The opinion of the court was delivered by: QUACKENBUSH
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT WASHINGTON PUBLIC POWER SUPPLY SYSTEM'S MOTION TO DISMISS AND DEFENDANT'S JOHN MORRIS, MCA, BECHTEL, J. A. JONES, BURNS & ROE, BOVEE & CRAIL AND WPPSS' MOTIONS FOR SUMMARY JUDGMENT.
Plaintiffs are a labor union and its employees. They maintain that Defendants are liable for damages due to a course of conduct that allegedly violated the Sherman Act §§ 1 and 2. For this, Plaintiffs invoke the remedies of treble damages and injunction pursuant to 15 U.S.C. §§ 15 and 26. The Court assumed jurisdiction over the case under these statutes and 28 U.S.C. § 1337.
This case is set in the area of the nuclear power facility construction ongoing at Hanford in eastern Washington. Washington Public Power Supply System (WPPSS), a defendant, owns and operates one of the relevant nuclear plant sites at Hanford. The other relevant site is owned and operated by the U. S. Department of Energy (formerly ERDA), not a party.
Local Union 598 (Local), a Plaintiff, is an affiliate of the United Association of Journeymen and Apprentices, AFL-CIO (UA). Local's primary business is to represent plumbing and pipefitting employees and to negotiate collective bargaining agreements regarding wages, hours, and conditions of employment within eastern Washington.
Defendant Mechanical Contractors Association (MCA) is a multi-employer collective bargaining agent for mechanical contractor firms. It collectively bargains with Local. J. A. Jones is the only Defendant firm which belongs to MCA. Robert Morris was MCA's executive vice-president during relevant times. Bovee and Crail (B & C) and Bechtel are contractors who, like J. A. Jones, compete in national markets but, unlike Jones, belong to the National Contractors Association (NCA). Burns & Roe is WPPSS' project manager and architect and belongs to NCA. NCA, not a party, negotiates national collective bargaining agreements with Local's parent union-UA. Such a national agreement, binding upon the NCA member Defendants, existed during the period of time relevant to this case.
The NCA-UA (national) agreement subjected B & C, Bechtel, and Burns and Roe to the results of local collective bargaining in the geographical area of the particular jobsite. Thus, although NCA members did not participate in MCA, they had a vital economic interest in MCA negotiations with Local. WPPSS also had such an interest derived from contract provisions with major site contractors allowing wage increases to "pass through" to WPPSS. So far as these Defendants were concerned, wages, overtime rates, fringe benefit contributions, work days, and holidays all would be determined between Local and MCA through the collective bargaining process as pertains to pipefitters in eastern Washington. Facilitating and underscoring the convergence of these economic interests was Article XX in the national agreement. Article XX permitted NCA members to stop work and lockout in the event of an area strike instituted over local contract negotiations. The facts of this case developed in the context of such local negotiations.
National labor policy depends upon collective bargaining agreements and the process for reaching them as a primary means of achieving the desideratum of industrial peace and stability. More so than other forms of agreements, collective bargaining agreements contemplate a continuing relationship between the parties within the functional framework created in these agreements. Resolution of disputes is the goal rather than tolerance of disharmony and vindictiveness resulting in the idling both of business and employees. See, United Steelworkers v. Warrior & Gulf, 363 U.S. 574, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960). Indeed, employers and unions have an explicit statutory obligation to meet and bargain with one another in good faith" ... with respect to ... (inter alia) the negotiation of an agreement, or any question arising thereunder ..." 29 U.S.C. § 158(d). Not surprisingly, attainment of the desired goal is sometimes postponed, and as this case demonstrates, disharmony or even vindictiveness temporarily prevails.
The lawfulness of conduct in the traditional economic struggle between labor and management is generally measured under the standards of labor law and not antitrust law. However, in this instance Plaintiffs seek to apply the Sherman Act to conduct that this Court determines is within the economic heart of labor-management relations.
Local first recognized MCA's predecessor, PMC, as a multi-employer bargaining group under an agreement effective October 24, 1973. This agreement was renewed on September 26, 1974 to expire May 31, 1976. Local and MCA began to renegotiate March 12, 1976.
