South Carolina State Ports Authority v. NLRB
74 F.4th 368 (2023)
Rule of Law:
A union's lawsuit to enforce a broad, coast-wide work jurisdiction clause in a collective bargaining agreement is a lawful primary activity aimed at work preservation, not an unlawful secondary boycott, even if it has the incidental effect of causing the contracting employer to cease doing business with a neutral third party.
Facts:
- The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), a multi-employer shipping association, are parties to a Master Contract granting ILA members jurisdiction over all container loading and unloading work at East and Gulf Coast ports.
- Historically, ports in Charleston, South Carolina, Savannah, Georgia, and Wilmington, North Carolina, operated under a 'hybrid labor model' where non-union state employees operated lift equipment (cranes) and ILA members performed all other longshore work.
- The South Carolina State Ports Authority (Ports Authority), which is not a party to the Master Contract, has long operated its Charleston terminals using this hybrid model.
- In 2020, the Ports Authority announced that its new Hugh K. Leatherman, Sr. Terminal would also operate using the hybrid labor model.
- After negotiations between the ILA and the Ports Authority over staffing at the new terminal failed, the Leatherman Terminal began operations with non-union state employees operating the cranes.
- Two USMX-affiliated shipping carriers sent vessels to the new Leatherman Terminal.
- The ILA filed a lawsuit in New Jersey state court against USMX and the two carriers for breaching the Master Contract, seeking $300 million in damages.
- Following the initiation of the lawsuit, USMX carrier-members ceased sending ships to the Leatherman Terminal.
Procedural Posture:
- The South Carolina State Ports Authority and others filed unfair labor practice charges against the ILA and USMX with the National Labor Relations Board (NLRB).
- The NLRB's General Counsel consolidated the charges, and an Administrative Law Judge (ALJ) conducted a hearing.
- The ALJ issued a decision finding that a clause in the parties' contract was facially valid, but that the ILA's lawsuit constituted an unlawful secondary activity in violation of the National Labor Relations Act.
- Multiple parties, including the ILA and the Ports Authority, filed exceptions to the ALJ's decision, appealing to the full NLRB.
- A three-member panel of the NLRB issued a final order, affirming the ALJ's finding on the contract clause but reversing the finding on the lawsuit, concluding that the lawsuit was a lawful work preservation effort.
- The South Carolina State Ports Authority, as petitioner, filed a petition for review of the NLRB's final order in the United States Court of Appeals for the Fourth Circuit.
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Issue:
Does a union's lawsuit against a multi-employer association, seeking damages for an alleged breach of a collective bargaining agreement's work jurisdiction clause after its members used a new terminal employing non-union labor, constitute an unlawful secondary activity under § 8(b)(4)(ii)(B) of the National Labor Relations Act?
Opinions:
Majority - Chief Judge Diaz
No. The union's lawsuit does not constitute an unlawful secondary activity because it is a lawful primary action to preserve work for its members. The lawsuit satisfies the two-prong work preservation test. First, its objective was to preserve the traditional work of loading and unloading containers on a coast-wide basis, a work category threatened by technological changes like containerization, rather than to acquire the new specific jobs at the Leatherman Terminal. The court must focus on the work of the entire bargaining unit, not just the work at a specific location where union members had not previously worked. Second, USMX and its carrier-members have the 'right of control' over the work because they decide which ports their ships will call on. By choosing to patronize fully-unionized ports, they can assign the disputed work to ILA members. The resulting harm to the Ports Authority is a permissible secondary effect of a lawful primary dispute, not an unlawful secondary objective.
Dissenting - Judge Niemeyer
Yes. The union's lawsuit constitutes an unlawful secondary activity because its objective was to acquire new work, not preserve traditional work, and it was illegally directed at a neutral party. The ILA's action fails the work preservation test. First, the union sought to acquire work, as ILA members had never operated cranes in the Port of Charleston, which has used a hybrid model for 50 years. The ILA's own statements revealed a desire to 'consume all the jobs' and 'grow' its business, which is evidence of work acquisition. Second, the Ports Authority, not USMX, has the 'right of control' over the crane operator jobs. The ILA's lawsuit against USMX, a neutral party, was a classic secondary boycott designed to coerce USMX into pressuring the Ports Authority, the party with whom the ILA had its actual dispute.
Analysis:
This decision reinforces a broad interpretation of the work preservation doctrine, allowing unions to enforce coast-wide collective bargaining agreements even at new facilities where their members have not historically performed the specific disputed work. The ruling solidifies the precedent that the 'right of control' analysis can focus on a primary employer's ability to direct the flow of its business (e.g., choosing which port to use), rather than its direct power to hire and fire for the specific jobs in question. This strengthens a union's ability to protect its jurisdictional claims against erosion from new business models or facilities, while potentially increasing the vulnerability of neutral third-party employers to the effects of labor disputes.
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