State Bldg. & Constr. Trades v. Cty. Bd.

• Decision Date: 27 December 2002
• Docket Number: No. 2001-2036.,2001-2036.
• Citation: 2002 Ohio 7213,781 N.E.2d 951,98 Ohio St.3d 214
• Court: Ohio Supreme Court
• Parties: OHIO STATE BUILDING & CONSTRUCTION TRADES COUNCIL et al., Appellants, v. CUYAHOGA COUNTY BOARD OF COMMISSIONERS et al., Appellees.

781 N.E.2d 951

98 Ohio St.3d 214

2002 Ohio 7213

OHIO STATE BUILDING & CONSTRUCTION TRADES COUNCIL et al., Appellants, v. CUYAHOGA COUNTY BOARD OF COMMISSIONERS et al., Appellees.

No. 2001-2036.

Supreme Court of Ohio.

Submitted September 25, 2002.

Decided December 27, 2002.

Benesch, Friedlander, Coplan & Aronoff, L.L.P., N. Victor Goodman, Mark D. Tucker and Edward Kancler, Cleveland, for appellant Ohio State Building & Construction Trades Council.

Goldstein & O'Connor and Joyce Goldstein, Cleveland, for appellant Cleveland Building & Construction Trades Council.

Wuliger, Fadel & Beyer and William I. Fadel, Cleveland, for appellant International Union of Operating Engineers, Local 18.

William D. Mason, Cuyahoga County Prosecuting Attorney, and Kathleen A. Martin, Assistant Prosecuting Attorney, for appellee Cuyahoga County Board of Commissioners.

Betty D. Montgomery, Attorney General, Michael D. Allen and Peter M. Thomas, Assistant Attorneys General, for appellee state of Ohio.

Stewart Jaffy & Assoc. Co., L.P.A., Stewart R. Jaffy and Marc J. Jaffy, Columbus, urging reversal for amicus curiae Ohio AFL-CIO.

Sherman, Dunn, Cohen, Leifer & Yellig, P.C., Laurence J. Cohen and Victoria L. Bor, Washington, DC, urging reversal for amicus curiae Building & Construction Trades Dept., ABL-CIO.

Coolidge, Wall, Womsley & Lombard, Fred A. Ungerman Jr., Dayton, and Jill A. May, urging affirmance for amicus curiae Ohio Associated Builders & Contractors, Inc.

Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A., and Susan Carson Rodgers, Canton; National Right to Work Legal Defense Foundation, Inc. and William L. Messenger, urging affirmance for amicus curiae National Right to Work Legal Defense Foundation, Inc.

ALICE ROBIE RESNICK, J.

¶ 1 This action for declaratory and injunctive relief challenges the constitutionality of R.C. Chapter 4116, which was enacted by Am.H.B. No. 101 of the 123rd General Assembly, effective October 11, 1999, "to prohibit public authorities from imposing certain labor requirements as a condition of performing public works." Preamble to 1999 Am.H.B. No. 101.

¶ 2 The following facts, though gleaned from scant evidence, are sufficient for purposes of the present inquiry. Between September 1998 and July 1999, defendant-appellee Cuyahoga County Board of Commissioners ("board") held several meetings with Loree Kenneth Soggs, executive secretary to plaintiff-appellant Cleveland Building & Construction Trades Council ("CBCTC"), to discuss the propriety of establishing a project labor agreement ("PLA") to govern construction of the county's proposed new juvenile detention center.

¶ 3 As proposed by Soggs, the PLA for the detention center would be typical of PLAs that CBCTC had negotiated on other construction projects, which generally contain union security clauses, provisions establishing standard work rules and prohibiting strikes, lockouts, slowdowns, and other work stoppages during the course of construction, a provision regarding the use of CBCTC's hiring halls to supply the project's labor force, and possibly a requirement that the various contractors on site become signatory to individual collective bargaining agreements with the affiliated local unions of the CBCTC. The board would then impose a requirement, presumably through its bid specifications and subsequent agreements with individual contractors, that "successful bidders agree to enter into a project labor agreement * * * [and] that contractors and/or sub-contractors on the Project agree to abide by [its terms]."

¶ 4 In his testimony at the preliminary injunction hearing, Soggs indicated that the board was "very receptive" to the idea of developing such an agreement for the detention center project and stated that "the commissioners individually * * * told me they were in favor of the project labor agreement." As the board was considering the issue, however, Am.H.B. No. 101 was winding its way through the legislative process. The bill was passed by the Ohio House of Representatives on May 12, 1999, and by the Ohio Senate on June 23, 1999. When Governor Bob Taft's intention neither to sign nor veto the bill was announced in a release dated June 30, 1999, it was clear that Am.H.B. No. 101 would become law without his signature pursuant to Section 16, Article II of the Ohio Constitution.

