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BUILDING AND CONSTRUCTION TRADES COUNCIL METROPOLITAN DISTRICT v. ASSOCIATED BUILDERS AND CONTRACTORS MASSACHUSETTS/RHODE ISLAND

*fn* decided: March 8, 1993.

BUILDING AND CONSTRUCTION TRADES COUNCIL OF THE METROPOLITAN DISTRICT, PETITIONER 91-261
v.
ASSOCIATED BUILDERS AND CONTRACTORS OF MASSACHUSETTS/RHODE ISLAND, INC., ET AL.

MASSACHUSETTS WATER RESOURCES AUTHORITY, ET AL., PETITIONERS 91-274
v.
ASSOCIATED BUILDERS AND CONTRACTORS OF MASSACHUSETTS/RHODE ISLAND, INC., ET AL.



ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT.

Blackmun, J., delivered the opinion for a unanimous Court.

Author: Blackmun

JUSTICE BLACKMUN delivered the opinion of the Court.

The issue in this case is whether the National Labor Relations Act, 49 Stat. 449, as amended, 29 U.S.C. § 151 et seq., pre-empts enforcement by a state authority, acting as the owner of a construction project, of an otherwise lawful prehire collective-bargaining agreement negotiated by private parties.

I

The Massachusetts Water Resources Authority (MWRA) is an independent government agency charged by the Massachusetts Legislature with providing water-supply services, sewage collection, and treatment and disposal services for the eastern half of Massachusetts. Mass. Gen. Laws, ch. 92 App., § 1-1 et seq. (Supp. 1992). Following a lawsuit arising out of its failure to prevent the pollution of Boston Harbor, in alleged violation of the Federal Water Pollution Control Act, 86 Stat. 816, as amended, 33 U.S.C. § 1251 et seq., MWRA was ordered to clean up the Harbor. See United States v. Metropolitan Dist. Comm'n, 757 F. Supp. 121, 123 (Mass. 1991). The clean-up project was expected to cost $6.1 billion over 10 years. 935 F.2d 345, 347 (CA1 1991). The District Court required construction to proceed without interruption, making no allowance for delays from causes such as labor disputes. App. 71 (Affidavit of Richard D. Fox, Director of the Program Management Division of MWRA). MWRA has primary responsibility for the project. Under its enabling statute and the Commonwealth's public-bidding laws, MWRA provides the funds for construction (assisted by state and federal grants), owns the sewage-treatment facilities to be built, establishes all bid conditions, decides all contract awards, pays the contractors, and generally supervises the project. See 935 F.2d, at 347 (citing Mass. Gen. Laws, ch. 92 App. §§ 1-1 et seq. (Supp. 1992), ch. 149, §§ 44A to 44I, and ch. 30, § 39M) (1991).

In the spring of 1988, MWRA selected Kaiser Engineers, Inc., as its project manager. Kaiser was to be primarily in charge of managing and supervising construction activity. Kaiser also was to advise MWRA on the development of a labor-relations policy that would maintain worksite harmony, labor-management peace, and overall stability throughout the duration of the project. To that end, Kaiser suggested to MWRA that Kaiser be permitted to negotiate an agreement with the Building and Construction Trades Council and affiliated organizations (BCTC) that would assure labor stability over the life of the project. App. to Pet. for Cert. in No. 91-274, p. 75a (MWRA Pet. App.). MWRA accepted Kaiser's suggestion, and Kaiser accordingly proceeded to negotiate the Boston Harbor Wastewater Treatment Facilities Project Labor Agreement. Ibid. The Agreement included: recognition of BCTC as the exclusive bargaining agent for all craft employees; use of specified methods for resolving all labor-related disputes; a requirement that all employees be subject to union-security provisions compelling them to become union members within seven days of their employment; the primary use of BCTC's hiring halls to supply the project's craft labor force; a 10-year no-strike commitment; and a requirement that all contractors and subcontractors agree to be bound by the Agreement. 935 F.2d, at 348. See generally MWRA Pet. App. 107a (full text of Agreement). MWRA's Board of Directors approved and adopted the Agreement in May 1989 and directed that Bid Specification 13.1 be incorporated into its solicitation of bids for work on the project.*fn1 935 F.2d, at 347. Bid Specification 13.1 provides in pertinent part:

"Each successful bidder and any and all levels of subcontractors, as a condition of being awarded a contract or subcontract, will agree to abide by the provisions of the Boston Harbor Wastewater Treatment Facilities Project Labor Agreement as executed and effective May 22, 1989, by and between Kaiser . . . on behalf of [MWRA], and [BCTC] . . . and will be bound by the provisions of that agreement in the same manner as any other provision of the contract." MWRA Pet. App. 141a-142a.

