381 U.S. 657 (1965), 48, United Mine Workers of America v. Pennington

Docket Nº:No. 48
Citation:381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626
Party Name:United Mine Workers of America v. Pennington
Case Date:June 07, 1965
Court:United States Supreme Court
 
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Page 657

381 U.S. 657 (1965)

85 S.Ct. 1585, 14 L.Ed.2d 626

United Mine Workers of America

v.

Pennington

No. 48

United States Supreme Court

June 7, 1965

Argued January 27, 1965

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Syllabus

The trustees of the United Mine Workers of America Welfare and Retirement Fund sued respondents, partners in a coal mining company, for royalty payments under the National Bituminous Coal Wage Agreement of 1950, as amended. Respondents filed a cross-claim for damages, alleging that the trustees, the UMW and certain large coal operators had conspired to restrain and monopolize commerce in violation of §§1 and 2 of the Sherman Act. It was alleged that, to eradicate overproduction in the coal industry, the UMW and large operators agreed to eliminate the smaller companies by imposing the terms of the 1950 Agreement on all companies regardless of ability to pay, by increasing royalties due the welfare fund, by excluding the marketing, production and sale of nonunion coal, by refusing to lease coal lands to nonunion operators and refusing to buy or sell coal mined by such operators, by obtaining from the Secretary of Labor the establishment of a minimum wage under the Walsh-Healey Act higher than that in other industries, by urging TVA to curtail spot market purchases which were exempt from the Walsh-Healey order, and by waging a price-cutting campaign to drive small companies out of the spot market. Petitioner's motions to dismiss were denied, and the jury returned a verdict against the trustees and the UMW. The trial court set aside the verdict against the trustees, but overruled the union's motion for judgment notwithstanding the verdict or for a new trial. The Court of Appeals affirmed, ruling that the union was not exempt from liability under the Sherman Act under the facts of the case.

Held:

1. An agreement between the union and large operators to secure uniform labor standards throughout the industry would not be exempt from the antitrust laws. Pp. 661-669.

(a) An agreement resulting from union-employer bargaining is not automatically exempt from Sherman Act scrutiny merely because the negotiations covered wage standards, or any other compulsory subject of bargaining. Pp. 664-665.

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(b) A union may make wage agreements with a multiemployer bargaining unit and may, in pursuance of its own self-interests, seek to obtain the same terms from other employers, but it forfeits its antitrust exemption when it agrees with a group of employers to impose a certain wage scale on other bargaining units, and thus joins a conspiracy to curtail competition. Pp. 665-666.

(c) Nothing in the national labor policy indicates that a union and employers in one bargaining unit are free to bargain about wages or working conditions of other bargaining units or to settle these matters for the whole industry, nor does it allow an employer to condition the signing of an agreement on the union's imposition of a similar contract on his competitors. Pp. 666-667.

(d) Antitrust policy clearly restricts employer-union agreements seeking to set labor standards outside the bargaining unit, in view of the anticompetitive potential and the surrender by the union of its freedom of action with respect to bargaining policy. P. 668.

2. Concerted efforts to influence public officials do not violate the antitrust laws even though intended to eliminate competition. Eastern R. Conf. v. Noerr Motors, 365 U.S. 127, followed. Pp. 669-672.

(a) Instructions to the jury that anticompetitive purpose could support an illegal conspiracy based solely on the Walsh-Healey and TVA episodes did not constitute merely harmless error. P. 670.

(b) Respondents were not entitled to damages under the Sherman Act for any injury suffered from the actions of the Secretary of Labor, and the jury should have been so instructed. Pp. 671-672.

325 F.2d 804, reversed and remanded.

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WHITE, J., lead opinion

MR. JUSTICE WHITE delivered the opinion of the Court.

