NLRB v. Local 19 , 154 F.3d 137 ( 1998 )

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
8-31-1998
N.L.R.B. v. Local 19
Precedential or Non-Precedential:
Docket 97-3459,97-3470
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Recommended Citation
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Filed August 31, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 97-3459 & 97-3470
NATIONAL LABOR RELATIONS BOARD,
Petitioner No. 97-3459
v.
SHEET METAL WORKERS' INTERNATIONAL
ASSOCIATION, LOCAL UNION No. 19
ASSOCIATED BUILDINGS AND CONTRACTORS, INC.,
Southeast Pennsylvania, Keystone, Delaware and New
Jersey Chapters,
Amicus Curiae
SHEET METAL WORKERS' INTERNATIONAL
ASSOCIATION, LOCAL UNION No. 19,
Petitioner No. 97-3470
v.
NATIONAL LABOR RELATIONS BOARD,
ASSOCIATED BUILDINGS AND CONTRACTORS, INC.,
Southeast Pennsylvania, Keystone, Delaware and New
Jersey Chapters,
Amicus Curiae
On Petition for Enforcement and
Cross Petition for Review
Argued May 18, 1998
Before: ROTH and MCKEE, Circuit Judges, and
O'NEILL, Senior District Judge*
(Filed: August 31, 1998)
Bruce E. Endy (argued)
Spear, Wilderman, Borish, Endy,
Spear and Runckel
230 South Broad Street, Suite 1400
Philadelphia, PA 19102
Attorney for Local Union 19
Aileen A. Armstrong
Deputy Associate General Counsel
Jeffrey L. Horowitz (argued)
Frederic C. Harvard
National Labor Relations Board
1099 14th Street, N.W.
Washington, D.C. 20570
Attorneys for National Labor
Relations Board
Lawrence C. Coburn
Pepper Hamilton LLP
3000 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103
Attorney for amicus curiae
OPINION OF THE COURT
O'NEILL, Senior District Judge:
This case requires us to decide whether a labor union
may be liable for unfair labor practices under the National
Labor Relations Act (NLRA or the Act), 29 U.S.C.A.S 151-
_________________________________________________________________
*The Honorable Thomas N. O'Neill, Jr., Senior District Judge of the
United States District Court for the Eastern District of Pennsylvania,
sitting by designation.
2
160 (West 1973), due to the actions of fellow unions
pursuant to a joint venture theory of agency. We answer
that question in the negative and remand to the Board for
further proceedings consistent with this opinion.1
I.
This case is before us on application of the Board for
enforcement of its order against Sheet Metal Workers
International Association, Local Union No. 19 (Union or
Local No. 19) and the Union's cross petition for review of
the Board's order. Unfair labor practice charges were filed
against the Union by Delcard Associates, Inc., Omni
Mechanical, Inc. and Joseph Stong, Inc. After investigating
these charges, the Board's General Counsel issued
complaints alleging that the Union violated SS 8(b)(1)(A) and
8(b)(4)(ii)(B) of the Act, 29 U.S.C.A. SS 158(b)(1)(A) and
158(b)(4)(ii)(B), by restraining, coercing and threatening
employees seeking access to their jobsites and by picketing
at jobsite gates reserved for use by neutral employers.2 The
complaints were consolidated for trial before an
Administrative Law Judge.
Following six days of hearings, the A.L.J. issued an
opinion in which he found that the Union committed unfair
labor practices at all three of the job sites. In addition, the
A.L.J. found that the Union engaged in a joint venture with
four other unions picketing at the Stong job site and was
jointly responsible for unfair labor practices committed by
those unions. The A.L.J. recommended a broad order
requiring the Union to cease and desist from restraining
and coercing employees of the three employers and any
other employer.
The Union filed exceptions to the A.L.J.'s findings of fact
and legal conclusions and to the recommended order. With
some minor exceptions not relevant here, the Board
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1. We have appellate jurisdiction over the Board's petition seeking
enforcement and the Union's petition for review pursuant to SS 10(e) and
10(f) of the NLRA, 29 U.S.C.A. S 160(e) and (f), respectively.
2. The Board's General Counsel issued three different complaints
reflecting the three different job sites, Delcard, Omni and Stong.
3
adopted the A.L.J.'s conclusions including the
determination that the Union "was engaged in a joint
venture with several other unions and thus was liable for
the unlawful acts committed by the other unions," as well
as the recommended broad cease and desist order. Sheet
Metal Workers Int'l Ass'n, Local No. 19, 316 N.L.R.B. 426,
4-CB-3783, 4-CB-6879, 4-CB-6944, and 4-CC-2005-1,
1995 WL 77107, at *1 (N.L.R.B. February 23, 1995).
II.
