Associated General Contractors of California, Inc. v. N.L.R.B.

• Citation: 514 F.2d 433
• Decision Date: 28 March 1975
• Docket Number: No. 73-3354,73-3354
• Parties: 88 L.R.R.M. (BNA) 3542, 76 Lab.Cas. P 10,790 ASSOCIATED GENERAL CONTRACTORS OF CALIFORNIA, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 433

514 F.2d 433

88 L.R.R.M. (BNA) 3542, 76 Lab.Cas. P 10,790

ASSOCIATED GENERAL CONTRACTORS OF CALIFORNIA, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 73-3354.

United States Court of Appeals Ninth Circuit.

March 28, 1975.

John H. Stephens (argued), of Cox, Castle, Nicholson & Weepes, Los Angeles Cal., for petitioner.

Sandra R. McCandless (argued), NLRB, Washington, D. C., for respondent.

OPINION

Before KOELSCH and KILKENNY, Circuit Judge, and SOLOMON, ^* District Judge.

SOLOMON, District Judge:

Associated General Contractors of California, Inc. (AGC) appeals a National Labor Relations Board (NLRB) decision ¹ which held that the union did not engage in unfair labor practices in violation of Section 8(b)(4)(B) ² and Section 8(e) ³ of the National Labor Relations Act (NLRA). We reverse.

The Plumbing-Heating and Piping Employers Council of Southern California (the Employers Council) is an association of employers who are plumbing, heating, and piping contractors in the building and construction industry. The primary function of the Employers Council is to negotiate and enter into collective bargaining agreements for its members. Robert J. Ohland, Inc. (Ohland), a plumbing subcontractor, is a member of the Employers Council and is bound by the collective bargaining agreement negotiated by the Employers Council. Ohland was the direct employer of the union members here.

Southern California Pipe Trades District Council No. 16 of the United Association (the District Council) is made up of 17 local unions. It negotiates and administers master collective bargaining agreements for its affiliated local unions. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local No. 494 (Local 494) is a member of the District Council and is bound by the collective bargaining agreements negotiated by the District Council. Ohland employed members of Local 494.

Petitioner AGC is a trade association of employers engaged as general contractors in the building and construction industry. AGC is not a party to the collective bargaining agreement here, nor is its member Stolte, Inc. (Stolte). Stolte was the general contractor who hired Ohland to do plumbing subcontract work.

On September 18, 1969, the Employers Council and the District Council signed a three-year collective bargaining agreement. Section III, paragraph 13 of that agreement provides in pertinent part:

The Employer agrees that all work covered under "Scope of Work" in the P.I.P.E. Specification Guide (Revised Edition), except those items excluded and listed below, including but not limited to, all fabrication and installation work, shall be performed by the Employer under the terms and conditions of this Agreement. In the event any fabrication and/or installation work mentioned in this paragraph 13 has been performed is being performed, or will be performed by anyone other than employees working for Employers in accordance with the provisions of this Agreement, the Employer agrees to pay the equivalent of wages and fringe benefits lost by employees covered by this Agreement, as determined by the Joint Arbitration Board or its Subcommittee, into the Retirement Trust Fund of the Plumbing-Heating and Piping Industry of Southern California within ten (10) days of date of posting of the decision of the Joint Arbitration Board.

This is the so-called work preservation clause.

Section XV, paragraph 82 provides that "All pipe fabricated for specialty units . . . shall be fabricated and installed under the terms of (the collective bargaining agreement)."

Section XV, paragraph 86 provides that when a union representative discovers work being performed which he considers in violation of the collective bargaining agreement, the union may require the employer to stop the contested work for up to 72 hours while the Joint Arbitration Board investigates. After 72 hours, the employer may resume work even if the investigation is not complete. The Board may make an award against the offending employer which "it may deem appropriate" including damages or requiring the employer to "fabricate all material on the jobsite" for some period of time.

In June, 1971, Stolte contracted with National Medical Enterprises, Inc. (National) to construct a hospital in Lakewood, California. Stolte was required by the contract to install, or have installed, eight or nine stainless steel surgical scrub stations which National purchased from Market Forge Company (Market Forge) of Massachusetts. Stolte subcontracted all plumbing work, including installation of the scrub stations, to Ohland.

