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521 F.2d 885 (C.A.D.C.)

union's activities into "disputes not his own."20 Section 8(b)(4)(B) was seen as an accommodation between the "dual congressional objectives of preserving the right of labor organizations to bring pressure to bear on offending employers in primary labor disputes and of shielding unoffending employers and others from pressures in controversies not their own." The Board acknowledges that the neutrality of the employer against whom pressure is directly exerted is critical to the distinction between primary and secondary activity. It nevertheless comes to the remarkable conclusion that an employer like Hudik-Ross, which is struck by its own employees for the purpose of enforcement of a clause in its collective bargaining agreement with these employees which preserves work which the employees have traditionally performed, is the type of innocent neutral which the Supreme Court says Section 8(b)(4)(B) was fashioned to protect. We cannot agree with the Board's portrayal.

To assert that Hudik-Ross is a neutral bystander innocently caught up

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in the union's attempts to achieve its objectives by changing Austin's policy of purchasing prefabricated climate control units is to ignore the realities of this labor conflict and the process by which Hudik-Ross was confronted with conflicting contractual commitments. The Hudik-Ross management did not innocently awake one day to find itself in the midst of this dispute. The management had negotiated, presumably in good faith, a collective bargaining agreement which obligated Hudik-Ross to preserve for its employees the work of cutting and threading internal piping on the climate control units which these employees were to install. When the management subsequently executed a

201d. at 620, 626, 87 S.Ct. 1250.

Id. at 626-27, 87 S. Ct. at 1259 quoting N.L.R.B. v. Denver Bldg. & Constr. Trades Council, 341 U.S. 675, 692, 71 S.Ct. 943, 95 L. Ed. 1284 (1951). The dissenting judges delve into the legislative history of §§ 8(b)(4)(B) and 8(e) to prove that Congress was particularly concerned with installation abuses and thereby to prove that the refusal to install the prepiped units was illegal secondary activity. See, e. g., dissenting op., at 172 U.S. App. D.C. at-, 521 F.2d at 922-925. However the National Woodwork Court has already thoroughly canvassed this legislative history, see generally 386 U.S. at 620-44, 87 S.Ct. 1250, and has concluded that the refusal to install prefabricated products is proper if the pressure is exerted against an employer who is not a neutral in the dispute. Merely characterizing the controversy as one involving purported installation abuses (and generally in the context of union action initiated with the objective of expanding the union's representational jurisdiction, see e.g., dissenting op., 172 U.S.App. D.C. at—, 521 F.2d at 923-924) does not lead to the delphic conclusion that the pressure in this case is tainted secondary activity.

Local 438, Plumbers & Pipe Fitters, 201 NLRB 59, 61 (1973); brief for the NLRB at 4. See also, e. g., dissenting op., 172 U.S. App. D.C. at-, 521 F.2d at 922.

521 F.2d 885 (C.A.D.C.)

contract with Austin which it was fully aware would require its employees to install units on which these employees had not done the internal piping, it could hardly have expected the employees to acquiesce in the blatant violation of their contractual rights.23 As we emphasized in Local 742, supra, "The legal effect of the Board's test is to allow an employer to bind his own hands and thereby immunize himself from union pressure occasioned by his employees' loss of work. In one act, the employer helps to create a labor conflict and simultaneously wash his hands of it."24 Hudik-Ross could have totally avoided the labor dispute merely by honoring its bargaining agreement and not bidding on a contract which required it to breach the valid work preservation provision it had negotiated with the union.25 Thus, to accept

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the Board's characterization of Hudik-Ross as a neutral

