Larry V. Muko, Inc. v. Southwestern Pennsylvania Bldg. and Const. Trades Council
| Decision Date | 20 July 1979 |
| Docket Number | No. 77-2259,77-2259 |
| Citation | 609 F.2d 1368 |
| Parties | 101 L.R.R.M. (BNA) 2875, 84 Lab.Cas. P 10,774, 86 Lab.Cas. P 11,469, 1978-2 Trade Cases 62,184, 1979-2 Trade Cases 62,783 LARRY V. MUKO, INC., Appellant, v. SOUTHWESTERN PENNSYLVANIA BUILDING AND CONSTRUCTION TRADES COUNCIL, Long John Silver's Inc., and Building and Construction Trades, Council of Pittsburgh, Pennsylvania, and Vicinity. |
| Court | U.S. Court of Appeals — Third Circuit |
Before ALDISERT, GIBBONS and HIGGINBOTHAM, Circuit Judges.
Reargued en banc May 17, 1979
Before SEITZ, Chief Judge, and ALDISERT, ADAMS, GIBBONS, ROSENN, HUNTER, WEIS, GARTH and HIGGINBOTHAM, Circuit Judges.
Larry V. Muko, Inc. (Muko), a Pennsylvania corporation engaged in the general contracting business, appeals from an order granting defendants' Fed.R.Civ.P. 50(a) motion for a directed verdict in an antitrust action seeking damages and injunctive relief under §§ 4, 16 of the Clayton Act, 15 U.S.C. §§ 15, 26. The defendants are Long John Silver's Inc. (Silver's), a fast-food seafood restaurant chain, and two labor organizations, the Southwestern Pennsylvania Building and Construction Trades Council (Southwestern Council) and the Building and Construction Trades Council of Pittsburgh, Pennsylvania and Vicinity (Pittsburgh Council). We reverse and remand for a new trial.
Muko is a nonunion general contractor. Its complaint charges that Silver's entered into an agreement with the defendant labor organizations that it would not award building and construction contracts to any contractor that was not a party to a current collective bargaining agreement with member unions of either the Southwestern Council or the Pittsburgh Council. The defendants' motions for a directed verdict were granted at the end of the plaintiff's case. The grant of those motions was proper only if, without weighing the credibility of witnesses, as a matter of law, there could be only one reasonable conclusion as to a verdict. Thus we must determine what, from Muko's evidence, a jury might have found.
The jury could have found as follows: Silver's is a national chain of fast-food seafood restaurants with its headquarters in Kentucky. In 1973, when it first decided to enter the fast-food seafood business in Western Pennsylvania, Silver's contracted with Muko, after competitive bidding, for the construction of a restaurant in Monroeville, a Pittsburgh suburb. Muko was an experienced builder of fast-food restaurants. In 1973 it was Silver's policy to solicit bids on a competitive basis without regard to whether the contractor used union labor. The Monroeville site was picketed during construction by Council pickets. After the restaurant opened, Council representatives leafleted its patrons, asking them to refrain from patronizing Silver's because it used contractors who were paying less than the established prevailing construction wages in the area. Muko was also awarded a contract for the construction of a Silver's restaurant in Lower Burrell, and commenced construction there about the time the Monroeville restaurant opened.
Faced with handbilling at the completed Monroeville restaurant, and fearful of new picketing at the Lower Burrell construction site, Silver's approached the Councils and arranged for a meeting. On November 1, 1973, a meeting took place between Silver's vice president for real estate, its local real estate agent, and three council representatives. Silver's vice president said that he wanted the leafleting to end as quickly as possible. One of the Council representatives stated that he wanted future restaurants built by union labor. Another union representative gave Silver's vice president a form of contract used between the Councils' local unions and union contractors in the area, and supplied Silver's with a list of contractors with whom the local unions had collective bargaining agreements. A Council representative stated there would be no picketing or leafleting at Lower Burrell, the second Silver's location, pending a decision on the use of union contractors at future construction sites.
