678 F.2d 492 | 4th Cir. | 1982
Lead Opinion
The National Electrical Contractors Association, the International Brotherhood of Electrical Workers, and other defendants appeal the award of a permanent injunction to plaintiffs who include the National Constructors Association and numerous construction companies, after a finding that the actions of the defendants amounted to price fixing illegal under § 1 of the Sherman Act, 15 U.S.C. § 1. National Constructors Association, et a1 v. National Electrical Contractors Association, Inc., et al, 498 F.Supp. 510 (D.Md.1980). This appeal is taken under 28 U.S.C. § 1292(a)(1) permitting appeals from the award of injunctive relief. A FRCP 54(b) certificate was entered by the district court relating to the counterclaims. We affirm, and modify the injunctive order only slightly.
NECA is the largest trade association in the electrical contracting industry, consisting of at least 133 local trade associations or chapters whose members are both union and non-union electrical contractors. The IBEW is the largest union representing electrical workers, representing the vast majority of all of the organized electrical workers in the nation. At the time of the district court’s order the members of NECA performed slightly more than 50% of the electrical contracting work in the nation. Since 1960 NECA members have performed between 50 and 60% of such work. Because of their respective positions, much of the collective bargaining in the electrical contracting industry is done by IBEW and NECA. Local chapters of NECA are assigned territories throughout the country which coincide with the jurisdiction of one or more of the more than 400 IBEW locals. The local chapters of NECA act as multi-employer bargaining representatives and negotiate local collective bargaining agreements with the local IBEW unions. Individual electrical contractors who are not members of NECA usually enter into a labor agreement with the IBEW in one of several ways: (1) Letter of Assent — A—An “A” Letter of Assent authorizes the local NECA chapter to act as the collective bargaining representative for the employer in negotiations with the local union. As such, the employer is, of course, considered a member of the NECA chapter bargaining unit. (2) Letter of Assent — B—A “B” Letter of Assent binds the employer to the terms of the local IBEW-NECA collective bargaining agreement and all approved amendments, but does not make the employer part of the bargaining unit. (3) International agreements — Designed for employers operating on a national basis, such an agreement binds the employer to the terms of local union contracts in the areas in which the employer performs work. (4) Project agreements — These agreements apply to a single construction site and contain any provisions that may be agreed upon. A local contractor may also negotiate separately with the IBEW although this is not commonly done.
Both NECA and IBEW International reserve the right to approve or veto all collective bargaining agreements entered into by the local organizations.
The parties agree to the establishment of a legally constituted trust to be called the National Electrical Industry Fund.
All construction agreements in the electrical industry shall contain the following language:
“Each individual employer shall contribute one percent (1%) * of the gross labor payroll to be forwarded monthly to the National Electrical Industry Fund in a form and manner prescribed by the trustees no later than fifteen (15) calendar days following the last day of the month in which the labor was performed. Failure to do so will be considered a breach of this agreement on the part of the individual employer.” * (an amount not to exceed 1% nor less than 0.2 of 1% as determined by each local chapter and approved by the trustees)
The National Electrical Contractors Association will be responsible to see that the objects of the fund, as outlined in the trust, are adhered to strictly.
No part of the funds collected under this trust shall be used for purely social activities.
No part of the funds collected under this trust shall be used for any purpose which is held to be in conflict with the interests of the International Brotherhood of Electrical Workers and its local unions.
Both parties will be provided with a copy of the Trust and any further amendments.5
On December 8, 1976, President Pillard of IBEW and Vice President Higgins of NECA signed the agreement containing the provision for the industry fund. Contemporaneously they signed a paper called “Basic Understandings and Interpretations of the IBEW-NECA Agreement” which provided in part:
Article Six — Industry Fund
(1) It is understood that because of the cost of administration of labor agreements, industry advancement and services rendered to the electrical contracting industry by the National Association and the NECA chapters that the intent of this Article is to insert the industry fund contribution language in all IBEW construction agreements containing the NEBF language except those covering employees of utility companies and municipalities and employees working under contractor equipment maintenance agreements and employees working for motor shops. In return, NECA will provide basic service to electrical contracting employers employing workmen obtained from the IBEW without regard to the affiliation of the individual employer with NECA.
