869 F.3d 92 (2nd Cir. 2017), 16-485-cv, Connecticut Ironworkers Employers Association, Inc. v. New England Regional Council of Carpenters

Docket Nº:16-485-cv
Citation:869 F.3d 92
Opinion Judge:JOS
Party Name:CONNECTICUT IRONWORKERS EMPLOYERS ASSOCIATION, INC., MRS ENTERPRISES, INC., BARRETT, INC., ERNEST PETERSON, INC., BERLIN STEEL CONSTRUCTION CO., IRON WORKERS LOCAL NO. 15, INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL, ORNAMENTAL & REINFORCING, IRON WORKERS LOCAL 37, INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL, ORNAMENTAL & REINFORCING, IRON
Attorney:PAUL C. HETTERMAN, Hartnett Gladney Hetterman, LLC, St. Louis, MO (Ronald C. Gladney, Hartnett Gladney Hetterman, LLC, St. Louis, MO; Thomas W. Meiklejohn, Livingston, Adler, Pulda, Meiklejohn & Kelly, Hartford, CT; on the brief), for Plaintiffs-Appellants. KEITH P. CARROLL, Mintz Levin Cohn Ferr...
Judge Panel:Before: JACOBS, CABRANES, and PARKER, Circuit Judges.
Case Date:August 23, 2017
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 92

869 F.3d 92 (2nd Cir. 2017)

CONNECTICUT IRONWORKERS EMPLOYERS ASSOCIATION, INC., MRS ENTERPRISES, INC., BARRETT, INC., ERNEST PETERSON, INC., BERLIN STEEL CONSTRUCTION CO., IRON WORKERS LOCAL NO. 15, INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL, ORNAMENTAL & REINFORCING, IRON WORKERS LOCAL 37, INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL, ORNAMENTAL & REINFORCING, IRON WORKERS LOCAL 424, INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL, ORNAMENTAL & REINFORCING, SHEET METAL WORKERS LOCAL 38 CRAFT TRAINING FUND, SHEET METAL WORKERS LOCAL NO. 40, INTERNATIONAL UNION OF PAINTERS & ALLIED TRADES DISTRICT COUNCIL 11, AFLCIO, CLC, INTERNATIONAL UNION OF PAINTERS, ALLIED TRADES LOCAL UNIONS, GLAZIERS LOCAL UNION NOS. 1333 & 1274, GLAZIERS UNION, NO. 1333, GLAZIERS UNION, LOCAL NO. 1274, Plaintiffs-Appellants,

v.

NEW ENGLAND REGIONAL COUNCIL OF CARPENTERS, Defendant-Appellee. [*]

No. 16-485-cv

United States Court of Appeals, Second Circuit

August 23, 2017

Argued December 13, 2016

On Appeal from the United States District Court for the District of Connecticut.

This case concerns a " turf battle" between Ironworkers and Carpenters. The Ironworkers allege that the Carpenters used restrictive subcontracting clauses in their collective bargaining agreements (" CBAs" ) to secure work in the New England area that historically belonged to the Ironworkers. The Ironworkers contend that the Carpenters' conduct constitutes anticompetitive behavior in violation of Sections 1 and 2 of the Sherman Antitrust Act and unfair labor practices in violation of Sections 8(b)(4) and 8(e) of the National Labor Relations Act (" NLRA" ).

The Carpenters counter that their subcontracting practices are consistent with longstanding industry practices, including with practices currently used by the Ironworkers. They assert, as an affirmative defense, that such practices are protected from liability by the " construction industry proviso" under Section 8(e) of the National Labors Relations Act (" NLRA" ) and the judicially-created " non-statutory exemption." To defeat the antitrust claim, the Carpenters' conduct must come within the protection of both the construction industry proviso and the non-statutory exemption. However, to defeat the unfair trade practices claim, it only needs to satisfy the construction industry proviso.

On January 20, 2016, the United States District Court for the District of Connecticut (Stefan R. Underhill, Judge) granted summary judgment to the Carpenters based on the affirmative defenses just described. It held that the disputed subcontracting practices were immune from both antitrust and unfair labor practices liability because they qualified for protection under the construction industry proviso and the non-statutory exemption.

We agree that the Carpenters have met the requirements of the construction industry proviso. But we conclude that, on this record, there are factual disputes that preclude a decision on whether the conduct falls within the non-statutory exemption. To demonstrate that the disputed subcontracting practices are sheltered by the non-statutory exemption (and thus to defeat the Ironworkers' antitrust claim completely), the Carpenters must show that these practices furthered legitimate aims of collective bargaining in a way that is not unduly restrictive of market competition. Absent additional fact-finding by the District Court as to whether the Carpenters' subcontracting practices further legitimate labor goals, it cannot undertake the analysis required by our precedents.

