### 1998 D e c i sion s O p inion s of the U nit e d

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D ock e t 97-3459,97-3470

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. e du/thir dc ir c uit_1998/208Filed August 31, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 97-3459 & 97-3470

NATIONAL LABOR RELATIONS BOARD,
Petitioner No. 97-3459

v.

SHEET METAL WORKERS' INTERNATIONAL ASSOCIATION, LOCAL UNION No. 19

ASSOCIATED BUILDINGS AND CONTRACTORS, INC., Southeast Pennsylvania, Keystone, Delaware and New Jersey Chapters,
Amicus Curiae

SHEET METAL WORKERS' INTERNATIONAL ASSOCIATION, LOCAL UNION No. 19,
Petitioner No. 97-3470

v.

NATIONAL LABOR RELATIONS BOARD,

ASSOCIATED BUILDINGS AND CONTRACTORS, INC., Southeast Pennsylvania, Keystone, Delaware and New Jersey Chapters,
Amicus Curiae

On Petition for Enforcement and
Cross Petition for ReviewArgued May 18, 1998

Before: ROTH and MCKEE, Circuit Judges, and O'NEILL, Senior District Judge*

(Filed: August 31, 1998)

Bruce E. Endy (argued) Spear, Wilderman, Borish, Endy, Spear and Runckel 230 South Broad Street, Suite 1400 Philadelphia, PA 19102 Attorney for Local Union 19

Aileen A. Armstrong Deputy Associate General Counsel Jeffrey L. Horowitz (argued)
Frederic C. Harvard
National Labor Relations Board 1099 14th Street, N.W. Washington, D.C. 20570 Attorneys for National Labor
Relations Board

Lawrence C. Coburn Pepper Hamilton LLP 3000 Two Logan Square
18th & Arch Streets Philadelphia, PA 19103 Attorney for amicus curiae

OPINION OF THE COURT

O'NEILL, Senior District Judge:

This case requires us to decide whether a labor uni on may be liable for unfair labor practices under the National Labor Relations Act (NLRA or the Act), 29 U.S.C.A.S 151-

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*The Honorable Thomas N. O'Neill, Jr., Senior Distr ict Judge of the
United States District Court for the Eastern Distri ct of Pennsylvania, sitting by designation.

2160 (West 1973), due to the actions of fellow union s

pursuant to a joint venture theory of agency. We an swer that question in the negative and remand to the Boa rd for further proceedings consistent with this opinion.1

I.

This case is before us on application of the Board for enforcement of its order against Sheet Metal Worker s International Association, Local Union No. 19 (Unio n or Local No. 19) and the Union's cross petition for re view of the Board's order. Unfair labor practice charges we re filed against the Union by Delcard Associates, Inc., Omni Mechanical, Inc. and Joseph Stong, Inc. After inves tigating these charges, the Board's General Counsel issued complaints alleging that the Union violated SS 8(b) (1)(A) and 8(b)(4)(ii)(B) of the Act, 29 U.S.C.A. SS 158(b)(1) (A) and 158(b)(4)(ii)(B), by restraining, coercing and thre atening employees seeking access to their jobsites and by p icketing at jobsite gates reserved for use by neutral employ ers.2 The complaints were consolidated for trial before an Administrative Law Judge.

Following six days of hearings, the A.L.J. issued a n opinion in which he found that the Union committed unfair labor practices at all three of the job sites. In a ddition, the A.L.J. found that the Union engaged in a joint vent ure with four other unions picketing at the Stong job site a nd was jointly responsible for unfair labor practices comm itted by
those unions. The A.L.J. recommended a broad order requiring the Union to cease and desist from restra ining and coercing employees of the three employers and a ny other employer.

The Union filed exceptions to the A.L.J.'s findings of fact and legal conclusions and to the recommended order. With some minor exceptions not relevant here, the Board

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1. We have appellate jurisdiction over the Board's petition seeking enforcement and the Union's petition for review pur suant to SS 10(e) and 10(f) of the NLRA, 29 U.S.C.A. S 160(e) and (f), re spectively.

2. The Board's General Counsel issued three differe nt complaints reflecting the three different job sites, Delcard, Omni and Stong.

3adopted the A.L.J.'s conclusions including the

determination that the Union "was engaged in a join t
venture with several other unions and thus was liab le for the unlawful acts committed by the other unions," a s well
as the recommended broad cease and desist order. Sh eet Metal Workers Int'l Ass'n, Local No. 19, 316 N.L.R. B. 426, 4-CB-3783, 4-CB-6879, 4-CB-6944, and 4-CC-2005-1, 1995 WL 77107, at *1 (N.L.R.B. February 23, 1995).

