644 F.2d 930 | 2d Cir. | 1981
This appeal concerns labor practices and collective bargaining provisions in the marine transportation service industry. Appellants are three affiliated companies, Ber-man Enterprises Inc. (Berman), General Marine Transport Corp. (General Marine), and Standard Tank Cleaning Corp. (Standard Tank). They allege antitrust violations by Marine Towing and Transportation Employers’ Association (Association), a mul-tiemployer bargaining organization, certain of the Association’s members, and Local 333, United Marine Division, International Longshoremen’s Association (Union), a union representing vessel employees. Appellants also allege labor law violations by the Union. The United States District Court for the Southern District of New York, Robert W. Sweet, Judge, at the conclusion of the evidence dismissed all elements of the antitrust claim except that portion alleging conspiracy to refuse to deal with Berman. Thereafter the jury returned verdicts against Berman and the companies affiliated with it on the remaining antitrust claim and on the labor claim. The court then denied the appellants’ request for in-junctive relief. On appeal the three affiliated companies argue that the antitrust claim should not have been dismissed, that the court should have directed a verdict for the appellants on the labor claim, and that evidence concerning salaries of Berman’s officers should neither have been admitted nor have been the subject of an argument about Berman’s damages. We cannot accept these contentions and, accordingly, affirm the judgment below.
I. FACTS
Berman, General Marine, and Standard Tank are all owned by Standard Marine Services, Inc., which in turn is owned by Evelyn Berman Frank and her brothers, Berman operates tugs, barges, and harbor tankers in New York harbor; General Marine operates two ships which dispose of sewage sludge produced by municipal customers; and Standard Tank operates a vessel-cleaning facility and one tank-cleaning vessel.
General Marine was a member of the Association at the time the dispute in question arose, but Berman and Standard Tank were not and the Union did not represent their employees.
Well before April 1, 1976, the date of the new collective bargaining agreement with which we are concerned here, the Union unsuccessfully sought to require Berman to
In January 1976 the Union made certain demands upon the Association for contract provisions to be incorporated in the new collective bargaining agreement, which was to commence on April 1, 1976. This was followed by a Union demand made to General Marine that all the Berman companies’ crew members, except those on the tank-cleaning vessel, join the Union and that all hiring be done through the Union hiring hall. Further negotiations, accompanied by the litigation noted above, resulted in an impasse, with General Marine refusing to resign from the Association despite the Association bargaining committee’s statement that unless General Marine resigned, the Association would enter into a contract that satisfied the Union. Finally on March 26, 1976, the Union and the Association entered into a Memorandum of Agreement containing what we will call the “vegetable oil” and the “affiliates” clauses, the first in effect requiring two men on vegetable oil barges carrying less than 55,000 barrels
After the Union ratified the new contract, the Union president wrote General Marine to demand compliance with the affiliates clause and to list fourteen Berman-General Marine vessels which he claimed were covered by the Union-Association contract. At about the same time, in early April 1976, the Union membership was informed about and advised to enforce the vegetable oil clause, on pain of discipline. Following General Marine’s response that the contract exceeded the scope of the Association’s bargaining power and constituted a group boycott, the Union again struck General Marine. The Union also advised Association members not to deal with Ber-man and specifically not to tow Berman barges with less than two men aboard.
This suit by Berman, General Marine, and Standard Tank is in two counts — the first charges all defendants with a combination in restraint of trade under section 1 of the Sherman Act, 15 U.S.C. § 1, and seeks damages under section 4 of the Clayton Act, 15 U.S.C. § 15, and an injunction under section 16 of the Clayton Act, 15 U.S.C. § 26. The second count charges the Union alone with participation in a secondary boycott in violation of section 303 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 187, and seeks damages from the Union.
The court below held that the vegetable oil and the affiliates clauses, as well as the actions taken under them, were not themselves antitrust violations in light of the so-called “labor exemption” to the antitrust laws,
II. DISCUSSION
A. Antitrust Claim •
Berman argues that the vegetable oil and the affiliates clauses had the purpose of restraining Berman from charging lower prices and from taking work away from Union members, and that the clauses had the effect of excluding Berman as a competitor of Association members and restricting the conditions under which Berman could hire an Association tug.