Accordingly, we VACATE the judgment of the District Court as to the Sherman Act claim, AFFIRM the judgment as to the unfair labor practices claim, and REMAND the cause to the District Court for further proceedings consistent with this opinion, including for such additional discovery as will permit the District Court to be informed of the relevant history and permit the parties to move for summary judgment or, if necessary, to proceed to trial.

PAUL C. HETTERMAN, Hartnett Gladney Hetterman, LLC, St. Louis, MO (Ronald C. Gladney, Hartnett Gladney Hetterman, LLC, St. Louis, MO; Thomas W. Meiklejohn, Livingston, Adler, Pulda, Meiklejohn & Kelly, Hartford, CT; on the brief), for Plaintiffs-Appellants.

KEITH P. CARROLL, Mintz Levin Cohn Ferris Glovsky and Popeo, PC, Boston, MA (Christopher N. Souris, Krakow & Souris LLC, Boston, MA; Kevin McGinty, Mintz Levin Cohn Ferris Glovsky and Popeo, PC, Boston, MA; Bruce D. Sokler, Mintz Levin Cohn Ferris Glovsky and Popeo, PC, Washington, DC; on the brief), for Defendant-Appellee.

Before: JACOBS, CABRANES, and PARKER, Circuit Judges.

OPINION

JOSÉ A. CABRANES, Circuit Judge

Much of the practice of American antitrust law consists of deciding whether particular conduct is, or is not, " exempt" from the application of the antitrust statutes by virtue of immunities conferred by later legislation or judicial interpretation. The celebrated fourteen-volume treatise of Professor Philip E. Areeda devotes fully two volumes to these numerous immunities.1 The history of these immunities is " rich and fascinating . . . com[ing] in waves. Each particular wave has involved a distinct approach and rested on its own economic justification." 2

We consider here the latest chapter in the unfolding story of one of those immunities--those that exempt certain labor union activities. Professor Ralph K. Winter (as he then was) characterized this topic as " one of the most disputed legal issues of this century." 3 We address only a piece of this storied immunity: the exemption for certain union activities within the construction industry.

This case arises out of a dispute over subcontracting clauses in collective bargaining agreements (" CBAs" ) between the defendant New England Regional Council of Carpenters (the " Carpenters Union" or " Carpenters" ) and various construction companies and construction managers. These clauses effectively bar subcontracting of construction work with non-Carpenter affiliates. The plaintiffs, consisting of several other unions, employers, trade associations, and union pensions funds (jointly, the " Ironworkers" ), allege that the Carpenters have used these subcontracting clauses to expand the scope of work assigned to the Carpenters Union to include work traditionally assigned to the Ironworkers. The Ironworkers bring two claims against the Carpenters: first, that the Carpenters' conduct constitute anticompetitive behavior in violation of Sections 1 and 2 of the Sherman Antitrust Act4 and second, that the Carpenters' conduct constitutes unfair labor practices in violation of Sections 8(b)(4) and 8(e) of the National Labor Relations Act (" NLRA" ).5 The Carpenters counter that their subcontracting practices are shielded from both antitrust liability and claims of unfair labor practices.

To determine if the disputed subcontracting practices6 are protected from antitrust liability, we must assess whether both the " construction industry proviso" of Section 8(e) of the NLRA7 and the judicially-created " non-statutory exemption" 8 to antitrust liability apply.9 To defeat the unfair labor practices claim, the Carpenters need only show that their conduct fall within the statutory construction industry proviso.

In the United States District Court for the District of Connecticut (Stefan R. Underhill, Judge ), the Carpenters moved for summary judgment based on the affirmative defenses just described and the Court granted their motion. Specifically, the District Court held that the disputed subcontracting practices were immune from both antitrust and unfair labor practices liability because they qualified for protection under the construction industry proviso and the non-statutory exemption.

We agree that the Carpenters have met the requirements of the construction industry proviso, but we conclude that, on this record, there are factual disputes that preclude a decision on whether the conduct falls within the non-statutory exemption. To demonstrate that the disputed subcontracting practices are sheltered by the non-statutory exemption (and thus to defeat the Ironworkers' antitrust claim completely), the Carpenters must show that these practices furthered legitimate aims of collective bargaining, in a way that is not unduly restrictive of market competition. Absent additional fact-finding by the District Court as to whether the Carpenters' subcontracting practices further legitimate labor goals, it cannot undertake the analysis required by our precedents.10 Establishing that these subcontracting agreements arose from a lawful CBA is not, in and of itself, sufficient to gain the protection of the non-statutory exemption.

Accordingly, we VACATE the judgment of the District Court as to the Sherman Act claim, AFFIRM the judgment as to the unfair labor practices claim, and REMAND the cause to the District...

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