23 Indeed, the terms of the collective bargaining agreement itself provide internal indicia that Hudik-Ross is not a neutral to this dispute. Article One of that agreement specifies that both parties are to abide by certain rules governing wages, hours, "and other conditions of employment." JA at 210. Rule IX is among those to which both sides agreed to be bound. JA at 213. Article Two of the agreement then stipulates that strikes or lockouts are to be prohibited, but only "so long as this agreement and the rules hereto attached are conformed to by both parties." JA at 210 (emphasis added). Hudik-Ross must therefore have realized that it had contractually acknowledged the union's right to strike in the situation presented to us. Indeed, it is curious that Hudik-Ross, the "neutral" that was supposedly injured by being dragged into a "labor dispute not its own," did not file the charge of an unfair labor practice; rather, it was filed by the general contractor, Austin. Perhaps Hudik-Ross perceived the injustice that would result if it attempted to have the Board directly rectify Hudik-Ross' breach of contract; perhaps it merely sought to avoid the exacerbation of labor relations that would result by adding this insult to the injury it had previously inflicted on the union. We appreciate the fact that a contractual provision cannot immunize either an employer or a union from an unfair labor practice charge. See, e.g., Radio Officers' Union v. N.L.R.B., 347 U.S. 17, 74 S. Ct. 323, 98 L. Ed. 455 (1954). However, we see no justification for converting this dispute over enforcement of a valid contractual provision, in which the union lawfully strikes in accordance with an explicit bargaining clause, into an unfair labor practice proceeding before the Board.

24Local 742, Carpenters v. N.L.R.B., supra note 9, 144 U.S.App.D.C. at 24, 444 F.2d at 899.

25 We do not believe that this restriction unduly ties an employer's hands concerning managerial decisions. Hudik-Ross could have, and still can, negotiate collective bargaining agreements which exempt from the work preservation clause work over which it does not have legal control. Indeed, on remand the Board is free to reconsider whether the parties to the agreement actually intended the cutting, threading, and installation of the internal piping of the climate control units to fall within its scope in the situation here presented. The dissent implies that the ALJ has already made a finding that the parties to the bargaining agreement did not so intend, and that the Board implicity upheld this finding. See, e. g., dissenting op., 172 U.S. App. D.C. at— 521 F.2d at 927-928, 940, & nn. 71 & 106. However, the dissent recognizes that the ALJ declined to rely on his "opinion" that Rule IX "necessarily implied that it referred to pipe within Hudik's control," See JA at 237. Dissenting op. at n.7. In any event, the ALJ's "opinion" appears to be premised on his views of the ultimate merits of the right to control doctrine rather than on any expertise in interpreting collective bargaining agreements, and would appear to be contradicted by the plain language of the agreement, which stipulates that "[r]adiator branches, convector branches and coil connectors shall be cut and threaded by hand on the job * *" JA at 233 (emphasis added). The Board accepted the fact that the work stoppage was motivated by the desire to preserve traditional unit work, and we therefore do not believe it accepted any finding (to the extent one may have been made) that this work was not intended to be included within the ambit of Rule IX. See also text appended to dissenting op. Figure 1. In any event, custom and tradition in the industry must also be looked to in determining the intent of the parties with respect to what work is to be preserved, even in the absense of an explicit work preservation provision. See Local 742, Carpenters v. N.L.R.B., supra note 9, 144 U.S.App. D. C. at 224, 444 F.2d at 899. Moreover, given the record now before us, when the Board on remand analyzes "not only the situation the pressured employer finds himself in but also how he came to be in that situation," in order to determine whether he is an "unoffending party," see Local 438, Plumbers and Fitters, supra note 4, 201 NLRB at 64, it must consider whether Hudik-Ross knowingly entered the second contract in contravention of the prior one. It is important to recognize that Hudik-Ross' refusal to bid on the Austin contract, in compliance with its collective

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521 F.2d 885 (C.A.D.C.)

bystander under these circumstances would allow the "Cinderella-like transformation of an obviously in

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volved party, "26 and would both render nugatory the commitment which Hudik-Ross made27 and demean the collec

