Federal Maritime Commission v. Pacific Maritime Association

• Citation: 55 L.Ed.2d 96,98 S.Ct. 927,435 U.S. 40
• Decision Date: 01 March 1978
• Docket Number: No. 76-938,76-938
• Parties: FEDERAL MARITIME COMMISSION et al., Petitioners, v. PACIFIC MARITIME ASSOCIATION et al
• Court: United States Supreme Court

435 U.S. 40

98 S.Ct. 927

55 L.Ed.2d 96

FEDERAL MARITIME COMMISSION et al., Petitioners,

v PACIFIC MARITIME ASSOCIATION et al.

No. 76-938.

Argued Dec. 7, 1977.

Decided March 1, 1978.

Syllabus

Respondent Pacific Maritime Association (PMA), a collective-bargaining agent for a multiemployer bargaining unit composed of various employers of Pacific coast dockworkers, entered into a collective-bargaining agreement with respondent Union regarding nonmember use of dockworkers jointly registered and dispatched through PMA-Union hiring halls whereby the nonmembers would participate in all fringe-benefit programs, pay the same dues and assessments as PMA members, use "steady" men in the same way as members, and be treated as members during work stoppages. Various nonmember public ports, which had previously competitively made separate (and assertedly in several respects more advantageous) agreements with the Union and the PMA, filed a petition with petitioner Federal Maritime Commission (FMC) asserting that the collective-bargaining agreement was subject to filing and approval under § 15 of the Shipping Act, 1916 (Act), which requires the filing of agreements between a common carrier by water (or "other person" furnishing facilities in connection with such a carrier) and another such carrier or person, including those agreements "controlling, regulating, preventing, or destroying competition." The FMC is empowered to "disapprove, cancel, or modify" any such agreement that it finds to be unjustly discriminatory or to be detrimental to commerce or the public interest. Before FMC approval or after disapproval agreements subject to filing are unlawful and may not be implemented. Lawful agreements are excepted from the antitrust laws. The FMC severed for initial determination the issues of its jurisdiction over the challenged agreement and whether there were considerations in the national labor policy that would nevertheless exempt the agreement from the filing and approval requirements of § 15. The FMC found that the purpose of the agreement was to place nonmembers on the same asis as members of the PMA and that its effect was to control or affect competition between members and nonmembers. Applying the standards articulated in United Stevedoring Corp. v. Boston Shipping Assn., 16 F.M.C. 7, the FMC found the agreement to be outside the protection of an FMC-recognized labor exemption and therefore subject to filing under § 15. The Court of Appeals reversed, ruling that any collective-bargaining agreement, regardless of its impact on competition, was exempt from the § 15 filing requirements. Though recognizing that its holding precluded for collective-bargaining agreements the antitrust immunity that § 15 approval provides, even in cases where shipping considerations would support an exemption, the court felt its holding necessary to implement the collective-bargaining system established by the federal statutes dealing with labor-management relations, including those in the shipping industry. Alternatively, the court held that if its per se rule was infirm the FMC had erred in refusing to exempt the challenged agreement. Held:

1. Collective-bargaining agreements as a class are not categorically exempt from § 15's filing requirements. Pp. 53-60.

(a) Because § 15 provides that an approved agreement will not be subject to the antitrust laws, it is clear that Congress (1) assigned to the FMC, not the courts, the task of initially determining which anticompetitive restraints are to be approved and which are to be disapproved under the general statutory guidelines, and (2) anticipated that various anticompetitive restraints, forbidden by the antitrust laws in other contexts, would be acceptable in the shipping industry. Pp. 53-56.

(b) The Court of Appeals' conclusion that prompt implementation of lawful collective-bargaining agreements could not be realized under the § 15 procedure overlooked the fact that under the Act's terms the vast majority of collective-bargaining arrangements would not be candidates for disapproval under § 15 and would be routinely approved even if filed. The FMC has determined that it will recognize a "labor exemption" from § 15 filing requirements for collective-bargaining contracts falling within the boundaries of the exemption defined by announced criteria like those applicable to the labor exemption from the antitrust laws. Pp. 56-58.

(c) The FMC's procedure for conditional approval of filed agreements pending a final decision as to their legality is adequate to overcome the Court of Appeals' concern that the § 15 procedures would prevent "the maintenance or prompt restoration of industrial peace." Pp. 59-60.

