Connell Construction Co. v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616 (1975)

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Filed: 1975-10-06Precedential Status: PrecedentialCitations: 421 U.S. 616, 95 S. Ct. 1830, 44 L. Ed. 2d 418, 1975 U.S. LEXIS 17Docket: 73-1256Supreme Court Database id: 1974-109

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421 U.S. 616
95 S.Ct. 1830
44 L.Ed.2d 418

CONNELL CONSTRUCTION COMPANY, INC.,
Petitioner,
v.
PLUMBERS AND STEAMFITTERS LOCAL UNION NO. 100, etc.
No. 73—1256.
Argued Nov. 19, 1974.
Decided June 2, 1975.
Rehearing Denied Oct. 6, 1975.

See 423 U.S. 884, 96 S.Ct. 156.
Syllabus

Respondent union, representing the plumbing and mechanical trades in
Dallas, was a party to a multiemployer collective-bargaining agreement
with a mechanical contractors association. The agreement contained a
'most favored nation' clause, by which the union agreed that if it granted a
more favorable contract to any other employer it would extend the same
terms to all association members. Respondent picketed petitioner, a
general building contractor which subcontracted all plumbing and
mechanical work and had no employees respondent wished to represent, to
secure a contract whereby petitioner agreed to subcontract such work only
to firms that had a current contract with respondent. Petitioner signed
under protest and, claiming that the agreement violated §§ 1 and 2 of the
Sherman Act and state antitrust laws, brought suit against respondent
seeking declaratory and injunctive relief. By the time this case went to
trial, respondent had secured identical agreements from other general
contractors and was selectively picketing those who resisted. The District
Court held (1) that the subcontracting agreement was exempt from federal
antitrust laws because it was authorized by the first proviso in § 8(e) of the
National Labor Relations Act (NLRA), which exempts jobsite contracting
agreements in the construction industry from the statutory ban on
secondary agreements requiring employers to cease doing business with
other persons, and (2) that federal labor legislation pre-empted the State's
antitrust laws. The Court of Appeals affirmed. Held:
1. Respondent union's agreement with petitioner is not entitled to the
nonstatutory exemption from the federal antitrust laws recognized in Meat
Cutters v. Jewel Tea Co., 381 U.S. 676, 85 S.Ct. 1596, 14 L.Ed.2d 640,
because it imposed direct restraints on competition among subcontractors
that would not have resulted from the elimination of competition based on
differences in wages and working conditions. Pp. 621-626.
(a) The agreement indiscriminately excluded nonunion subcontractors
from a portion of the market, even if their competitive advantages were
derived from efficient operating methods rather than substandard wages
and working conditions. P. 623.
(b) The 'most-favored nation' clause in the multiemployer bargaining
agreement, by insuring that no union subcontractor would have a
competitive advantage on any matters covered by the agreement, gave
respondent's agreements with petitioner and other general contractors the
effect of creating a sheltered market for union subcontractors in that
portion of the subcontracting market controlled by signatory general
contractors. Pp. 623-624.

(c) Since the agreement did not simply prohibit subcontracting to any
nonunion firm but to any firm that did not have a contract with respondent,
it gave the union complete control over subcontract work offered by
general contractors that had signed the agreement and empowered the
union to exclude certain subcontractors from that portion of the market by
refusing to deal with them. Pp. 624-625.
2. The first proviso to § 8(e) of the NLRA does not shelter the challenged
agreement from the federal antitrust laws, since that proviso was not
intended to authorize subcontracting agreements that are neither within the
context of a collective-bargaining relationship nor limited to any particular
jobsite. Here respondent, which has never sought to represent petitioner's
employees or bargain with petitioner on their behalf, makes no claim to be
protecting those employees from working with nonunion men; the
agreement was not limited to any particular jobsite; and respondent
concededly sought the agreement solely as a means of pressuring Dallas
mechanical subcontractors to recognize it as their employees'
representative. Pp. 626-633.
3. There is no indication that Congress in the Taft-Hartley amendments or
later meant to make NLRA remedies for 'hot cargo' agreements exclusive,
thus precluding liability for such agreements under the antitrust acts. Pp.
633-634.
4. The agreement is not subject to the state antitrust laws, the use of which
to regulate union activities in aid of union organization would risk
substantial conflict with policies central to federal labor law. Pp. 635-637.
5. Whether the subcontracting agreement violated the Sherman Act, an
issue not fully briefed or argued in this Court, must be decided on remand.
P. 637.
483 F.2d 1154, 5th Cir., reversed in part, affirmed in part, and remanded.
Joseph F. Canterbury, Jr., Dallas, Tex., for petitioner.
David R. Richards, Austin, Tex., for respondent.
Mr. Justice POWELL delivered the opinion of the Court.

1

The building trades union in this case supported its efforts to organize
mechanical subcontractors by picketing certain general contractors, including
petitioner. The union's sole objective was to compel the general contractors to
agree that in letting subcontracts for mechanical work they would deal only
with firms that were parties to the union's current collective-bargaining
agreement. The union disclaimed any interest in representing the general
contractors' employees. In this case the picketing succeeded, and petitioner
seeks to annul the resulting agreement as an illegal restraint on competition
under federal and state law. The union claims immunity from federal antitrust
statutes and argues that federal labor regulation pre-empts state law.

2

* Local 100 is the bargaining representative for workers in the plumbing and
mechanical trades in Dallas. When this litigation began, it was party to a
multiemployer bargaining agreement with the Mechanical Contractors
Association of Dallas, a group of about 75 mechanical contractors. That
contract contained a 'most favored nation' clause, by which the union agreed
that if it granted a more favorable contract to any other employer it would
extend the same terms to all members of the Association.

3

Connell Construction Co. is a general building contractor in Dallas. It obtains
jobs by competitive bidding and subcontracts all plumbing and mechanical
work. Connell has followed a policy of awarding these subcontracts on the
basis of competitive bids, and it has done business with both union and
nonunion subcontractors. Connell's employees are represented by various
building trade unions. Local 100 has never sought to represent them or to
bargain with Connell on their behalf.

4

In November 1970, Local 100 asked Connell to agree that it would subcontract
mechanical work only to firms that had a current contract with the union. It
demanded that Connell sign the following agreement:

5

'WHEREAS, the contractor and the union are engaged in the construction
industry, and 'WHEREAS, the contractor and the union desire to make an
agreement applying in the event of subcontracting in accordance with Section
8(e) of the Labor Management Relations Act;

6

'WHEREAS, it is understood that by this agreement the contractor does not
grant, nor does the union seek, recognition as the collective bargaining
representative of any employees of the signatory contractor; and

7

'WHEREAS, it is further understood that the subcontracting limitation provided
herein applies only to mechanical work which the contractor does not perform
with his own employees but uniformly subcontracts to other firms;

8

'THEREFORE, the contractor and the union mutually agree with respect to
work falling within the scope of this agreement that is to be done at the site of
construction, alteration, painting or repair of any building, structure, or other
works, that (if) the contractor should contract or subcontract any of the
aforesaid work falling within the normal trade jurisdiction of the union, said
contractor shall contract or subcontract such work only to firms that are parties
to an executed, current collective bargaining agreement with Local Union 100
of the United Association of Journeymen and Apprentices of the Plumbing and
Pipefitting Industry.'

9

When Connell refused to sign this agreement, Local 100 stationed a single
picket at one of Connell's major construction sites. About 150 workers walked
off the job, and construction halted. Connell filed suit in state court to enjoin
the picketing as a violation of Texas antitrust laws. Local 100 removed the case
to federal court. Connell then signed the subcontracting agreement under
protest. It amended its complaint to claim that the agreement violated §§ 1 and
2 of the Sherman Act, 26 Stat. 209, as amended, 15 U.S.C. §§ 1 and 2, and was
therefore invalid. Connell sought a declaration to this effect and an injunction
against any further efforts to force it to sign such an agreement.

10

By the time the case went to trial, Local 100 had submitted identical
agreements to a number of other general contractors in Dallas. Five others had
signed, and the union was waging a selective picketing compaign against those
who resisted.

