1998 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

8-31-1998

NLRB v. Local 19

Precedential or Non-Precedential:

Docket 97-3459,97-3470

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Recommended Citation

"NLRB v. Local 19" (1998). 1998 Decisions. Paper 208.

http://digitalcommons.law.villanova.edu/thirdcircuit_1998/208
Filed 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 Review 
Argued 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 union 

may be liable for unfair labor practices under the National 

Labor Relations Act (NLRA or the Act), 29 U.S.C.A.S 151- 

_________________________________________________________________ 

*The Honorable Thomas N. O'Neill, Jr., Senior District Judge of the 

United States District Court for the Eastern District of Pennsylvania, 

sitting by designation. 

 2 
160 (West 1973), due to the actions of fellow unions 

pursuant to a joint venture theory of agency. We answer 

that question in the negative and remand to the Board 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 Workers 

International Association, Local Union No. 19 (Union or 

Local No. 19) and the Union's cross petition for review of 

the Board's order. Unfair labor practice charges were filed 

against the Union by Delcard Associates, Inc., Omni

Mechanical, Inc. and Joseph Stong, Inc. After investigating 

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 threatening 

employees seeking access to their jobsites and by picketing 

at jobsite gates reserved for use by neutral employers.2 The 

complaints were consolidated for trial before an 

Administrative Law Judge. 

Following six days of hearings, the A.L.J. issued an 

opinion in which he found that the Union committed unfair 

labor practices at all three of the job sites. In addition, the 

A.L.J. found that the Union engaged in a joint venture with 

four other unions picketing at the Stong job site and was 

jointly responsible for unfair labor practices committed by 

those unions. The A.L.J. recommended a broad order 

requiring the Union to cease and desist from restraining 

and coercing employees of the three employers and any 

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 

_________________________________________________________________ 

1. We have appellate jurisdiction over the Board's petition seeking 

enforcement and the Union's petition for review pursuant to SS 10(e) and 

10(f) of the NLRA, 29 U.S.C.A. S 160(e) and (f), respectively. 

2. The Board's General Counsel issued three different complaints 

reflecting the three different job sites, Delcard, Omni and Stong. 

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

determination that the Union "was engaged in a joint 

venture with several other unions and thus was liable for 

the unlawful acts committed by the other unions," as well 

as the recommended broad cease and desist order. Sheet 

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 described 

in the A.L.J.'s opinion and requires recital here only insofar 

as is relevant to resolution of the joint venture liability 

question.3 We will limit our discussion to the Stong job site 

because that was the only job site at which the A.L.J. and 

the Board found the Union vicariously liable for the unfair 

labor practices of other unions. 

Stong is a nonunion contractor. About November 1992, 

several local labor organizations affiliated with the Building 

& Construction Trades Council of Philadelphia & Vicinity 

(BCTC), commenced an organizational campaign among 

Stong's employees. On March 12, 1993, BCTC and several 

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, 

_________________________________________________________________ 

3. In addition to challenging the joint venture theory of liability, the 

Union raises several additional issues. One of these issues is the 

sufficiency of the evidence in support of the Board's conclusion that the 

Union itself committed unfair labor practices at all three job sites 

independent of the other unions. We find no merit to the Union's 

argument and affirm the Board's conclusion that the Union itself 

committed unfair labor practices at the Delcard, Omni and Stong job 

sites. 

The Union also challenges the sufficiency of the evidence in support of 

the finding that the Union acted in conjunction with the other unions at 

the Stong job site, the sufficiency of the evidence in support of the 

finding that the other unions committed unfair labor practices at the 

Stong site, and the propriety of the broad cease and desist order. We 

need not reach these other issues because of our holding that the joint 

venture theory of agency is invalid. 

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

in a single unit comprising all Stong employees performing 

construction and/or fabrication work in Philadelphia 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 nonunion 

subcontractor. Stong's subcontract covered sprinkler work, 

installation of plumbing and piping, steam-fitter work, and 

related insulation. Swarthmore established three separate 

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 Fitters 

Local No. 692, Plumbers Local No. 690, Steamfitters Local 

No. 420, and Asbestos Workers Local No. 14, commenced 

picketing at the Swarthmore site in furtherance of their 

labor dispute with Stong.4 The complaint alleges, and 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 and 

impliedly threatening employees with violence in the course 

of picketing at gate 1 and S 8(b)(4)(ii)(B) 6 by picketing 

neutral employees at the other gates. 

_________________________________________________________________ 

4. Local Nos. 669 and 74, who were part of the joint election campaign, 

played no role in the subsequent picketing at Swarthmore. 

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-organization, to form, 

join, 

 or assist labor organizations, to bargain collectively through 

 representatives of their own choosing, and to engage in other 

 concerted activities for the purpose of collective bargaining or 

other 

 mutual aid or protection, and shall also have the right to refrain 

 from any or all of such activities[.] 