2. The Court of Appeals also erred in its alternative ground of decision that even under a balancing test weighing Shipping Act and labor relations considerations the challenged agreement should be exempt from filing, in support of which view the court suggested that the FMC had failed to realize that the agreement was an effort to force the public ports into a multiemployer bargaining unit against their will, an issue exclusively within the domain of the National Labor Relations Board. Here there was no effort to change bargaining units but to impose bargaining-unit terms on employers outside the units. Pp. 60-61.

3. The FMC made the requisite findings to sustain its decision. Pp. 61-63.

177 U.S.App.D.C. 248, 543 F.2d 395, reversed.

Daniel M. Friedman, Washington, D. C., for petitioners.

R. Frederic Fisher, San Francisco, Cal., for respondent Pacific Maritime Association.

Norman Leonard, San Francisco, Cal., for respondent International Longshoremen's and Warehousemen's Union.

Mr. Justice WHITE delivered the opinion of the Court.

Section 15 of the Shipping Act, 1916, 39 Stat. 733, as amended, 46 U.S.C. § 814,¹ requires the filing with the Federal Maritime Commission (Commission) of seven categories of agreements between a common carrier by water, or "other person subject to this chapter ' and another such carrier or person.² Among those agreements that must be filed are those "controlling, regulating, preventing, or destroying competition." The Commission is empowered to "disapprove, cancel, or modify" any such agreement that it finds to be "unjustly discriminatory or unfair as between carriers, shippers, exporters, importers, or ports, . . . or to operate to the detriment of the commerce of the United States, or to be contrary to the public interest . . . " and is directed to approve all filed agreements that do not transgress these standards. Before approval or after disapproval, agreements subject to filing are unlawful and may not be implemented.³ Agreements that are "lawful under this section" are excepted from those provisions of the antitrust laws contained in §§ 1-11 and 15 of Title 15 of the United States Code. Violations of the section are punishable by civil fines of not more than $1,000 per day.

The issue in this case is whether § 15 of the Shipping Act requires the filing and the Commission's approval or disapproval of a collective-bargaining agreement between respondent Pacific Maritime Association (PMA), a collective-bargaining agent for a multiemployer bargaining unit made up of various employers of Pacific coast dockworkers,⁴ and respondent International Longshoremen's and Warehousemen's Union (Union).

I

This case arose when eight municipal corporations, owners and operators of Pacific coast port facilities and not members of the PMA,⁵ filed a petition with the Commission asserting that a 1972 agreement between PMA and the Union was subject to filing and approval under § 15 and was violative of §§ 15, 16, and 17 of the Shipping Act ⁶ because it was unjust discriminatory, and contrary to the public interest. Prior to this time, the nonmember ports had negotiated separate agreements with the Union which contained terms and conditions that in some respects differed from those contained in the collective-bargaining contracts between PMA and the Union. Fringe-benefit provisions varied, depending on the result of individual negotiations.⁷ In some respects the ports enjoyed more flexible work rules than did PMA; the ports, for example, were often permitted to use "steady crews," whereas, under the PMA contract rotation of workers among employers was the general rule.⁸ The existence of separate agreements between the Union and the public ports also enable the Union to exert negotiating pressure on PMA by striking PMA while continuing to work for the individual ports. The ports, nevertheless, were permitted by virtue of separate agreements with PMA to secure their work force through the PMA-Union hiring halls ⁹ and to make the particular fringe-benefit pay- ments called for by their individual contracts by contributing to the fringe-benefit funds maintained by PMA.¹⁰

During contract negotiations between PMA and the Union beginning in November 1970, one of the issues raised was whether nonmembers should continue to be allowed to participate in PMA hiring-hall and fringe-benefit plans. These privileges PMA desired to eliminate.¹¹ Ultimately, the parties arrived at a Supplemental Memorandum of Understanding described as follows by the court below:

"In the Supplemental Memorandum the parties agreed that PMA would accept contributions from all nonmembers who executed a uniform participation agreement. This standard agreement, included in the Supplemental Memorandum, would require nonmembers, as a condition of using the joint dispatching halls for jointly registered employees, to participate in all fringe benefit programs, pay the same dues and assessments as PMA members, use steady men 'in the same way a member may do so,' and be treated as a member during work stoppages." 177 U.S.App.D.C. 248, 250-251, 543 F.2d 395, 397-39 (1976) (footnotes omitted).¹² It was this agreement that the public ports asserted was subject to filing and Commission action under § 15.

In ...