bargaining agreement, would indeed serve work preservation goals. This point is often misunderstood. For example, the ALJ in this case asked rhetorically: "[I]f Hudik, an employer of union steamfitters, does not bid on jobs and does not secure subcontracts, how does such a situation preserve or increase work for Hudik's union steamfitters[?]" JA at 240. Yet he had unknowingly answered that question himself earlier in his opinion: "If prepaid [sic] units cannot be installed *** Austin and other engineers and general contractors will not specify their purchase and use in buildings." JA at 239. The union certainly expected the work preservation clause to be complied with. Like the ALJ, it knew such clauses would in fact subserve its legitimate end of ensuring that its members could continue to perform in the future the work they had traditionally performed in the past. Of course, it is also true that Hudik-Ross and similar employers could bid on a subcontract specifying prefabricated products and still satisfy a union's work preservation goals, but in this latter situation they would probably be subserved by negotiation of a monetary settlement that would partially compensate the employees for their lost work. See 172 U.S.App. D.C. — 521 F.2d pp.898-900 & note 34 infra. It should also be noted that the dissent, apparently oblivious to the fact that Hudik-Ross could take this latter tack, compounds its error by making the statement, which has no support in the record, that “Hudik could not decline to bid on projects with prefabrication specifications and continue to be a compoetitive subcontractor." Dissenting op., 172 U.S.App.D.C. at-, 521 F.2d at 928. If this were actually the case, one might wonder why Hudik-Ross contractually bound itself to such an allegedly self-destructive course. Although the Board rejected the ALJ's misconception that Rule IX was not designed for work preservation purposes in these circumstances, a similar fallacious belief may lie at the root of its right to control doctrine. In its brief to the Supreme Court in National Woodwork, in supporting its claim that the union had not violated § 8(b)(4)(B), the Board stated: "[T]his provision (in the bargaining agreement in National Woodwork was a lawful work preservation clause, reflecting the Union's policy of preserving for jobsite carpenters work which they have performed for over 80 years. Since Frouge had failed to abide by this lawful contract provision, the Union had a legitimate dispute with him; and, since he was not required by any arrangement with the project owner to use pre-cut doors, Frouge was in a position to accede to the Union's demands without having contract relations severed or even directly affected. Accordingly, by refusing to handle pre-cut doors for Frouge, the Union confined its activity to the employer with whom it had its basic dispute, and its activity was therefore primary."

Brief for the NLRB at 5-6 (emphasis added). If the Board is serious about its characterization of the union/Hudik-Ross provision as a valid work preservation clause, the logic of National Woodwork should mandate a conclusion that the union's activity in our case is lawful. In both National Woodwork and this case, there was a valid work preservation clause. In both National Woodwork and this case, the employer could comply with the union's demands before breaking the contract. And, contrary to the Board's assertion, in both National Woodwork and this case, some third party would inevitably be affected by compliance after the contract was broken. Admittedly, only a manufacturer was involved in National Woodwork whereas this case involves both a manufacturer and a general contractor. But that cannot obscure the fact that for all relevant analytical purposes the situation of the two employers is identical. See also note 28 infra.

A final misconception concerning work preservation agreements between subcontractors and unions is that exhibited by the dissent, see e. g., dissenting op., 172 U.S.App. D. C. at-521, F.2d at 921-922, 928, and by the recent panel opinion in the Ninth Circuit, see Associated General Contractors of California, Inc. v. N.L.R.B. supra note 3, 514 F.2d at 435. This misconception involves the belief that when a subcontractor's employees request that when a contruction contract specifies prefabricated products the subcontractor either not bid on the contract or else compensate them for their lost work, they are not seeking to preserve traditional work but are attempting to acquire additional work. However, by the very nature of subcontract bidding, a subcontractor will always be acquiring work when he bids on a project; the characterization of union activity as having a work preservation objective must therefore depend on whether it is the type of unit work which the employees have traditionally performed, not whether they actually performed the particular work in question. And as indicated above, enforcement of a work preservation clause is designed to protect such traditional work whether the subcontract specifications themselves required that the traditional work be replaced by prefabrication or whether the specifications granted to the subcontractor discretion to displace the employees' traditional work. In both situations the union seeks to prevent elimination of employees' work through factory prefabrication or, at a minimum, to prevent their employer from lending active support to elimination of that work.

Local 742, Carpenters v. N.L.R.B., supra note 9, 144 U.S.App.D.C. at 24, 444 F.2d at 899. 27As Judge Lasker observed in a similar situation:

"It would be unthinkable to apply the 'right to control' test to facts such as those just outlined. To do so would be to encourage subcontractor employers to undermine their collective bargaining agreements by actively soliciting contracts whose very terms called for conduct violative of those trade agreements * * Manufacturers and general contractors, too, would be tempted to insert all manner of specification and standard[s] into their licenses and contracts with a total disregard of subcontractors' commitments to their respective unions."

Danielson v. Painters Dist. Council No. 20, supra note 3, 305 F.Supp. at 1115.