II.

The factual background of this matter is fully desc ribed in the A.L.J.'s opinion and requires recital here o nly insofar as is relevant to resolution of the joint venture l iability question.3 We will limit our discussion to the Ston g job site because that was the only job site at which the A.L .J. and the Board found the Union vicariously liable for th e unfair labor practices of other unions.

Stong is a nonunion contractor. About November 1992
, several local labor organizations affiliated with t he Building & Construction Trades Council of Philadelphia & Vic inity (BCTC), commenced an organizational campaign among Stong's employees. On March 12, 1993, BCTC and seve ral local unions (Road Sprinkler Fitters Local No. 669, Steamfitters Local No. 420, Plumbers Local No. 74, Sprinkler Fitters Local No. 692, Plumbers Local No. 690,

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3. In addition to challenging the joint venture the ory of liability, the
Union raises several additional issues. One of thes e issues is the sufficiency of the evidence in support of the Board 's conclusion that the Union itself committed unfair labor practices at al l three job sites independent of the other unions. We find no merit t o the Union's argument and affirm the Board's conclusion that the Union itself committed unfair labor practices at the Delcard, Om ni and Stong job
sites.

The Union also challenges the sufficiency of the ev idence in support of the finding that the Union acted in conjunction wit h the other unions at the Stong job site, the sufficiency of the evidence in support of the finding that the other unions committed unfair labo r practices at the Stong site, and the propriety of the broad cease an d desist order. We
need not reach these other issues because of our ho lding that the joint venture theory of agency is invalid.

4and Local No. 19), petitioned for a Board-conducted election

in a single unit comprising all Stong employees per forming construction and/or fabrication work in Philadelphi a and its vicinity. An election was conducted on May 13, which
the unions lost.

After the election, Swarthmore College commenced a construction project on which Stong was the only no nunion subcontractor. Stong's subcontract covered sprinkle r work, installation of plumbing and piping, steam-fitter w ork, and
related insulation. Swarthmore established three se parate entrances to the campus for access to the project, with gate 1 reserved for exclusive use by Stong.

On June 2, the Union, together with Sprinkler Fitte rs Local No. 692, Plumbers Local No. 690, Steamfitters Local No. 420, and Asbestos Workers Local No. 14, commenc ed picketing at the Swarthmore site in furtherance of their labor dispute with Stong.4 The complaint alleges, a nd the A.L.J. found, that the Union violated S 8(b)(1)(A) of the Act5 by blocking ingress of employees to the job site an d impliedly threatening employees with violence in th e course of picketing at gate 1 and S 8(b)(4)(ii)(B) 6 by pi cketing neutral employees at the other gates.

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4. Local Nos. 669 and 74, who were part of the join t election campaign, played no role in the subsequent picketing at Swart hmore.

5. Section 8(b)(1)(A) of the Act, 29 U.S.C.A.S 158( b)(1)(A), provides:

(b) It shall be an unfair labor practice for a lab or organization
or its agents --

(1) to restrain or coerce (A) employees in the exercise of the rights guaranteed in section 157 of this title[.]

Section 7, 29 U.S.C.A. S 157, provides:

Employees shall have the right to self-orga nization, to form, join, or assist labor organizations, to bargain co llectively through representatives of their own choosing, and t o engage in other concerted activities for the purpose of coll ective bargaining or

other mutual aid or protection, and shall also hav e the right to refrain from any or all of such activities[.]

The A.L.J. and the Board found that the unions viol ated the Stong employees' right to refrain from exercising these r ights by blocking theiraccess to the job site and by implicitly threatenin g them with violence.

6. Section 8(b)(4)(ii)(B) of the Act, 29 U.S.C.A.S 158(b)(4)(ii)(B), provides:

(b) Unfair labor practices by labor organiza tion

5It is undisputed that Local Nos. 692, 690, 420, 14, and

the Union picketed at gate 1 during the period from June 2 through July 22. All of the picketing unions exce pt Local No. 14 were petitioners in the May election and all were affiliated with BCTC, a BCTC subsidiary group (Dela ware and Chester County Building Trades) and the Mechani cal Trades Council. At the BCTC meetings prior to the commencement of the Swarthmore project, representat ives of the unions discussed Stong's participation in th e Swarthmore project and eventually agreed that all w ould picket the site. They mutually arranged days for ea ch union to picket and agreed upon the manner of picketing, including the number of pickets and the posting of "observers" at the neutral gates. They monitored an d consulted with each other and exchanged information on the progress of the picketing. Representatives of t he unions were present at each others' picket lines. During t he picketing, the representatives of the unions met th ree times with either the general contractor or the College. The last of these meetings resulted in a joint agreement by the unions to cease picketing based on assurances they receive d from the College. After the picketing ceased, the picket ing unions jointly distributed handbills at various locations over the names of the five picketing unions.