The factual background of this matter is fully described
in the A.L.J.'s opinion and requires recital here only insofar
as is relevant to resolution of the joint venture liability
question.3 We will limit our discussion to the Stong job site
because that was the only job site at which the A.L.J. and
the Board found the Union vicariously liable for the unfair
labor practices of other unions.
Stong is a nonunion contractor. About November 1992,
several local labor organizations affiliated with the Building
& Construction Trades Council of Philadelphia & Vicinity
(BCTC), commenced an organizational campaign among
Stong's employees. On March 12, 1993, BCTC and several
local unions (Road Sprinkler Fitters Local No. 669,
Steamfitters Local No. 420, Plumbers Local No. 74,
Sprinkler Fitters Local No. 692, Plumbers Local No. 690,
_________________________________________________________________
3. In addition to challenging the joint venture theory of liability, the
Union raises several additional issues. One of these issues is the
sufficiency of the evidence in support of the Board's conclusion that the
Union itself committed unfair labor practices at all three job sites
independent of the other unions. We find no merit to the Union's
argument and affirm the Board's conclusion that the Union itself
committed unfair labor practices at the Delcard, Omni and Stong job
sites.
The Union also challenges the sufficiency of the evidence in support of
the finding that the Union acted in conjunction with the other unions at
the Stong job site, the sufficiency of the evidence in support of the
finding that the other unions committed unfair labor practices at the
Stong site, and the propriety of the broad cease and desist order. We
need not reach these other issues because of our holding that the joint
venture theory of agency is invalid.
4
and Local No. 19), petitioned for a Board-conducted election
in a single unit comprising all Stong employees performing
construction and/or fabrication work in Philadelphia and
its vicinity. An election was conducted on May 13, which
the unions lost.
After the election, Swarthmore College commenced a
construction project on which Stong was the only nonunion
subcontractor. Stong's subcontract covered sprinkler work,
installation of plumbing and piping, steam-fitter work, and
related insulation. Swarthmore established three separate
entrances to the campus for access to the project, with gate
1 reserved for exclusive use by Stong.
On June 2, the Union, together with Sprinkler Fitters
Local No. 692, Plumbers Local No. 690, Steamfitters Local
No. 420, and Asbestos Workers Local No. 14, commenced
picketing at the Swarthmore site in furtherance of their
labor dispute with Stong.4 The complaint alleges, and the
A.L.J. found, that the Union violated S 8(b)(1)(A) of the Act5
by blocking ingress of employees to the job site and
impliedly threatening employees with violence in the course
of picketing at gate 1 and S 8(b)(4)(ii)(B) 6 by picketing
neutral employees at the other gates.
_________________________________________________________________
4. Local Nos. 669 and 74, who were part of the joint election campaign,
played no role in the subsequent picketing at Swarthmore.
5. Section 8(b)(1)(A) of the Act, 29 U.S.C.A.S 158(b)(1)(A), provides:
(b) It shall be an unfair labor practice for a lab or organization
or its
agents --
(1) to restrain or coerce (A) employees in the exercise of the
rights
guaranteed in section 157 of this title[.]
Section 7, 29 U.S.C.A. S 157, provides:
Employees shall have the right to self-organization, to form,
join,
or assist labor organizations, to bargain collectively through
representatives of their own choosing, and to engage in other
concerted activities for the purpose of collective bargaining or
other
mutual aid or protection, and shall also have the right to refrain
from any or all of such activities[.]
The A.L.J. and the Board found that the unions violated the Stong
employees' right to refrain from exercising these rights by blocking their
access to the job site and by implicitly threatening them with violence.
6. Section 8(b)(4)(ii)(B) of the Act, 29 U.S.C.A.S 158(b)(4)(ii)(B),
provides:
(b) Unfair labor practices by labor organization
5
It is undisputed that Local Nos. 692, 690, 420, 14, and
the Union picketed at gate 1 during the period from June
2 through July 22. All of the picketing unions except Local
No. 14 were petitioners in the May election and all were
affiliated with BCTC, a BCTC subsidiary group (Delaware
and Chester County Building Trades) and the Mechanical
Trades Council. At the BCTC meetings prior to the
commencement of the Swarthmore project, representatives
of the unions discussed Stong's participation in the
Swarthmore project and eventually agreed that all would
picket the site. They mutually arranged days for each union
to picket and agreed upon the manner of picketing,
including the number of pickets and the posting of
"observers" at the neutral gates. They monitored and
consulted with each other and exchanged information on
the progress of the picketing. Representatives of the unions
were present at each others' picket lines. During the
picketing, the representatives of the unions met three times
with either the general contractor or the College. The last of
these meetings resulted in a joint agreement by the unions
to cease picketing based on assurances they received from
the College. After the picketing ceased, the picketing unions
jointly distributed handbills at various locations over the
names of the five picketing unions.
