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From Antitrust Law Daily, January 21, 2016

NLRA exemptions shield labor organization from conspiracy, monopolization claims

By Greg Hammond, J.D.

Allegations that a labor organization used the subcontracting clause of collective bargaining agreements to expand the scope of work assigned to carpenters to include work traditionally assigned to other associations were barred by the construction industry proviso and non-statutory labor exemption of the National Labor Relations Board Act (NLRA). The labor organization’s motion for summary judgment with regard to the employers associations’ conspiracy and monopolization Sherman Act claims was therefore granted by the federal district court in Bridgeport, Connecticut (Connecticut Ironworkers Employers Assoc. v. New England Regional Council of Carpenters, January 20, 2016, Underhill, S.).

Connecticut Ironworkers Employers Association—a district council comprised of construction trade unions, contractors, and trade organizations—claimed that the New England Regional Council of Carpenters—a labor organization—used the subcontracting clause of its collective bargaining agreements to expand the scope of work assigned to carpenters to include work traditionally assigned to plaintiff organizations. The Carpenters council moved for summary judgment, arguing that the construction industry proviso and non-statutory labor exemption of the NLRA shielded it from the Sherman Act claim.

Construction industry proviso. The court agreed with Carpenters’ arguments, finding first that the construction industry proviso is applicable. The proviso—which states that “nothing in this subsection shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work”—generally exempts those in the construction industry from the prohibitions of NLRA section 8(e)—the “hot-cargo” provision.

In addition, the court rejected the Ironworkers’ arguments that the construction industry proviso does not apply because the Carpenters purportedly failed to show that: (1) the parties with whom the Carpenters entered into a collective bargaining agreement with were “employers within the construction industry”; (2) the conduct occurred within the context of a collective bargaining agreement; and (3) the conduct at issue is consistent with Congress’ perception of practices in the construction industry in 1959. The objections, according to the court, relied on strained interpretations of the construction industry proviso that is unsupported by legal authority.

Non-statutory labor exemption. The NLRA’s non-statutory labor exemption provides that restraints are lawful so long as the alleged anticompetitive conduct is inherent in the collective-bargaining process, concerns only the parties to the collective bargaining relationship, and relates to wages, hours, conditions of employment, or other relevant subjects of collective bargaining.

Contrary to the Ironworkers’ arguments, the court concluded that: (1) each subcontracting agreement did not just arise in the context of a collective bargaining relationship, but also was a part of an existing collective bargaining agreement; and (2) the Ironworkers failed to cite any cases indicating that the type of subcontracting agreement at issue was anything other than a lawful subject of a collective bargaining agreement. The subcontracting agreements were therefore additionally protected by the non-statutory labor exemption and the motion for summary judgment was granted.

The case is No. 3:10-cv-165 (SRU).

Attorneys: George J. Kelly, Jr. (Siegel, O'Connor, O'Donnell & Beck, PC) and Paul C. Hetterman (Bartley Goffstein, LLC) for Connecticut Ironworkers Employers Assoc. Inc., Associated Sheet Metal & Roofing Contractors of CT Inc., and MRS Ent Inc. Bruce D. Sokler (Mintz, Levin, Cohn, Ferris, Glovsky & Popeo PC) and Christopher N. Souris (Krakow & Souris, LLC) for New England Regional Council of Carpenters.

Companies: Connecticut Ironworkers Employers Assoc. Inc.; Associated Sheet Metal & Roofing Contractors of CT Inc.; MRS Ent Inc.; New England Regional Council of Carpenters

MainStory: TopStory Antitrust ConnecticutNews

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