In the past Local bargained in units consisting of employers represented by MCA and in units with independent employers who negotiated directly. These separate collective bargaining agreements had different terms regulating the contributions to certain fringe benefit trusts established for Local's members. The disparities in trust fund arrangements were of concern to MCA during the contract renewal period. In fact, MCA filed a lawsuit in the case of MCA v. Huico, NCA, Local 598, et al., No. C-75-6675 (W.D.Wa.) on April 2, 1976, under 29 U.S.C. § 186 and the Sherman Act, challenging payments into these funds as creating a substantial per man hour cost differential which gave non-MCA members a competitive advantage in bid pricing. Plaintiffs contend this issue is critical to an understanding of the Defendants' state of mind during the period covered by the lawsuit. However, as far as NCA members participation in these funds was concerned, the UA-NCA collective bargaining agreement
We may assume that the Huico suit brought the fringe benefit fund issues to the attention of the present parties. However, MCA's proposed threshold collective bargaining issues, submitted to Local by letter of May 6, 1976, did not address the fund contribution problem. In any event, Local rejected MCA's proposal and apparently made no initiative or counter proposal of its own.
By May 31, 1976 the bargaining was at an impasse and on June 1, 1976, Local struck the MCA member firms except for J. A. Jones.
J. A. Jones employed 90 pipefitters at Hanford, Bechtel employed 600 and B & C employed 200. The majority of Local's working members were employed at Hanford. Approximately 800 members were employed outside Hanford by either MCA members or firms who had assigned their bargaining rights to MCA. On June 3, 1976, Bechtel, B & C, and Jones locked out. Local filed this action on June 18, 1976 charging all the Defendants with conspiring to lockout in order to restrain and monopolize trade. Nevertheless, Local had struck knowing the lockout would follow.
Shortly after the strike, Local signed an interim agreement with non-MCA member contractors retroactively incorporating wages and fringe benefits "agreed upon in negotiations between the union and MCA or the National Agreement holders, whichever settlement is earlier agreed upon." MCA Exhibit 2646. Local also met with several non-MCA firms and agreed to recognize a new multi-employer bargaining group named the Tri-City Plumbing and Mechanical Contractors Association (Tri-City). The union membership ratified an agreement with Tri-City on October 2, 1976, but not until Local had presented it to MCA and, after MCA's refusal to accept it, notified each MCA member that Local would negotiate with them on a single-employer basis. Following ratification of the agreement, MCA filed another unfair labor practice charge against Local, alleging an attempt to withdraw from the historical multi-employer unit. This matter settled after the regional NLRB office issued a complaint. Local then filed a NLRB charge against MCA, Bechtel, Jones, Burns & Roe, and B & C alleging that the lockout resulted from a conspiracy in support of MCA's goal to force Local to recognize MCA as the exclusive bargaining agent for all firms employing pipefitters in Local's jurisdiction. On appeal, NLRB General Counsel upheld the Regional Director's refusal to issue a complaint based on Local's allegations.
Prior to this latter activity the national agreement holders and UA executed a project agreement which included J. A. Jones. It set forth the economic terms that Local and MCA had been unable to settle. As to the national agreement holders and J. A. Jones, the strike and lockout ended on November 23, 1976. Finally, MCA acceded to the Tri-City agreement on January 26, 1977.
The case proceeds under Plaintiffs' third amended complaint filed April 3, 1980, CR # 374, after 4 years of voluminous discovery.
The gravamen of the claim rests in paragraph 12 of the amended complaint and alleges that on June 1, 1976 "approximately 900 employees represented by Plaintiff were locked out." From this singular fact Plaintiffs contend: (1) the lockout was a means to implement an agreement between Defendants to force Local to agree to MCA's 1976 negotiating demands; (2) this violates Sections 1 and 2 of the Sherman Act; (3) wages and fringe benefit losses resulted; and (4) for this, Plaintiff is entitled to treble damages and a permanent injunction. The amended complaint attempts to depict a coercive group boycott designed to effectuate a concerted refusal to deal, which, if carried out with anti-competitive design or effect, constitutes a per se violation of Section 1 of the Sherman Act.
Defendants move for summary judgment of dismissal based on the grounds that (1) their activities are not restraints of trade within the intendment of the Sherman Act's protection of the freedom of competition; (2) their conduct is immune from antitrust penalty by the statutory and non-statutory labor exemptions; and (3) Plaintiffs lack standing to contest any arguable antitrust violations arising from ...