National Constructors v. National Elec. Contractors
| Decision Date | 09 September 1980 |
| Docket Number | Civ. No. HM77-1302. |
| Court | U.S. District Court — District of Maryland |
| Parties | NATIONAL CONSTRUCTORS ASSOCIATION and Commonwealth Electric Company, by and on behalf of itself and all others similarly situated and the Howard P. Foley Company, by and on behalf of itself and all others similarly situated and Donovan Construction Company of Minnesota, Inc., Arthur McKee & Company, Inc., Badger America, Inc., Catalytic, Inc., C. F. Braun Constructors, Inc., Dravo Corporation, Guy F. Atkinson Company, the H. K. Ferguson Company, Jacobs Constructors, Inc., Pullman Kellogg, Division of Pullman, Inc., Stearns-Roger, Inc., v. NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, INC., Robert L. Higgins, the International Brotherhood of Electrical Workers, AFL-CIO, Charles H. Pillard, Colgan Electric, Inc., Miller Electric Co., and H. E. Autrey, Allen L. Bader, Frank H. Bertke, Donald C. Cates, Robert W. Colgan, Joe R. Devish, and Carl T. Hinote, in their Individual capacities and as Trustees of the National Electrical Industry Fund, and Allan H. Stroupe, L. R. McCord, Aldo P. Lero and Lowell C. Timm, in their official capacities as Trustees of the National Electrical Industry Fund, and John Ostrow, C. W. Stroupe, Warren Losh and J. D. Hilburn, Sr., in their Individual capacities. |
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Wilbur D. Preston, Jr., Robert M. Wright, Nevett Steele, Jr., Ward B. Coe, III, Gerson B. Mehlman, and James R. Chason, of Whiteford, Taylor, Preston, Trimble & Johnston, Baltimore, Md; Anthony J. Obadal, Steven R. Semler, Howard J. Kaufman, Alan D. Cirker, Stephen C. Yohay, of Zimmerman & Obadal, Washington, D. C.; Ira Genberg, Peter R. Spanos, of Stokes & Shapiro, Atlanta, Ga., for plaintiffs.
Guy Farmer, of Farmer, Shibley, McGuinn & Flood, Washington, D. C., Alan I. Baron, Peter H. Gunst, of Frank, Bernstein, Conaway & Goldman, Baltimore, Md., for defendant National Electrical Contractors Ass'n, Inc. and all other defendants Except defendants International Broth. of Electrical Workers, AFL-CIO and Charles H. Pillard.
Thomas X. Dunn, Richard M. Resnick, of Sherman, Dunn, Cohen & Liefer, Washington, D. C., James P. Garland, Anthony W. Kraus, Steven D. Frenkil, Nora Winay, of Semmes, Bowen & Semmes, Baltimore, Md., for defendants International Broth. of Electrical Workers and Charles H. Pillard, International President of IBEW.
I. Factual Background
This is a private antitrust action for treble damages and declaratory and injunctive relief, brought under § 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. Currently pending before the court are eight motions, on which the court has heard extensive oral argument. An explanation of the factual background of the dispute is essential to an understanding of the pending motions.
Plaintiff National Constructors Association (NCA) is an unincorporated trade association whose members are "corporations who perform electrical construction work and who otherwise transact business in the electrical construction industry." Amended Complaint at 4. Of the remaining plaintiffs, Commonwealth, Foley, Donovan, Catalytic, Braun, Atkinson, Ferguson and Pullman-Kellogg are corporations which perform electrical construction work and employ electrical construction workers who are members of the defendant IBEW and its local unions. McKee, Badger, Dravo, Jacobs and Stearns-Roger are also corporations which perform electrical construction work, but rather than employ IBEW workers directly, they hire electrical construction contractors who in turn employ IBEW labor. None of those corporate plaintiffs except Donovan is a member of defendant National Electrical Contractors Association, Inc. (NECA).
Defendant NECA is an incorporated trade association whose members, like those of NCA, perform electrical construction work. Although NECA's principal place of business is in Bethesda, Maryland, the association has approximately 1331 local chapters nationwide. NECA and its local chapters provide various services to member companies, including representing members in collective bargaining with the IBEW and its local unions. Amended Complaint ¶ 4(a)(iii).