Appellees challenged the industry fund provision under the Sherman Act, alleging that the fund added a 1% charge to the cost of all their electrical construction contracts with IBEW whether the contractor belonged to NECA or not. Appellees noted that prior to the 1976 agreement members of NECA paid dues and a service charge for their membership in and services received
The district court also summarily dismissed as without merit the NECA defendants’ counterclaims that appellees were engaged in a boycott, illegal under § 1 of the Sherman Act, by their concerted refusal to pay what they owed into the industry fund. 498 F.Supp. at 551. The NECA defendants appeal this grant of summary judgment for the appellees on the counterclaims.
Before dealing with appellants’ substantive arguments, we note that appellants Colgan Electric and Miller Electric argue as a separate issue that the district court erred in not granting their motion to dismiss the complaint because venue was improper as to them since they were not transacting business in Maryland as required by § 12 of the Clayton Act, 15 U.S.C. § 22.
Appellants’ primary contention on appeal is that summary judgment for the appellees in their price fixing case was inappropriate. Preliminarily we note that the Supreme Court has cautioned against the granting of summary judgment in antitrust cases, stating in Poller v. Columbia Broadcasting Systems, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962), that “summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles. . .,” and we have had occasion to follow this case in Morrison v. Nissan Co., Ltd., 601 F.2d 139 (4th Cir. 1979). This is not to say that summary judgment is never appropriate in antitrust cases, see White Motors Co. v. United States, 372 U.S. 253, 83 S.Ct. 696, 9 L.Ed.2d 738 (1963), and in fact grants of summary judgment in such cases have been explicitly affirmed. Citizens Publishing Co. v. United States, 394 U.S. 131, 89 S.Ct. 927, 22 L.Ed.2d 148 (1969); First National Bank v. Cities Service, 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968).
With these rules in mind, we analyze appellants’ arguments. They initially contend that summary judgment was inappropriate because a genuine issue of fact exists
Even if the language itself is clear, argue the appellants, a consideration of the evidence submitted in the form of documents and pre-trial depositions create an issue of fact as to the meaning of Article 6. To support this argument, appellants principally rely upon several pieces of evidence which we shall consider separately. We find no error in the district court’s rejection of the pre-trial depositions submitted by the appellants as sufficient to create an issue of fact. This testimony amounted to no more than a denial of the meaning of the clear words of the contract. In no way does it seek to clarify the terms of the contract, but instead seeks to change the terms of an already clear agreement.
Appellants also contend that other documents submitted to the district court create a question of fact as to the meaning of Article 6. The minutes of the October 1976 Board of Governors meeting of NECA reflect that Robert Higgins, Executive Vice President of NECA, read to the group a letter from its counsel, Henry H. Glassie, with reference to whether or not the NECA bylaws would have to be amended to reflect the industry fund as a change in NECA dues. Concluding that they would not, Glassie in part stated, as transcribed, as follows: “If the industry fund provided for in the Article 6 of the agreement referred to in proposal number 3 applies to the NECA members, as such, a change in the by-laws would be involved. However, we are informed that the contribution to this fund as provided in Article 6 will be required of all union electrical contractors whether they are members of NECA or not. Indeed, would be applicable to a company after resignation from NECA. And moreover that the contribution will not be required of non-NECA members and nonunion members of NECA.”
We first note that the minutes of the meeting are self contradictory. At one place they state that the industry fund contributions are “required of all union electrical contractors whether they are members of NECA or not.” In the second sentence following, the minutes then contradict themselves as they state that “the contribution will not be required of non-NECA members and non-union members of NECA.” The very best that can be said of the minutes is that they both corroborate and flatly contradict NECA’s position in the case. There was a mistake made in reading the letter from Glassie, however, or in the transcription of the minutes of the meeting. The letter itself did not contain the critical words “non-NECA members and,” but read (in the form of a clause in the letter) “The contribution will not be required of non-union members of NECA.” Even if we accept the minutes of the meeting instead of the content of the letter (and no reason is offered as to why the letter is not the proper document to use), they do not clarify any claimed ambiguity existing in the agreement but amount at the best to no more than an ambiguous interpretation thereof. The letter from Glassie obviously supports the already clear contract terms, and, indeed, its observation that contribution would not be required of non-union members of NECA only states the obvious. In all events, the status of non-union members of NECA is not a matter of dispute in this case and is of no consequence.
Appellants next rely upon three letters from Pillard to three different local unions, their text being very similar, advising the locals that they must bargain in good faith with contractors who terminated their letters of assent. Again, we do not see how these letters support appellants’ contentions. At best they show that the local unions were advised as to their obligations under the National Labor Relations Act to bargain in good faith as to a whole contract and not take a take or leave it stance in negotiations.