11

The District Court held that the subcontracting agreement was exempt from
federal antitrust laws because it was authorized by the construction industry
proviso to § 8(e) of the National Labor Relations Act, 49 Stat. 452, as added, 73
Stat. 543, 29 U.S.C. § 158(e). The court also held that federal labor legislation
pre-empted the State's antitrust laws. 78 L.R.R.M. 3012 (ND Tex.1971). The
Court of Appeals for the Fifth Circuit affirmed, 483 F.2d 1154 (1973), with one
judge dissenting. It held that Local 100's goal of organizing nonunion
subcontractors was a legitimate union interest and that its efforts toward that
goal were therefore exempt from federal antitrust laws. On the second issue, it
held that state law was pre-empted under San Diego Building Trades Council v.
Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). We granted
certiorari on Connell's petition. 416 U.S. 981, 94 S.Ct. 2381, 40 L.Ed.2d 757
(1974). We reverse on the question of federal antitrust immunity and affirm the
ruling on state law pre-emption.
II

12

The basic sources of organized labor's exemption from federal antitrust laws are
§§ 6 and 20 of the Clayton Act, 38 Stat. 731 and 738, 15 U.S.C. § 17 and 29
U.S.C. § 52, and the Norris-LaGuardia Act, 47 Stat. 70, 71, and 73, 29 U.S.C.
§§ 104, 105, and 113. These statutes declare that labor unions are not
combinations or conspiracies in restraint of trade, and exempt specific union
activities, including secondary picketing and boycotts, from the operation of the
antitrust laws. See United States v. Hutcheson, 312 U.S. 219, 61 S.Ct. 463, 85
L.Ed. 788 (1941). They do not exempt concerted action or agreements between
unions and nonlabor parties. Mine Workers v. Pennington, 381 U.S. 657, 662,
85 S.Ct. 1585, 1589, 14 L.Ed.2d 626 (1965). The Court has recognized,
however, that a proper accommodation between the congressional policy
favoring collective bargaining under the NLRA and the congressional policy
favoring free competition in business markets requires that some unionemployer agreements be accorded a limited nonstatutory exemption from
antitrust sanctions. Meat Cutters v. Jewel Tea Co., 381 U.S. 676, 85 S.Ct. 1596,
14 L.Ed.2d 640 (1965).

13

The nonstatutory exemption has its source in the strong labor policy favoring
the association of employees to eliminate competition over wages and working
conditions. Union success in organizing workers and standardizing wages
ultimately will affect price competition among employers, but the goals of
federal labor law never could be achieved if this effect on business competition
were held a violation of the antitrust laws. The Court therefore has
acknowledged that labor policy requires tolerance for the lessening of business
competition based on differences in wages and working conditions. See Mine
Workers v. Pennington, supra, 381 U.S. at 666, 85 S.Ct. at 1591; Jewel Tea,
supra, 381 U.S. at 692 693, 85 S.Ct. at 1603—1604 (opinion of White, J.).
Labor policy clearly does not require, however, that a union have freedom to
impose direct restraints on competition among those who employ its members.
Thus, while the statutory exemption allows unions to accomplish some
restraints by acting unilaterally, e.g., Federation of Musicians v. Carroll, 391
U.S. 99, 88 S.Ct. 1562, 20 L.Ed.2d 460 (1968), the nonstatutory exemption
offers no similar protection when a union and a nonlabor party agree to restrain
competition in a business market. See Allen Bradley Co. v. Electrical Workers,
325 U.S. 797, 806—811, 65 S.Ct. 1533, 1538—1541, 89 L.Ed. 1939 (1945);
Cox, Labor and the Antitrust Laws—A Preliminary Analysis, 104 U.Pa.L.Rev.
252 (1955); Meltzer, Labor Unions, Collective Bargaining, and the Antitrust
Laws, 32 U.Chi.L.Rev. 659 (1965).

14

In this case Local 100 used direct restraints on the business market to support
its organizing campaign. The agreements with Connell and other general
contractors indiscriminately excluded nonunion subcontractors from a portion
of the market, even if their competitive advantages were not derived from
substandard wages and working conditions but rather from more efficient
operating methods. Curtailment of competition based on efficiency is neither a
goal of federal labor policy nor a necessary effect of the elimination of
competition among workers. Moreover, competition based on efficiency is a
positive value that the antitrust laws strive to protect.

15

The multiemployer bargaining agreement between Local 100 and the
Association, though not challenged in this suit, is relevant in determining the
effect that the agreement between Local 100 and Connell would have on the
business market. The 'most favored nation' clause in the multiemployer
agreement promised to eliminate competition between members of the
Association and any other subcontractors that Local 100 might organize. By
giving members of the Association a contractual right to insist on terms as
favorable as those given any competitor, it guaranteed that the union would
make no agreement that would give an unaffiliated contractor a competitive
advantage over members of the Association.1 Subcontractors in the Association
thus stood to benefit from any extension of Local 100's organization, but the
method Local 100 chose also had the effect of sheltering them from outside
competition in that portion of the market covered by subcontracting agreements
between general contractors and Local 100. In that portion of the market, the
restriction on subcontracting would eliminate competition on all subjects
covered by the multiemployer agreement, even on subjects unrelated to wages,
hours, and working conditions.

16

Success in exacting agreements from general contractors would also give Local
100 power to control access to the market for mechanical subcontracting work.
The agreements with general contractors did not simply prohibit subcontracting
to any nonunion firm; they prohibited subcontracting to any firm that did not
have a contract with Local 100. The union thus had complete control over
subcontract work offered by general contractors that had signed these
agreements. Such control could result in significant adverse effects on the
market and on consumers—effects unrelated to the union's legitimate goals of
organizing workers and standardizing working conditions. For example, if the
union thought the interests of its members would be served by having fewer
subcontractors competing for the available work, it could refuse to sign
collective-bargaining agreements with marginal firms. Cf. Mine Workers v.
Pennington, supra. Or, since Local 100 has a well-defined geographical
jurisdiction, it could exclude 'traveling' subcontractors by refusing to deal with
them. Local 100 thus might be able to create a geographical enclave for local
contractors, similar to the closed market in Allen Bradley, supra.

17

This record contains no evidence that the union's goal was anything other than
organizing as many subcontractors as possible.2 This goal was legal, even
though a successful organizing campaign ultimately would reduce the
competition that unionized employers face from nonunion firms. But the
methods the union chose are not immune from antitrust sanctions simply
because the goal is legal. Here Local 100, by agreement with several
contractors, made nonunion subcontractors ineligible to compete for a portion
of the available work. This kind of direct restraint on the business market has
substantial anticompetitive effects, both actual and potential, that would not
follow naturally from the elimination of competition over wages and working
conditions. It contravenes antitrust policies to a degree not justified by
congressional labor policy, and therefore cannot claim a nonstatutory
exemption from the antitrust laws.

18

There can be no argument in this case, whatever its force in other contexts, that
a restraint of this magnitude might be entitled to an antitrust exemption if it
were included in a lawful collective-bargaining agreement. Cf. Mine Workers
v. Pennington, 381 U.S., at 664—665, 85 S.Ct., at 1590, 1591; Jewel Tea, 381
U.S., at 689—690, 85 S.Ct., at 1601—1602 (opinion of White, J.); id., at 709—
713, 732—733, 85 S.Ct. 1614, 1616, 1626 1627 (opinion of Goldberg, J.). In
this case, Local 100 had no interest in representing Connell's employees. The
federal policy favoring collective bargaining therefore can offer no shelter for
the union's coercive action against Connell or its campaign to exclude nonunion
firms from the subcontracting market.
III

19

Local 100 nonetheless contends that the kind of agreement it obtained from
Connell is explicitly allowed by the construction-industry proviso to § 8(e) and
that antitrust policy therefore must defer to the NLRA. The majority in the
Court of Appeals declined to decide this issue, holding that it was subject to the
'exclusive jurisdiction' of the NLRB. 483 F.2d, at 1174. This Court has held,
however, that the federal courts may decide labor law questions that emerge as
collateral issues in suits brought under independent federal remedies, including
the antitrust laws.3 We conclude that § 8(e) does not allow this type of
agreement.

20

Local 100's argument is straightforward: the first proviso to § 8(e) allows '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.'4 Local 100 is a labor organization, Connell is an employer in the
construction industry, and the agreement covers only work 'to be done at the
site of construction, alteration, painting or repair of any building, structure, or
other works.' Therefore, Local 100 says, the agreement comes within the
proviso. Connell responds by arguing that despite the unqualified language of
the proviso, Congress intended only to allow subcontracting agreements within
the context of a collective-bargaining relationship; that is, Congress did not
intend to permit a union to approach a 'stranger' contractor and obtain a binding
agreement not to deal with nonunion subcontractors. On its face, the proviso
suggests no such limitation. This Court has held, however, that § 8(e) must be
interpreted in light of the statutory setting and the circumstances surrounding its
enactment:

21

'It is a 'familiar rule, that a thing may be within the letter of the statute and yet
not within the statute, because not within its spirit nor within the intention of its
makers.' Holy Trinity Church v. United States, 143 U.S. 457, 459, 12 S.Ct. 511,
512, 36 L.Ed. 226.' National Woodwork Mfrs. Assn. v. NLRB, 386 U.S. 612,
619, 87 S.Ct. 1250, 1255, 18 L.Ed.2d 357 (1967).

