Associated Builders and Contractors of Massachusetts/Rhode Island, Inc. v. Massachusetts Water Resources Authority

Decision Date15 May 1991
Docket NumberNo. 90-1392,90-1392
Parties137 L.R.R.M. (BNA) 2249, 59 USLW 2719, 119 Lab.Cas. P 10,780 ASSOCIATED BUILDERS AND CONTRACTORS OF MASSACHUSETTS/RHODE ISLAND, INC., et al., Plaintiffs, Appellants, v. The MASSACHUSETTS WATER RESOURCES AUTHORITY, et al., Defendants, Appellees.
CourtU.S. Court of Appeals — First Circuit

Maurice Baskin, with whom Carol Chandler, Mary L. Marshall, Stoneman, Chandler & Miller, Thomas J. Madden and Venable, Baetjer, Howard & Civiletti, were on briefs for appellants.

Richard D. Wayne and Hinckley, Allen, Snyder & Comen, were on brief for Utility Contractors Ass'n of New England, Inc., amicus curiae.

Ralph F. Abbott, Jr., Jay M. Presser and Skoler, Abbott & Presser, P.C., were on brief for National Ass'n of Mfrs., amicus curiae.

James J. Kelley and John M. Stevens, with whom E. Carl Uehlein, Jr., Morgan, Lewis & Bockius, Arthur G. Telegen, Foley Hoag & Eliot, Catherine L. Farrell, Gen. Counsel and Virginia S. Renick, Sr. Staff Counsel, were on joint brief for appellees Kaiser Engineers, Inc. and Massachusetts Water Resources Authority.

Donald J. Siegel, with whom Mary T. Sullivan, Segal, Roitman & Coleman, Laurence J. Cohen, Victoria L. Bor, Sherman, Dunn, Cohen, Leifer & Yellig, Walter Kamiat and Laurence Gold, were on briefs for appellee Building and Const. Trades Council of the Metropolitan Dist.

Scott Harshbarger, Atty. Gen. and Douglas H. Wilkins, Asst. Atty. Gen., were on supplemental brief for the Com. of Mass., amicus curiae.

Bond, Schoeneck & King, Sherburne, Powers & Needham, Raymond W. Murray, Robert W. Kopp and Anthony E. Battelle, were on brief for Bechtel Corporation/Parsons Brinckerhoff, Quade & Douglas, Inc., a Joint Venture, amicus curiae.

Before BREYER, Chief Judge, and CAMPBELL, TORRUELLA, SELYA and CYR, Circuit Judges.


TORRUELLA, Circuit Judge.

Plaintiffs-Appellants Associated Builders and Contractors of Massachusetts/Rhode Island, Inc. ("ABC") 1 appeal the decision of the United States District Court for the District of Massachusetts denying ABC's request for a preliminary injunction. For the reasons stated below, we reverse this decision and remand for action consistent with our opinion.


The Massachusetts Water Resources Authority ("MWRA") is a governmental agency authorized by the Massachusetts legislature to provide water supply services, sewage collection, and treatment and disposal services for the eastern half of Massachusetts. Following a lawsuit arising out of its failure to prevent the pollution of Boston Harbor, United States v. Metropolitan District Commission, C.A. No. 85-0489-MA (Mazzone, J.), the MWRA was ordered to meet a detailed timetable to carry out the clean-up of that body of water. This task, known as the Boston Harbor Clean-Up Project ("Project"), is estimated to involve $6.1 billion of public works over a ten year period. The means and methods of carrying out the Project are set forth in the MWRA's enabling statute, Mass.Gen.Laws ch. 92, App. Secs. 1-1, et seq., and the Commonwealth's public bidding laws. Mass.Gen.Laws ch. 149, Secs. 44A-44I and ch. 30, Sec. 39M. Pursuant to these laws, the MWRA provides the funds for construction (assisted by state and federal grants), owns the property to be built, establishes all bid conditions, decides all contract awards, pays the contractors, and generally exercises control and supervision over all aspects of this project.

In the spring of 1988, the MWRA retained Kaiser Engineers, Inc. ("Kaiser") as its program/construction manager. Kaiser's primary function is to manage and supervise the ongoing construction activity. In the course of performing its function, however, Kaiser could be expected to employ craft labor in certain situations. Its agreement with the MWRA permits it to act as an execution contractor, or to perform certain direct hire work as needed in cases of default or incomplete performance by other contractors, clean-up work and other limited or emergency situations.