Silver's representatives left the meeting with the form contract and the list of union contractors. Within a week Silver's vice president for development sent the Councils a letter. The letter began by emphasizing Silver's desire "to establish good working relationships" with unions in the Pittsburgh area. It noted that the form contract was specifically designed for use by area contractors and local trade unions. But, the writer continued:
I believe that we can serve the same purpose with this letter to show intent that Long John Silver's, Inc., plans to use only union contractors certified by the affiliated Building and Construction Trades Councils of Pittsburgh and Allegheny Kiski Valley and vicinity. We will also request that all the investors (property owners) developing for us use union contractors. By operating in this manner, we will accomplish a good working relationship with you. We have visited several of the contractors, the names of which we mentioned to you. As soon as we have firm bids on several construction sites, we will contact you to insure that these contractors are in good standing with the union.
In any relationship between two parties there must be mutual need and assistance. . . . It is . . . extremely important to both parties that our location at Monroeville, Pennsylvania and the one under construction in Lower Burrell Township, Pennsylvania not be subjected to any kind of informational picketing.
Silver's had been satisfied with Muko's work at Monroeville, and had therefore contracted with Muko for erection of the second restaurant at Lower Burrell. The president of Silver's had told Muko it could construct all the chain's restaurants in Western Pennsylvania if it continued to offer high-quality work at competitive prices. After the meeting of November 1, 1973, Silver's asked Muko if it would build as a union contractor. It refused to do so, and subsequently was not asked to bid on any further jobs for Silver's. By the trial date twelve other restaurants had been built, all by union contractors whose prices for those twelve restaurants aggregated over $250,000 more than Muko would have charged. Muko's bids and cost estimates for these twelve restaurants projected a profit even at its lower bid prices.
Muko's operation involved only a handful of construction employees, who functioned primarily as supervisors. The bulk of the work on its jobs was performed by subcontractors. Neither the Pittsburgh Council nor the Southwestern Council had any interest in or made any attempt to organize Muko's employees. Neither council ever represented those employees. Muko made a tender of proof that it was paying prevailing wage rates to its supervisory employees. The district court rejected the tender on the ground that it was irrelevant in the plaintiff's case, but suggested that it might be offered later, depending on the defendants' evidence. On this record we must therefore assume that Muko was paying those employees prevailing rates. There is no evidence in the record regarding the wage rates paid by Muko's subcontractors.
The defendants stipulated that Muko could prove the requisite jurisdictional relationship to interstate commerce and that direct out-of-state purchases would, had Muko obtained the additional contracts, have exceeded $50,000.
In face of the foregoing evidence the district court granted defendants' Rule 50(a) motions. No opinion was written, but the transcript of proceedings discloses that the directed verdict was granted solely because the court believed the evidence could sustain no finding other than a unilateral decision on the part of Silver's to accept bids only from union contractors.
Clearly the directed verdict cannot be affirmed on the ground upon which the district court acted. Looking at the evidence, and particularly the letter of November 7, 1973, in the light most favorable to Muko, reasonable jurors could find that Silver's and the Councils agreed that, in consideration of the Councils refraining from informational picketing and leafleting directed at the Monroeville and Lower Burrell restaurants, Silver's would use, for the restaurants yet to be constructed, contractors with whom Council local unions had collective bargaining agreements. Since the jury could have found such an agreement, we cannot sustain the grant of a directed verdict on the theory that the only activity which Muko proved was a unilateral appeal to an employer for the exercise of managerial discretion. See NLRB v. Servette, Inc., 377 U.S. 46, 54, 84 S.Ct. 1098, 12 L.Ed.2d 121 (1964). Moreover, although the Councils argue on appeal that Muko failed to prove an injury to its business or property within the meaning of § 4 of the Clayton Act, that argument cannot prevail on the record before us. The jury could have found that but for the agreement to exclude nonunion contractors Muko would have been the low bidder on twelve restaurant jobs and would have made a profit on each. Finally, because of the parties' stipulation, we must assume that the twelve construction projects involved a substantial amount of...
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