22

Section 8(e) was part of a legislative program designed to plug technical
loopholes in § 8(b)(4)'s general prohibition of secondary activities. In § 8(e)
Congress broadly proscribed using contractual agreements to achieve the
economic coercion prohibited by § 8(b)(4). See National Woodwork Mfrs.
Assn., supra, 386 U.S. at 634, 87 S.Ct. at 1262. The provisos exempting the
construction and garment industries were added by the Conference Committee
in an apparent compromise between the House bill which prohibited all 'hot
cargo' agreements, and the Senate bill, which prohibited them only in the
trucking industry.5 Although the garment-industry proviso was supported by
detailed explanations in both Houses,6 the construction-industry proviso was
explained only by bare references to 'the pattern of collective bargaining' in the
industry.7 It seems, however, to have been adopted as a partial substitute for an
attempt to overrule this Court's decision in NLRB v. Denver Building &
Construction Trades Council, 341 U.S. 675, 71 S.Ct. 943, 95 L.Ed. 1284
(1951).8 Discussion of 'special problems' in the construction industry,
applicable to both the § 8(e) proviso and the attempt to overrule Denver
Building Trades, focused on the problems of picketing a single nonunion
subcontractor on a multiemployer building project, and the close relationship
between contractors and subcontractors at the jobsite.9 Congress limited the
construction-industry proviso to that single situation, allowing subcontracting
agreements only in relation to work done on a jobsite. In contrast to the latitude
it provided in the garment-industry proviso, Congress did not afford
construction unions an exemption from § 8(b)(4)(B) or otherwise indicate that
they were free to use subcontracting agreements as a broad organizational
weapon. In keeping with these limitations, the Court has interpreted the
construction-industry proviso as

23

'a measure designed to allow agreements pertaining to certain secondary
activities on the construction site because of the close community of interests
there, but to ban secondary-objective agreements concerning nonjobsite work,
in which respect the construction industry is no different from any other.'
National Woodwork Mfrs. Assn., 386 U.S., at 638 639, 87 S.Ct., at 1265
(footnote omitted).

24

Other courts have suggested that it serves an even narrower function:

25

'(T)he purpose of the section 8(e) proviso was to alleviate the frictions that may
arise when union men work continuously alongside nonunion men on the same
construction site.' Drivers Local 695 v. NLRB, 124 U.S.App.D.C. 93, 99, 361
F.2d 547, 553 (1966).

26

See also Denver Building Trades, 341 U.S., at 692—693, 71 S.Ct., at 953,
(Douglas, J., dissenting); Essex County & Vicinity District Council of
Carpenters v. NLRB, 332 F.2d 636, 640 (CA3 1964).

27

Local 100 does not suggest that its subcontracting agreement is related to any of
these policies. It does not claim to be protecting Connell's employees from
having to work alongside nonunion men. The agreement apparently was not
designed to protect Local 100's members in that regard, since it was not limited
to jobsites on which they were working. Moreover, the subcontracting
restriction applied only to the work Local 100's members would perform
themselves and allowed free subcontracting of all other work, thus leaving open
a possibility that they would be employed alongside nonunion subcontractors.
Nor was Local 100 trying to organize a nonunion subcontractor on the building
project it picketed. The union admits that it sought the agreement solely as a
way of pressuring mechanical subcontractors in the Dallas area to recognize it
as the representative of their employees.

28

If we agreed with Local 100 that the construction-industry proviso authorizes
subcontracting agreements with 'stranger' contractors, not limited to any
particular jobsite, our ruling would give construction unions as almost
unlimited organizational weapon.10 The unions would be free to enlist any
general contractor to bring economic pressure on nonunion subcontractors, as
long as the agreement recited that it only covered work to be performed on
some jobsite somewhere. The proviso's jobsite restriction then would serve
only to prohibit agreements relating to subcontractors that deliver their work
complete to the jobsite.

29

It is highly improbable that Congress intended such a result. One of the major
aims of the 1959 Act was to limit 'top-down' organizing compaigns, in which
unions used economic weapons to force recognition from an employer
regardless of the wishes of his employees. 11 Congress accomplished this goal
by enacting § 8(b)(7), which restricts primary recognitional picketing, and by
further tightening § 8(b)(4)(B), which prohibits the use of most secondary
tactics in organizational campaigns. Construction unions are fully covered by
these sections. The only special consideration given them in organizational
campaigns is § 8(f), which allows 'pre-hire' agreements in the construction
industry, but only under careful safeguards preserving workers' rights to decline
union representation. The legislative history accompanying § 8(f) also suggests
that Congress may not have intended that strikes or picketing could be used to
extract prehire agreements from unwilling employers.12

30

These careful limits on the economic pressure unions may use in aid of their
organizational campaigns would be undermined seriously if the proviso to §
8(e) were construed to allow unions to seek subcontracting agreements, at
large, from any general contractor vulnerable to picketing. Absent a clear
indication that Congress intended to leave such a glaring loophole in its
restrictions on 'top-down' organizing, we are unwilling to read the constructionindustry proviso as broadly as Local 100 suggests.13 Instead, we think its
authorization extends only to agreements in the context of collective-bargaining
relationships and in light of congressional references to the Denver Building
Trades problem, possibly to common-situs relationships on particular jobsites
as well.14

31

Finally, Local 100 contends that even if the subcontracting agreement is not
sanctioned by the constructionindustry proviso and therefore is illegal under §
8(e), it cannot be the basis for antitrust liability because the remedies in the
NLRA are exclusive. This argument is grounded in the legislative history of the
1947 Taft-Hartley amendments. Congress rejected attempts to regulate
secondary activities by repealing the antitrust exemptions in the Clayton and
Norris-LaGuardia Acts, and created special remedies under the labor law
instead.15 It made secondary activities unfair labor practices under § 8(b)(4),
and drafted special provisions for preliminary injunctions at the suit of the
NLRB and for recovery of actual damages in the district courts. § 10(l) of the
NLRA, 49 Stat. 453, as added, 61 Stat. 149, as amended, 29 U.S.C. § 160l, and
§ 303 of the Labor Management Relations Act, 61 Stat. 158, as amended, 29
U.S.C. § 187. But whatever significance this legislative choice has for antitrust
suits based on those secondary activities prohibited by § 8(b)(4), it has no
relevance to the question whether Congress meant to preclude antitrust suits
based on the 'hot cargo' agreements that it outlawed in 1959. There is no
legislative history in the 1959 Congress suggesting that labor-law remedies for
§ 8(e) violations were intended to be exclusive, or that Congress thought
allowing antitrust remedies in cases like the present one would be inconsistent
with the remedial scheme of the NLRA.16

32

We therefore hold that this agreement, which is outside the context of a
collective-bargaining relationship and not restricted to a particular jobsite, but
which nonetheless obligates Connell to subcontract work only to firms that
have a contract with Local 100, may be the basis of a federal antitrust suit
because it has a potential for restraining competition in the business market in
ways that would not follow naturally from elimination of competition over
wages and working conditions.
IV

33

Although we hold that the union's agreement with Connell is subject to the
federal antitrust laws, it does not follow that state antitrust law may apply as
well. The Court has held repeatedly that federal law pre-empts state remedies
that interfere with federal labor policy or with specific provisions of the NLRA.
E.g., Motor Coach Employees v. Lockridge, 403 U.S. 274, 91 S.Ct. 1909, 29
L.Ed.2d 473 (1971); Teamsters v. Morton, 377 U.S. 252, 84 S.Ct. 1253, 12
L.Ed.2d 280 (1964); Teamsters v. Oliver, 358 U.S. 283, 79 S.Ct. 297, 3
L.Ed.2d 312 (1959).17 The use of state antitrust law to regulate union activities
in aid of organization must also be pre-empted because it creates a substantial
risk of conflict with policies central to federal labor law.

34

In this area, the accommodation between federal labor and antitrust policy is
delicate. Congress and this Court have carefully tailored the antitrust statutes to
avoid conflict with the labor policy favoring lawful employee organization, not
only by delineating exemptions from antitrust coverage but also by adjusting
the scope of the antitrust remedies themselves. See Apex Hoisery Co. v.
Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311 (1940). State antitrust laws
generally have not been subjected to this process of accommodation. If they
take account of labor goals at all, they may represent a totally different balance
between labor and antitrust policies.18 Permitting state antitrust law to operate
in this field could frustrate the basic federal policies favoring employee
organization and allowing elimination of competition among wage earners, and
interfere with the detailed system Congress has created for regulating
organizational techniques.

35

Because employee organization is central to federal labor policy and regulation
of organizational procedures is comprehensive, federal law does not admit the
use of state antitrust law to regulate union activity that is closely related to
organizational goals. Of course, other agreements between unions and nonlabor
parties may yet be subject to state antitrust laws. See Teamsters v. Oliver,
supra, 358 U.S., at 295—297, 79 S.Ct., at 304—305. The governing factor is
the risk of conflict with the NLRA or with federal labor policy.
V

36

Neither the District Court nor the Court of Appeals decided whether the
agreement between Local 100 and Connell, if subject to the antitrust laws,
would constitute an agreement that restrains trade within the meaning of the
Sherman Act. The issue was not briefed and argued fully in this Court.
Accordingly, we remand for consideration whether the agreement violated the
Sherman Act.19

37

Reversed in part, affirmed in part, and remanded.

38

Mr. Justice DOUGLAS, dissenting.