Based on these facts the A.L.J. found that the unions
were acting pursuant to a joint venture, and that therefore
the Union was liable for the unfair labor practices
_________________________________________________________________
It shall be an unfair labor practice for a labor organization or
its
agents --
(4)(ii) to threaten, coerce, or restrain any p erson engaged in
commerce or in an industry affecting commerce, where in either
case the object is --
(B) forcing or requiring any person to cease u sing, selling,
handling, transporting, or otherwise dealing in the products of any
other producer, processor or manufacturer[.]
The A.L.J. and the Board concluded that the unions"induced and
encouraged employees of [the general contractor] and Swarthmore to
cease doing business with Stong[,] thereby violat[ing] Section
8(b)(4)(b)."
Sheet Metal Workers Int'l Ass'n, 1995 WL 77107, at *25.
6
committed by the other unions. The A.L.J. made nofinding
that Local No. 19 had control over the other unions; rather,
he based his finding on a factual conclusion that the
unions were equals acting together in pursuit of a common
goal.
III.
Our authority to review an order of the NLRB is limited.
The Board's construction of a statute is ordinarily afforded
considerable deference: "we will enforce a Board order that
rests on a construction of the NLRA that is not`an
unreasonable or unprincipled construction of the statute' "
NLRB v. Joy Techs., Inc., 990 F.2d 104, 108 (3d Cir. 1993),
quoting Ford Motor Co. v. NLRB, 441 U.S. 488, 497 (1978);
Dorsey Trailers, Inc. v. NLRB, 134 F.3d 125, 129 (3d Cir.
1998); NLRB v. Greensburg Coca-Cola Bottling Co., Inc., 40
F.3d 669, 670 (3d Cir. 1994); see also Bro-Tech Corp. v.
NLRB, 105 F.3d 890, 894 (3d Cir. 1997) ("If the Board
adopts a rule that is rational and consistent with the Act,
then the rule is entitled to deference from the courts. . . .
Deference to the Board, however, is not automatic but
depends substantially on the persuasiveness of the agency
view." ) (citations omitted).
In Ford Motor Co., the Supreme Court held that the
Board's construction of a statute was entitled to
"considerable deference" because the issue in that case --
determining whether in-plant cafeteria and vending
machine prices were "terms and conditions of employment"
subject to mandatory collective bargaining under SS 8(a)(5)
and 8(d) of the Act -- required use of the NLRB's expertise
in the labor field. 441 U.S. at 495. Moreover, "Congress
[had] assigned to the Board the primary task of construing
these provisions in the course of adjudicating charges of
unfair refusals to bargain." Id.
This case requires us to interpret S 2(13) of the Act;
Congress did not delegate to the Board the power to
interpret that section. Overnite Transp. Co. v. NLRB, No. 97-
1387, 1998 WL 155574 (D.C. Cir. April 7, 1998). In
addition, as discussed below, this case requires application
of common law principles of agency and, unlike the issue in
7
Ford Motor Co., the NLRB has no special expertise applying
those common law principles; that expertise lies with the
Court. Therefore, "we accord only limited deference to the
Board's agency law analysis." International Longshoremen's
Ass'n (ILA) v. NLRB, 56 F.3d 205, 212 (D.C. Cir. 1995), cert.
denied, 516 U.S. 1158 (1996); Overnite Transp. Co., 1998
WL 155574, at *5.
IV.
The Union argues that S 8(b) of the Act applies only to the
unfair trade practices of "a labor organization or its agent,"
that the other unions were not Local No. 19's agents, and
that therefore it is not responsible for the acts of the other
unions. We agree.
The Board's decision approving the A.L.J.'s application of
a joint venture theory of agency preceded the Court of
Appeals for the District of Columbia's rejection of a joint
venture theory of agency in International Longshoremen's
Ass'n (ILA) v. NLRB, 56 F.3d 205 (D.C. Cir. 1995). We follow
the well-reasoned approach taken in ILA.
