National Elec. Contractors Ass'n, Inc. v. National Constructors Ass'n

• Decision Date: 17 May 1982
• Docket Number: Nos. 80-1808,80-1809,s. 80-1808
• Citation: 678 F.2d 492
• Parties: 110 L.R.R.M. (BNA) 2385, 94 Lab.Cas. P 13,543, 1982-2 Trade Cases 64,738 NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, INC., et al., Defendants-Appellants, v. NATIONAL CONSTRUCTORS ASSOCIATION, et al., Plaintiffs-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 492

678 F.2d 492

110 L.R.R.M. (BNA) 2385, 94 Lab.Cas. P 13,543,

1982-2 Trade Cases 64,738

NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, INC., et al Defendants-Appellants, v. NATIONAL CONSTRUCTORS ASSOCIATION, et al., Plaintiffs-Appellees.

Nos. 80-1808, 80-1809.

United States Court of Appeals Fourth Circuit.

Argued March 3, 1981.

Decided May 17, 1982.

Stanley D. Robinson, New York City (Kaye, Scholer, Fierman, Hays & Handler, New York City, on brief), James P. Garland, Anthony W. Kraus, Nora Winay, Semmes, Bowen & Semmes, Baltimore, Md., Laurence J. Cohen, Richard M. Resnick, Sherman, Dunn, Cohen, Leifer & Counts, Baltimore, Md., Milton Handler, Michael Malina, New York City, Peter H. Gunst, Mary K. Farmer, Frank, Bernstein, Conaway & Goldman, Baltimore, Md., Guy Farmer, Washington, D. C. (Farmer, Wells, McQuinn, Flood & Sibal, Washington, D. C., on brief) and Donald M. Barnes, Washington, D. C. (Earl W. Kintner, Dennis C. Cuneo, Arent, Fox, Kintner, Plotkin & Kahn, Washington, D. C., on brief), for defendants-appellants.

Wilbur D. Preston, Jr., Baltimore, Md. (Robert M. Wright, Gerson B. Mehlman, James R. Chason, Whiteford, Taylor, Preston, Trimble & Johnston, Baltimore, Md., on brief), Alan D. Cirker, Washington, D. C. (Anthony J. Obadal, Zimmerman & Obadal, Washington, D. C., Ira Genberg, Stokes, Shapiro, Fussell & Genberg, Atlanta, Ga., on brief), for plaintiffs-appellees.

K. L. Estabrook, Donald F. Nicolai, Lindabury, McCormick & Estabrook, Westfield, N. J., on brief, for amicus curiae Mechanical Contractors Ass'n of America, Inc.

John P. Frank, Lewis & Roca, Phoenix, Ariz., on brief, for amicus curiae NECA, Pipe, and Masonry.

Robert J. Fenlon, Stephen J. Burton, Felhaber, Larson, Fenlon & Vogt, St. Paul, Minn., on brief, for amicus curiae The Sheet Metal and Air Conditioning Contractors Nat. Ass'n, Inc.

J. Albert Woll and Laurence Gold, Washington, D. C., on brief, for amicus curiae The American Federation of Labor and Congress of Industrial Organizations.

Jerry J. Williams, Keith B. Bardellini, Freshman, Mulvaney, Marantz, Comsky, Forst, Kahan & Deutsch, Beverly Hills, Cal., on brief, for amicus curiae Const. Industry Advancement Fund of Southern California, Fund for Const. Industry Advancement, San Diego Const. Industry Advancement Fund, and Associated Gen. Contractors, San Diego County, Inc.

Before WIDENER and HALL, Circuit Judges, and MICHAEL, District Judge. ^*

WIDENER, Circuit Judge:

The National Electrical Contractors Association, the International Brotherhood of Electrical Workers, and other defendants appeal the award of a permanent injunction to plaintiffs who include the National Constructors Association and numerous construction companies, after a finding that the actions of the defendants amounted to price fixing illegal under § 1 of the Sherman Act, 15 U.S.C. § 1. National Constructors Association, et al v. National Electrical Contractors Association, Inc., et al, 498 F.Supp. 510 (D.Md.1980). This appeal is taken under 28 U.S.C. § 1292(a)(1) permitting appeals from the award of injunctive relief. A FRCP 54(b) certificate was entered by the district court relating to the counterclaims. We affirm, and modify the injunctive order only slightly.