39

While I join the opinion of Mr. Justice STEWART, I write to emphasize what
is, for me, the determinative feature of the case. Throughout this litigation,
Connell has maintained only that Local 100 coerced it into signing the
subcontracting agreement. With the complaint so drawn, I have no difficulty in
concluding that the union's conduct is regulated solely by the labor laws. The
question of antitrust immunity would be far different, however, if it were
alleged that Local 100 had conspired with mechanical subcontractors to force
nonunion subcontractors from the market by entering into exclusionary
agreements with general contractors like Connell. An arrangement of that
character was condemned in Allen Bradley Co. v. Electrical Workers, 325 U.S.
797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945), which held that Congress did not
intend 'to immunize labor unions who aid and abet manufacturers and traders in
violating the Sherman Act,' id., at 810, 65 S.Ct. at 1540. Were such a
conspiracy alleged, the multiemployer bargaining agreement between Local
100 and the mechanical subcontractors would unquestionably be relevant. See
Mine Workers v. Pennington, 381 U.S. 657, 673, 85 S.Ct. 1585, 1595, 14
L.Ed.2d 626 (1965) (concurring opinion); Meat Cutters v. Jewel Tea Co., 381
U.S. 676, 737, 85 S.Ct. 1596, 1606, 14 L.Ed.2d 640 (1965) (dissenting
opinion). But since Connell has never alleged or attempted to show any
conspiracy between Local 100 and the subcontractors, I agree that Connell's
remedies, if any, are provided exclusively by the labor laws.

40

Mr. Justice STEWART, with whom Mr. Justice DOUGLAS, Mr. Justice
BRENNAN, and Mr. Justice MARSHALL join, dissenting.

41

As part of its effort to organize mechanical contractors in the Dallas area, the
respondent Local Union No. 100 engaged in peaceful picketing to induce the
petitioner Connell Construction Co., a general contractor in the building and
construction industry, to agree to subcontract plumbing and mechanical work at
the construction site only to firms that had signed a collective-bargaining
agreement with Local 100. None of Connell's own employees were members of
Local 100, and the subcontracting agreement contained the union's express
disavowal of any intent to organize or represent them. The picketing at
Connell's construction site was therefore secondary activity, subject to detailed
and comprehensive regulation pursuant to § 8(b)(4) of the National Labor
Relations Act, as added, 61 Stat. 141, 29 U.S.C. § 158(b)(4), and § 303 of the
Labor Management Relations Act, 61 Stat. 158, as amended, 29 U.S.C. § 187.
Similarly, the subcontracting agreement under which Connell agreed to cease
doing business with nonunion mechanical contractors is governed by the
provisions of § 8(e) of the National Labor Relations Act, 29 U.S.C. § 158(e).
The relevant legislative history unmistakably demonstrates that in regulating
secondary activity and 'hot cargo' agreements in 1947 and 1959, Congress
selected with great care the sanctions to be imposed if proscribed union activity
should occur. In so doing, Congress rejected efforts to give private parties
injured by union activity such as that engaged in by Local 100 the right to seek
relief under federal antitrust laws. Accordingly, I would affirm the judgment
before us.

42

* For a period of 15 years, from passage of the Norris-LaGuardia Act, 47 Stat.
70, in 19321 until enactment of the Labor Management Relations Act (the TaftHartley Act), 61 Stat. 136, in 1947, union economic pressure directed against a
neutral, secondary employer was not subject to sanctions under either federal
labor law or antitrust law, at least in the absence of proof that the union was
coercing the secondary employer in furtherance of a conspiracy with a nonlabor
group. See United States v. Hutcheson, 312 U.S. 219, 61 S.Ct. 463, 85 L.Ed.
788; Allen Bradley Co. v. Electrical Workers, 325 U.S. 797, 65 S.Ct. 1533, 89
L.Ed. 1939. '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 Mfrs. Assn. v. NLRB, 386 U.S. 612, 623, 87 S.Ct. 1250,
1257, 18 L.Ed.2d 357.

43

In Hunt v. Crumboch, 325 U.S. 821, 65 S.Ct. 1545, 89 L.Ed. 1954, for
example, the Court found that union conduct in forcing a freight carrier out of
business was protected activity beyond the reach of the federal antitrust laws
even though it involved secondary pressure that culminated in the union's
compelling the carrier's principal patron to break its contract with the carrier
and to discharge the carrier from further service. 'That which Congress has
recognized as lawful,' the Court noted, 'this Court has no constitutional power
to declare unlawful, by arguing that Congress has accorded too much power to
labor organizations.' Id., 325 U.S. at 825 n. 1, 65 S.Ct. at 1547.

44

Congressional concern over labor abuses of the broad immunity granted by the
Norris-LaGuardia Act was one of the considerations that resulted in passage of
the TaftHartley Act in 1947, which, among other things, prohibited specified
union secondary activity. See National Woodwork Mfrs. Assn. v. NLRB, supra,
386 U.S. at 623, 87 S.Ct. at 1257. The central thrust of that statutory provision
was to forbid 'a union to induce employees to strike against or to refuse to
handle goods for their employer when an object is to force him or another
person to cease doing business with some third party.' Carpenters' Union v.
NLRB, 357 U.S. 93, 98, 78 S.Ct. 1011, 1015, 2 L.Ed.2d 1186.2 In condemning
'specific union conduct directed to specific objectives,' ibid., however,
Congress deliberately chose not to subject unions engaging in prohibited
secondary activity to the sanctions of the antitrust laws.

45

Section 12(a)(3) of the Hartley bill, H.R. 3020, 80th Cong., 1st Sess., as
initially passed by the House, defined 'unlawful concerted activities' to include
an 'illegal boycott.' 1 NLRB, Legislative History of the Labor Management
Relations Act, 1947, p. 205 (hereinafter Leg.Hist. of LMRA). Section 12(c)
provided that the Norris-LaGuardia Act should have no 'application in any
action or proceeding in a court of the United States involving any activity
defined in this section as unlawful.' 1 Leg.Hist. of LMRA 206—207. The
Committee on Education and Labor explained in its report on the Hartley bill:

46

'Illegal boycotts take many forms. . . . Sometimes they are direct restraints of
trade, designed to compel people against whom they are engaged in to place
their business with some other than those they are delaing with at the time . . ..
Under (§ 12), these practices are called by their correct name, 'unlawful
concerted activities.' It is provided that any person injured in his person,
property, or business by an unlawful concerted activity affecting commerce
may sue the person or persons responsible for the injury in any district court
having jurisdiction of the parties and recover damages. The bill makes
inapplicable in such suits the Norris-LaGuardia Act, which heretofore has
protected parties to industrial strife from the consequences of their lawlessness,
no matter how violent their disputes became. Persons who engage in unlawful
concerted activities are subject to losing their rights and privileges under the
act.' H.R.Rep.No.245, 80th Cong., 1st Sess., 24, 44, 1 Leg.Hist. of LMRA 315,
335.

47

The Senate, however, refused to adopt the House's removal of antitrust
immunity for prohibited secondary activity, choosing instead to make the
remedies available under federal labor law exclusive. The Senate Committee on
Labor and Public Welfare approved S. 1126, 80th Cong., 1st Sess., which
provided that proscribed secondary conduct would be an unfair labor practice
and could be enjoined on application of the National Labor Relations Board.
No private remedy for an injured employer was authorized in the bill approved
by the Committee. See S.Rep.No.105, 80th Cong., 1st Sess., 24, 44, 1 Leg.Hist.
of LMRA 413—414, 428.

48

Four members of the Senate Committee, although supporting the provisions of
S. 1126 as reported by the Committee, felt that a number of the provisions of
the bill could be stronger. S.Rep.No.105, supra, at 50, 1 Leg.Hist. of LMRA
456. In particular, the minority Senators proposed:

49

'An amendment reinserting in the bill a section making secondary boycotts and
jurisdictional strikes unlawful and providing for direct suits in the courts by any
injured party. . . .

50

'The amendment proposes that (the injured party) be entitled to file a suit for
damages and obtain a temporary injunction while that suit is being heard. . . .

51

'The amendment, furthermore, removes the protection of the Clayton Act from
monopoly agreements to fix prices, allocate customers, restrict production,
distribution, or competition, or impose restrictions or conditions on the
purchase, sale, or use of material, machines, or equipment. While the existence
of the union should not be a combination in restraint of trade, we see no reason
why unions should not be subject in this field to the same restriction as are
competing employers.' S.Rep.No.105, supra, at 54—55, 1 Leg.Hist. of LMRA
460—461.