Finally, appellants rely upon a June 1978 letter from Pillard to the union locals which stated that local unions should specifically remove from the bargaining table the industry fund if a contractor objected to its inclusion. Not only was this letter sent almost a year after this lawsuit was filed, it only reflects how the union at that later time wished to handle the industry fund. It does not clarify the agreement itself.
All of this evidence taken together shows no more than appellants’ attempt to change the meaning of the National Agreement to reflect how they now wish the contract to be read. None seeks to clarify any particular language or term in the National Agreement. As such, they have no effect upon an obviously clear agreement.
The National Agreement and the Basic Understanding must be considered together as documents which are a part of the same transaction. Gordon v. Vincent Youmans, Inc., 358 F.2d 261 (5th Cir. 1966); 4 Willi-ston, Contracts (3d Ed.) § 628. The agreement states very clearly that the industry fund goes “in all construction agreements in the electrical industry.” As such, we need go no further to find appellants’ intent. Locafrance U. S. Corp. v. Intermodal Systems Leasing, 558 F.2d 1113 (2d Cir. 1977); E. P. Hinkel Co. v. Manhattan Co., 506 F.2d 201 (D.C.Cir.1974). But, even if we go further, the Basic Understanding says the same thing, to wit: “in all IBEW construction agreements containing the NEBF language.” The evidence shows, without dispute, in the NECA — IBEW Employees Benefit Agreement, that all contracts with IBEW unions contain NEBF provisions whether the contractor belongs to NECA or not. These two documents, then (the National Agreement and the Basic Understanding), read separately or together leave no doubt as to the applicability of the industry fund to all IBEW construction contracts. Appellants’ evidence shows no more than that NECA and the IBEW sought to read the contract differently at a later date.
We also agree with the district court that the evidence presented was so removed in time and self serving as to not create a genuine issue of fact as to the meaning of the contract. The district court did not err in relying upon the clear language of the agreement in deciding the issue in the appellees favor.
Appellants next claim that the district court erred in concluding that the agreement in question constituted price fixing illegal per se under the Sherman Act. Instead, they contend that no restraint of trade existed. Alternately, if a restraint of trade is found, appellants contend that it must be judged under the rule of reason.
Although a literal reading of the Sherman Act would make illegal all contracts if they restrain trade in any particular, the Supreme Court has construed the statute to outlaw only unreasonable or undue restraints. Standard Oil of N. J. v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619 (1911). In Standard Oil the Court established the rule of reason as a method of examining the actions of parties to determine if § 1 has been violated by looking at the purpose, character, and effect of the actions in question. Unreasonableness is based upon either the nature of the contract or upon the surrounding circumstances that give rise to an inference that the parties intended to restrain trade or enhance prices. National Society of Professional Engineers v. United States, 435 U.S. 679, 98 S.Ct. 1355, 55 L.Ed.2d 637 (1978). By this standard, the courts decide whether conduct is unreasonably anticompetitive in character or in effect.
Certain practices whose nature and effect are so clearly anticompetitive have been held to be illegal per se. Those specifically include price fixing.
As just noted, price fixing is one of those practices that the Court has held to be illegal per se under the Sherman Act. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940). The Court stated at 223, 60 S.Ct. at 844 “a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se.” To be guilty of price fixing, the conspirators do not have to adopt a rigid price, substantially less has been found to be price fixing.
Appellants further contend that even if the per se doctrine is applicable the district court erred because a genuine issue of fact existed as to the purpose of the fund. Additionally, they argue that the district court erred as a matter of law because it concluded that an anticompetitive effect need not be shown in order to prove price fixing. Appellants would argue instead that both anticompetitive purpose and effect must be proven. Such an argument is without merit. We know of no better statement of the rule than that of this court in United States v. Society of Ind. Gasoline Marketers, 624 F.2d 461, 465 (4th Cir. 1979), cert. den. 101 S.Ct. 859, 449 U.S. 1078, 66 L.Ed.2d 801, where we stated: “Since in a price-fixing conspiracy the conduct is illegal per se, further inquiry on the issues of intent or the anti-competitive effect is not required. The mere existence of a price-fixing agreement establishes the defendants’ illegal purpose since ‘[t]he aim and result of every price-fixing agreement, if effective, is the elimination of one form of competition.’ United States v. Trenton Potteries, 273 U.S. 392, 397, 47 S.Ct. 377, 379, 71 L.Ed. 700 .... ” See also 2 Areeda & Turner, Antitrust Law § 314.
