Griffith Co. v. National Labor Relations Board

660 F.2d 406
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 26, 1981
DocketNos. 79-7394, 80-7103
StatusPublished
Cited by3 cases

This text of 660 F.2d 406 (Griffith Co. v. National Labor Relations Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Griffith Co. v. National Labor Relations Board, 660 F.2d 406 (9th Cir. 1981).

Opinion

CANBY, Circuit Judge:

This case returns for appellate review having been previously remanded to the Board for further consideration. 545 F.2d 1194 (9th Cir. 1976), cert. denied, 434 U.S. 854, 98 S.Ct. 171, 54 L.Ed.2d 125 (1977). The present petition raises several issues. The primary question presented is whether the construction industry’s limited exemption from hot cargo agreements, § 8(e) of the National Labor Relations Act, 29 U.S.C. § 158(e), renders lawful a provision in a Master Labor Agreement which prohibits an employer from subcontracting work to any signatory subcontractor who is delinquent in required payments to a common employee fringe benefit trust. Secondary issues include: (1) whether these agreements can be enforced by economic coercion; (2) whether the union must reimburse the employers for any monies which were contributed pursuant to the contract provision; and (3) whether certain statements by the trust administrator and counsel for the fund to an employer constituted a threat by union agents to invoke the self-enforcement provision of the contract.

I

The relevant facts are recited in our previous decision 545 F.2d at 1195-96. They are summarized here for convenience. Griffith Company, J. W. Nicks Construction Company and Security Paving Company, Inc. (Griffith) are general contractors in Southern California. All are members of a construction industry trade association which negotiated a Master Labor Agreement (MLA) with Local 12 of the International Union of Operating Engineers. A large number of other contractors individually negotiated “short form” agreements with Local 12 which incorporated by reference most of the terms and conditions of the MLA.

The agreement establishes four employee benefit trusts pursuant to § 302(c) of the Labor Management Relations Act, 1947, 29 U.S.C. § 186(c)(5). Each trust is jointly administered by a Board of Trustees composed of members appointed in equal numbers by the employer groups and the union. The trust funds are managed by a hired administrator.

Contributions to each trust áre pooled into one account. An employee’s eligibility for benefits is not dependent on whether his employer has actually contributed to the trust. The employer’s failure to contribute, however, decreases the total funds in the pool and thereby results in reduced benefits for all beneficiaries. As the size of the required trust payments has increased, so too has the number of employers who are delinquent in their payments. The union has employed various methods to combat the delinquency problem. The most recent [408]*408approach is manifest in paragraphs 15 1 and 16 2 of the MLA.

Firms which are delinquent in their contributions and are unable to reach a settlement with the trustees are placed on the fund’s official delinquency list. Copies of this list are sent to the signatory contractors and the union. Paragraph 15 of the MLA provides that no employer shall contract any work to a delinquent subcontractor until the subcontractor has paid all delinquent amounts. Paragraph 16 provides that if an employer violates paragraph 15 by hiring a subcontractor then listed as delinquent, the employer is liable for all prior delinquency payments even if those payments were not incurred as a result of work done at the employer’s worksite. If the subcontractor becomes delinquent after commencing work on the employer’s project, the employer must terminate the subcontractor, and if the employer fails to do so, the employer becomes liable for all delinquencies incurred on the job by the subcontractor ten days after the subcontractor’s name appears on the delinquency list. Paragraph 16 also permits the union to picket or strike to enforce these provisions.

In 1973, the trustees discovered that the Urban Pacific Construction Company, a firm which had signed a short form agreement with the union and was on the delinquency list, was doing work for Griffith. Griffith had notice of Urban Pacific’s prior delinquencies at the time of contracting. The trust administrator, Mr. Majich, and his attorney informed the employer that if the delinquencies were not paid, the administrator would notify the union of its right to enforce paragraph 16 by economic action. Griffith refused to pay and the administrator notified the union.

Griffith then filed a complaint with the NLRB alleging that paragraphs 15 and 16 were an agreement to cease doing business with another employer in violation of § 8(e)3 and that the statements by the trust officials were a threat to strike for secondary purposes in violation of § 8(b)(4)(ii)(B).4 [409]*409The Board held the agreement was a primary provision intended to preserve union standards or union employment and therefore rejected the complaint.

This court found the agreements were secondary and accordingly reversed. The court remanded the case to the Board with instructions that it determine whether the clause was rendered lawful by the construction industry’s limited exemption from “hot cargo” agreements.5 It further instructed the Board to consider whether, if the clauses were unlawful, the union was required to reimburse the employers for any monies which were contributed pursuant to the contract provisions and whether certain statements by the administrator and the trust counsel constituted a threat by union agents to invoke the self-enforcement provisions of the delinquency clause.

On remand, the Board held that the delinquency clause, with the exception of the self-help provision, was within the scope of the construction industry proviso and the payments made pursuant to that clause were therefore legal. The Board also concluded that the trust officials were not acting as agents of the union in making the questioned statements. We agree with the decision of the Board and enforce its order.

II

In Pacific Northwest v. NLRB, 654 F.2d 1301 (9th Cir. 1981) this court, sitting en banc, held that a Master Labor Agreement containing a union signatory clause requiring an employer to subcontract only to subcontractors who employed members of a particular union was within the scope of the construction industry proviso. The court focused on the unique nature of the construction industry, where short-term hiring and the extensive use of subcontractors make it difficult to define the primary bargaining unit and serve to create a community of interests among all workers at the jobsite. The court rejected the position advocated here by Griffith that the 8(e) proviso was intended solely to prevent jobsite friction between union and non-union workers. Instead, it adopted the view that where a collective bargaining relationship exists, an agreement which serves the community of interests at the jobsite is permitted. At 1318-1322. See also, 105 Cong. Ree. 17900, II Legislative History of the Labor-Management Reporting and Disclosure Act of 1959 [hereinafter Leg. Hist.] 1433, (Senator Kennedy).

We believe that paragraphs 15 and 16 of the MLA serve the community of interests at the jobsite and consequently fall within the proviso.

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660 F.2d 406, Counsel Stack Legal Research, https://law.counselstack.com/opinion/griffith-co-v-national-labor-relations-board-ca9-1981.