Defendant IBEW is an unincorporated labor organization whose local unions throughout the United States represent at least some of the electrical workers whom the corporate plaintiffs employ. Defendant Charles H. Pillard is now and at all pertinent times was International President of the IBEW; defendant Robert L. Higgins is and at all pertinent times was Executive Vice President of NECA.
Defendants Colgan Electric Co. and Miller Electric Co. are corporations engaged in the electrical contracting business and are members of defendant NECA. The remaining defendants are the trustees of the National Electrical Industry Fund (NEIF), which is more fully described below.
At the heart of the plaintiffs' suit is the collective bargaining structure in the electrical construction industry. Local chapters of NECA, which is the largest trade association in the industry, are assigned regional territories throughout the country which coincide with the jurisdictions of one or more IBEW local unions. Acting as a multi-employer bargaining unit representing its chapter members, each NECA chapter periodically negotiates a collective bargaining agreement with the IBEW union or unions in its territory. Each "Local Agreement" provides for wages, hours, terms and conditions of employment, and any other subjects of bargaining permitted by the National Labor Relations Act. A Local Agreement is either "inside," covering labor on the interior of buildings, or "outside," covering labor on outdoor power lines. Although the IBEW locals also negotiate with other local contractors' associations, the majority of the Local Agreements are the result of collective bargaining between the unions and NECA chapters.
Individual electrical contractors who are not members of NECA usually enter into a labor agreement with the IBEW in one of three ways. The most prevalent practice is for the contractor to sign a short-form agreement known as a Letter of Assent, which binds the signatory to the terms of the existing NECA-IBEW Local Agreement for the area in which the contractor works. There are two types of Letters of Assent: Type "A" authorizes the local NECA chapter to act as the signatory's collective bargaining agent for all matters contained in the existing NECA-IBEW Local Agreement, and remains in effect until the contractor gives timely notice of termination. Type "B" does not authorize NECA to act as the contractor's collective bargaining agent, but merely binds the signatory for a stated period (usually the life of the current Local Agreement) to all the terms of the existing Local Agreement and any amendments that might be made to it.
The second method by which an unassociated contractor enters into a labor agreement with the IBEW is by signing an "International Agreement." Large general contractors which perform construction work at several sites across the country usually adopt this second method. The International Agreement is in effect a nationwide Letter of Assent, which binds the signatory to the terms and conditions of the NECA-IBEW Local Agreements for any and all geographic areas in which the general contractor seeks to procure IBEW labor. Made available by the IBEW's international office, an International Agreement is terminable at will upon sixty days' notice.
The third means of negotiating with the IBEW is by signing a "Project Agreement." As the name implies, such an agreement is usually designed to cover a single construction project which the contractor has in the area, and may contain any terms on which the parties agree. Although a Project Agreement is negotiated independently of the NECA agreements, the IBEW usually seeks to procure the terms of the Local Agreements in an unassociated contractor's Project Agreement.
Both NECA and the IBEW International reserve the power to approve all collective bargaining agreements entered into by local chapters or local unions. Either national body may veto an agreement if its terms do not conform to the association's or the union's policies.
As of December 1976, the vast majority of contractors in the electrical construction industry procured IBEW labor under the terms and conditions of NECA-IBEW Local Agreements, either as members of local NECA chapters, or as signatories to Letters of Assent or International Agreements.
In the summer and fall of 1975, national officials of NECA and the IBEW began negotiation of the agreement which the plaintiffs contend violates § 1 of the Sherman Act. The parties undertook the negotiations at least in part to provide for increased employer contributions to the National Electrical Benefit Fund (NEBF), which is a pension fund for IBEW workers, jointly administered by NECA and the IBEW and funded by payments provided for in electrical construction industry collective bargaining agreements. At the meetings that began in 1975, International President Charles H. Pillard and his Administrative Assistant Marcus Loftis represented the IBEW; Executive Vice President Robert L. Higgins and Director of Labor Relations Mark Hughes represented NECA.
In the spring of 1976, the parties tentatively agreed to what will hereinafter be referred to as the National Agreement, a copy of which is appended hereto as Exhibit A. The first five articles of the agreement contained provisions for the NEBF, shift work, management rights and apprentice ratios. Article Six, which is the crux of this litigation, provided as follows:
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