Sage Realty Corp. v. ISS Cleaning Services Group, Inc.

936 F. Supp. 130, 1996 WL 438776
CourtDistrict Court, S.D. New York
DecidedAugust 2, 1996
Docket96 Civ. 0581
StatusPublished
Cited by9 cases

This text of 936 F. Supp. 130 (Sage Realty Corp. v. ISS Cleaning Services Group, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sage Realty Corp. v. ISS Cleaning Services Group, Inc., 936 F. Supp. 130, 1996 WL 438776 (S.D.N.Y. 1996).

Opinion

OPINION

CHIN, District Judge.

In this case, the owners of six commercial buddings and their managing agent seek relief for adeged antitrust violations that occurred during the January 1996 strike by office budding maintenance employees in New York City. Plaintiffs contend that defendants engaged in a group boycott that blocked union members from returning to work on a limited basis for certain large, wed-known cleaning service contractors. In turn, plaintiffs were prohibited from employing those union members through the estab-dshed cleaning service contractors.

Defendants move to dismiss the complaint, contending that plaintiffs cannot state an antitrust claim for two reasons: first, plaintiffs have faded to allege that defendants’ conduct caused a cognizable antitrust injury, and second, the non-statutory labor exemption bars plaintiffs’ antitrust claim. For the reasons set forth below, I agree. Because plaintiffs fad to sufficiently adege facts demonstrating antitrust injury and because defendants’ conduct is protected from the antitrust laws by the non-statutory labor exemption, defendants’ motion is granted and the complaint is dismissed.

BACKGROUND 1

I. The Parties

The labor dispute that erupted in December 1995 and January 1996 involved *133 several key parties. The union representing the cleaning service workers was Local 32B-32J of the Service Employers International Union of the AFL-CIO (the “Union”). The Union’s primary negotiations were with defendant Realty Advisory Board on Labor Relations, Inc. (the “RAB”), a multi-employer bargaining organization consisting of owners and managers of nearly 1,000 New York commercial buildings. The Union also negotiated with the Service Employers Association (the “SEA”), a trade association of nineteen of the largest cleaning service contractors in New York. Defendant ISS Cleaning Services Group, Inc. (“ISS”) is a well-known cleaning service contractor and a member of the SEA. The six plaintiff building companies are non-RAB members and thus are considered independent buildings (“Independent Buildings”). Plaintiff Sage Realty Corporation (“Sage”) is the managing agent for the six plaintiff buildings and is not a member of the RAB. 2

II.The Office Building Cleaning Industry

Office building maintenance workers in New York are primarily employed by two types of entities: a RAB-member building or a cleaning service contractor. The RAB, which was formed in 1938 as a multi-employer association through which employers in the building service industry could bargain with the Union, currently has approximately 1000 members who control about 65% of the office buildings in New York. Since its formation, the RAB has negotiated numerous collective bargaining agreements on behalf of its members with the Union. Approximately one-quarter of the Union members who work in RAB-member buildings are employed directly by the RAB-member.

The remaining Union members who work in RAB-member buildings are employed by cleaning service contractors, most of which belong to the SEA. The SEA was formed over thirty years ago as a multi-employer association and currently has nineteen members. Until 1993, the SEA entered into collective bargaining agreements on behalf of its members with the Union. Since that time, however, the SEA has negotiated a pattern collective bargaining agreement, and subsequently each member enters its own agreement with the Union.

Finally, in some limited circumstances, the Union directly enters into contracts with Independent Buildings. In general, however, Independent Buildings obtain cleaning services by hiring a cleaning service contractor. Some cleaning service contractors, such as ISS, provide services for both RAB buildings and Independent Buildings.

III. The Strike

On December 31, 1995, the Union’s existing collective bargaining agreements and contracts expired. On January 4,1996, after several days of fruitless negotiations, the Union went on strike. Both RAB buildings and Independent Buildings were affected.

In order for the cleaning service contractors to continue servicing their customers, they began using non-Union labor. As a result, the Union sent representatives to picket those buildings where non-Union personnel were being employed. Disturbances resulted and the police were summoned on several occasions. The business of some commercial building tenants was also occasionally disrupted because delivery services would not cross the picket lines.

IV. The Union’s Effort to Settle the Strike with Independent Buildings

Attempting to settle the strike with Independent Buildings while it continued to negotiate with the RAB, the Union offered to enter into so-called “you too” agreements with various cleaning service contractors. Each “you too” agreement provided for modest wage and benefit increases to workers and a cessation of the strike at the building covered by the agreement. More importantly, the “you too” agreement also included a “most favored nations” clause. This clause provided that:

In the event the Union negotiates an industry wide commercial building agree *134 ment with the RAB with terms and conditions more favorable than those provisions provided herein the Union agrees to grant the Employer the more favorable terms and conditions of said settlement.

In other words, by signing the “you too” agreement, the cleaning service contractor would be able to settle with the Union, and resume employing Union members, at no risk of getting a worse deal than the RAB received after it settled with the Union. At the same time, a number of Union members would be able to return to work.

V. The Purported Group Boycott

Although the Union was able to enter into “you too” agreements with many Independent Buildings, it was unable to enter into such agreements with those Independent Buddings, such as Sage, that employ cleaning service contractors who also work for RAB members. According to Sage, ISS and other cleaning service contractors were prepared to enter into “you too” agreements to service Independent Buddings with Union laborers during the strike untd RAB issued a “threat.” RAB allegedly informed ISS and other cleaning service contractors that if they entered into “you too” agreements to service Independent Buddings, they would no longer be permitted to service RAB buddings. After receiving this “threat,” ISS and other cleaning service contractors refused to enter into “you too” agreements.

Sage adeges that ISS’s refusal to enter into “you too” agreements resulted from an agreement between RAB and cleaning service contractors that constituted a group boycott in restraint of trade. One of the purposes of this boycott was to ensure that Union employees could not return to work at Independent Buddings during the strike.

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Bluebook (online)
936 F. Supp. 130, 1996 WL 438776, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sage-realty-corp-v-iss-cleaning-services-group-inc-nysd-1996.