Smith's Management Corp. v. International Broth. of Elec. Workers, Local Union No. 357

• Decision Date: 26 July 1984
• Docket Number: No. 83-2299,83-2299
• Citation: 737 F.2d 788
• Parties: 116 L.R.R.M. (BNA) 2750, 116 L.R.R.M. (BNA) 3455, 101 Lab.Cas. P 11,110 SMITH'S MANAGEMENT CORP., d/b/a Smith's Food King and Smith's Food & Drug, Plaintiff-Appellee, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION NO. 357, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 788

737 F.2d 788

116 L.R.R.M. (BNA) 2750, 116 L.R.R.M. (BNA) 3455,

101 Lab.Cas. P 11,110

SMITH'S MANAGEMENT CORP., d/b/a Smith's Food King and Smith's Food & Drug, Plaintiff-Appellee, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION NO. 357, Defendant-Appellant.

No. 83-2299.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 13, 1983.

Decided June 13, 1984.

As Modified July 26, 1984.

Max Schneier, Marina del Rey, Cal., for defendant-appellant.

William S. Estabrook, Washington, D.C., for plaintiff-appellee.

Appeal from the United States District Court for the District of Nevada.

Before HUG, PREGERSON, and NORRIS, Circuit Judges.

NORRIS, Circuit Judge:

The question in this case is whether the district court violated the anti-injunction provisions of the Norris-LaGuardia Act, 29 U.S.C. Secs. 101-115 (1982), in issuing a preliminary injunction restraining the International Brotherhood of Electrical Workers, Local Union No. 357 (the "Union"), from engaging in a secondary boycott against Smith's Management Corporation ("Smith's"), the operator of Smith's Food King markets in Las Vegas, Nevada. ¹ The Union was involved in a dispute with Desert Valley Electric, a non-union subcontractor hired by the developer of a shopping center to do the electrical work on a new market to be leased by Smith's. The Union distributed handbills asking Smith's customers not to patronize Smith's markets because Smith's had failed to ensure that the new market would be built by union labor.

This court has jurisdiction of this appeal under 28 U.S.C. Sec. 1292(a)(1) (1982). We conclude that the issuance of the injunction violated the Norris-LaGuardia Act.

I

The district court held that the anti-injunction provisions of the Norris-LaGuardia Act did not prevent the court from issuing injunctive relief because the controversy between Smith's and the Union did not grow out of a "labor dispute" as defined by section 13(c) of that Act, 29 U.S.C. Sec. 113(c). ² The district court found there was no labor dispute in this case because the Union is not attempting to organize or to negotiate for Smith's employees and because Smith's and Desert Valley Electric are in "no wise substantially aligned ... in any economic way or ... in any other way." On appeal, the determination of whether such a "labor dispute" exists in the present case "is a question of law which the court must answer from the whole record." Hasbrouck v. Sheet Metal Workers Local 232, 586 F.2d 691, 694 (9th Cir.1978).

The Union is engaged in a dispute with the subcontractor, Desert Valley Electric, over that subcontractor's refusal to employ union labor. This controversy--whether the subcontractor will remain a non-union employer--is plainly one which concerns "the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment." 29 U.S.C. Sec. 113(c). As such, it is a "labor dispute" The Union's handbilling of Smith's customers is expressly intended to influence the outcome of the Union's labor dispute with Desert Valley Electric. ³ Such "pressure tactically directed toward a neutral employer in a labor dispute not his own," is, of course, the "central aspect" of the classic secondary boycott. National Woodwork Manufacturer's Association v. NLRB, 386 U.S. 612, 623, 87 S.Ct. 1250, 1257, 18 L.Ed.2d 357 (1967). There is no question that under the Norris-LaGuardia Act a secondary boycott can be found to involve or grow out of a labor dispute. Id.; United States v. Hutcheson, 312 U.S. 219, 231, 61 S.Ct. 463, 465, 85 L.Ed. 788 (1941); California Association of Employers v. Building & Construction Trades Council, 178 F.2d 175, 179 (9th Cir.1949). The Supreme Court has noted that in the Norris-LaGuardia Act, "Congress abolished, for purposes of labor immunity, the distinction between primary activity between the 'immediate disputants' and secondary activity in which the employer disputants and the members of the union do not stand 'in the proximate relation of employer and employee ....' " National Woodwork Manufacturers Association v. NLRB, 386 U.S. at 623, 87 S.Ct. at 1257 (citation omitted). There is also no doubt that "[s]ale by a merchant of non-union commodities is ... a traditional source of labor disputes within the scope of the Norris-LaGuardia Act." Bakery Sales Drivers Local Union No. 33 v. Wagshal, 333 U.S. 437, 444, 68 S.Ct. 630, 633, 92 L.Ed. 792 (1948).

within the meaning of the Norris-LaGuardia Act.