521 F.2d 885 (C.A.D.C.)

tive bargaining process which is the cornerstone of labor relations in the United States.28

The Board insists on closing its eyes to the circumstances surrounding the creation of this labor dispute, circumstances which belie the assertion that Hudik-Ross is a neutral caught between the contending forces really involved in the work preservation controversy.29 In

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stead, it reasons that, since "[the subcontractor] had no past, present, or future authority to award this work to the Respondents, their actions here must have been undertaken to produce their effect elsewhere,"30 and thus must violate Section 8(b)(4)(B).31 From the premise that it is

28Cf., e.g., International Union of Electrical Workers v. N.L.R.B., 138 U.S.App. D.C. 249, 255, 426 F.2d 1243, 1249, cert. denied, 400 U.S. 950, 91 S.Ct. 239, 27 L.Ed.2d 256 (1970).

In its brief for respondent NLRB at 26, which it filed in National Woodwork, the Board stated: "[W]here, as here, the union is opposed to a product, not because of its price or its design, but because it deprives the employees whom the union represents of work which they have traditionally performed, there is a sufficiently direct connection between the product and employment security to bring the question respecting the use of that product within the area of mandatory bargaining under the Act.”

However, in its Koch opinion the Board distinguished National Woodwork and Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S. 203, 85 S.Ct. 398, 13 L. Ed. 2d 233 (1964), from a situation where the employer lacks power to assign the work sought to be preserved:

"The situation here is radically different since Phillips never initially had the disputed work and thus obviously could not have contracted away that which it never had and could not have been ordered to bargain over that which it never had." 201 NLRB at 63 n.22 We fail to comprehend the logic of this assertion. Certainly Phillips in that case and Hudik-Ross in our case were free to agree not to execute other contracts which would require them to force their employees to handle prefabricated goods. This is effectively what a work preservation clause requires in the present situation. Although we do not reach the substantial question whether employers could be forced to bargain over such clauses, we find that, having negotiated and agreed to such a clause, Hudik-Ross must abide by it; nothing in the Act or the Supreme Court's decision in National Woodwork requires that an employer be allowed to escape such a freely-undertaken obligation merely by unilaterally executing subsequent contracts.

29 The Board's holding has the potential for unnecessarily harsh or excessively disruptive results. Although the ALJ found that Austin and Slant/Fin were the primary employers for purposes of the work preservation dispute with the union, the Board declined to decide whether the union could therefore have exerted direct pressure against them. See JA at 254 n.1. It is thus possible that the Board is prepared to accept the position advanced by amicus curiae Chamber of Commerce of the United States that, unless the target of the strike has both the power to control the work assigned and a bargaining relationship with the union, the union's economic pressures are illegal secondary activity. In the present case there would thus be no primary employer; indeed, in most subcontracting situations the subcontractor's employees would be deprived of all economic weapons and all legal mechanisms for preserving their traditional work against onrushing technological changes. We do not find it necessary to rule on whether the union could have exerted pressure directly against Austin or Slant/Fin. However, we do note that interpreting § 8(b)(4)(B) so that, in a situation where a union is motivated by a single lawful goal, it is nevertheless adjudged guilty of secondary activity without there being some employer against whom it could have exerted pressure gives the section a harshness which has not heretofore been suggested by its most aggressive proponents. Certainly nothing in § 8(b) compels such a result.

On the other hand, when a union's sole objective is work preservation, it would be anomalous to allow it to press its demands on a general contractor with whom it has no on-going relationship. Rather than limit the scope of labor disputes consonant with the congressional intent expressed in § 8(b)(4), such a result is likely to expand them since it would probably affect all subcontractors on a jobsite. The National Woodwork Court tacitly accepted work preservation as a legitimate subject of mandatory collective bargaining, within the "wages, hours, and other terms and conditions of employment" language of §§ 8(d) and 9(a) of the National Labor Relations Act. See 386 U.S. at 642-43, 87 S.Ct. at 1267; not 28 supra. Disputes over such subjects are best resolved within the bargaining unit encompassing the contending parties. See also Connell Constr. Co. v. Plumbers & Steamfitters Local No. 100, 421 U.S. 616, 95 S.Ct. 1830, 44 L.Ed.2d 418 (1975).