52

Senator Ball, one of the four minority Senators on the Labor and Public
Welfare Committee, did in fact offer an amendment on the Senate floor that
was 'designed to correct the interpretation of the Norris-LaGuardia and Clayton
acts made by the Supreme Court in the Hutchinson (sic) case, and a number of
other cases brought by former Assistant Attorney General Thurman Arnold,
when he attempted to break up monopolistic practices on the part of labor
unions, sometimes acting on their own, sometimes in conspiracy with
employers.' 93 Cong.Rec. 4838, 2 Leg.Hist. of LMRA 1354.3

53

Although stating that he personally agreed with the changes proposed by
Senator Ball, Senator Taft argued for defeat of the Ball amendment, explaining
that resistance to providing a private injunctive remedy in cases of secondary
boycotts was so strong that an attempt to eliminate the labor exemption from
the antitrust laws would lead to the defeat of any effort to provide for a private
damages remedy for injured parties. Senator Taft proposed as a substitute that
private parties be given only the right to sue for actual damages. 93 Cong.Rec.
4843—4844, 2 Leg.Hist. of LMRA 1365. The Ball amendment was thereafter
defeated, 93 Cong.Rec. 4847, 2 Leg.Hist. of LMRA 1369—1370, and Senator
Taft introduced his proposal 'to restore to people who lose something because
of boycotts and jurisdictional strikes the money which they have lost.' 93
Cong.Rec. 4858, 2 Leg.Hist. of LMRA 1370—1371.

54

In response to Senator Morse's claim that the proposal would impose virtually
unlimited liability on unions, Senator Taft made plain that he was not
advocating the use of antitrust sanctions against prohibited secondary activity.
'Under the Sherman Act the same question of boycott damage is subject to a
suit for (treble) damages and attorneys' fees. In this case we simply provide for
the amount of the actual damages.' 93 Cong.Rec. 4872—4873, 2 Leg.Hist. of
LMRA 1398; see Teamsters v. Morton, 377 U.S. 252, 260 n. 16, 84 S.Ct. 1253,
1258, 12 L.Ed.2d 280. Senator Taft's proposal for a private damages remedy
under federal labor law was adopted by the Senate. 93 Cong.Rec. 4874—4875,
2 Leg.Hist. of LMRA 1399—1400.

55

In Conference, the House members agreed to eliminate the provisions of the
Hartley bill which, like the Ball amendment, provided that the NorrisLaGuardia Act should have no application to private suits for unlawful
secondary activity. See H.R.Conf.Rep.No.510, 80th Cong., 1st Sess. (House
Managers' statement), 58—59, 1 Leg.Hist. of LMRA 562—563. With only
'clarifying changes,' H.R.Conf.Rep.No.510, supra, at 67, 1 Leg.Hist. of LMRA
571, the House-Senate Conferees and then both Houses of Congress agreed to
regulate union secondary activity by making specified activity an unfair labor
practice under § 8(b)(4) of the National Labor Relations Act, authorizing the
Board to seek injunctions against such activity, 29 U.S.C. § 160(l), and
providing for recovery of actual damages in a suit by a private party under
Senator Taft's compromise proposal, which became § 303 of the Labor
Management Relations Act, 29 U.S.C. § 187.4 Congress in 1947 did not
prohibit all secondary activity by labor unions, see Corpenters v. NLRB, 357
U.S. 93, 78 S.Ct. 1011, 2 L.Ed.2d 1186; and those practices which it did outlaw
were to be remedied only by seeking relief from the Board or by pursuing the
newly created, exclusive federal damages remedy provided by § 303. Teamsters
v. Morton, supra.
II

56

Contrary to the assertion in the Court's opinion, ante, at 634, the deliberate
congressional decision to make § 303 the exclusive private remedy for unlawful
secondary activity is clearly relevant to the question of Local 100's antitrust
liability in the case before us. The Court is correct, of course, in noting that §
8(e)'s prohibition of 'hot cargo' agreements was not added to the Act until 1959,
and that § 303 was not then amended to cover § 8(e) violations standing alone.
But as part of the 1959 amendments designed to close 'technical loopholes'
perceived in the Taft-Hartley Act, Congress amended § 8(b)(4) to make it an
unfair labor practice for a labor organization to threaten or coerce a neutral
employer, either directly or through his employees, where an object of the
secondary pressure is to force the employer to enter into an agreement
prohibited by § 8(e).5 At the same time, Congress expanded the scope of the §
303 damages remedy to allow recovery of the actual damages sustained as a
result of a union's engaging in secondary activity to force an employer to sign
an agreement in violation of § 8(e).6 In short, Congress has provided an
employer like Connell with a fully effective private damages remedy for the
allegedly unlawful union conduct involved in this case.

57

The essence of Connell's complaint is that it was coerced by Local 100's
picketing into 'conspiring' with the union by signing an agreement that limited
its ability to subcontract, mechanical work on a competitive basis.7 If, as the
Court today holds, the subcontracting agreement is not within the constructionindustry proviso to § 8(e), then Local 100's picketing to induce Connell to sign
the agreement constituted a § 8(b)(4) unfair labor practice, and was therefore
also unlawful under § 303(a), 29 U.S.C. § 187(a).8 Accordingly, Connell has
the right to sue Local 100 for damages sustained as a result of Local 100's
unlawful secondary activity pursuant to § 303(b), 29 U.S.C. § 187(b). Although
'limited to actual, compensatory damages,' Teamsters v. Morton, 377 U.S., at
260, 84 S.Ct. at 1258, Connell would be entitled under § 303 to recover all
damages to its business that resulted from the union's coercive conduct,
including any provable damage caused by Connell's inability to subcontract
mechanical work to nonunion firms. Similarly, any nonunion mechanical
contractor who believes his business has been harmed by Local 100's having
coerced Connell into signing the subcontracting agreement is entitled to sue the
union for compensatory damages; for § 303 broadly grants its damages action
to '(w)hoever shall be injured in his business or property' by reason of a labor
organization's engaging in a § 8(b)(4) unfair labor practice.9

58

Moreover, there is considerable evidence in the legislative materials indicating
that in expanding the scope of § 303 to include a remedy for secondary pressure
designed to force an employer to sign an illegal 'hot cargo' clause and in
restricting the remedies for violation of § 8(e) itself to those available from the
Board, Congress in 1959 made the same deliberate choice to exclude antitrust
remedies as was made by the 1947 Congress.

59

While the House was considering labor reform legislation in the summer of
1959, specific proposals were made to apply the antitrust laws to labor unions.
Representative Hiestand of California introduced a bill which 'would solve
many of the problems attending unbridled union power as it exists and operates
in this country. My proposal is in the nature of antitrust legislation, applied to
labor unions.' 105 Cong.Rec. 12135, 2 NLRB, Legislative History of the
Labor-Management Reporting and Disclosure Act of 1959, p. 1507 (hereinafter
Leg.Hist. of LMRDA). Representative Alger of Texas joined in cosponsoring
the legislation, stating that '(u)nion monopoly power' manifests itself in
'restrictive trade practices such as price fixing, restrictions on use of new
processes and technological improvements, exclusion of products for the
market, and so forth . . .. This bill deals directly with (this aspect) of union
monopoly power.' 105 Cong.Rec. 12136, 2 Leg.Hist. of LMRDA 1507.
Representative Alger added the following explanation of the bill:

60

'Under the language of H.R. 8003 any attempt by a union to induce an employer
or a group of employers to comply with a union demand which would result in
restrictive trade practices would be unlawful, and an employer faced with such
a demand could seek legal remedies to restrain the union from enforcing its
demand. The consequent denial to unions of the right to fix prices or impose
other artificial market limitations would not in any way interfere with normal
and legitimate union functions or with their proper collective bargaining
powers. They would merely be placed on an equal footing with all other groups
in society as was the case during the fifty years prior to the Hutcheson
decision.' 105 Cong.Rec. 12137, 2 Leg.Hist. of LMDRA 1508.

61

The Landrum-Griffin bill, H.R. 8400, 86th Cong., 1st Sess., which as amended,
was enacted as the Labor-Management Reporting and Disclosure Act of 1959,10
by contrast, clearly provided that the new secondary-boycott and 'hot cargo'
provisions were to be enforced solely through the Board and by use of the §
303 damages remedy. See 105 Cong.Rec. 14347—14348, 2 Leg.Hist. of
LMRDA 1522—1523. Recognizing this important difference, Representative
Alger proposed to amend the Landrum-Griffin bill by adding, as an additional
title, the anti-trust provisions of H.R. 8003. 105 Cong.Rec. 15532—15533, 2
Leg.Hist. of LMRDA 1569. Representative Alger once again stated that his
proposed amendment would make it unlawful for an individual local union to
'(e)nter into any arrangement—voluntary or coerced—with any employer,
groups of employers, or other unions which cause product boycotts, price
fixing, or other types of restrictive trade practices.' 105 Cong.Rec. 15533, 2
Leg.Hist. of LMRDA 1569.

62

Representative Griffin responded to Representative Alger's proposed
amendment by observing:

63

'(It) serves to point out that the substitute (the Landrum-Griffin bill) is a
minimum bill. It might be well at this point to mention some provisions that are
not in it.

64

'There is no antitrust law provision in this bill.