Another important function of Kaiser is to advise the MWRA on the development of a labor relations policy which will maintain worksite harmony, labor-management peace, and overall stability during the ten-year life of the Project. The MWRA had already experienced work stoppages and informational picketing at various sites 2 and was concerned that, because of the scale of the Project and the number of different craft skills involved, it was vulnerable to numerous delays thus placing the court-ordered schedule in jeopardy and subjecting the MWRA to possible contempt orders. This concern was enhanced by the geographic location of the existing and proposed treatment facilities which makes them vulnerable to picketing and other concerted activity. 3

The above circumstances led Kaiser to recommend to the MWRA that it be permitted to negotiate with the building and construction trades unions, through the Building and Construction Trades Council and affiliated labor organizations 4 ("Trades Council"), in an effort to arrive at an agreement which would assure labor stability over the life of the Project. Any agreement would be subject to review and final approval by the MWRA.

The MWRA accepted Kaiser's recommendations and in early May 1989 Kaiser proceeded to meet with negotiating teams from the unions, including the Trades Council. The Master Labor Agreement was the result of their negotiations. After review by the MWRA staff, and upon its recommendation, the MWRA Board of Directors on May 28, 1989 adopted the Master Labor Agreement as the labor policy for the Project and directed that Specification 13.1 be added to the bid specification for all new construction work. Specification 13.1 provides that:

[E]ach successful bidder and any and all levels of subcontractors, as a condition of being awarded a contract or subcontract, will agree to abide by the provisions of the Boston Harbor Wastewater Treatment Facilities Project Labor Agreement ["the Master Labor Agreement"] as executed and effective May 22, 1989, by and between [Kaiser], on behalf of [MWRA], and the [Trades Council] ... and will be bound by the provisions of that agreement in the same manner as any other provision of the contract. A copy of the agreement is attached and included as part of these Contract Documents ...

The Master Labor Agreement establishes as "the policy of the [MWRA] that the construction work covered by this Agreement shall be contracted to Contractors who agree to execute and be bound by the terms of this Agreement." It is the duty of Kaiser on behalf of MWRA to "monitor compliance with this Agreement by all Contractors who through their execution of this Agreement, together with their subcontractors, have become bound hereto." The parties state the need to meet the "specified and limited time frames" established by the district court's order in the Boston Harbor Clean-up case. Also agreed to are binding methods for the settlement of "all misunderstandings, disputes or grievances which may arise [and] ... the Union, agree[s] not to engage in any strike, slowdown or interruption of work [or] the [employers] ... to engage in any lockout."

Most importantly, the Trades Council is recognized "as the sole and exclusive bargaining representative of all craft employees," and its hiring halls are made the initial and principal source for the Project's labor force. All employees are subject to the union security provisions of the agreement which require that they become union members within seven days of their employment. Employees may seek redress for their grievances only through the recognized labor organizations, and the contractors are bound by the Trades Council member unions' wage and benefit provisions and apprenticeship program. The contractors are required to make contributions to various union benefit trust funds and to observe the unions' work rules and job classifications.

The Master Labor Agreement became "effective [on] May 22, 1989, and shall continue in effect for the duration of the Project construction work." As previously indicated, the Project is expected to take ten years to complete.


ABC is an organization composed of individual construction contractors and trade associations representing over 18,000 "merit shop" (i.e., non-union) construction industry employers. On March 5, 1990, ABC brought suit in the United States District Court for the District of Massachusetts against the MWRA, Kaiser and the Trades Council, seeking injunctive relief against enforcement of bidding Specification 13.1. ABC claims that, as applied to its membership, Specification 13.1 effectively bars them from seeking and obtaining any bids in this multi-billion dollar, ten-year endeavor. ABC alleges irreparable injury and damages from what it perceives to be a violation of various federal and state statutes. These contentions, and the district court's treatment of them, can be summarized as follows:

(1) Preemption under the NLRA. ABC alleged that the National Labor Relations Act ("NLRA" or "Act"), 29 U.S.C. Sec. 151 et seq., prohibits the MWRA from interfering with the labor negotiations process, specifically arguing that requiring employers to accept the terms of a collective bargaining agreement with a union that has not been designated as the bargaining agent by employees is illegal. The district court held that Section 8(e) and (f) of the NLRA 5 permit such restrictive agreements in the construction industry and that even if the Master Labor Agreement were to affect NLRA-regulated conduct, such impact must be considered against the manifest importance of the Boston Harbor clean-up. "The presence of non-represented employees simply increases the potential for continuous strife and crippling work stoppages." The court ruled that the Master Labor Agreement was lawful under the circumstances.

(2) Preemption under ERISA. ABC...

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