Based on these facts the A.L.J. found that the unio ns were acting pursuant to a joint venture, and that t herefore the Union was liable for the unfair labor practices

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It shall be an unfair labor practice for a l abor organization or
its agents --

(4)(ii) to threaten, coerce, or restrain an y p erson engaged in commerce or in an industry affecting commerc e, where in either case the object is --

(B) forcing or requiring any person to ceas e u sing, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor or manufacturer[.]

The A.L.J. and the Board concluded that the unions" induced and encouraged employees of [the general contractor] an d Swarthmore to cease doing business with Stong[,] thereby violat[i ng] Section 8(b)(4)(b)." Sheet Metal Workers Int'l Ass'n, 1995 WL 77107, at *25.

6committed by the other unions. The A.L.J. made nofi nding

that Local No. 19 had control over the other unions ; rather, he based his finding on a factual conclusion that t he unions were equals acting together in pursuit of a common goal.

III.

Our authority to review an order of the NLRB is lim ited. The Board's construction of a statute is ordinarily afforded
considerable deference: "we will enforce a Board or der that rests on a construction of the NLRA that is not`an unreasonable or unprincipled construction of the st atute' " NLRB v. Joy Techs., Inc., 990 F.2d 104, 108 (3d Cir . 1993), quoting Ford Motor Co. v. NLRB, 441 U.S. 488, 497 ( 1978); Dorsey Trailers, Inc. v. NLRB, 134 F.3d 125, 129 (3 d Cir. 1998); NLRB v. Greensburg Coca-Cola Bottling Co., I nc., 40 F.3d 669, 670 (3d Cir. 1994); see also Bro-Tech Cor p. v. NLRB, 105 F.3d 890, 894 (3d Cir. 1997) ("If the Boa rd adopts a rule that is rational and consistent with the Act,
then the rule is entitled to deference from the cou rts. . . . Deference to the Board, however, is not automatic b ut depends substantially on the persuasiveness of the agency view." ) (citations omitted).

In Ford Motor Co., the Supreme Court held that the
Board's construction of a statute was entitled to
"considerable deference" because the issue in that case -- determining whether in-plant cafeteria and vending machine prices were "terms and conditions of employ ment" subject to mandatory collective bargaining under SS 8(a)(5) and 8(d) of the Act -- required use of the NLRB's e xpertise in the labor field. 441 U.S. at 495. Moreover, "Con gress [had] assigned to the Board the primary task of con struing these provisions in the course of adjudicating char ges of unfair refusals to bargain." Id.

This case requires us to interpret S 2(13) of the A ct; Congress did not delegate to the Board the power to interpret that section. Overnite Transp. Co. v. NLR B, No. 97- 1387, 1998 WL 155574 (D.C. Cir. April 7, 1998). In addition, as discussed below, this case requires ap plication of common law principles of agency and, unlike the issue in

7Ford Motor Co., the NLRB has no special expertise a pplying

those common law principles; that expertise lies wi th the Court. Therefore, "we accord only limited deference to the Board's agency law analysis." International Longsho remen's Ass'n (ILA) v. NLRB, 56 F.3d 205, 212 (D.C. Cir. 19 95), cert. denied, 516 U.S. 1158 (1996); Overnite Transp. Co., 1998 WL 155574, at *5.

IV.

The Union argues that S 8(b) of the Act applies onl y to the unfair trade practices of "a labor organization or its agent," that the other unions were not Local No. 19's agent s, and that therefore it is not responsible for the acts o f the other unions. We agree.

The Board's decision approving the A.L.J.'s applica tion of a joint venture theory of agency preceded the Court of Appeals for the District of Columbia's rejection of a joint venture theory of agency in International Longshore men's Ass'n (ILA) v. NLRB, 56 F.3d 205 (D.C. Cir. 1995). We follow the well-reasoned approach taken in ILA.