In March, 1972, when Ohland began to install the scrub stations, Local 494 ordered him to stop work because the scrub stations had prefabricated piping. Ohland stopped work. A representative of Local 494 told Ohland that the only way he could resolve the dispute immediately was to allow the union workers to dismantle and refabricate the piping on the scrub stations. Ohland asked Stolte for permission to allow refabrication, but Stolte refused because the scrub stations were owned and furnished by National. The dispute was submitted to the Joint Arbitration Board.

After three and half workdays had passed without a decision by the Joint Arbitration Board, Ohland, installed the scrub stations without any interference. The Board subsequently decided that Ohland violated paragraph 13 of the collective bargaining agreement when he installed scrub stations with piping and trim fabricated by employees not covered by the agreement. The Board assessed Ohland $557.76 the "equivalent of wages and fringe benefits" not earned by members of Local 494 because of the prefabrication. ⁴ Ohland paid the assessment.

AGC filed charges with the NLRB against the union for unfair labor practices in violation of Section 8(b)(4)(B) and Section 8(e).

An Administration Law Judge, after a hearing, decided in favor of AGC. He held that the union violated both of these sections of the NLRA when it applied and enforced paragraphs 13, 82 and 86 of the collective bargaining agreement here.

A three-member NLRB panel, with member Kennedy dissenting, rejected the recommended decision of the Administrative Law Judge. The majority held that the union "in resorting to use of the applicable contractual provisions in the situation here did not violate Section 8(b)(4)(ii)(B) of the Act and that the contract as so applied did not violate Section 8(e)."

We overrule the NLRB decision and hold that the labor practices here were illegal under both of these sections of the NLRA.

In Section 8(b)(4)(B) ⁵ Congress proscribed labor practices which had an object of "forcing or requiring any person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person. . . ."

In 1959, Congress enacted Section 8(e) to stop the union practice of pressuring employers into so-called "hot cargo" agreements to achieve the secondary objectives proscribed by Section 8(b)(4)(B).

The criterion of legality under both sections is "whether the agreement or its maintenance is addressed to the labor relations of the contracting employer vis-a-vis his own employees." National Woodwork Manufacturers Association v. NLRB, 386 U.S. 612, 645, 87 S.Ct. 1250, 1268, 18 L.Ed.2d 357 (1967). Labor practices so addressed are permissible primary labor activity. If an agreement or its maintenance is "tactically calculated to satisfy union objectives elsewhere", it presents an illegal secondary boycott.

Congress enacted Section 8(b)(4)(B) and Section 8(e) to shield unoffending employers from union pressures designed to involve them in disputes not their own. Labor Board v. Denver Building Trades Council, 341 U.S. 675, 692, 71 S.Ct. 943, 95 L.Ed. 1284 (1951). The other subsections of Section 8(b)(4) were similarly intended to protect employers in the position of neutrals between contending parties. National Woodwork, supra 386 U.S. at 625, 87 S.Ct. at 1258.

Whether an agreement or its maintenance constitutes a secondary boycott must be determined by reference to "all the surrounding circumstances." National Woodwork, supra at 644, 87 S.Ct. at 1268. An important factor in this determination is the "right-to-control" test which provides that "if an employer is not legally empowered to meet his employees' demand, then they cannot lawfully strike him for his failure to accede." George Koch Sons, Inc. v. NLRB, 490 F.2d 323, 326 (4th Cir. 1973).

Here, Ohland was a neutral, unoffending employer who was drawn into Local 494's dispute with National and Market Forge. Local 494 was not engaged in primary labor activity intended to affect Ohland's labor practices; Ohland did not have and never had the power to accede to the union's demands. Local 494 wanted to force Ohland to pressure Market Forge to cease manufacturing scrub stations with prefabricated piping and to pressure National to either cease purchasing them or to allow them to be dismantled and refabricated. ⁶

The union argues that National Woodwork, supra, undercuts the right-to-control doctrine. There, a collective bargaining agreement provided that union members were not required to handle premachined doors. A general contractor, whose building contract would have permitted "blank" doors, ordered premachined doors from National Woodwork. When the union members refused to hang the premachined doors, the general contractor substituted "blank" doors. National Woodwork charged that the agreement and its enforcement violated Section 8(b)(4)(B).

The Supreme Court held that the purpose of the contract clause and its enforcement was work preservation, a legitimate union objective. Id. 386 U.S. at 635, 87 S.Ct. at 1263. The union lawfully demanded that the employer cease handling premachined doors. The right- to-control issue was...