Berman begins with the assertion that the nonstatutory labor exemption is not available to protect a combination, between a union and a nonlabor group, that has an anticompetitive purpose or effect on the business of another, Allen Bradley Co. v. Local 3, IBEW, 325 U.S. 797, 809-10, 65 S.Ct. 1533, 1539, 1540, 89 L.Ed. 1939 (1945), particularly in light of the narrow construc
Both of the disputed clauses represented legitimate union objectives because they dealt either with working conditions, Jewel Tea
Although the language in the affiliates clause here may appear broader than necessary to fulfill legitimate union objectives, as applied to Berman the clause served legitimate goals of the Union. The reason for this is that General Marine and Berman treated employees as fungible, that is to say, the two affiliated companies used employees interchangeably.
We also agree with the court below, in the alternative, that even if the vegetable oil and the affiliates clauses do not fall within the labor exemption, there was no proof of an antitrust violation under the rule of reason, which would be applicable here. See, e. g., National Society of Professional Engineers v. United States, 435 U.S. 679, 687-88, 98 S.Ct. 1355, 1363-1364 (1978); Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 50 & n. 16, 58-59, 97 S.Ct. 2549, 2557 & n. 16, 2561-2562, 53 L.Ed.2d 568 (1977). Despite the Union newspaper col
B. Labor Law Claim
In light of the special jury verdicts set forth in the margin,
Under National Woodwork Manufacturers Association v. NLRB, 386 U.S. 612, 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967), it is now well settled that section 8(b)(4)(A) (which incorporates by reference section 8(e)) and section 8(b)(4)(B) of the NLRA are intended to prohibit not agreements or actions directed toward the primary employer, but secondary objectives such as the exertion of pressure on a neutral employer. The key question, therefore, is whether the provisions that the Union sought were aimed at preserving work and maintaining working conditions or whether they were tactically calculated by the Union to satisfy its objectives elsewhere. Id, at 644-45, 87 S.Ct. at 1268-1269. In NLRB v. International Longshoremen’s Association, 447 U.S. 490, 503-504, 100 S.Ct. 2305, 2313, 65 L.Ed.2d 289 (1980), the Supreme Court stated that
a lawful work preservation agreement must pass two tests: First, it must have as its objective the preservation of work traditionally performed by employees represented by the union. Second, the contracting employer must have the power to give the employees the work in question — the so-called “right of control” test ....
And the Circuit Court for the District of Columbia, discussing contract clauses analogous to the “two men on a barge” requirement in the instant case, noted that
[t]he test as to the “primary” nature of a subcontractor clause in an agreement with a general contractor has been phrased by scholars as whether it “will directly benefit employees covered thereby,” and “seeks to protect the wages and job opportunities of the employees covered by the contract.” We have phrased the test as whether the clauses are “germane to the economic integrity of the principal work unit,” and seek “to protect and preserve the work and standards [the union] has bargained for,” or instead “extend beyond the [contracting] employer and are aimed really at the union’s difference with another employer.”
Painters District Council 48 v. NLRB, 328 F.2d 534, 538 (D.C. Cir. 1964) (footnotes omitted). Although Berman claims that
Berman complains about Union pressure on the Association to force Association members not to tow Berman barges or to hire its tugs. Berman asserts that the history of the relationship between it and the Union shows that pressure on Association members not to tow Berman barges was exerted solely to impose manning and other labor requirements on nonunit vessels and nonunion employees. Indeed, Berman contends that any work preservation argument regarding this point is frivolous because when Berman hired an Association member’s tug to tow a Berman barge, Berman gave work to, rather than took work away from, Association members’ employees. But this is all a one-sided interpretation of the facts.
The “idle tugs”
Certainly there was ample evidence to support this view that the Union’s objectives were primary rather than secondary and thus, in our opinion, the trial judge properly sent the labor law issue to the jury. Furthermore, the jury charge correctly stated that if the Union’s sole purpose was work preservation then the activity was primary and protected, but that if the Union’s purpose was to force Berman to recognize the Union or to require Berman to join the Association then the jury had to find in favor of Berman. See National Woodwork, 386 U.S. at 644-45, 87 S.Ct. at 1268-1269.
C. Evidence on Salaries
The final issue is an evidentiary one. Berman claims that the court erroneously permitted the appellees to present evidence about the salaries of Berman’s officers to demonstrate that Berman had not been injured by the alleged antitrust and labor law violations and that this evidence unfairly prejudiced the jury. We cannot agree with this contention. The evidence on salaries was relevant to Berman’s operations because Berman was a close corporation; it was also admissible to impeach the credibility of Berman’s president, Mrs. Frank. It was within the trial judge’s discretion to decide that the probative value of the evidence was not outweighed by unfair prejudice, see Fed.R.Evid. 403. As for the cases
Judgment affirmed.