This case involves a private antitrust action for injunctive relief under § 16 of the Clayton Act, 15 U.S.C. § 26, and damages under § 4 of that Act, 15 U.S.C. § 15, for a violation of § 1 of the Sherman Act, 15 U.S.C. § 1. ¹ The plaintiffs below, appellees here, are the National Constructors Association (NCA), an unincorporated trade association made up of companies who perform electrical construction work and transact business in the electrical construction industry, and other corporations performing electrical contracting work which employ IBEW electrical workers. ² The defendants below, appellants here, are the National Electrical Contractors Association (NECA), an incorporated trade association, whose members perform electrical construction work; the International Brotherhood of Electrical Workers (IBEW), an unincorporated labor union representing electrical workers throughout the country; Charles H. Pillard, President of IBEW International; Robert L. Higgins, Executive Vice President of NECA; Miller Electric Co. and Colgan Electric Co., corporations engaged in electrical contracting work and members of NECA; and the trustees of the National Electrical Industry Fund. ³

NECA is the largest trade association in the electrical contracting industry, consisting of at least 133 local trade associations or chapters whose members are both union and non-union electrical contractors. The IBEW is the largest union representing electrical workers, representing the vast majority of all of the organized electrical workers in the nation. At the time of the district court's order the members of NECA performed slightly more than 50% of the electrical contracting work in the nation. Since 1960 NECA members have performed between 50 and 60% of such work. Because of their respective positions, much of the collective bargaining in the electrical contracting industry is done by IBEW and NECA. Local chapters of NECA are assigned territories throughout the country which coincide with the jurisdiction of one or more of the more than 400 IBEW locals. The local chapters of NECA act as multi-employer bargaining representatives and negotiate local collective bargaining agreements with the local IBEW unions. Individual electrical contractors who are not members of NECA usually enter into a labor agreement with the IBEW in one of several ways: (1) Letter of Assent-A-An "A" Letter of Assent authorizes the local NECA chapter to act as the collective bargaining representative for the employer in negotiations with the local union. As such, the employer is, of course, considered a member of the NECA chapter bargaining unit. (2) Letter of Assent-B-A "B" Letter of Assent binds the employer to the terms of the local IBEW-NECA collective bargaining agreement and all approved amendments, but does not make the employer part of the bargaining unit. (3) International agreements-Designed for employers operating on a national basis, such an agreement binds the employer to the terms of local union contracts in the areas in which the employer performs work. (4) Project agreements-These agreements apply to a single construction site and contain any provisions that may be agreed upon. A local contractor may also negotiate separately with the IBEW although this is not commonly done.

Both NECA and IBEW International reserve the right to approve or veto all collective bargaining agreements entered into by the local organizations.

NECA and IBEW International also enter into national agreements, whose terms are incorporated into local agreements between NECA and IBEW. It is a provision of the 1976 National Agreement between NECA and IBEW ⁴ that appellees challenged below as being in violation of the Sherman Act. The first five articles of the 1976 agreement provide for the National Electrical Benefit Fund (a pension fund), shift work, management rights, and apprentice ratios. Article 6, the one challenged below, provides for the establishment of an industry fund. Article 6 states:

The parties agree to the establishment of a legally constituted trust to be called the National Electrical Industry Fund.

All construction agreements in the electrical industry shall contain the following language:

"Each individual employer shall contribute one percent (1%) * of the gross labor payroll to be forwarded monthly to the National Electrical Industry Fund in a form and manner prescribed by the trustees no later than fifteen (15) calendar days following the last day of the month in which the labor was performed. Failure to do so will be considered a breach of this agreement on the part of the individual employer." * (an amount not to exceed 1% nor less than 0.2 of 1% as determined by each local chapter and approved by the trustees)

The National Electrical Contractors Association will be responsible to see that the objects of the fund, as outlined in the trust, are adhered to strictly.

No part of the funds collected under this trust shall be used for purely social activities.

No part of the funds collected under this trust shall be used for any purpose which is held to be in conflict with the interests of the International Brotherhood of Electrical Workers and its local unions.

Both parties will be provided with a copy of the Trust and any further amendments. ⁵

On December 8, 1976, President Pillard of IBEW and Vice President Higgins of NECA signed the agreement containing the provision for the industry fund. Contemporaneously they signed a paper called "Basic Understandings and Interpretations of the IBEW-NECA Agreement" which provided in part:

Article Six-Industry Fund

(1) It is understood that because of the cost of administration of labor agreements, industry advancement and services rendered to the electrical contracting industry by the National Association and the NECA chapters that the intent of this Article is to insert the industry fund contribution language in all IBEW construction agreements containing the NEBF language except those covering employees of utility companies and municipalities and employees working under contractor equipment maintenance agreements and employees working for motor shops. In return, NECA will provide basic service to electrical contracting employers employing workmen obtained from the IBEW without regard to the affiliation of the individual employer with NECA.

Appellees challenged the industry fund provision under the Sherman Act, alleging that the fund added a 1% charge to the cost of all their electrical construction contracts with IBEW whether the contractor belonged to NECA or not. Appellees noted that prior to the 1976 agreement members of NECA paid dues and a service charge for their membership in and services received from NECA. ⁶ The...