Connecticut Ironworkers Employers Ass'n v. New England Regional Council of Carpenters

869 F.3d 92, 2017 WL 3611586, 209 L.R.R.M. (BNA) 3455, 2017 U.S. App. LEXIS 16142
CourtCourt of Appeals for the Second Circuit
DecidedAugust 23, 2017
DocketNo. 16-485-cv
StatusPublished
Cited by34 cases

This text of 869 F.3d 92 (Connecticut Ironworkers Employers Ass'n v. New England Regional Council of Carpenters) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Connecticut Ironworkers Employers Ass'n v. New England Regional Council of Carpenters, 869 F.3d 92, 2017 WL 3611586, 209 L.R.R.M. (BNA) 3455, 2017 U.S. App. LEXIS 16142 (2d Cir. 2017).

Opinion

JOSÉ A. CABRANES, Circuit Judge:

Much of the practice of American antitrust law consists of deciding whether particular conduct is, or is not, “exempt” from the application of the antitrust statutes by virtue of immunities conferred by later legislation or judicial interpretation. The celebrated fourteen-volume treatise of Professor Philip E. Areeda devotes fully two volumes to these numerous immunities.1 The history of these immunities is “rich and fascinating ... com[ing] in waves. Each particular wave has involved a distinct approach and rested on its own economic justification.”2

We consider here the latest chapter in the unfolding story of one of those immunities — those that exempt certain labor union activities. Professor Ralph K. Winter (as he then was) characterized this topic as “one of the most disputed legal issues of this century.”3 We address only a piece of this storied immunity: the exemption for certain union activities within the construction industry.

This case arises out of a dispute over subcontracting clauses in collective bargaining agreements (“CBAs”) between the defendant New England Regional Council of Carpenters (the “Carpenters Union” or “Carpenters”) and various construction companies and construction managers. These clauses effectively bar subcontracting of construction work with non-Carpenter affiliates. The plaintiffs, consisting of several other unions, employers, trade as[96]*96sociations,- and union pensions,funds (jointly, the “Ironworkers”),’allege that the'Carpenters have used these subcontracting clauses to expand the scope of work assigned to the Carpenters Union to include work traditionally assigned to the Iron-workers. The Ironworkers bring two claims against the Carpenters: -first, that the Carpenters’ conduct constitute anti-competitive behavior in violation of Sections 1 and 2 of the Sherman Antitrust Act4 and second, that the Carpenters’ conduct constitutes unfair labor practices in violation of Sections 8(b)(4) and 8(e) of the National Labor Relations Act (“NLRA”).5 The Carpenters counter that their subcontracting practices are shielded from both antitrust liability and claims of’unfair labor practices.

To determine if the disputed subcontracting practices6 are protected from antitrust liability, we must assess whether both the “construction industry proviso” of Section 8(e) of the NLRA7 and the judicially-created “non-statutory exemption”8 to antitrust-liability apply.9 To defeat the unfair labor practices claim, the Carpenters need only show that their conduct falls within the statutory construction industry proviso.

In the United States District Court for the District of Connecticut (Stefan R. Un-derhill, Judge), the Carpenters moved for summary judgment-based on the affirmative defenses just described and the Court granted their motion. Specifically, the District Court held that the disputed subcontracting practices were immune from both antitrust and unfair labor practices liability because they qualified for protection under the construction industry proviso and the non-statutory exemption. ' ,

We agree that the Carpenters have met the requirements of the construction industry proviso, but we conclude that, on this record, there are factual disputes that preclude a decision on whether the conduct falls within the non-statutory exemption. To demonstrate that the disputed subcontracting practices are sheltered by the [97]*97non-statutory exemption (and thus to defeat the Ironworkers’ antitrust claim completely), the Carpenters must show that these practices furthered legitimate aims of collective bargaining, in a way that is not unduly restrictive of market competition. Absent additional fact-finding by the District Court as to whether the Carpenters’ subcontracting practices further legitimate labor goals, it cannot undertake the analysis required by our precedents.10 Establishing that these subcontracting agreements arose from a lawful CBA is not, in and of itself, sufficient to gain the protection of the non-statutory exemption.

Accordingly, we VACATE the judgment of the District Court as to the Sherman Act claim, AFFIRM the judgment as to the unfair labor practices claim, and REMAND the cause to the District Court for further proceedings consistent with, this opinion, including for such additional discovery as will permit the District Court to be informed of the relevant history and permit the parties to move for summary judgment or, if necessary, to proceed to trial.

BACKGROUND

This ease concerns what • some might call a “turf battle” between the Ironwork-ers and the Carpenters Union. The plaintiff Ironworkers are a group of construction organizations including: a district council, seven locals affiliated with construction trade unions,, four construction contractors, and two trade groups.11 The defendant Carpenters Union is a labor organization that operates throughout New England.

The Ironworkers challenge the enforcement of restrictive subcontracting clauses in the Carpenters’ CBAs. These clauses, colloquially called “hot cargo” clauses, bar signatories from subcontracting work to any employer that is not also a signatory to a Carpenters’ CBA.12 The Ironworkers argue that the Carpenters use these subcontracting clauses to act'in concert with various non-party general contractors and construction managers tp prevent the Ir-onworkers from performing the relevant work,13 In other words, they allege that [98]*98the Carpenters designed and enforced the disputed clauses not to further legitimate goals of collective bargaining, such as protecting wages, but rather, to secure work in the New England area that allegedly belonged to the Ironworkers. Accordingly, they claim that these subcontracting practices violate the antitrust laws and constitute unfair labor practices.

The Carpenters counter that these subcontracting practices are commonplace in the construction industry, and point to similar provisions in CBAs to which the Ironworkers are signatories. They assert, as affirmative defenses, that these practices are immune from antitrust liability and unfair labor practices claims because they fall within the construction industry proviso of Section 8(e) of the NLRA and the judicially-devised non-statutory exemption to antitrust liability.

The Ironworkers do not dispute that these subcontracting clauses have long existed, but they argue nonetheless that enforcement of the subcontracting provisions — namely, acting in concert with various non-party general managers — only started between 2005 and 2006.14 They assert that such enforcement impinges on work traditionally performed by Iron-workers and conflicts with historical industry practice. The primary purpose of these subcontracting practices, they argue, is to force parties to enter into CBAs with the Carpenters as opposed to other labor organizations.

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869 F.3d 92, 2017 WL 3611586, 209 L.R.R.M. (BNA) 3455, 2017 U.S. App. LEXIS 16142, Counsel Stack Legal Research, https://law.counselstack.com/opinion/connecticut-ironworkers-employers-assn-v-new-england-regional-council-of-ca2-2017.