The A.L.J. and the Board found that the unions violated the Stong 

employees' right to refrain from exercising these rights by blocking their 
access to the job site and by implicitly threatening 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 organization 

 5 
It 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 except Local 

No. 14 were petitioners in the May election and all were 

affiliated with BCTC, a BCTC subsidiary group (Delaware 

and Chester County Building Trades) and the Mechanical 

Trades Council. At the BCTC meetings prior to the 

commencement of the Swarthmore project, representatives 

of the unions discussed Stong's participation in the 

Swarthmore project and eventually agreed that all would 

picket the site. They mutually arranged days for each 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 and 

consulted with each other and exchanged information on 

the progress of the picketing. Representatives of the unions 

were present at each others' picket lines. During the 

picketing, the representatives of the unions met three 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 received from 

the College. After the picketing ceased, the picketing 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 unions 

were acting pursuant to a joint venture, and that therefore 

the Union was liable for the unfair labor practices

_________________________________________________________________ 

 It shall be an unfair labor practice for a labor organization or 

its 

 agents -- 

 (4)(ii) to threaten, coerce, or restrain any p erson engaged in 

 commerce or in an industry affecting commerce, where in either 

 case the object is -- 

 (B) forcing or requiring any person to cease 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] and Swarthmore to 

cease doing business with Stong[,] thereby violat[ing] Section 

8(b)(4)(b)." 

Sheet Metal Workers Int'l Ass'n, 1995 WL 77107, at *25. 

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

that Local No. 19 had control over the other unions; rather, 

he based his finding on a factual conclusion that the 

unions were equals acting together in pursuit of a common 

goal. 

III. 

Our authority to review an order of the NLRB is limited. 

The Board's construction of a statute is ordinarily afforded 

considerable deference: "we will enforce a Board order that 

rests on a construction of the NLRA that is not`an 

unreasonable or unprincipled construction of the statute' " 

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 (3d Cir. 

1998); NLRB v. Greensburg Coca-Cola Bottling Co., Inc., 40 

F.3d 669, 670 (3d Cir. 1994); see also Bro-Tech Corp. v. 

NLRB, 105 F.3d 890, 894 (3d Cir. 1997) ("If the Board 

adopts a rule that is rational and consistent with the Act, 

then the rule is entitled to deference from the courts. . . . 

Deference to the Board, however, is not automatic but 

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 employment" 

subject to mandatory collective bargaining under SS 8(a)(5) 

and 8(d) of the Act -- required use of the NLRB's expertise 

in the labor field. 441 U.S. at 495. Moreover, "Congress 

[had] assigned to the Board the primary task of construing 

these provisions in the course of adjudicating charges of 

unfair refusals to bargain." Id. 

This case requires us to interpret S 2(13) of the Act; 

Congress did not delegate to the Board the power to

interpret that section. Overnite Transp. Co. v. NLRB, No. 97- 

1387, 1998 WL 155574 (D.C. Cir. April 7, 1998). In 

addition, as discussed below, this case requires application 

of common law principles of agency and, unlike the issue in 

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

those common law principles; that expertise lies with the 

Court. Therefore, "we accord only limited deference to the 

Board's agency law analysis." International Longshoremen's 

Ass'n (ILA) v. NLRB, 56 F.3d 205, 212 (D.C. Cir. 1995), 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 only to the 

unfair trade practices of "a labor organization or its agent," 

that the other unions were not Local No. 19's agents, and 

that therefore it is not responsible for the acts of the other 

unions. We agree. 

The Board's decision approving the A.L.J.'s application 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 Longshoremen'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 were 

using nonunion labor to load fruit onto ships bound for 

Japan. The Japanese unions told the shippers that the 

unions would refuse to unload fruit in Japan that was not 

loaded by union labor. The shippers claimed that this was 

a secondary boycott that amounted to a unfair trade

practice. The Longshoremen union did not violate the NLRA 

and the Japanese unions were beyond the scope of the Act. 

Therefore the shippers and the Board argued that the ILA 

was responsible for the Japanese unions' actions under a 

joint venture theory of agency. The NLRB sought and

received an injunction in the Middle District of Florida 

under this joint venture theory which was affirmed on 

appeal by the Court of Appeals for the Eleventh Circuit. See 

Dowd v. International Longshoremen's Ass'n, 781 F. Supp. 

1565 (M.D. Fla. 1991), aff 'd, 975 F.2d 779 (11th Cir. 

1992). In its decision, the Court of Appeals held that the 

Board had demonstrated reasonable cause to believe that 

the ILA had violated the NLRA by articulating "a substantial 

 8 
and not frivolous legal theory on which to attribute the 

actions of the Japanese unions to the ILA." 975 F.2d at 

784. Although acknowledging that the ILA had no right of 

control over the Japanese unions as is normally required to 

create an agency relationship, the Court concluded that: 

 [u]nder the liberal application of agency concepts 

 appropriate in the labor context, a contractual right to 

 control and direct the performance of another is not 

 required to impose responsibility under section 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 the Court 

of Appeals for the District of Columbia followed. 