This brings us to appellants’ objections to the injunctive order entered by the district court which was in two parts.
The first part of the injunction enjoins ÑECA and IBEW and others named from “seeking to continue, continuing, enforcing, maintaining, or renewing Article 6 of the National Agreement ... as to any person, corporation, or other entity which is not a member of the National Electrical Contractors Association or from entering into, maintaining or participating in any act, contract, agreement, understanding, plan, program, or other arrangement with any person, corporation, or other entity which is not a member of the National Electrical Contractors Association that includes any provision for implementation of Article 6 of the aforesaid agreement.” The second part of the injunction enjoins the same defendants from “demanding, soliciting, collecting or receiving from any person, corporation or entity which is not a member of the National Electrical Contractors Association contributions to the National Electrical Industry Fund, or any alternate or substitute therefor, the effect of which would be to add a surcharge, determined by a uniform formula, to the cost of procuring all contracts with the IBEW in the electrical construction industry.”
Appellants object to the first part of the injunction as being overbroad in that a non-NECA employer who voluntarily assents to pay into the industry fund should
Appellants next object to the second part of the injunction which they say could be construed to prohibit any demand that an IBEW local might unilaterally make in collective bargaining to be characterized as a uniform surcharge on labor contracts. They say that it prevents the union, even acting unilaterally, from doing the very thing that § 7 of the National Labor Relations Board Act, 29 U.S.C. § 157, permits unions to do, that is, to bargain collectively on any permissive or mandatory subject of bargaining. That objection is well taken only to a very small extent. The question of whether or not the industry fund is either a permissive or mandatory subject of collective bargaining is not before us, but, for present purposes, we will assume that it is a permissive subject of collective bargaining. Merely, however, because establishment and maintenance of the industry fund may be a permissive subject of collective bargaining does not automatically exempt the IBEW from the provisions of the antitrust laws. This was specifically held in Allen Bradley v. Local Union No. 8, IBEW, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945). In Allen Bradley the Court upheld a finding of the district court which had found Local 3 of IBEW guilty of a violation of the Sherman Act for acting in concert with business organizations and with manufacturers of goods to restrain competition in and monopolize the marketing of such goods in New York City. The Court found that “. .. the same labor union activities may or may not be in violation of the Sherman Act, dependent upon whether the union acts alone or in combination with business groups.” 325 U.S. at 810, 65 S.Ct. at 1540. The gist of the Court’s reasoning, which is applicable here, is found on the same page of the opinion where it said: “For if business groups, by combining with labor unions, can fix prices and divide up markets, it was little more than a futile gesture for Congress to prohibit price fixing by business groups themselves.” The Supreme Court in Allen Bradley did require a modification of the decree “so as to enjoin only those prohibited activities in which the union engaged in combination ‘with any person, firm or corporation which is a non labor group’ ”. p. 812, 65 S.Ct. p. 1541. The second part of the order complained of does no more than this. It enjoins the “above mentioned defendants” (which include ÑECA and IBEW) from demanding, etc., from non-NECA members contributions to the National Electrical Industry Fund. The order must be read in the context of the case instead of divorced from it. As such, it undoubtedly means the defendants acting together and not the defendants acting severally. It leaves IBEW entirely free to pursue any legitimate object of collective bargaining acting unilaterally, but, this, of course, does not include IBEW acting “with any person, firm or corporation which is a non-labor group,” Allen Bradley, p. 812, 65 S.Ct. p. 1541, to violate the Sherman Act, and this expressly includes the maintenance of the industry fund as expressed in the contract between ÑECA and IBEW.
The standard by which we review such injunctive orders is “whether the relief represents a reasonable method of eliminating the consequences of the illegal conduct.” National Society of Professional Engineers v. United States, 435 U.S. 679, 698, 98 S.Ct. 1355, 1368, 55 L.Ed.2d 637 (1978). We think the order of the district court meets that standard; it does no more than enjoin the enforcement of, and collection of money under, a contract held to violate the antitrust laws.
We have discussed in some detail the principal contentions of appellants and note that we have considered all of their other assignments of error and find them without merit, including those relating to the granting of summary judgment in favor of appel-lees on the NECA defendants’ counterclaims. Except as may be otherwise indicated in this opinion, we rely upon the district court’s complete and thorough discussion of the issues in this case, and its judgment is accordingly
AFFIRMED AS MODIFIED.
