Maui Trucking, Inc. v. Operating Engineers Local Union No. 3 International Union of Operating Engineers

24 F.3d 1134
CourtCourt of Appeals for the Ninth Circuit
DecidedMay 18, 1994
DocketNo. 92-15321
StatusPublished
Cited by3 cases

This text of 24 F.3d 1134 (Maui Trucking, Inc. v. Operating Engineers Local Union No. 3 International Union of Operating Engineers) 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
Maui Trucking, Inc. v. Operating Engineers Local Union No. 3 International Union of Operating Engineers, 24 F.3d 1134 (9th Cir. 1994).

Opinion

Opinion by Judge TROTT.

TROTT, Circuit Judge:

This lawsuit arises from a collective bargaining agreement (“Master Agreement”) entered into in Hawaii by the Operating Engineers Local Union No. 3 (“Local No. 3”) on one hand, and the General Contractors Labor Association and the Building Industry Labor Association (“Associations” or “General Contractors”) on the other. Section 24E of this Master Agreement covers the subcontracting by the General Contractors of off-site work such as the hauling of construction materials to and from the General Contractors’ job sites. With the alleged purpose of protecting the work and employment opportunities of all employees covered by the agreement, including the benefits of the Master Agreement itself, Section 24E requires the General Contractors to subcontract off-site work only to subcontractors who agree (1) to pay their employees a total wage and benefits package equal in value to the wage and benefits package payable under the Master Agreement; (2) to ensure that their employees work in accordance with the schedule of hours established in the Master Agreement; (3) to submit certified payroll records to Local 3 and to the Associations; and, (4) to submit any disputes regarding their compliance with these requirements to the grievance procedures set forth in the Master Agreement.

The plaintiffs in this case are independent nonunion truckers with an established history of off-site hauling. When they learned of the impending- implementation of Section 24E, they became concerned it would effectively prevent the General Contractors from continuing to do business with them. Accordingly, they threatened Local No. 3 and the Associations with a lawsuit. This development caused the Associations to refuse to sign and implement Section 24E out of concern that it might not be lawful. This refusal prompted Local No. 3 to file an action for declaratory judgment against the Associations seeking a declaration that the subcontracting restrictions in Section 24E were lawful under federal labor and antitrust law.

In that action, to which the independent nonunion truckers were not parties, Judge David A. Ezra ruled that Section 24E was facially valid and did not violate section 8(e) of the National Labor Relations Act1 because Section 24E constituted a valid “union standards clause.” See Associated Builders & Contractors v. N.L.R.B., 654 F.2d 1301, 1307 (9th Cir.1981), aff'd in part, vacated in part, 456 U.S. 645, 102 S.Ct. 2071, 72 L.Ed.2d 398 (1982). Quoting and relying on General Teamsters Local 386, 198 N.L.R.B. 1038 (1972), Judge Ezra concluded that the disputed restrictions furthered the union’s “legitimate interest in preventing the undermining of the work opportunities and standards of employees in a contractual bargaining unit by subcontractors who do not meet the prevailing wage scales and employee benefits covered by the contract.” Id. In so holding, however, Judge Ezra noted that “where a union standards clause is intended not to protect or preserve the working standards of employees in the unit, but rather to control the employment practices of firms that seek to do business with-the employer and to aid and assist union members generally, the object of that clause is secondary and unlawful.” (citing General Teamsters Local 386, 198 N.L.R.B. at 1038). See Sheet Metal Workers Local 91, 294 N.L.R.B. 766, 770 [1137]*1137(1989); National Woodwork Mfrs. Ass’n v. N.L.R.B., 386 U.S. 612, 644-45, 87 S.Ct. 1250, 1268-69, 18 L.Ed.2d 357 (1967). Accordingly, Judge Ezra opined that although Section 24E was facially valid, “it may nonetheless be unlawful as applied.” (citing Building Materials and Construction Local 216, 198 N.L.R.B. 1046 (1972), aff'd sub nom. Building Materials & Construction Local No. 216 v. N.L.R.B., 520 F.2d 172 (D.C.Cir.1975)).

In Building Materials, the union sought to apply similar restrictions to subcontractors hauling pre-stressed concrete girders. Because the general contractors had never hauled pre-stressed girders and had no plans to do so, the court upheld the NLRB’s conclusions (1) that the object of the restrictions, as applied to the hauling of pre-stressed girders, was not the preservation or protection of unit work, and (2) that therefore their aim was “secondary” and thus a violation of section 8(e). Building Materials, 520 F.2d at 179. Noting that “the question of whether the restrictions are invalid, as applied, depends on specific factual situations that may in time unfold,” Judge Ezra deferred resolution of this issue to a later date. See In re Bituminous Coal Wage Agreements, 756 F.2d 284, 290-291 (3d Cir.), cert. denied, 474 U.S. 863, 106 S.Ct. 180, 88 L.Ed.2d 149 (1985).

Building on his holding that the disputed clause did not violate section 8(e) and was a legitimate subcontracting restriction, Judge Ezra also held that the clause did not violate federal antitrust law which excepts traditional union activity from antitrust review. Continental Maritime v. Pacific Coast Metal Trades, 817 F.2d 1391, 1393 (9th Cir.1987); California Dump Truck Owners Ass’n v. Associated General Contractors, 562 F.2d 607, 610 (9th Cir.1977).

Needless to say, both Local No. 3 and the Associations were generally pleased with the outcome, but the independent nonunion truckers were not. Thus, the independent truckers filed the present lawsuit challenging the validity of Section 24E as applied to them. Because they were not parties to the earlier lawsuit, the independent truckers were permitted again to litigate the issues decided by Judge Ezra, including the “as applied” issue he did not decide. The independent truckers originally filed this lawsuit only against Local No. 3, but the district court permitted the Associations to intervene as plaintiffs seeking a declaration as to the legality and enforceability of Section 24E as applied to the facts of this case.

Eventually, motions and cross motions for summary judgment were joined, and Judge Samuel King ruled for the Associations and Local No. 3 and against the plaintiffs. On the central issue of whether Section 24E was valid as applied, Judge King held that it was because it served as a “union standards clause” designed appropriately (1) to preserve the work of the union, and (2) to preserve “union standards.”

The independent truckers appeal this ruling. We have jurisdiction over this timely appeal pursuant to 28 U.S.C. § 1291, and we reverse and remand for further proceedings consistent with this opinion.

I

A.

The first issue we must decide is whether the appropriate universe for work preservation analysis is the entire State of Hawaii, as the Associations and Local No. 3 claim, or whether it can be limited to just the island of Maui, as the independent truckers argue.

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Bluebook (online)
24 F.3d 1134, Counsel Stack Legal Research, https://law.counselstack.com/opinion/maui-trucking-inc-v-operating-engineers-local-union-no-3-international-ca9-1994.