In ILA the Union requested assistance from Japanese labor unions in its dispute with two shippers who w ere using nonunion labor to load fruit onto ships bound for Japan. The Japanese unions told the shippers that t he unions would refuse to unload fruit in Japan that w as not loaded by union labor. The shippers claimed that th is was a secondary boycott that amounted to a unfair trade practice. The Longshoremen union did not violate th e NLRA and the Japanese unions were beyond the scope of th e Act. Therefore the shippers and the Board argued that th e ILA was responsible for the Japanese unions' actions un der a joint venture theory of agency. The NLRB sought and received an injunction in the Middle District of Fl orida under this joint venture theory which was affirmed on appeal by the Court of Appeals for the Eleventh Cir cuit. See Dowd v. International Longshoremen's Ass'n, 781 F. Supp. 1565 (M.D. Fla. 1991), aff 'd, 975 F.2d 779 (11th C ir. 1992). In its decision, the Court of Appeals held t hat the
Board had demonstrated reasonable cause to believe that the ILA had violated the NLRA by articulating "a su bstantial

8and not frivolous legal theory on which to attribut e the

actions of the Japanese unions to the ILA." 975 F.2 d at 784. Although acknowledging that the ILA had no rig ht of control over the Japanese unions as is normally req uired to create an agency relationship, the Court concluded that:

[u]nder the liberal application of agency co ncepts appropriate in the labor context, a contract ual right to control and direct the performance of anothe r is not required to impose responsibility under sect ion 8(b) where an employer or union has encouraged or requested another to engage in unfair labor practices
on its behalf.

Id. at 785 (footnote omitted).

With the injunction in place, the parties submitted the case directly to the Board on stipulated facts. The Board reaffirmed the position it had argued to the Court of Appeals for the Eleventh Circuit and an appeal to t he Court of Appeals for the District of Columbia followed.

That Court first determined that "this case gives r ise to an unfair labor practice under the NLRA section 8(b)(4)(ii)(B) only if the threats issued by the Ja panese unions somehow may be attributed to the ILA." ILA, 56 F.3d at 211. The Court then turned to S 2(13) of th e NLRA which provides: "In determining whether any person is acting as an `agent' of another person so as to mak e such other person responsible for his acts, the question of whether the specific acts performed were actually authorized or subsequently ratified shall not be controlling." Congress added this provision in 1947 to make clear that the Act was designed to render both empl oyers and labor organizations responsible for the acts of their agents in accordance with ordinary common law rules of agency.7 Overnite Transp. Co., 1998 WL 155574, at * 4; ILA,

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7. This Congressional intent was gleaned from the u nusually clear legislative history and not from the plain language of the statute. We found nothing in the plain language of statute whic h validates or invalidates the Board's joint venture theory of age ncy. In fact, the plain language of S 2(13) is particularly uninstructive i n analyzing this question because the section merely states which pr inciples will not

956 F.3d at 211; see also H.R. Conf. Rep. No. 510 at 36

(1947), reprinted in 1947 U.S.C.C.A.N. 1135, 1142;8 Local 1814, International Longshoremen's Ass'n v. NLRB, 7 35 F.2d 1384, 1394 (D.C. Cir. 1984) ("Beyond doubt, th e legislative intent of [section 2(13)] was to make t he ordinary law of agency applicable to the attribution of indi vidual acts to both employers and unions.")

Applying the common law rules of agency, the Court reversed the Board's holding that Japanese unions w ere agents of the ILA because the ILA did not control t he conduct of the Japanese unions. See ILA, 56 F.3d at 213 ("It is a fundamental principle of hornbook agency law that an agency relationship arises only where the princi pal `has the right to control the conduct of the agent with respect to matters entrusted to him.' Restatement (Second) of Agency S 14[.]"); see also AT & T Co. v. Winback and Conse rve Program, Inc., 42 F.3d 1421, 1434 (3d Cir.) ("An ag ency relationship is created when one party consents to have another act on its behalf, with the principal contr olling and directing the acts of the agent." (citations omitte d), cert.

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control and does not attempt to affirmatively prono unce which principles will apply. We note, however, that the language of S 2(13) is consistent with applying common law principles of agency becau se under those principles whether or not the acts performed were a ctually authorized or ratified by the principal is not controlling. See, e.g., Restatement (Second) of Agency S 159 (1958) (principals can be liable for unauthorized acts by an agent with apparent authori ty).

