Jim Neff, Inc v. Todd

• Decision Date: 27 April 1983
• Docket Number: No. 81-2150,81-2150
• Citation: 75 L.Ed.2d 830,461 U.S. 260,103 S.Ct. 1753
• Parties: JIM McNEFF, INC., Petitioner v. Frank L. TODD, et al
• Court: U.S. Supreme Court

461 U.S. 260

103 S.Ct. 1753

75 L.Ed.2d 830

JIM McNEFF, INC., Petitioner

v Frank L. TODD, et al.

No. 81-2150.

Argued Jan. 17, 1983.

Decided April 27, 1983.

Syllabus

Section 8(f) of the National Labor Relations Act (NLRA) authorizes construction industry employers and unions to enter into so-called "prehire" agreements setting the terms and conditions of employment for workers hired by the signatory employer without the union's majority status first having been established under § 9 of the Act. Section 8(f) also provides that such an agreement shall not bar a petition for a representative election under § 9. A local union and a contractors association entered into a master labor agreement which provided that work at jobsites was to be performed only by subcontractors who had signed a labor agreement with the union and that covered employees, including those of subcontractors, must become union members. The agreement also required employers to make monthly contributions to fringe benefit trust funds on behalf of covered employees. When petitioner, engaged in the construction industry, began work on a jobsite as a subcontractor, it was not a signatory to a labor agreement with the union, and none of its employees on the jobsite were union members. Upon being notified by representatives of the union and the general contractor that it was required to do so, petitioner became a signatory to the master labor agreement, and its employees signed union cards. After petitioner submitted monthly reports to the union trust funds, falsely stating that "no members of this craft were employed during this month," petitioner on several occasions postponed audits requested by respondents, the trustees of the funds, to verify the monthly reports. Respondents then filed suit in Federal District Court under § 301 of the Labor Management Relations Act to compel an accounting and to recover payment of any trust fund contributions found to be due. The District Court entered summary judgment for respondents and ordered payment of unpaid contributions. The Court of Appeals affirmed.

Held: Monetary obligations assumed by an employer under a prehire contract authorized by § 8(f) may be recovered in a § 301 action brought by a union prior to repudiation of the contract by the employer, even though the union has not obtained majority support in the relevant unit. Pp. 265-272.

(a) In authorizing § 8(f) prehire contracts even though the union's majority status was not first established, Congress recognized that because of the uniquely temporary, transitory, and sometimes seasonal nature of construction industry employment, unions often would not be able to establish majority support with respect to many bargaining units. Congress also recognized that an employer must know labor costs in preparing contract bids and must have available a supply of skilled craftsmen for quick referral. Pp. 265-267.

(b) The question presented was not decided by NLRB v. Iron Workers, 434 U.S. 335, 98 S.Ct. 651, 54 L.Ed.2d 586, which held that § 8(b)(7)(C) of the NLRA, prohibiting picketing to force an employer to recognize a union that is not the certified representative of the employees in the relevant unit, was violated by a union's picketing to enforce a § 8(f) contract with the employer where the union had failed to request a timely representative election. That decision was based on Congress' intent, when it enacted § 8(f), to protect employees' rights to select their own bargaining representatives, and to ensure that prehire agreements are arrived at voluntarily and are voidable until the union attains majority support in the relevant unit. However, union enforcement, by way of a § 301 suit, of monetary obligations incurred by an employer under a prehire contract prior to its repudiation does not impair the right of employees to select their own bargaining agent, or trench on the voluntary and voidable characteristics of a § 8(f) prehire agreement. Allowing an action such as respondents' vindicates Congress' policies in authorizing prehire contracts to meet problems unique to the construction industry. When a § 8(f) agreement is voluntarily executed, as here, both parties must abide by its terms until it is repudiated. Pp. 267-271.

667 F.2d 800 (CA9 1982), affirmed.

James T. Winkler, Long Beach, Cal., for petitioner.

Wayne Jett, Los Angeles, Cal., for respondents.

Chief Justice BURGER delivered the opinion of the court.