In ILA the Union requested assistance from Japanese
labor unions in its dispute with two shippers who were
using nonunion labor to load fruit onto ships bound for
Japan. The Japanese unions told the shippers that the
unions would refuse to unload fruit in Japan that was not
loaded by union labor. The shippers claimed that this was
a secondary boycott that amounted to a unfair trade
practice. The Longshoremen union did not violate the NLRA
and the Japanese unions were beyond the scope of the Act.
Therefore the shippers and the Board argued that the ILA
was responsible for the Japanese unions' actions under a
joint venture theory of agency. The NLRB sought and
received an injunction in the Middle District of Florida
under this joint venture theory which was affirmed on
appeal by the Court of Appeals for the Eleventh Circuit. See
Dowd v. International Longshoremen's Ass'n, 781 F. Supp.
1565 (M.D. Fla. 1991), aff 'd, 975 F.2d 779 (11th Cir.
1992). In its decision, the Court of Appeals held that the
Board had demonstrated reasonable cause to believe that
the ILA had violated the NLRA by articulating "a substantial
8
and not frivolous legal theory on which to attribute the
actions of the Japanese unions to the ILA." 975 F.2d at
784. Although acknowledging that the ILA had no right of
control over the Japanese unions as is normally required to
create an agency relationship, the Court concluded that:
[u]nder the liberal application of agency concepts
appropriate in the labor context, a contractual right to
control and direct the performance of another is not
required to impose responsibility under section 8(b)
where an employer or union has encouraged or
requested another to engage in unfair labor practices
on its behalf.
Id. at 785 (footnote omitted).
With the injunction in place, the parties submitted the
case directly to the Board on stipulated facts. The Board
reaffirmed the position it had argued to the Court of
Appeals for the Eleventh Circuit and an appeal to the Court
of Appeals for the District of Columbia followed.
That Court first determined that "this case gives rise to
an unfair labor practice under the NLRA section
8(b)(4)(ii)(B) only if the threats issued by the Japanese
unions somehow may be attributed to the ILA." ILA, 56
F.3d at 211. The Court then turned to S 2(13) of the NLRA
which provides: "In determining whether any person is
acting as an `agent' of another person so as to make such
other person responsible for his acts, the question of
whether the specific acts performed were actually
authorized or subsequently ratified shall not be
controlling." Congress added this provision in 1947 to make
clear that the Act was designed to render both employers
and labor organizations responsible for the acts of their
agents in accordance with ordinary common law rules of
agency.7 Overnite Transp. Co., 1998 WL 155574, at *4; ILA,
_________________________________________________________________
7. This Congressional intent was gleaned from the unusually clear
legislative history and not from the plain language of the statute. We
found nothing in the plain language of statute which validates or
invalidates the Board's joint venture theory of agency. In fact, the plain
language of S 2(13) is particularly uninstructive in analyzing this
question because the section merely states which principles will not
9
56 F.3d at 211; see also H.R. Conf. Rep. No. 510 at 36
(1947), reprinted in 1947 U.S.C.C.A.N. 1135, 1142;8 Local
1814, International Longshoremen's Ass'n v. NLRB, 735
F.2d 1384, 1394 (D.C. Cir. 1984) ("Beyond doubt, the
legislative intent of [section 2(13)] was to make the ordinary
law of agency applicable to the attribution of individual acts
to both employers and unions.")
Applying the common law rules of agency, the Court
reversed the Board's holding that Japanese unions were
agents of the ILA because the ILA did not control the
conduct of the Japanese unions. See ILA, 56 F.3d at 213
("It is a fundamental principle of hornbook agency law that
an agency relationship arises only where the principal `has
the right to control the conduct of the agent with respect to
matters entrusted to him.' Restatement (Second) of Agency
S 14[.]"); see also AT & T Co. v. Winback and Conserve
Program, Inc., 42 F.3d 1421, 1434 (3d Cir.) ("An agency
relationship is created when one party consents to have
another act on its behalf, with the principal controlling and
directing the acts of the agent." (citations omitted), cert.
_________________________________________________________________
control and does not attempt to affirmatively pronounce which principles
will apply. We note, however, that the language of S 2(13) is consistent
with applying common law principles of agency because under those
principles whether or not the acts performed were actually authorized or
ratified by the principal is not controlling. See, e.g., Restatement
(Second) of Agency S 159 (1958) (principals can be liable for
unauthorized acts by an agent with apparent authority).