8. This view was reinforced by Senator Taft's state ment included in the legislative history:

This [amendment] restores the law of agency as it has been developed at common law. . . . It is true th at this definition was
written to avoid the construction which the Supreme Court in the recent case of [United Brotherhood of Carpen ters v. United States, 330 U.S. 395 (1947)] placed upon section 6 o f the Norris-La Guardia Act which exempts organizations from liabili ty for illegal acts committed in labor disputes unless proof of actual instigation, participation, or ratification can be shown. . . . The conferees agreed that the ordinary law of agency should apply to employers and union representatives.

93 Cong. Rec. 6859 (1947).

10denied, 115 S.Ct. 1838 (1994)); Menichini v. Grant, 995

F.2d 1224, 1233 n.14 (3d Cir. 1993) ("Agency law recognizes the principal's ability to control and m onitor agent behavior[.]"); Restatement (Second) of Agency S 1(1) (1958) ("Agency is the fiduciary relation which res ults from the manifestation of consent by one person to anoth er that the other shall act on his behalf and subject to hi s control, and consent by the other to act.")9

The only reported case which gives credence to a jo int venture theory of agency is the Court of Appeals fo r the Eleventh Circuit's affirmance of the injunction ent ered by the Middle District of Florida. Dowd, 975 F.2d 770. We agree with the Court of Appeals for the District of Columbia that the Court of Appeals for the Eleventh Circuit' s analysis is distinguishable. First, the Court of Appeals for the Eleventh Circuit was called upon to review only whe ther
there was reasonable cause to believe that a violat ion of the Act had occurred and limited its inquiry to an eval uation of
whether the Board's theories of law and facts were not
insubstantial and frivolous. Id. at 783. "This defe rential review is appropriate at the injunction stage even where the

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9. Joint ventures are generally governed by partner ship law and, like a partner, a member of the venture may be regarded as both a principal and an agent of the other co-venturers. United Stat es v. USX Corp., 68 F.3d 811, 826 (3d Cir. 1995) ("Each member of a joi nt venture is `considered the agent of the others, so that the ac t of any member within the scope of the enterprise is charged vicariously against the rest.' "), quoting Pritchett v. Kimberly Cove, Inc., 568 F.2d 570, 579-580 (8th Cir. 1977); 46 Am. Jur. 2d Joint Ventures S 24 (1994); 3 Am. Jur. 2d Agency S 4 (1986). Members of the joint venture, however, are not considered agents of the other co-venturers pursuant to common law principles of agency, but pursuant to partnership law. Harold Gil l Reuschlein & William A. Gregory, The Law of Agency and Partnersh ip, 450-55 (2d ed. 1990) (discussing the merging of partnership and jo int venture law and stating that as a general rule joint ventures are g overned by the same rules as partnerships); Adam B. Weissburg, Reviewin g the Law on Joint Ventures with an Eye Toward the Future, 63 S. Cal. L. Rev. 487, 488 (1990) (stating that courts apply partnership princ iples to joint ventures); 46 Am. Jur. Joint Ventures S 3 (1994). Therefore, e ven if the other unions were agents of Local No. 19 under joint venture and partnership jurisprudence, they were not agents pursuant to com mon law principles of agency law and thus were not agents pursuant to S 8 of the Act.

11theory underlying the petition is `untested' or`nov el' in

order to preserve the legal issue for Board determi nation." Id. Second, the Court of Appeals for the Eleventh C ircuit did not analyze S 2(13)'s legislative history, whic h the ILA Court found required invalidation of the Board's jo int venture theory of agency. ILA, 56 F.3d at 213.

We hold that the joint venture theory of agency ado pted by the A.L.J. and the Board below is inconsistent w ith S 8 of the Act. We therefore deny the Board's enforceme nt petition and grant in part and deny in part the Uni on's cross petition for review.10 Because the A.L.J. rec ommended
and the Board entered the broad cease and desist or der based at least partially on the conduct of the othe r unions who were not "agents" of the Union pursuant toS 8 o f the Act, we remand to the Board for further proceedings consistent with this opinion.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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10. The petition for review is granted to the exten t it sought review of

the
A.L.J.'s and the Board's conclusion that the Union was liable for the unfair labor practices of other unions pursuant to a joint venture theory of agency. The Union's petition is denied to the ex tent it argued that there was insufficient evidence in support of the B oard's conclusion that the Union committed unfair labor practices itself i ndependent of the actions of the other unions. See supra n.3.

12