We granted certiorari to resolve conflicts in the Circuits as to whether monetary obligations that have accrued under a prehire contract authorized by § 8(f) of the National Labor Relations Act, 29 U.S.C. § 158(f), can be enforced, prior to the repudiation of such a contract, in a suit brought by a union against an employer under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, absent proof that the union represented a majority of the employees.

I

Petitioner is engaged in the construction industry and, in September 1978, was a subcontractor on a jobsite in Southern California. The general contractor was contractually bound to the Master Labor Agreement negotiated between the International Union of Operating Engineers, Local No. 12, and the Southern California General Contractors Associations. The Master Labor Agreement provided that work at the jobsite was to be performed only by subcontractors who had signed a labor agreement with the Union.¹ The Master Labor Agreement also contained a union security clause requiring covered employees, including those of subcontrac- tors, to become members of the Union.² At the time petitioner began work on the jobsite as a subcontractor, it was not a signatory to a labor agreement with the Union and none of its employees on the jobsite were members of the Union.

On September 13, 1978, petitioner's president, McNeff, was approached on the jobsite by a representative of the Union who informed him that in order to remain on the project he was required to sign the Master Labor Agreement. McNeff refused. Later that day, the Union representative returned with a representative of the general contractor who also informed McNeff that he was required to sign the agreement in order to remain on the project. McNeff then signed the agreement on behalf of petitioner.³ Petitioner's employees signed Union cards that same day.

The Master Labor Agreement required petitioner to make monthly contributions to fringe benefit trust funds on behalf of each covered employee.⁴ From October 1978 through March 1979 petitioner submitted required monthly reports to the trust funds, but made no contributions. Each form was submitted by petitioner with the false notation that "no members of this craft were employed during this month." In November 1978, after petitioner had filed the first of such reports, respondents, the trustees of the funds, requested permission from petitioner to audit its records to verify the statements made in its monthly report. Petitioner purported to agree, but postponed the audit several times. On April 4, 1979, respondents brought this suit under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185,⁵ to compel an accounting and payment of any contributions found to be due the trust funds. An audit performed in pretrial discovery proceedings revealed that petitioner had five employees covered by the agreement during the period October 1978 through March 1979 and therefore owed a total of $5,316.79 in trust fund contributions for that period.

The District Court for the Central District of California granted respondents' motion for summary judgment and ordered payment of the unpaid trust fund contributions. The Court of Appeals for the Ninth Circuit affirmed.

We granted certiorari, --- U.S. ----, 102 S.Ct. 3508 73 L.Ed.2d 1382, (1982), in part to resolve Circuit conflicts on this issue,⁶ and we affirm.

II

By authorizing so-called "prehire" agreements like that at issue in this case, § 8(f) of the National Labor Relations Act, 29 U.S.C. § 158(f), exempts construction industry employers and unions from the general rule precluding a union and an employer from signing "a collective-bargaining agreement recognizing the union as the exclusive bargaining representative when in fact only a minority of the employees have authorized the union to represent their interests." NLRB v. Local 103, International Association of Bridge Workers (Higdon), 434 U.S. 335, 344-345, 98 S.Ct. 651, 657, 54 L.Ed.2d 586 (1978). See Garment Workers v. NLRB, 366 U.S. 731, 737-738, 81 S.Ct. 1603, 1607, 6 L.Ed.2d 762 (1961). Section 8(f) provides in pertinent part:

"It shall not be an unfair labor practice under subsections (a) and (b) of this section for any employer engaged primarily in the building and construction industry to make an agreement covering employees engaged (or who, upon their employment, will be engaged) in the building and construction industry with a labor organization of which building and construction employees are members . . . because (1) the majority status of such labor organization has not been established under the provisions of section 159 of this title prior to the making of such agreement. . . . Provided . . . That any agreement which would be invalid, but for clause (1) of this subsection, shall not be a bar to a petition filed pursuant to section 9(c) or 9(e)."

Thus, § 8(f) allows construction industry employers and unions to enter into agreements setting the terms and conditions of employment for the workers hired by the signatory employer without the union's majority status first having been established in the manner provided for under § 9 of the Act. One factor prompting Congress to enact § 8(f) was the uniquely temporary, transitory and sometimes seasonal nature of much of the employment in the construction industry. Congress recognized that construction industry unions often would not be able to establish majority support with respect to many bargaining units. See...