65

'This is truly a minimum bill that a responsible Congress should pass. I believe
I speak for the gentleman from Georgia (Mr. Landrum), as well as myself when
I say that if amendments are offered on the floor to add antitrust provisions or
others that have been mentioned, I, for one, will oppose them. The gentleman
from Georgia and I have tried to balance delicately the provisions which we
believe should be in a bill at this time and which a majority of this body could
support.' 105 Cong.Rec. 15535, 2 Leg.Hist. of LMRDA 1571—1572.

66

The Alger amendment was rejected, as were additional efforts to subject
proscribed union activities to the anti-trust laws and their sanctions. See e.g.,
105 Cong.Rec. 15853, 2 Leg.Hist. of LMRDA 1685 (amendment offered by
Rep. Hoffman). The House then adopted the Landrum-Griffin bill over protests
that it 'does not go far enough, that it needs more teeth, and that more teeth are
going to come in the form of legislation to bring labor union activities under the
anti-trust laws.' 105 Cong.Rec. 15858, 2 Leg.Hist. of LMDRA 1690 (remarks
of Rep. Alger); see 105 Cong.Rec. 15859—15860, 2 Leg.Hist. of LMRDA
1691—1692 (adoption of the Landrum amendment to H.R. 8342, substituting
in lieu of the text thereof the text of H.R. 8400 as amended).

67

The House-Senate Conferees made some substantive changes in the language
of the amendments to § 8(b)(4), and also added the construction-and garmentindustry provisos to § 8(e). See generally Cox, The Landrum-Griffin
Amendments to the National Labor Relations Act, 44 Minn.L.Rev. 257. But no
change was made in the nature of the sanctions authorized for violations of
either section by the House-passed Landrum-Griffin bill: An injured party
could either seek relief from the Board or bring suit for damages under § 303
against unions that violate the revised secondary-boycott prohibitions. No
provisions were made for exposing proscribed union secondary activity or 'hot
cargo' agreements to antitrust liability. See H.R.Conf.Rep. No. 1147, 86th
Cong., 1st Sess., 1 Leg.Hist. of LMRDA 934.11

68

Indeed, two years after enactment of the Landrum-Griffin Act, Senator
McClellan, whose committee hearings into abuses caused by concentrated labor
power had played a major role in generating support for the 1959 labor reform
legislation, together with five other Senators, introduced a bill to provide
antitrust sanctions for illegal 'hot cargo' agreements in the transportation
industry, despite the fact that such agreements were already expressly
prohibited by § 8(e).12 As it had in 1947 and 1959, however, Congress in 1961
rejected this effort to subject illegal union secondary conduct to the sanctions of
the antitrust laws.

69

In sum, the legislative history of the 1947 and 1959 amendments and additions
to national labor law clearly demonstrates that Congress did not intend to
restore antitrust sanctions for secondary boycott activity such as that engaged in
by Local 100 in this case, but rather intended to subject such activity only to
regulation under the National Labor Relations Act and § 303 of the Labor
Management Relations Act. The judicial imposition of 'independent federal
remedies' not intended by Congress, no less than the application of state law to
union conduct that is either protected or prohibited by federal labor law,13
threatens 'to upset the balance of power between labor and management
expressed in our national labor policy.' Teamsters v. Morton, 377 U.S., at 260,
84 S.Ct., at 1258. See Carpenters v. NLRB, 357 U.S., at 98—100, 78 S.Ct., at
1015, 1017; National Woodwork Mfrs.Assn. v. NLRB, 386 U.S., at 619—620,
87 S.Ct., at 1254—1255. Accordingly, the judgment before us should be
affirmed.

1

The primary effect of the agreement seems to have been to inhibit the
union from offering any other employer a more favorable contract. When
asked at trial whether another subcontractor could get an agreement on
any different terms, Local 100's business agent answered:
'No. The agreement says that no one will be given a more favorable
agreement. I couldn't, if I desired, as an agent, sign an agreement other
than the ones in existence between the local contractors and the Local 100.
'Q. I see. So that's—in other words, once you sign that contract with the
Mechanical Contractors' Association, that sets the only type of agreement
which your Union can enter into with any other mechanical contractors; is
that correct, sir?
'A. That is true.' Tr. 45—46.

2

3

There was no evidence that Local 100's organizing campaign was
connected with any agreement with members of the multiemployer
bargaining unit, and the only evidence of agreement among those
subcontractors was the 'most favored nation' clause in the collectivebargaining agreement. In fact, Connell has not argued the case on a theory
of conspiracy between the union and unionized subcontractors. It has
simply relied on the multiemployer agreement as a factor enhancing the
restraint of trade implicit in the subcontracting agreement it signed.
Meat Cutters v. Jewel Tea Co., 381 U.S. 676, 684—688, 85 S.Ct. 1596,
1599—1601, 14 L.Ed.2d 640 (1965) (opinion of White, J.); id., at 710 n.
18, 85 S.Ct., at 1614 (opinion of Goldberg, J.); cf. Vaca v. Sipes, 386 U.S.
171, 176—188, 87 S.Ct. 903, 909 916, 17 L.Ed.2d 842 (1967); Smith v.
Evening News Assn., 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962).

4

Section 8(e) provides:
'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 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: Provided further, That for the
purposes of this subsection and subsection (b) ((4)(B)) of this section the
terms 'any employer', 'any person engaged in commerce or an industry
affecting commerce', and 'any person' when used in relation to the terms
'any other producer, processor, or manufacturer', 'any other employer', or
'any other person' shall not include persons in the relation of a jobber,
manufacturer, contractor, or subcontractor working on the goods or
premises of the jobber or manufacturer or performing parts of an
integrated process of production in the apparel and clothing industry:
Provided further, That nothing in this subchapter shall prohibit the
enforcement of any agreement which is within the foregoing exception.'
29 U.S.C. § 158(e).

5
6

7

See H.R.Conf.Rep.No.1147, 86th Cong., 1st Sess., 39—40 (1959),
U.S.Code Cong. & Admin.News, p. 2318.
105 Cong.Rec. 17327 (1959) (remarks by Sen. Kennedy); id., at 17381
(remarks by Sens. Javits and Goldwater); id., at 15539 (memorandum by
Reps. Thompson and Udall); id., at 16590 (memorandum by Sen. Kennedy
and Rep. Thompson). These debates are reproduced in 2 NLRB,
Legislative History of the Labor-Management Reporting and Disclosure
Act of 1959, pp. 1377, 1385, 1576, 1708 (1959) (hereinafter Leg.Hist. of
LMRDA).
105 Cong.Rec. 17899 (1959) (remarks by Sen. Kennedy); id., at 18134
(remarks by Rep. Thompson); 2 Leg.Hist. of LMRDA 1432, 1721.

8

9

President Eisenhower's message to Congress recommending labor reform
legislation urged amendment of the secondary-boycott provisions to
permit secondary activity 'under certain circumstances, against secondary
employers engaged in work at a common construction site with the
primary employer.' S.Doc.No.10, 86th Cong., 1st Sess., 3 (1959)
(emphasis added). Various bills introduced in both Houses included such
provisions, see 2 Leg.Hist. of LMRDA 1912—1915, but neither the bill
that passed the Senate nor the one that passed the House contained a
Denver Building Trades provision. The Conference Committee proposed
to include such an amendment to § 8(b)(4)(B) in the Conference
agreement, along with a closely linked construction-industry exemption
from § 8(e). 105 Cong.Rec. 17333 (1959) (proposed Senate resolution), 2
Leg.Hist. of LMRDA 1383. But a parliamentary obstacle killed the § 8(b)
(4) (B) amendment, and only the § 8(e) proviso survived. See 105
Cong.Rec. 17728—17729, 17901—17903, 2 Leg.Hist. of LMRDA 1397
—1398, 1434—1436. References to the proviso suggest that the
Committee may have intended the § 8(e) proviso simply to preserve the
status quo under Carpenters v. NLRB (Sand Door), 357 U.S. 93, 78 S.Ct.
1011, 2 L.Ed.2d 1186 (1958), pending action on the Denver Building
Trades problem in the following session. See H.R.Rep.No.1147, supra, n.
5, at 39—40; 105 Cong.Rec. 17900 (1959) (report of Sen. Kennedy on
Conference agreement); 2 Leg.Hist. of LMRDA 1433. Although Senator
Kennedy introduced a bill to amend § 8(b)(4), S. 2643, 86th Cong., 1st
Sess. (1959), it was never reported out of committee.
See 105 Cong.Rec. 17881 (1959) (remarks by Sen. Morse); id., at 15541
(memorandum by Reps. Thompson and Udall); id., at 15551—15552
(memorandum by Sen. Elliott); id., at 15852 (remarks by Rep. Goodell);
see also id., at 20004—20005 (post-legislative remarks by Rep. Kearns); 2
Leg.Hist. of LMRDA 1425, 1577, 1588, 1684, and 1861.