. § 1 of the Sherman Act provides in part: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal....
. The district court has certified a class of plaintiffs as those electrical contractors who, since July 1, 1977 have not been members of NECA and who perform electrical construction work using workers obtained or employed under the terms of collective bargaining agreements with locals of the IBEW, which agreements contain or incorporate by reference the terms of Article 6 of the NECA-IBEW national agreement.
The plaintiffs/appellees may be referred to as NCA or as appellees.
. The defendants/appellants may be referred to as NECA or as the appellants.
. This agreement was announced in the spring of 1976 and ratified at the October 1976 meeting of the NECA Board of Governors. The agreement went into effect on July 1, 1977.
. The National Agreement provides that less than 1% of the labor payroll may be collected by the local NECA chapter, but the local must collect at least .2 of 1%, the amount which must be remitted to the national organization. Both parties, as well as the district court, have treated the required contribution to be 1%. The record supports a conclusion that 1% is the usual amount collected.
. The dues were $50.00 per year with a service charge of .2% of their labor payroll after the first year of membership.
. The district court discussed at length the evidence before it which had been produced by both sides regarding the agreement. We need not discuss such evidence in any detail except as it applies to the issues to be dealt with later in this opinion.
. § 12 of the Clayton Act reads in part:
Any suit, action, or proceeding under the anti-trust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business... .
The parties agree that Miller and Colgan are neither inhabitants of Maryland nor are they found there.
. This also applies to IBEW President Pillard’s letter to NCA in June 1977 in which Pillard denied the interpretation of the agreement that NCA placed upon it, but immediately followed the denial with the statement that: “It is true that, by July 1, 1977, we expect that all local IBEW-NECA agreements will have been amended to include a number of new provisions, including contributions to the [Industry] Fund.”
.. Appellants further claim that in actuality IBEW did not insist upon inclusion of the fund in every contract signed, and that some labor contracts, entered into during this time did not include the industry fund. The fact that the IBEW was somewhat less diligent than it might have been in enforcing the provisions of the National Agreement is not a defense, especially since the language of the agreement itself leaves no room for debate that the fund was to be included in all construction contracts. An activity does not have to be a complete success to violate the antitrust laws. United States v. Trenton Potteries Co., 273 U.S. 392, 402, 47 S.Ct. 377, 381, 71 L.Ed. 700 (1927); United States v. Bensinger Co., 430 F.2d 584 (8th Cir.
. As the Supreme Court noted in Northern Pacifíc RW v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958): “because of their pernicious effect on competition and lack of any redeeming virtue [such activities] are conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.” The Court mentioned price fixing, division of markets, group boycotts, and tying arrangements.
. Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 100 S.Ct. 1925, 64 L.Ed.2d 580 (1980), elimination of interest free short term credit; United States v. Container Corp. of America, 393 U.S. 333, 89 S.Ct. 510, 21 L.Ed.2d 526 (1969), exchange of price information as stabilizing although lowering prices; United States v. Parke, Davis & Co., 362 U.S. 29, 80 S.Ct. 503, 4 L.Ed.2d 505 (1960), setting minimum prices; Kiefer-Stewart Co. v. Seagram & Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951), setting maximum prices; United States v. Socony-Vacuum Oil, 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940), buying surplus gasoline to stabilize prices; Plymouth Dealers Assoc, of Northern Cal. v. United States, 279 F.2d 128 (9th Cir. 1960), establishing price list from which negotiations began.
. In United States v. McKesson & Robbins, 351 U.S. 305, 76 S.Ct. 937, 100 L.Ed. 1209 (1956), the Court stated: “It has been held too often to require elaboration now that price fixing is contrary to the policy of competition underlying the Sherman Act & that its illegality does not depend on a showing of its unreasonableness, since it is conclusively presumed to be unreasonable. It makes no difference whether the motives of the participants are good or evil, whether the price fixing is accomplished by express contract or by some more subtle means; whether the participants possess market control; whether the amount of interstate commerce affected is large or small; or whether the effect of the agreement is to raise or to decrease prices.”