. When General Marine employees worked on Berman vessels, General Marine made payments to the Union-Association pension funds but the employees worked according to Ber-man wages and working conditions. Since January 1977 Berman employees’ bargaining representative has been Marine Engineers Beneficial Association (MEBA).
. “Vegetable oil barges” included any barge under 55,000 barrels used in the animal, vegetable, or fish oil trades.
. The “vegetable oil” clause read:
9. Section 29. Vegetable Oil Barges. No vessel operated under this contract shall tow any barge under 55,000 barrels used in the animal, vegetable, or fish oil trades unless there are two men aboard the barge at all times.
This clause was applicable to the Berman petroleum barges because they could be cleaned to carry vegetable oil.
. The “affiliates” clause read in part:
8. Section 1. Application Agreement
This Agreement applies only to all licensed and unlicensed Employees, employed on tugboats and self-propelled lighters owned or operated by the Employers, a subsidiary company, an affiliated company or a company division in the Port of New York and vicinity.
It went on to provide for strikes against noncomplying employers.
. In a column in a Union newspaper, the Union president further explained the Union-Association contract:
For several years, we have been having problems with certain companies who have been trying every way possible to duck our contracts and the wages, benefits and working '’onditions our membership is entitled to un*934 der those contracts. The actions of these companies, and some of the men employed by them, have a ripple effect throughout the industry. The companies have been able to undercut the rates of companies abiding by the contract, and thus expand and take work away from others resulting in a loss of jobs for our members. The new clauses and clause revisions are designed to strengthen the contract against this type of action, making the companies competitively equal and thus providing greater job security for our membership. I have said in the past that knowing your contract is very important. It now becomes even more important that every member know and abide by this contract.
. As explicated in Adams, Ray & Rosenberg v. William Morris Agency, 411 F.Supp. 403, 407-08 (C.D.Cal.1976), where litigation involves only union activities, the union may claim a statutory exemption under sections 6 and 20 of the Clayton Act, 15 U.S.C. § 17 and 29 U.S.C. § 52, and under the Norris-LaGuardia Act, 29 U.S.C. §§ 101-115; where litigation involves the activities of a union and employers, the defendants may claim a “nonstatutory exemption,” Connell Construction Co. v. Plumbers Local 100, 421 U.S. 616, 622-23, 95 S.Ct. 1830, 1835, 44 L.Ed.2d 418 (1975). See generally, R. Mann, B. Powers & B. Roberts, The Accommodation Between Antitrust and Labor Law: The Antitrust Labor Exemption, 9 Seton Hall L. Rev. 744 (1978).
. The three questions, all answered negatively by the jury, were:
4. Did Local 333 induce or encourage its members to refuse to work for their employers when asked to work on Berman vessels or threaten, coerce or restrain the Association or the corporate defendants in order to:
a. Force Berman to become a member of the Association?
b. Force Berman to recognize Local 333 as the representative of its employees?
c. Force the Association or the corporate defendants to cease doing business with Ber-man?
Following the verdict, the trial judge denied motions for a new trial, for judgment notwithstanding the verdict against the Union on the labor law count, and for injunctive relief.
. Although Justice White spoke for only a three-person plurality, his statement in Jewel Tea, 381 U.S. at 689-90, 85 S.Ct. at 1601-1602, is considered to be a classic formulation of the standard for determining applicability of the labor exemption. According to Justice White, the issue is whether the subject matter of the restriction
is so intimately related to wages, hours and working conditions that the unions’ successful attempt to obtain that provision through bona fide, arm’s-length bargaining in pursuit of their own labor union policies, and not at the behest of or in combination with nonla-bor groups, falls within the protection of the national labor policy and is therefore exempt from the Sherman Act.
. See note 8 supra.
. There was evidence that tug boat crews’felt that unmanned barges were unsafe to tow. This suggests that barges manned by a single person might also be unsafe.
. Mrs. Frank, president of all three affiliated companies, testified as follows:
Q. The directors of Berman and the directors of General Marine are the same people, are they not?
A. That’s right.
1 Q. You as the chief operating officer of Berman and of General Marine use the employees of Berman and General Marine fungi-bly [sic] and interchangeably, is that correct?
A. That’s correct.
Q. You have Berman employees doing General Marine work and General Marine employees doing Berman work, is that correct?
A. I would say mostly it was General Marine doing Berman work.
Q. In any event, you did use them fungi-bly [sic] and interchangeably, is that correct?
A. That’s right, with union consent.
. See note 5 supra.
. See note 7 supra.
. This refers to the Union effort to obtain a commitment from employers not to hire outside tugs when their own tugs stood idle.