Union ‘Turf Battle’ Revived by Second Circuit

MANHATTAN (CN) – Reviving what it billed as a union “turf war,” the Second Circuit ruled Wednesday that the New England Regional Council of Carpenters is not immune from antitrust claims.

Various unions of ironworkers brought the underlying suit in Connecticut, complaining that the carpenters violated fair labor practices by including subcontractor restrictions in its labor agreements to secure certain jobs that they say historically went to Ironworkers.

Last year, a federal judge sided with the carpenters at summary judgment. In addition to finding the subcontracting practices protected by the so-called Construction Industry Proviso, the court applied what is known as the nonstatutory exemption to antitrust liability.

A three-judge panel of the Second Circuit reversed as to the latter point Wednesday, explaining in a footnote that this judicially created exemption “permits certain union-employer agreements” despite some potential anticompetitive effects, in order to “balance the conflicting policies embodied in the labor and antitrust laws, with the policies inherent in labor law serving as the first point of reference.”

Writing for the Manhattan-based court, U.S. Circuit Judge Jose Cabranes noted that the nonstatutory exemption is applicable only when the labor agreement ensures the protection of jobs; it cannot be designed to create new jobs that non-union members already hold.

“As it stands, the record is insufficient to determine whether or not these subcontracting clauses were in fact being used to preserve work, prevent jobsite friction, improve the wages, enhance working conditions, or further another legitimate labor goal; or whether the clauses were used for work expansion — specifically whether the carpenters used the subcontracting clauses to take over work that was traditionally done by the ironworkers,” Cabranes wrote.

Here the ironworkers allege that they were the historical holders of the jobs affected by the subcontractor restrictions, barring the carpenters from invoking the exemption.

“As the history of the non‐statutory exemption shows, it was never intended to be used as a weapon in turf battles,” Cabranes wrote.

On remand, the carpenters must provide more information to show if the nonstatutory exemption applies.

“The carpenters must show that these practices furthered legitimate aims of collective bargaining in a way that is not unduly restrictive of market competition,” the 35-page opinion concludes.

Paul Hetterman with the firm Hartnett Gladney Hetterman in St. Louis represented the ironworkers.

The carpenters were represented by Keith Carroll of Mintz Levin Cohn Ferris Glovsky and Popeo in Boston.

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