. We are aware that, on its particular facts, this is a case of first impression and as such we should be careful in applying the per se rule. Broadcast Music, Inc. v. CBS, 441 U.S. 1, 9, 99 S.Ct. 1551, 1557, 60 L.Ed.2d 1 (1979). Cases are legion, however, declaring the illegality of price fixing in various forms, and the agreement here, we think, is as clear as the one struck down in Citizens Publishing Co. v. U. S., 394 U.S. 131, 89 S.Ct. 927, 22 L.Ed.2d 148 (1969). The conclusion reached by the Court in that case that “[t]he joint operating agreement exposed the restraints so clearly and unambiguously as to justify the rather rare use of a summary judgment in the antitrust field,” p. 136, 89 S.Ct. p. 929, is applicable here. The Supreme Court, indeed, in United States v. Container Corp., 393 U.S. 333, 89 S.Ct. 510, 21 L.Ed.2d 526 (1969), a price fixing case “unlike any other” decided by that Court, found a per se antitrust violation in reviewing a dismissed complaint, certainly without the benefit of any more documents than we have available here.
Dissenting Opinion
dissenting:
Through its blind application of the per se rule against price fixing, the majority ignores the realities of this case and, as a consequence, reaches a manifestly inequitable result. As I believe that the facts before us do not justify an extension of the per se price fixing rule, I must respectfully dissent.
Under a provision in the collective bargaining agreement between the National Electrical Contractors Association (NECA) and the International Brotherhood of Electrical Workers (IBEW), the IBEW could not sign any employment contract unless the employer agreed to pay one percent of its gross monthly labor payroll into the National Electrical Industry Fund. Finding that this requirement acts to increase the labor costs to non-NECA contractors and “would tend to stabilize the price of electrical construction contracts,” the majority concludes that the agreement is per se illegal under the Sherman Act, 15 U.S.C. § 1.
This case, however, is inherently different from those relied on by the majority in that all of the parties involved here receive an extremely important benefit from the NECA/IBEW negotiations, that being the establishment of a fixed wage level. “Assenting” non-NECA contractors (i.e., those who agree to follow the terms of the NECA/IBEW agreement through either “A” or “B” Letters of Assent or International Agreements) receive the benefit directly by accepting all of the gains and concessions secured by NECA during the course of the negotiations.
Non-assenting contractors who bargain directly with the Union enjoy the benefit in a similar, albeit indirect, manner. They have the terms of the NECA/IBEW agreement, especially the wage level, on which they can rely during the course of their independent negotiations. The salary level agreed to by NECA may be employed as a ceiling on the Union’s demands. Indeed, the Union has an incentive to obtain a high wage rate from NECA which it will then attempt to carry over into its non-NECA contracts. See generally P. Samuelson, ECONOMICS 586-87 (10th ed. 1976). Thus, any wage concessions NECA is able to draw out of IBEW spill over to the benefit of all non-assenting non-NECA contractors.
In Smitty Baker Coal Co. v. United Mine Workers of America, 620 F.2d 416 (4th Cir.), cert. denied, 449 U.S. 870, 101 S.Ct. 207, 66 L.Ed.2d 89 (1980), we ruled that a protective wage clause, requiring a union to demand the same wage scale from all employers who were not members of the multi-employer bargaining unit, did not constitute a per se violation of the Sherman Act. Rather,
[t]o amount to an antitrust violation the agreement must be rooted in an anti-competitive purpose, and must effect an anti-competitive result, as evidenced by action “ruining” a competitor’s business or driving him “out of business.” Unless there is such an agreement between the labor organization and the non-labor group and such an anti-competitive result, there is no conspiracy actionable under the antitrust laws.
Id. at 431-32 (emphasis supplied).
Since the one percent industry fund charge at issue here has no greater effect on electrical contractor prices than would a protective wage clause, I would follow the Smitty Baker standard and avoid the majority’s untenable extension of the per se rule.
As a final matter, I also disagree with the majority’s conclusion that the trial judge did not err in finding defendants Colgan Electric Co. (Colgan) and Miller Electric Co. (Miller) within the venue of the court. The record indicates that their most significant contact with the judicial district of Maryland was the payment of dues to NECA which has its national office located in that state. The holding that mere membership and payment of trade association dues is enough to constitute “transaetpng] business” under § 12 of the Clayton Act, 15 U.S.C. § 22, flies in the face of the well established rule that a defendant’s contacts with the forum state must be of a “substantial character” in order for venue to be proper. See Bartholomew v. Virginia Chiropractors Association, 612 F.2d 812, 815 (4th Cir. 1979), cert. denied, 446 U.S. 938, 100 S.Ct. 2158, 64 L.Ed.2d 791 (1980). Consequently, the district court clearly erred in failing to dismiss the complaint against defendants Colgan and Miller.
For the foregoing reasons, I respectfully dissent.