This action began as a suit by the trustees of the United Mine Workers of America Welfare and Retirement Fund against the respondents, individually and as owners of Phillips Brothers Coal Company, a partnership, seeking to recover some $55,000 in royalty payments alleged to be due and payable under the trust provisions of the National Bituminous Coal Wage Agreement of 1950, as amended, [85 S.Ct. 1588] September 29, 1952, executed by Phillips and United Mine Workers of America on or about October 1, 1953, and reexecuted with amendments on or about September 8, 1955, and October 22, 1956. Phillips filed an answer and a cross-claim against UMW, alleging in both that the trustees, the UMW and certain large coal operators had conspired to restrain and to monopolize interstate commerce in violation of §§ 1 and 2 of the Sherman Antitrust Act, as amended, 26 Stat. 209, 15 U.S.C. §§ 1, 2 (1958 ed.). Actual damages in the amount of $100,000 were claimed for the period beginning February 14, 1954, and ending December 31, 1958.1 The allegations of the cross-claim were essentially as follows: prior to the 1950 Wage Agreement between the operators and the union, severe controversy had existed in the industry, particularly over wages, the welfare fund and the union's efforts to control the working time of

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its members. Since 1950, however, relative peace has existed in the industry, all as the result of the 1950 Wage Agreement and its amendments and the additional understandings entered into between UMW and the large operators. Allegedly, the parties considered overproduction to be the critical problem of the coal industry. The agreed solution was to be the elimination of the smaller companies, the larger companies thereby controlling the market. More specifically, the union abandoned its efforts to control the working time of the miners, agreed not to oppose the rapid mechanization of the mines which would substantially reduce mine employment, agreed to help finance such mechanization and agreed to impose the terms of the 1950 agreement on all operators without regard to their ability to pay. The benefit to the union was to be increased wages as productivity increased with mechanization, these increases to be demanded of the smaller companies whether mechanized or not. Royalty payments into the welfare fund were to be increased also, and the union was to have effective control over the fund's use. The union and large companies agreed upon other steps to exclude the marketing, production, and sale of nonunion coal. Thus, the companies agreed not to lease coal lands to nonunion operators, and, in 1958, agreed not to sell or buy coal from such companies. The companies and the union jointly and successfully approached the Secretary of Labor to obtain establishment under the Walsh-Healey Act, as amended, 49 Stat. 2036, 41 U.S.C. § 35 et seq. (1958 ed), of a minimum wage for employees of contractors selling coal to the TVA, such minimum wage being much higher than in other industries and making it difficult for small companies to compete in the TVA term contract market. At a later time, at a meeting attended by both union and company representatives, the TVA was urged to curtail its spot market purchases, a substantial portion of which

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were exempt from the Walsh-Healey order. Thereafter, four of the larger companies waged a destructive and collusive price-cutting campaign in the TVA spot market for coal, two of the companies, West Kentucky Coal Co. and its subsidiary Nashville Coal Co., being those in which the union had large investments and over which it was in position to exercise control.

The complaint survived motions to dismiss, and, after a five-week trial before a jury, a verdict was returned in favor of Phillips and against the trustees and the union, the damages against the union being fixed in the amount of $90,000, to be trebled under 15 U.S.C. § 15 (1958 ed.). The trial court set aside the verdict against the trustees, but overruled the union's motion for judgment notwithstanding the verdict or, in the alternative, [85 S.Ct. 1589] for a new trial. The Court of Appeals affirmed. 325 F.2d 804. It ruled that the union was not exempt from liability under the Sherman Act on the facts of this case, considered the instructions adequate, and found the evidence generally sufficient to support the verdict. We granted certiorari. 377 U.S. 929. We reverse and remand the case for proceedings consistent with this opinion.

I

We first consider UMW's contention that the trial court erred in denying its motion for a directed verdict and for judgment notwithstanding the verdict, since a determination in UMW's favor on this issue would finally resolve the controversy. The question presented by this phase of the case is whether, in the circumstances of this case, the union is exempt from liability under the antitrust laws. We think the answer is clearly in the negative, and that the union's motions were correctly denied.

The antitrust laws do not...

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