That Court first determined that "this case gives rise to 

an unfair labor practice under the NLRA section 

8(b)(4)(ii)(B) only if the threats issued by the Japanese 

unions somehow may be attributed to the ILA." ILA, 56 

F.3d at 211. The Court then turned to S 2(13) of the NLRA 

which provides: "In determining whether any person is 

acting as an `agent' of another person so as to make 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 employers 

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, 

_________________________________________________________________ 

7. This Congressional intent was gleaned from the unusually clear 

legislative history and not from the plain language of the statute. We 

found nothing in the plain language of statute which validates or 

invalidates the Board's joint venture theory of agency. In fact, the plain 

language of S 2(13) is particularly uninstructive in analyzing this 

question because the section merely states which principles will not 

 9 
56 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, 735 

F.2d 1384, 1394 (D.C. Cir. 1984) ("Beyond doubt, the 

legislative intent of [section 2(13)] was to make the ordinary 

law of agency applicable to the attribution of individual acts 

to both employers and unions.") 

Applying the common law rules of agency, the Court 

reversed the Board's holding that Japanese unions were 

agents of the ILA because the ILA did not control the 

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 principal `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 Conserve 

Program, Inc., 42 F.3d 1421, 1434 (3d Cir.) ("An agency 

relationship is created when one party consents to have 

another act on its behalf, with the principal controlling and 

directing the acts of the agent." (citations omitted), cert. 

_________________________________________________________________ 

control and does not attempt to affirmatively pronounce which principles 

will apply. We note, however, that the language of S 2(13) is consistent 

with applying common law principles of agency because under those 

principles whether or not the acts performed were actually 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 authority). 

8. This view was reinforced by Senator Taft's statement included in the 

legislative history: 

 This [amendment] restores the law of agency as it has been 

 developed at common law. . . . It is true that this definition was 

 written to avoid the construction which the Supreme Court in the 

 recent case of [United Brotherhood of Carpenters v. United States, 

 330 U.S. 395 (1947)] placed upon section 6 of the Norris-La Guardia 

 Act which exempts organizations from liability 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). 

 10 
denied, 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 monitor 

agent behavior[.]"); Restatement (Second) of Agency S 1(1) 

(1958) ("Agency is the fiduciary relation which results from 

the manifestation of consent by one person to another that 

the other shall act on his behalf and subject to his control, 

and consent by the other to act.")9 

The only reported case which gives credence to a joint 

venture theory of agency is the Court of Appeals for the 

Eleventh Circuit's affirmance of the injunction entered 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 whether 

there was reasonable cause to believe that a violation of the 

Act had occurred and limited its inquiry to an evaluation of 

whether the Board's theories of law and facts were not 

insubstantial and frivolous. Id. at 783. "This deferential 

review is appropriate at the injunction stage even where the 

_________________________________________________________________ 

9. Joint ventures are generally governed by partnership 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 States v. USX Corp., 68 

F.3d 811, 826 (3d Cir. 1995) ("Each member of a joint venture is 

`considered the agent of the others, so that the act 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 Gill Reuschlein & 

William A. Gregory, The Law of Agency and Partnership, 450-55 (2d ed. 

1990) (discussing the merging of partnership and joint venture law and 

stating that as a general rule joint ventures are governed by the same 

rules as partnerships); Adam B. Weissburg, Reviewing the Law on Joint 

Ventures with an Eye Toward the Future, 63 S. Cal. L. Rev. 487, 488 

(1990) (stating that courts apply partnership principles to joint 

ventures); 

46 Am. Jur. Joint Ventures S 3 (1994). Therefore, even if the other unions 

were agents of Local No. 19 under joint venture and partnership 

jurisprudence, they were not agents pursuant to common law principles 

of agency law and thus were not agents pursuant to S 8 of the Act. 

 11 
theory underlying the petition is `untested' or`novel' in 

order to preserve the legal issue for Board determination." 

Id. Second, the Court of Appeals for the Eleventh Circuit 

did not analyze S 2(13)'s legislative history, which the ILA 

Court found required invalidation of the Board's joint 

venture theory of agency. ILA, 56 F.3d at 213. 

We hold that the joint venture theory of agency adopted 

by the A.L.J. and the Board below is inconsistent with S 8 

of the Act. We therefore deny the Board's enforcement 

petition and grant in part and deny in part the Union's 

cross petition for review.10 Because the A.L.J. recommended 

and the Board entered the broad cease and desist order 

based at least partially on the conduct of the other unions 

who were not "agents" of the Union pursuant toS 8 of 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 

_________________________________________________________________ 

10. The petition for review is granted to the extent 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 extent it argued that 

there was insufficient evidence in support of the Board's conclusion that 

the Union committed unfair labor practices itself independent of the 

actions of the other unions. See supra n.3. 

 12