¶ 5 Accordingly, in a letter dated July 2, 1999, the county's deputy administrator, Lee A. Trotter, informed Soggs as follows:

¶ 6 "As you know the County had been working toward developing a Project Labor Agreement for its proposed new Juvenile Detention Center since 1998. We have had several meetings and exchanged information geared toward identifying the key benefits of such an agreement for both the County and The Cleveland Building and Construction Trades Council.

¶ 7 "We have recently been informed of the passage of H.B. 101, prohibiting a public authority from requiring that a bidder, contractor, or subcontractor become a party to a project labor agreement as a condition of being awarded a public improvement project. The passage of H.B. 101 prohibits the County from pursuing the development and execution of the proposed agreement. Should conditions change allowing Project Labor Agreements we will immediately revisit this issue.

¶ 8 On September 9, 1999, CBCTC, along with plaintiffs-appellants Ohio State Building & Construction Trades Council and International Union of Operating Engineers, Local 18, commenced the present action by filing a verified complaint in the Cuyahoga County Court of Common Pleas against the board and defendant-appellee state of Ohio. The complaint essentially charges that Am.H.B. No. 101, as codified at R.C. Chapter 4116, is preempted by the National Labor Relations Act ("NLRA"), Section 151 et seq., Title 29, U.S.Code, and, therefore, violates the Supremacy Clause of the United States Constitution.

¶ 9 Finding that the NLRA leaves the responsibility for "the negotiation and administration of * * * prehire collective bargaining agreements [to] labor organizations" and that "[t]hat responsibility * * * is precluded by Amended House Bill 101," the trial court declared R.C. Chapter 4116 invalid under the Supremacy Clause and permanently enjoined its enforcement.

¶ 10 In a split decision, the court of appeals reversed the judgment of the trial court. In so doing, the court of appeals found that R.C. 4116.02 "does not on its face or by its application prohibit a public authority from entering into a PLA." Instead, the statute prohibits a public authority only "from entering into a PLA with objectionable terms," as set forth in R.C. 4116.02(A) and (B). According to the appellate court, "a PLA can be drafted without these terms and still be valid and enforceable." Thus, the court concluded, "there is no real controversy that warrants declaratory relief."

¶ 11 The court of appeals also considered whether the statute would be preempted by the NLRA if it were interpreted to preclude a public authority from entering into a PLA. The court concluded that even under this interpretation, "the statute is not * * * preempted by the NLRA because the State is not acting as a market regulator but rather is acting as a market participant." The gist of the court's reasoning is that the state, acting as proprietor, may choose whether to enter into a PLA without running afoul of the NLRA, and that this choice need not be made on a project-by-project basis. Instead, the state may do as it has done in R.C. Chapter 4116, which is "to choose, in a summary manner, never to enter into a PLA on any public construction project when it acts as a market participant." And since "[t]he statute does not impinge on the rights of any [private] entity to enter into a PLA * * *, it does not frustrate the intent of Congress to permit the use or non-use of PLAs to be `controlled by the free play of economic forces.'"

¶ 12 The cause is now before this court pursuant to the allowance of a discretionary appeal.

¶ 13 When Governor Taft announced his intention to allow Am.H.B. No. 101 to become law without his signature, he explained:

¶ 14 "I am concerned that this legislation would not survive a constitutional challenge based on the supremacy clause of the U.S. Constitution. Our legal research shows the courts have, in the past, found that the regulation of project labor agreements is a federal responsibility under the National Labor Relations Act and that the state is therefore preempted from legislating in this area." Communications Release (June 30, 1999), Office of the Governor.

¶ 15 For the reasons that follow, we agree with the Governor's assessment of Am.H.B. No. 101's constitutionality and hold that Sections 8(e) and (f) of the NLRA, as enacted by the 1959 Landrum — Griffin Act, Sections 158(e) and (f), Title 29, U.S.Code, preempt R.C. Chapter 4116's blanket prohibition against the enforcement of PLAs on public works.

¶ 16 Section 8(e) of the NLRA provides:

¶ 17 "It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforcible [sic] and void: Provided, That nothing in this subsection shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work." (Italics sic.) Section 158(e), Title 29, U.S.Code.

¶ 18 Section 8(e) is aimed at socalled "hot cargo" agreements, that is, agreements between a union and...