The Union here is acting against a secondary employer, Smith's, in an effort to promote the interest of the members of the Union in a contest with a primary employer, Desert Valley Electric, over terms and conditions of employment. Accordingly we hold that this secondary boycott grows out of or involves a labor dispute and that the preliminary injunction was therefore issued in violation of the Norris-LaGuardia Act.

We reject Smith's argument that the dispute between the Union and Smith's remains outside the scope of the anti-injunction provisions of the Norris-LaGuardia Act because of the supposedly tenuous nature of the relationship between Smith's, as lessee of a market, and Desert Valley Electric, as subcontractor. Citing secondary boycott decisions of other circuits, Smith's contends that federal courts will not find that a secondary boycott has grown out of a labor dispute unless the primary employer and the secondary employer are in fact economically aligned in some substantial manner. See, e.g., Ashley, Drew & Northern Ry. v. United Transportation Union When applying the "economic self-interest" test, courts assess for themselves the degree of "alignment" between employers. The "substantial alignment" inquiry, in fact, requires that the court decide whether the union's secondary target actually possessed sufficient economic power over the primary employer to affect the outcome of the underlying labor dispute. The Union's belief in the efficiency of a secondary boycott is irrelevant to this inquiry. Thus, the Fifth Circuit found that the operator of a railroad terminal picketed by a union engaged in a labor dispute with a railroad could not obtain injunctive relief because the railroad received services from the terminal that "in fact constitute[d] an integral part of [the struck railroad's] day-to-day operations." Brotherhood of Railroad Trainmen v. Atlantic Coast Line R.R., 362 F.2d at 651 (emphasis in original). On the other hand, in Ashley, Drew & Northern Railway v. United Transportation Union, the Eighth Circuit found that an injunction could issue against the union because the union failed to present evidence showing that the target of the secondary picketing, Ashley, Drew & Northern Railway, the operator of a rail yard, had any substantial connection with the primary employer, Rock Island Railroad. 625 F.2d at 1364-65. In fact, courts have found "substantial alignment" between employers only when the secondary employer provides the primary employer with essential services or facilities, participates in a joint strike insurance plan, or has some other "significant commonality of interest" with the primary employer. Id. at 1363-65 (citing cases). See, e.g., Amalgamated Association of Street Employers v. Dixie Motor Coach Corp., 170 F.2d 902 (8th Cir.1948). Smith's urges that under this "economic self-interest" test, no labor dispute exists in this case, because "[i]t is difficult to emphasize too much the absolute absence of any relationship between Smith's and Desert Valley Electric."

                625 F.2d 1357 (8th Cir.1980);  Brotherhood of Railroad Trainmen v. Atlantic Coast Line R.R., 362 F.2d 649 (5th Cir.), aff'd by an equally divided Court, 385 U.S. 20, 87 S.Ct. 226, 17 L.Ed.2d 20 (1966).  Because the premise of this rule is that "the scope of Norris-LaGuardia's protection is determined by the union's self interest," Ashley, Drew & Northern Railway v. United Transportation Union, 625 F.2d at 1365 n. 10, a case is considered to involve or grow out of a labor dispute "only when the offending activity is furthering the union's economic interest in a labor dispute."   Id. at 1363.  Under the "economic self-interest test" of the Fifth and Eighth Circuits, a union engaging in a secondary boycott is furthering its economic self-interest only if the secondary employer is "substantially aligned" with the primary employer.   Id. at 1364
                

Mindful that "the term 'labor dispute' must not be narrowly construed," Jacksonville Bulk Terminals, Inc. v. International Longshoremen's Association, 457 U.S. 702, 712, 102 S.Ct. 2673, 2681, 73 L.Ed.2d 327 (1982), we reject the "economic self-interest test" applied by the Fifth and Eighth Circuits and urged upon us by Smith's. We...