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SUPREME COURT OF THE UNITED STATES

Syllabus

CONNELL CONSTRUCTION CO., INC. v. PLUMBERS & STEAMFITTERS LOCAL UNION NO. 100, UNITED ASSOCIATION OF JOURNEYMEN & APPRENTICES OF THE PLUMBING & PIPEFITTING INDUSTRY OF THE UNITED STATES AND CANADA, AFL-CIO

412 U.S. 616

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 73-1256. Argued November 19, 1974 -- Decided June 2, 1975

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 (1) 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, 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 "hotcargo" 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.

. 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, reversed in part, affirmed in part, and remanded.

Powell, J., delivered the opinion of the Court, in which Burger, C. J., and White, Blackmun, and Rehnquist, JJ., joined. Douglas, J., filed a dissenting opinion, post, p. 638. Stewart, J., filed a dissenting opinion, in which Douglas, Brennan, and Marshall, JJ., joined, post, p. 638.



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