Connell Construction Co. v. Plumbers & Steamfitters Local Union No. 100
421 U.S. 616 (1975)
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Rule of Law:
An agreement between a union and an employer with whom the union has no collective bargaining relationship, which requires the employer to subcontract work only to firms that are party to a collective bargaining agreement with the union, is not protected by labor law exemptions and may be subject to federal antitrust laws as a direct restraint on the business market.
Facts:
- Local 100, a plumbers and mechanical trades union, was party to a multiemployer bargaining agreement with the Mechanical Contractors Association of Dallas, which included a 'most favored nation' clause.
- Connell Construction Co. was a general building contractor that subcontracted all its plumbing and mechanical work, awarding these subcontracts to both union and nonunion firms based on competitive bids.
- Local 100 did not represent, nor had it ever sought to represent, any of Connell's own employees.
- In November 1970, Local 100 demanded that Connell sign an agreement obligating it to subcontract mechanical work only to firms that had a current contract with Local 100.
- When Connell refused, Local 100 stationed a picket at one of Connell's major construction sites.
- The picketing caused approximately 150 workers to walk off the job, which halted all construction at the site.
- As a direct result of the work stoppage caused by the picketing, Connell signed the subcontracting agreement under protest.
- Local 100 was engaged in a campaign to secure identical agreements from other general contractors in the Dallas area.
Procedural Posture:
- Connell Construction Co. initially filed suit in a Texas state court seeking an injunction against Local 100's picketing.
- Local 100 removed the case to the U.S. District Court for the Northern District of Texas.
- After signing the subcontracting agreement under protest, Connell amended its complaint to allege the agreement violated federal antitrust laws.
- The District Court (trial court) held that the agreement was exempt from federal antitrust laws and that state antitrust law was preempted.
- Connell, as appellant, appealed the decision to the U.S. Court of Appeals for the Fifth Circuit.
- The Court of Appeals affirmed the District Court's judgment in favor of Local 100, the appellee.
- The U.S. Supreme Court granted certiorari on Connell's petition.
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Issue:
Does an agreement between a union and a general contractor, with whom the union has no collective bargaining relationship, that requires the contractor to subcontract work only to firms that have a collective bargaining agreement with the union, fall outside labor's nonstatutory exemption from federal antitrust laws?
Opinions:
Majority - Mr. Justice Powell
Yes. An agreement which is outside the context of a collective-bargaining relationship and not restricted to a particular jobsite, but which obligates a general contractor to subcontract work only to firms that have a contract with a particular union, may be the basis of a federal antitrust suit because it constitutes a direct restraint on the business market not justified by national labor policy. The nonstatutory exemption for labor unions is intended to permit the elimination of competition over wages and working conditions, not to allow unions to impose direct restraints on business competition based on efficiency or to control market access. The construction-industry proviso to § 8(e) of the National Labor Relations Act (NLRA) does not shelter this agreement, as its purpose is to address jobsite friction in the context of a collective-bargaining relationship, not to provide a broad organizational weapon for unions against 'stranger' employers. While federal antitrust law can apply, federal labor policy preempts the application of state antitrust law to such organizational activities.
Dissenting - Mr. Justice Douglas
No. The union's conduct should be regulated solely by labor laws, not antitrust laws, because Connell did not allege a conspiracy between the union and unionized subcontractors. Antitrust immunity would be a different question if there were allegations that Local 100 conspired with unionized mechanical subcontractors to force nonunion firms from the market, as in Allen Bradley Co. v. Electrical Workers. Since Connell's complaint is limited to coercion by the union, its remedies, if any, are exclusively provided by the labor laws.
Dissenting - Mr. Justice Stewart
No. The legislative history of the 1947 and 1959 amendments to the federal labor laws demonstrates that Congress made a deliberate choice to regulate union secondary activity, such as the conduct here, exclusively under the National Labor Relations Act and § 303 of the Labor Management Relations Act. Congress specifically considered and rejected applying antitrust remedies to this type of conduct, instead creating a comprehensive remedial scheme limited to NLRB action and a private suit for actual, not treble, damages. By allowing an antitrust suit, the Court is imposing a remedy Congress rejected and upsetting the carefully crafted balance of power between labor and management.
Analysis:
This decision significantly narrows labor's nonstatutory exemption from antitrust laws by exposing unions to antitrust liability for certain agreements with employers outside a direct collective bargaining relationship. The ruling limits the use of 'hot cargo' agreements under the § 8(e) construction-industry proviso, clarifying that the proviso is not a tool for 'top-down' organizing of an entire market through pressure on 'stranger' general contractors. The case distinguishes between union actions that permissibly affect the labor market (e.g., standardizing wages) and those that impermissibly create a direct restraint on the business market, thereby setting a precedent that requires a closer examination of the anticompetitive effects of union agreements with non-labor entities.
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