8. This view was reinforced by Senator Taft's statement included in the
legislative history:
This [amendment] restores the law of agency as it has been
developed at common law. . . . It is true that this definition was
written to avoid the construction which the Supreme Court in the
recent case of [United Brotherhood of Carpenters v. United States,
330 U.S. 395 (1947)] placed upon section 6 of the Norris-La Guardia
Act which exempts organizations from liability for illegal acts
committed in labor disputes unless proof of actual instigation,
participation, or ratification can be shown. . . . The conferees
agreed
that the ordinary law of agency should apply to employers and
union representatives.
93 Cong. Rec. 6859 (1947).
10
denied, 115 S. Ct. 1838 (1994)); Menichini v. Grant, 995
F.2d 1224, 1233 n.14 (3d Cir. 1993) ("Agency law
recognizes the principal's ability to control and monitor
agent behavior[.]"); Restatement (Second) of Agency S 1(1)
(1958) ("Agency is the fiduciary relation which results from
the manifestation of consent by one person to another that
the other shall act on his behalf and subject to his control,
and consent by the other to act.")9
The only reported case which gives credence to a joint
venture theory of agency is the Court of Appeals for the
Eleventh Circuit's affirmance of the injunction entered by
the Middle District of Florida. Dowd, 975 F.2d 770. We
agree with the Court of Appeals for the District of Columbia
that the Court of Appeals for the Eleventh Circuit's analysis
is distinguishable. First, the Court of Appeals for the
Eleventh Circuit was called upon to review only whether
there was reasonable cause to believe that a violation of the
Act had occurred and limited its inquiry to an evaluation of
whether the Board's theories of law and facts were not
insubstantial and frivolous. Id. at 783. "This deferential
review is appropriate at the injunction stage even where the
_________________________________________________________________
9. Joint ventures are generally governed by partnership law and, like a
partner, a member of the venture may be regarded as both a principal
and an agent of the other co-venturers. United States v. USX Corp., 68
F.3d 811, 826 (3d Cir. 1995) ("Each member of a joint venture is
`considered the agent of the others, so that the act of any member within
the scope of the enterprise is charged vicariously against the rest.' "),
quoting Pritchett v. Kimberly Cove, Inc., 568 F.2d 570, 579-580 (8th Cir.
1977); 46 Am. Jur. 2d Joint Ventures S 24 (1994); 3 Am. Jur. 2d Agency
S 4 (1986). Members of the joint venture, however, are not considered
agents of the other co-venturers pursuant to common law principles of
agency, but pursuant to partnership law. Harold Gill Reuschlein &
William A. Gregory, The Law of Agency and Partnership, 450-55 (2d ed.
1990) (discussing the merging of partnership and joint venture law and
stating that as a general rule joint ventures are governed by the same
rules as partnerships); Adam B. Weissburg, Reviewing the Law on Joint
Ventures with an Eye Toward the Future, 63 S. Cal. L. Rev. 487, 488
(1990) (stating that courts apply partnership principles to joint
ventures);
46 Am. Jur. Joint Ventures S 3 (1994). Therefore, even if the other unions
were agents of Local No. 19 under joint venture and partnership
jurisprudence, they were not agents pursuant to common law principles
of agency law and thus were not agents pursuant to S 8 of the Act.
11
theory underlying the petition is `untested' or`novel' in
order to preserve the legal issue for Board determination."
Id. Second, the Court of Appeals for the Eleventh Circuit
did not analyze S 2(13)'s legislative history, which the ILA
Court found required invalidation of the Board's joint
venture theory of agency. ILA, 56 F.3d at 213.
We hold that the joint venture theory of agency adopted
by the A.L.J. and the Board below is inconsistent with S 8
of the Act. We therefore deny the Board's enforcement
petition and grant in part and deny in part the Union's
cross petition for review.10 Because the A.L.J. recommended
and the Board entered the broad cease and desist order
based at least partially on the conduct of the other unions
who were not "agents" of the Union pursuant toS 8 of the
Act, we remand to the Board for further proceedings
consistent with this opinion.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
_________________________________________________________________
10. The petition for review is granted to the extent it sought review of
the
A.L.J.'s and the Board's conclusion that the Union was liable for the
unfair labor practices of other unions pursuant to a joint venture theory
of agency. The Union's petition is denied to the extent it argued that
there was insufficient evidence in support of the Board's conclusion that
the Union committed unfair labor practices itself independent of the
actions of the other unions. See supra n.3.
12