In March 1990, a contractors' association not a party to this case filed a charge with the National Labor Relations Board contending that the Agreement violated the NLRA. The NLRB General Counsel refused to issue a complaint, finding: (1) that the Agreement is a valid prehire agreement under § 8(f) of the NLRA, 29 U.S.C. § 158(f), which authorizes such agreements in the construction industry, and (2) that the Agreement's provisions limiting work on the project to contractors who agree to abide by the agreement are lawful under the construction-industry proviso to § 8(e), 29 U.S.C. § 158(e). This proviso sets forth an exception from § 8(e)'s prohibition against "hot cargo" agreements that require an employer to refrain from doing business with any person not agreeing to be bound by a prehire agreement. Building & Trades Council (Kaiser Engineers, Inc.), Case 1-CE-71, NLRB Advice Memo, June 25, 1990, MWRA Pet. App. 88a.

Also in March 1990, respondent Associated Builders and Contractors of Massachusetts/Rhode Island, Inc. (ABC), an organization representing nonunion construction industry employers, brought this suit against MWRA, Kaiser, and BCTC, seeking, among other things, to enjoin enforcement of Bid Specification 13.1. ABC alleged pre-emption under the NLRA, pre-emption under § 514(c) of the Employee Retirement Income Security Act, 88 Stat. 897, 29 U.S.C. § 1144 (c) (ERISA), violations of the Equal Protection and Due Process Clauses of the Fourteenth Amendment, conspiracy to reduce competition, in violation of the Sherman Act, 26 Stat. 209, as amended, 15 U.S.C. § 1, and various state-law claims. Only NLRA pre-emption is at issue here.

The United States District Court for the District of Massachusetts rejected each of ABC's claims and denied its motion for a preliminary injunction. MWRA Pet. App. 76a-83a. The Court of Appeals for the First Circuit reversed and directed entry of a preliminary injunction restraining the use of Bid Specification 13.1, reaching only the issue of NLRA pre-emption., 135 L.R.R.M. 2713 (1990). The Court of Appeals subsequently granted a petition for rehearing en banc, vacating the panel opinion. MWRA Pet. App. 84a. Upon rehearing en banc, the Court of Appeals, by a 3-2 vote, again reversed the judgment of the District Court, once more reaching only the pre-emption issue. 935 F.2d, at 359-360. The court held that MWRA's intrusion into the bargaining process was pervasive and not the sort of peripheral regulation that would be permissible under San Diego Building Trades Council v. Garmon, 359 U.S. 236, 3 L. Ed. 2d 775, 79 S. Ct. 773 (1959). See 935 F.2d, at 353. It also held that Bid Specification 13.1 was pre-empted under Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 49 L. Ed. 2d 396, 96 S. Ct. 2548 (1976), because MWRA was regulating activities that Congress intended to be unrestricted by governmental power. Because of the importance of the issue, we granted certiorari, 504 U.S. (1992).

II

The NLRA contains no express pre-emption provision. Therefore, in accordance with settled pre-emption principles, we should not find MWRA's bid specification pre-empted "' " . . . unless it conflicts with federal law or would frustrate the federal scheme, or unless [we] discern from the totality of the circumstances that Congress sought to occupy the field to the exclusion of the States." '" Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 747-748, 85 L. Ed. 2d 728, 105 S. Ct. 2380 (1985) (citations omitted). We are reluctant to infer pre-emption. See Cippolone v. Liggett Group, Inc., 504 U.S. , - (1992) (slip op. 9-10); Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 91 L. Ed. 1447, 67 S. Ct. 1146 (1947). "Consideration under the Supremacy Clause starts with the basic assumption that Congress did not intend to displace state law." Maryland v. Louisiana, 451 U.S. 725, 746, 68 L. Ed. 2d 576, 101 S. Ct. 2114 (1981). With these general principles in mind, we turn to the particular pre-emption doctrines that have developed around the NLRA.

In Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S., at 748, we noted: "The Court has articulated two distinct NLRA pre-emption principles." The first, " Garmon pre-emption," see San Diego Building Trades Council v. Garmon, supra, forbids state and local regulation of activities that are "protected by § 7 of the [NLRA], or constitute an unfair labor practice under § 8." 359 U.S., at 244. See also Garner v. Teamsters, 346 U.S. 485, 498-499, 98 L. Ed. 228, 74 S. Ct. 161 (1953) ("When two separate remedies are brought to bear on the same activity, a conflict is imminent"). Garmon pre-emption prohibits regulation even of activities that the NLRA only arguably protects or prohibits. See Wisconsin Dept. of Industry v. Gould Inc., 475 U.S. 282, 286, 89 L. Ed. 2d 223, 106 S. Ct. 1057 (1986). This rule of pre-emption is designed to prevent conflict between, on the one hand, state and local regulation and, on the other, Congress'"integrated scheme of regulation," Garmon, 359 ...


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