10

11

12

13

14

Local 100 contends, unsoundly we think, that the NLRB has decided this
issue in its favor. It cites Los Angeles Building & Construction Trades
Council (B & J Investment Co.), 214 N.L.R.B. No. 86, 87 L.R.R.M. 1424
(1974), and a memorandum from the General Counsel explaining his
decision not to file unfair labor practice charges in a similar case, Plumbers
Local 100 (Hagler Construction Co.), No. 16—CC—447 (May 1, 1974).
In B & J Investment the Board approved, without comment, an
administrative law judge's conclusion that the § 8(e) proviso authorized a
subcontracting agreement between the Council and a general contractor
who used none of his own employees in the particular construction project.
The agreement in question may have been a prehire contract under § 8(f),
and it is not clear that the contractor argued that it was invalid for lack of a
collective-bargaining relationship. The General Counsel's memorandum in
Hagler Construction is plainly addressed to a different argument—that a
subcontracting clause should be allowed only if there is a pre-existing
collective-bargaining relationship with the general contractor or if the
general contractor has employees who perform the kind of work covered
by the agreement.
105 Cong.Rec. 6428—6429 (1959) (remarks of Sen. Goldwater); id., at
6648—6649 (remarks of Sen. McClellan); id., at 6664—6665 (remarks of
Sen. Goldwater); id., at 14348 (memorandum of Rep. Griffin); 2 Leg.Hist.
of LMRDA 1079, 1175—1176, 1191—1192, 1523.
H.R.Rep.No.1147, supra, n. 5, at 42; 105 Cong.Rec. 10104 (1959)
(memorandum of Sen. Goldwater); id., at 18128 (remarks by Rep.
Barden); 2 Leg.Hist. of LMRDA 1289, 1715. The NLRB has taken this
view. Operating Engineers Local 542, 142 N.L.R.B. 1132 (1963),
enforced, 331 F.2d 99 (CA3), cert. denied, 379 U.S. 889, 85 S.Ct. 161, 13
L.Ed.2d 93 (1964).
As noted above, supra, at 628-630, the garment-industry proviso reflects
different considerations. The text of the proviso and the treatment in
congressional debates and reports suggest that Congress intended to
authorize garment workers' unions to continue using subcontracting
agreements as an organizational weapon. See Danielson v. Joint Board,
494 F.2d 1230 (CA2 1974) (Friendly, J.).
Connell also has argued that the subcontracting agreement was subject to
antitrust sanctions because the construction-industry proviso authorizes
only voluntary agreements. The foundation of this argument is a
contention that § 8(b)(4)(B) forbids picketing to secure an otherwise
lawful 'hot cargo' agreement in the construction industry. Because we hold
that the agreement in this case is outside the § 8(e) proviso, it is
unnecessary to consider this alternative contention.

15

16

17

See H.R.Conf.Rep.No.510, 80th Cong., 1st Sess. (House Managers'
statement), 65—67 (1947); 93 Cong.Rec. 4757, 4770, 4834 4874 (1947)
(debates over Sen. Ball's proposal for antitrust sanctions and Sen. Taft's
compromise proposal for actual damages, which became § 303 of the
NLRA).
The dissenting opinion of Mr. Justice STEWART argues that § 303
provides the exclusive remedy for violations of § 8(e), thereby precluding
recourse to antitrust remedies. For that proposition the dissenting opinion
relies upon 'considerable evidence in the legislative materials.' Post, at
650. In our view, these materials are unpersuasive. In the first place,
Congress did not amend § 303 expressly to provide a remedy for
violations of § 8(e). See Labor-Management Reporting and Disclosure Act
of 1959, §§ 704(d), (e), 73 Stat. 544—545. The House in 1959 did reject
proposals by Representatives Hiestand, Alger, and Hoffman to repeal
labor's antitrust immunity. Post, at 650-654. Those proposals, however,
were much broader than the issue in this case. The Hiestand-Alger
proposal would have repealed antitrust immunity for any action in concert
by two or more labor organizations. The Hoffman proposal apparently
intended to repeal labor's antitrust immunity entirely. That the Congress
rejected these extravagant proposals hardly furnishes proof that it intended
to extend labor's antitrust immunity to include agreements with nonlabor
parties, or that it thought antitrust liability under the existing statutes
would be inconsistent with the NLRA. The bill introduced by Senator
McClellan two years later provides even less support for that proposition.
Like most bills introduced in Congress, it never reached a vote.
In most cases a decision that state law is pre-empted leaves the parties
with recourse only to the federal labor law, as enforced by the NLRB. See
Motor Coach Employees v. Lockridge, 403 U.S. 274, 91 S.Ct. 1909, 29
L.Ed.2d 473 (1971); San Diego Building Trades Council v. Garmon, 359
U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). But in cases like this one,
where there is an independent federal remedy that is consistent with the
NLRA, the parties may have a choice of federal remedies. Cf. Vaca v.
Sipes, 386 U.S. 171, 176—188, 87 S.Ct. 903, 909—915, 17 L.Ed.2d 842
(1967); Smith v. Evening News Assn., 371 U.S. 195, 83 S.Ct. 267, 9
L.Ed.2d 246 (1962).

18

19

1

Texas law is a good example. Vernon's Texas Rev.Civ.Stat.Ann., Arts.
5152 and 5153 (1971), declare that it is lawful for workers to associate in
unions and to induce other persons to accept or reject employment. Article
5154, however, referring to the preceding articles, provides: 'Nothing
herein shall be construed to repeal, affect or diminish the force and effect
of any statute now existing on the subject of trusts, conspiracies against
trade, pools and monopolies.' The Texas antitrust statutes prohibit, among
other specified agreements, trusts, and monopolies, any combination of
two or more persons to restrict 'the free pursuit of a lawful business.'
Tex.Bus. & Comm.Code §§ 15.02—15.04 (1968) V.T.C.A.
In addition to seeking a declaratory judgment that the agreement with
Local 100 violated the antitrust laws, Connell sought a permanent
injunction against further picketing to coerce execution of the contract in
litigation. Connell obtained a temporary restraining order against the
picketing on January 21, 1971, and thereafter executed the contract—
under protest—with Local 100 on March 28, 1971. So far as the record in
this case reveals, there has been no further picketing at Connell's
construction sites. Accordingly, there is no occasion for us to consider
whether the Norris-LaGuardia Act forbids such an injunction where the
specific agreement sought by the union is illegal, or to determine whether,
within the meaning of the Norris-LaGuardia Act, there was a 'labor
dispute' between these parties. If the Norris-LaGuardia Act were
applicable to this picketing, injunctive relief would not be available under
the antitrust laws. See United States v. Hutcheson, 312 U.S. 219, 61 S.Ct.
463, 85 L.Ed. 788 (1941). If the agreement in question is held on remand
to be invalid under federal antitrust laws, we cannot anticipate that Local
100 will resume picketing to obtain or enforce an illegal agreement.
Before 1932 this Court had held that secondary strikes and boycotts were
not exempt from the coverage of the antitrust laws. E.g., Duplex Printing
Press Co. v. Deering, 254 U.S. 443, 41 S.Ct. 172, 65 L.Ed. 349; Bedford
Cut Stone Co. v. Journeymen Stone Cutters' Assn., 274 U.S. 37, 47 S.Ct.
522, 71 L.Ed. 916. Duplex and its progeny were overruled by Congress
with passage of the Norris-LaGuardia Act, 47 Stat. 70. See Milk Wagon
Drivers' Union v. Lake Valley Farm Products, Inc., 311 U.S. 91, 100—103, 61 S.Ct. 122, 126—128, 85 L.Ed. 63; United States v. Hutcheson,
312 U.S. 219, 229—231, 235—237, 61 S.Ct. 463, 464—466, 467—469,
85 L.Ed. 788.

2

3

4

The Act added § 8(b)(4) to the National Labor Relations Act, making it an
unfair labor practice for a labor organization or its agents 'to engage in, or
to induce or encourage the employees of any employer to engage in, a
strike or a concerted refusal in the course of their employment to use,
manufacture, process, transport, or otherwise handle or work on any
goods, articles, materials, or commodities or to perform any services,
where an object thereof is: (A) forcing or requiring any employer or selfemployed person to join any labor or employer organization or any
employer or other person to cease using, selling, handling, transporting, or
otherwise dealing in the products of any other producer, processor, or
manufacturer or to cease doing business with any other person . . ..' 61
Stat. 141.
The amendment introduced by Senator Ball provided in part that the
Clayton Act and the Norris-LaGuardia Act 'shall not be applicable in
respect of violations of subsection (a) (defining prohibited secondary
conduct), or in respect of any contract, combination, or conspiracy, in
restraint of commerce, to which a labor organization is a party, if one of
the purposes of such contract, combination, or conspiracy is to fix prices,
allocate customers, restrict production, distribution, or competition, or
impose restrictions or conditions upon the purchase, sale or use of any
material, machines, or equipment.' 93 Cong.Rec. 4757 (1947).
Section 303 of the Labor Management Relations Act of 1947, 61 Stat. 158
—159, provided:
'(a) It shall be unlawful, for the purposes of this section only, in an
industry or activity affecting commerce, for any labor organization to
engage in, or to induce or encourage the employees of any employer to
engage in, a strike or a concerted refusal in the course of their employment
to use, manufacture, process, transport, or otherwise handle or work on
any goods, articles, materials, or commodities or to perform any services,
where an object thereof is—
'(1) forcing or requiring any employer or self-employed person to join any
labor or employer organization or any employer or other person to cease
using, selling, handling, transporting, or otherwise dealing in the products
of any other producer, processor, or manufacturer, or to cease doing
business with any other person;
'(b) Whoever shall be injured in his business or property by reason o(f) any
violation of subsection (a) may sue therefor in any district court of the
United States subject to the limitations and provisions of section 301
hereof without respect to the amount in controversy, or in any other court
having jurisdiction of the parties, and shall recover the damages by him
sustained and the cost of the suit.'

