi-
nous Coal Wage Agreements, 756 F.2d 284, 289 (3d Cir. 1984).
15
The Supreme Court has set forth general formulations to aid courts
in determining when a clause has secondary effects and when it is pri-
mary in nature. In National Woodwork, the Court held that because
the union's goal in that case was to preserve work traditionally per-
formed by union laborers, the clause at issue was primary in nature
and did not violate § 8(e). 386 U.S. at 644-46. More than a decade
later, in NLRB v. International Longshoremen's Ass'n, 447 U.S. 490,
504 (1980) ("ILA I"), the Court held that courts must not only seek
to determine whether the agreement's effect is to preserve work, but
also whether its intent or objective is to preserve work.3
Where a clause meets the ILA I test and is found to have the pri-
mary objective of seeking to preserve work traditionally done by the
union, the clause generally does not violate § 8(e). However, the
Supreme Court has never held that a clause seeking to acquire new
work for union employees necessarily violates § 8(e).4 Rather, the
Court has stated that "[t]he touchstone is whether the agreement or its
maintenance is addressed to the labor relations of the contracting
employer vis-a-vis his own employees." National Woodwork, 386
U.S. at 645.
The majority holds that this case turns on whether the CBA's
clause was work-preservative or work-acquisitive. 5 Further, the
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3 The Third Circuit has held that to find a contract clause invalid under
§ 8(e), a court must find that it has both a secondary purpose and a sec-
ondary effect. In Re Bituminous Coal, 756 F.2d at 290. The Supreme
Court's holdings are consistent with this view. For example, the Court
has held that a work preservation clause is not valid per se, but rather
fails to provide a union with an adequate defense to an § 8(e) charge --
even if the work "preserved" was traditionally performed by the union --
if one of the union's objectives is really to influence the employer by
exerting pressure on a third party, such as a subcontractor. See NLRB v.
Enterprise Ass'n of Steam Pipefitters, 429 U.S. 507 (1977).
4 The Supreme Court specifically reserved that question, noting that
while work preservation was a protected primary motivation, it might be
different if a union sought to "monopolize jobs or acquire new job tasks
when their own jobs [were] not threatened." National Woodwork, 386
U.S. at 630-31; NLRB v. Enterprise Ass'n of Steam Pipefitters, 429 U.S.
at 528 n.16 (majority) and 537 n.2 (dissent).
5 Because the parties have focused on the question of whether the
Union is preserving or acquiring work, a primary issue has been whether
16
majority concludes that "Marrowbone . . . need not demonstrate that
the Union had an illegal motive. Rather, it need only show that, under
`all the surrounding circumstances,' the agreement is work-acquisitive
in nature." In my opinion, this analysis incorrectly replaces the
Supreme Court's primary query in National Woodwork, whether a
clause is primary or secondary, with a derivative inquiry, whether a
clause is work preservative or work acquisitive.
As the Supreme Court has recognized, "[t]he various linguistic for-
mulae and evidentiary mechanisms we have employed to describe the
primary/secondary distinction are not talismanic nor can they substi-
tute for analysis." ILA II, 473 U.S. at 81. Rather, cases require an
inferential, fact-intensive inquiry. Id. While the fact that a clause is
work acquisitive is a relevant factor to consider when analyzing
whether the clause is primary or secondary, the preserva-
tion/acquisition distinction is only one of several factors to consider.
The party who challenges a contract provision has the burden of
proving that the provision in question was motivated by unlawful,
secondary intent and thus violates § 8(e). Looking at the case at hand,
I find that Marrowbone has failed to show that the clause at issue had
any secondary purpose. Again, "[c]ontract provisions are secondary
and unlawful if they . . . have as their principal objective the regula-
tion of the labor policies of other employers and not the protection of
the unit." General Truck Drivers, 298 N.L.R.B. at 399 (quoting Retail
Clerks, 163 N.L.R.B. at 819). Even if a contract provision increases
the number of union jobs, "[a]bsent some additional showing of an
attempt `to reach out to monopolize jobs,' such an agreement is law-
ful." ILA II, 473 U.S. at 79 (quoting National Woodwork, 386 U.S.
at 630).
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we should consider the work that was previously done by the specific
local bargaining unit, or the work traditionally done by similar units
across the nation in order to decide if work is being preserved or
acquired. Although the district court held that it should consider the past
work practices of other local bargaining units, I find the majority's analy-
sis of this issue more persuasive. Nonetheless, I do not believe that this
determination ends our inquiry.
17
There is no evidence in this case that suggests the Union negotiated
this provision to target neutral employers or coerce customers. Rather,
the totality of the circumstances that can be gleaned from the record6
indicates that a newly-formed local bargaining unit had only its own
members' interests at heart when it negotiated a provision that would
reserve transport jobs for Marrowbone employees.
Determining § 8(e) claims is a fact-bound endeavor, and the totality
of surrounding circumstances must be examined to determine whether
a union's objective was primary in nature, or whether an agreement
was "tactically calculated to satisfy union objectives elsewhere."
National Woodwork, 386 U.S. at 644; ILA I , 447 U.S. at 504 (court
must look at "all the surrounding circumstances" to decide if Union's
objective is primary or secondary). The totality of circumstances to
consider in determining whether a union had primary or secondary
motivation includes the "history of labor relations between the union
and the employers . . . and the economic personality of the industry."
National Woodwork, 386 U.S. at 645 n.38. It seems also relevant to
consider the history and strength of a particular union when attempt-
ing to distinguish between the union which seeks only to advance its
members' economic interests and the union which seeks to aggran-
dize power with which to coerce neutral third parties.
The district court considered the history between the parties, as
well as the parties' actions and motivations, and after reviewing the
totality of circumstances, held that this case contained no indicia of
improper secondary Union motivations. Instead, it found that the pro-
vision was negotiated by a fledgling local bargaining unit solely to
advance its own workers' interests and that the provision was "ad-
dressed to the labor relations of the contracting employer vis-a-vis
[its] own employees." ILA I, 447 U.S. at 504. Marrowbone has not
identified any evidence contradicting these findings and has failed to
demonstrate that the provision at issue was the result of any improper
secondary motivations.
For these reasons, I respectfully dissent.
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6 The case was decided by the district court on a joint stipulation of
undisputed material facts.
18