Case Name: Julius MULLINS et al. v. KAISER STEEL CORPORATION, Appellant
Court: United States Court of Appeals for the District of Columbia Circuit
Jurisdiction: District of Columbia
Decision Date: 1980-09-17
Citations: 206 U.S. App. D.C. 334
Docket Number: No. 79-1463
Parties: Julius MULLINS et al. v. KAISER STEEL CORPORATION, Appellant.
Judges: 
Reporter: United States Court of Appeals for the District of Columbia Circuit
Volume: 206
Pages: 334–367

Head Matter:
642 F.2d 1302
Julius MULLINS et al. v. KAISER STEEL CORPORATION, Appellant.
No. 79-1463.
United States Court of Appeals, District of Columbia Circuit.
Argued Dec. 18, 1979.
Decided Sept. 17, 1980.
Rehearing Denied Nov. 12, 1980.
Certiorari Granted May 4, 1981.
See 101 S.Ct. 2044.
A. Douglas Melamed, Washington, D. C., with whom Robert A. Hammond, III and John H. Harwood, II, Washington, D. C., were on the brief, for appellant.
Stephen J. Poliak, Washington, D. C., with whom Ralph J. Moore, Jr., Wendy S. White, E. Calvin Golumbic and Walter P. O’Connell, Washington, D. C., were on the brief, for appellees.
Before WILKEY and MIKVA, Circuit Judges, and FLANNERY , United States District Judge for the District of Columbia.
Sitting by designation pursuant to 28 U.S.C. § 292(a) (1976).

Opinion:
Opinion for the Court filed by Circuit Judge MIKVA.
Dissenting opinion filed by Circuit Judge WILKEY.
MIKVA, Circuit Judge:
This suit was brought against Kaiser Steel Corporation (Kaiser) by the Trustees of the United Mine Workers of America Health and Retirement Funds, seeking payment of contributions due to these funds under the terms of the National Bituminous Coal Wage Agreement of 1974 (1974 Agreement). Kaiser's principal defense was that the contract provision sued on was illegal under both the antitrust prohibitions of the Sherman Act, § 1-2, 15 U.S.C. § 1-2 (1976), and the "hot cargo" proscriptions of the National Labor Relations Act (NLRA), § 8(e), 29 U.S.C. § 158(e) (1976). Rejecting these defenses, the district court granted summary judgment to the Trustees and awarded them attorneys' fees. For the reasons set forth below, we affirm.
I. THE PURCHASE-OF-COAL CLAUSE
The 1974 Agreement was a collective bargaining agreement between the United Mine Workers of America (UMW) and various coal operators and associations of coal operators, most notably the Bituminous Coal Operators Association (BCOA). As a member of BCOA, Kaiser became an employer-signatory to the 1974 Agreement.
Among the customary provisions of a collective bargaining agreement setting the terms and conditions of employment, the 1974 Agreement defined the obligations of the parties with respect to the management and funding of various health and retirement trusts established for the benefit of miners. Of particular importance to this litigation is Article XX(d) which provided three ways to measure the employer's obligation to contribute to these funds: first, by the amount of coal produced by the employer for sale or use; second, by the number of hours worked by the employees; and, third, by the amount of coal "procured or acquired" for sale or use for which no contribution had been made. In effect, this third provision-the so-called "purchase-of-coal clause'-required a signatory employer to contribute to the health and retirement funds for each ton of coal purchased from other producers who were not themselves parties to the 1974 Agreement and, hence, did not have a collective bargaining agreement with the UMW. It is the purchase-of-coal clause under which the Trustees now seek payment, and it is the purchase-of-coal clause that Kaiser claims should not be enforced on grounds of illegality.
Previous collective bargaining agreements between the UMW and BCOA had contained a similar provision, except that the predecessor clause required a contribution for coal bought from non-union producers that was double the required contribution for coal that UMW workers had mined. Due to this feature, the earlier clause had been called a "penalty clause" and was the subject of considerable litigation; sometimes the legality of the clause was sustained, but sometimes it was not. Compare United Mine Workers (Dixie Mining Co.), 188 N.L.R.B. 753 (1971) (upholding clause) with Riverton Coal Co. v. United Mine Workers, 453 F.2d 1035 (6th Cir.), cert. denied, 407 U.S. 915, 92 S.Ct. 2439, 32 L.Ed.2d 690 (1972) (invalidating clause). See generally International Union, UMW v. NLRB, 468 F.2d 1139 (D.C.Cir.1972). Under the current purchase-of-coal clause, the rates of contribution for the coal produced by union and non-union miners are equivalent. Whatever penalty may have been implicit in the disparity of payments in the earlier clause, that particular defect has been eliminated.