5

Section 8(b)(4) of the National Labor Relations Act, as amended by the
Labor-Management Reporting and Disclosure Act of 1959, 73 Stat. 519,
542—543, now provides in part that it shall be an unfair labor practice for
a labor organization or its agents:
'(4)(i) to engage in, or to induce or encourage any individual employed by
any person engaged in commerce or in an industry affecting commerce to
engage in, a strike or a refusal in the course of his employment to use,
manufacture, process, transport, or otherwise handle or work on any
goods, articles, materials, or commodities or to perform any services; or
(ii) to threaten, coerce, or restrain any person engaged in commerce or in
an industry affecting commerce, where in either case an object thereof is—
'(A) forcing or requiring any employer or self-employed person to join any
labor or employer organization or to enter into any agreement which is
prohibited by subsection (e) of this section . . ..' 29 U.S.C. § 158(b)(4).

6

Section 303, as amended by the Labor-Management Reporting and
Disclosure Act of 1959, 73 Stat. 519, 545, now provides:
'(a) It shall be unlawful, for the purpose of this section only, in an industry
or activity affecting commerce, for any labor organization to engage in any
activity or conduct defined as an unfair labor practice in section 158(b)(4)
of this title.
'(b) Whoever shall be injured in his business or property by reason o(f) any
violation of subsection (a) of this section may sue therefor in any district
court of the United States subject to the limitations and provisions of
section 185 of this title without respect to the amount in controversy, or in
any other court having jurisdiction of the parties, and shall recover the
damages by him sustained and the cost of the suit.' 29 U.S.C. § 187.

7

Indeed, Connell's original state-court complaint was filed before Connell
had signed any agreement with Local 100. See ante, at 620. At that point it
was apparent that the primary reason for the lawsuit was Connell's request
for an injunction to stop the union's picketing.

8

If, contrary to the Court's conclusion, see ante, at 626-633, Congress
intended what it said in the proviso to § 8(e), then the subcontracting
agreement is valid and, under the view of the Board and those Courts of
Appeals that have considered the question, Local 100's picketing to obtain
the agreement would also be lawful. See, e.g., Orange Belt District
Council of Painters v. NLRB, 117 U.S.App.D.C. 233, 236, 328 F.2d 534,
537; Construction Laborers v. NLRB, 323 F.2d 422 (CA9); Northeastern
Indiana Bldg. Trades Council, 148 N.L.R.B. 854, enforcement denied on
other grounds, 122 U.S.App.D.C. 220, 352 F.2d 696. Connell would
therefore have neither a remedy under § 303 nor one with the Board.
It would seem necessarily to follow that conduct specifically authorized by
Congress in the National Labor Relations Act could not by itself be the
basis for federal antitrust liability, unless the Court intends to return to the
era when the judiciary frustrated congressional design by determining for
itself 'what public policy in regard to the industrial struggle demands.'
Duplex Printing Press Co. v. Deering, 254 U.S. 443, 485, 41 S.Ct. 172,
183, 65 L.Ed. 349 (Brandeis, J., dissenting). See United States v.
Hutcheson, 312 U.S. 219, 61 S.Ct. 463, 85 L.Ed. 788. In my view,
however, even if Local 100's conduct was unlawful, Connell may not seek
to invoke the sanctions of the antitrust laws. Accordingly, I find it
unnecessary to decide in this case whether the subcontracting agreement
entered into by Connell and Local 100 is within the ambit of the
construction-industry proviso to § 8(e), and if it is, whether it was
permissible for Local 100 to utilize peaceful picketing to induce Connell
to sign the agreement.

9

If Connell and Local 100 had entered into a purely voluntary 'hot cargo'
agreement in violation of § 8(e), an injured nonunion mechanical
subcontractor would have no § 303 remedy because the union would not
have engaged in any § 8(b)(4) unfair labor practice. The subcontractor,
however, would still be able to seek the full range of Board remedies
available for a § 8(e) unfair labor practice. Moreover, if Connell had truly
agreed to limit its subcontracting without any coercion whatsoever on the
part of Local 100, the affected subcontractor might well have a valid
antitrust claim on the ground that Local 100 and Connell were engaged in
the type of conspiracy aimed at third parties with which this Court dealt in
Allen Bradley Co. v. Electrical Workers, 325 U.S. 797, 65 S.Ct. 1533, 89
L.Ed. 1939. At the very least, an antitrust suit by an injured subcontractor
under circumstances in which Congress had failed to provide any form of
private remedy for damage resulting from an illegal 'hot cargo' agreement
would present a very different question from the one before us—a question
which it is not now necessary to answer. Cf. Meat Cutters v. Jewel Tea
Co., 381 U.S. 676, 708 n. 9, 85 S.Ct. 1607, 1613, 14 L.Ed.2d 640 (opinion
of Goldberg, J.).
On the other hand, the signatory of a purely voluntary agreement that
violates § 8(e) is fully protected from any damage that might result from
the illegal 'hot cargo' agreement by his ability simply to ignore the contract
provision that violates § 8(e). If the union should attempt to enforce the
illicit 'hot cargo' clause through any form of coercion, the employer may
then bring a § 303 damages suit or may file an unfair labor practice charge
with the Board. See 29 U.S.C. § 158(b)(4)(B). Since § 8(e) provides that
any prohibited agreement is 'unenforcible and void,' any union effort to
invoke legal processes to compel the neutral employer to comply with his
purely voluntary agreement would obviously be unavailing.

10

11

12

The legislative proceedings leading to the passage of the LaborManagement Reporting and Disclosure Act of 1959 (the Landrum-Griffin
Act), 73 Stat. 519, began in January 1959 when Senator John Kennedy
introduced S. 505, 86th Cong., 1st Sess. In March 1959 Senator Kennedy
introduced S. 1555, incorporating 46 amendments to S. 505 made by the
Committee on Labor and Public Welfare. S. 1555, with various additional
amendments, was approved by the Senate on April 25, 1959, and sent to
the House, where it was referred to the Committee on Education and
Labor. On July 30, 1959, the House Committee favorably reported H.R.
8342, 86th Cong., 1st Sess. One week earlier H.R. 8400 and H.R. 8401,
identical bills, were introduced in the House by Representatives Landrum
and Griffin, respectively. The House voted on August 13, 1959, to
substitute the text of H.R. 8400 for the text of the House Committee bill,
and the Landrum-Griffin bill was then inserted by the House in S. 1555 in
lieu of its provisions. The Conference made several substantive changes in
the Landrum-Griffin bill, which was then passed by both the House and
Senate and approved by the President. See generally 1 Leg.Hist. of
LMRDA vii xi.
Representative Hiestand, during House debate on the report of the
Conference Committee, recommended adoption of the bill as amended by
the Conference and complimented Representatives Landrum and Griffin
for their efforts in guiding the bill through Congress. But in expressing
concern over the fact that the legislation did not restore antitrust sanctions
for union secondary activity and other anticompetitive restraints of trade,
he warned: '(W)e should act today with full knowledge that passage of the
Landrum-Griffin Bill will not solve every problem. The heart of the
problem, the very heart, is the sheer power in the hands of labor union
leaders due to their above-the-law status with respect to our antimonopoly
laws.' 105 Cong.Rec. 18132; 2 Leg.Hist. of LMRDA 1719.
Section 2(b)(2) of Senator McClellan's bill, S. 2573, 87th Cong., 1st Sess.,
provided that the Sherman Act be amended to read in part:
'Notwithstanding any other provision of law, every contract, agreement, or
understanding, express or implied, between any labor organization and any
employer engaged in the transportation of persons or property, whereby
such employer undertakes to cease, or to refrain from, purchasing, using,
selling, handling, transporting, or otherwise dealing in any of the products
or services of any producer, processor, distributor, supplier, handler, or
manufacturer which are distributed in trade or commerce in any territory of
the United States or the District of Columbia, or between any such
territory and another, or between any such territory or territories and any
State or States or the District of Columbia or with foreign nations, or
between theDistrict of Columbia and any State or States or foreign nations,
or to cease doing business with any other person shall be unlawful.'

13

I fully agree with the Court's conclusion, ante, at 635-637, that federal
labor law preempts the state law that Connell sought to apply to Local
100's secondary activity in this case.

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