Although our holding that the right to control test must be rejected is not based on the above considerations, we find that they shed light on Hudik-Ross' actual involvement with the subject matter of this labor dispute.

30See Local 438, Plumbers & Pipe Fitters, supra note 4, 201 NLRB at 62.

31See National Woodwork, 386 U.S. at 645, 87 S.Ct. 1250.

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"reasonable to hold that the object of the union was not an impossible act but was the alternative possible," the Board reaches what it considers to be an ineluctable conclusion that "where the pressured employer cannot himself accede to the union's wishes, the pressure is secondary because it is undertaken for its effect elsewhere." But rhetoric and rationalization are no substitute for substantial evidence. Even ignoring Hudik-Ross' actions in initially bidding on the subcontract, the fallacy of the

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Board's conclusion is readily apparent. For even if one focuses narrowly on the point in time when Hudik-Ross had already executed its second contract, one can clearly see that it was possible for Hudik-Ross to settle the labor dispute which it had created. The record is void of any suggestion that Hudik-Ross attempted to negotiate a compromise with the union under which the union would have agreed to install the climate control units in exchange for extra pay or other special benefits. 34 If the Board's finding

32Local 438, Plumbers & Pipe Fitters, supra note 4, 201 NLRB at 62 n. 14, quoting Ohio Valley Carpenters Dist. Council v. N.L.R.B., 339 F.2d 142, 145 (6th Cir. 1964).

33201 NLRB at 63. See also George Koch Sons, Inc. v. N.L.R.B., supra note 4, 490 F.2d at 327. Indeed the whole affirmative case that the Board makes for the right to control doctrine is found in a single simplistic paragraph of its Koch opinion:

"By the contract under which [the subcontractor] Phillips was to perform its work at the G. E. site or not perform any work at all, Phillips was contractually required to utilize in its work certain prefabricated pipe which had not been worked on by the employees the [union] Respondents represented. Thus, although the Respondent's claim of work preservation was indeed valid, Phillips by its contract with [the general contractor] Koch had no power to give the Respondents the work they sought, since such work was never Phillips' to award in the first place. And as Phillips had no past, present, or future authority to award this work to the Respondents, their actions here must have been undertaken in order to produce their effects elsewhere. Therefore, since the pressure directed at Phillips was undertaken for its effect elsewhere, such activity was secondary even though Phillips was the immediate employer here. As the Supreme Court itself said in National Woodwork, "In effect Congress in enacting § 8(b)(4)(A) of the Act (hence this holds for the present Section 8(b)(4)(B)) . . . barred as a secondary boycott union activity directed against a neutral employer, including the immediate employer when in fact the activity directed against him was carried on for its effect elsewhere."

201 NLRB at 62 (emphasis added; footnotes omitted).

As our opinion elaborates, we remain bewildered as to how Hudik-Ross may be characterized as "neutral" when it executed its contract with Austin in violation of a concededly valid work preservation clause. Nor can we understand how the union's refusal to acquiesce in that violation must indicate that its objectives were "directed elsewhere", particularly since Hudik-Ross could itself satisfy the union's demands, whether by negotiating a compromise with the union or, as in National Woodwork, terminating its tainted contract with Austin.

34Hudik-Ross was free to engage the union in negotiations either before or after it had accepted the subcontracting work. Such negotiations could have centered on an appropriate compromise payment that employees would receive for installing the prefabricated units, although other bargaining solutions were possible. For example, when the collective bargaining agreement was originally accepted the union may have given up demands for additional vacation time or other fringe benefits in order to receive the work preservation guarantee; Hudik-Ross could have achieved a settlement with the union by making concessions on such matters as a quid pro quo for the union's relaxation of the strictures of Rule IX. Alternatively, Hudik-Ross could have sought an arbitrated solution of the controversy. we cannot understand how, in the absence of such initiatives, Hudik-Ross may be labeled an innocent bystander. The Board appears to place the burden of finding such peaceful resolutions on the union, but we believe that Hudik-Ross, which was the culpable party in generating the controversy, had an obligation to reconcile its actions with its contractual commitments. If Hudik-Ross desires protection from work preservation pressures in the future, it need only negotiate an agreement that incorporates a no

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