The terms of the 1974 Agreement clearly indicate that the parties were concerned about the legality of the purchase-of — coal clause and about having their bargained— for agreement undone by subsequent legal rulings on that point. Article XX(d)(l), which sets forth the rates of contribution, also provides that the UMW shall have the right to require the parties to meet and negotiate in good faith a replacement for the purchase-of-coal clause if the clause is adjudged to be invalid or unlawful. A similar provision is repeated in the article on severability, which requires renegotiation if the parties are prevented by legal authorities from "implementing or effectuating the economic benefits, including health and retirement fund payments, required by this Agreement." 1974 Agreement, Art. XXIX(b). Both these provisions are set forth in the margin.
In addition to establishing the rates of contribution for the health and retirement funds, the 1974 Agreement required the employers to file monthly reports with the Trustees, setting forth the amount of coal produced internally and also the tonnage purchased elsewhere. 1974 Agreement, Art. XX(d)(5). An employer's failure to comply with the reporting requirement was stated in the contract to be an independent contract violation. 1974 Agreement, Art. XX(d)(7).
While the 1974 Agreement was in effect, Kaiser regularly reported and made contributions for coal it had produced; for purchased coal, it did neither. In April, 1978, four months after the 1974 Agreement expired under its terms, the Trustees brought this suit. They alleged that Kaiser had made coal purchases for which contributions were required under the purchase-of-coal clause, a fact Kaiser does not dispute. On that basis, the Trustees sought compliance with the purchase-of-coal clause and payment to the funds accordingly.
The Trustees filed a motion for summary judgment, which was granted by the district court. Kaiser's cross-motion, grounded on several affirmative defenses, was denied. Kaiser has brought the matter here.
II. KAISER'S ILLEGALITY DEFENSE
The gist of Kaiser's defense to this suit is that the pertinent contract clause is unenforceable. The argument has two branches: first, that the purchase-of-coal provision was, in reality, an anticompetitive penalty, violative of sections 1 and 2 of the Sherman Act; and, second, that the purchase-of-coal provision violated section 8(e) of the NLRA-the so-called "hot-cargo" provision of the labor law, which precludes unions from bargaining for secondary boycotts of non-union goods. For either or both of these reasons, it is argued, the offending contract clause ought not be enforced.
In an appeal from a summary judgment, Kaiser is, of course, entitled to have its version of the facts presumed. Bishop v. Wood, 426 U.S. 341, 347, 96 S.Ct. 2074, 2078, 48 L.Ed.2d 684 (1976). It is not . similarly entitled to have its legal characterization of the disputed contract clause prevail. This is not a case in which a contract's illegality is manifest. See generally 14 Williston on Contracts § 1630B (3d ed. 1972) (indicating procedural implications of whether or not contract is manifestly illegal). The narrow issue on appeal, therefore, is not whether an illegal contract clause should be enforced but rather whether Kaiser's proffered defense of illegality should be entertained. By granting summary judgment for the Trustees, notwithstanding Kaiser's claim that the clause was in two ways illegal, the district court decided that Kaiser was not entitled to interpose the illegality defense. This, we now hold, is correct.
In holding as we do today, we join two other courts of appeals on this question. In Huge v. Long's Hauling Co., 590 F.2d 457 (3d Cir. 1978), cert. denied, 442 U.S. 918, 99 S.Ct. 2840, 61 L.Ed.2d 285 (1979), the Third Circuit decided a case exactly like the one here on appeal; a suit under the 1974 Agreement by welfare fund trustees to enforce the purchase-of-coal clause met by the defense of illegality under the Sherman Act and section 8(e). The Huge court held that neither defense could be interposed. More recently, the Ninth Circuit, in Waggoner v. R. McGray, Inc., 607 F.2d 1229 (9th Cir. 1979), considered whether a suit by the trustees of a benefit fund should be dismissed on the ground that the provision sued on violated section 8(e) and was, thus, unenforceable. The court held that because the defendants had not first presented their unfair labor practice allegations to the Labor Board, the district court should have decided the trustees' contract claim without reference to the section 8(e) defense. 607 F.2d at 1236.
A. Antitrust Illegality
It has never been easy to reconcile the strong command of the antitrust law to fight monopolistic practices with the necessity to preclude windfalls and unjust enrichment of parties to a contract. When confronted in 1909 with a price-fixing scheme "more certain in results, more widespread in its operation, and more evil in its purposes" than any other with which it might be compared, Continental Wall Paper Co. v. Louis Voight & Sons Co., 212 U.S. 227, 256, 29 S.Ct. 280, 290, 53 L.Ed. 486 (1909) (quoting circuit court opinion, 148 F. 939, 947 (6th Cir. 1906)), it was easier for the Supreme Court to permit an antitrust defense to the plaintiffs contract action than it was to reconcile that result with any other case-before or since. Compare Continental Wall Paper Co. v. Louis Voight & Sons Co., supra, (allowing defense) with Connolly v. Union Sewer Pipe Co., 184 U.S. 540, 22 S.Ct. 431, 46 L.Ed. 679 (1902) (disallowing defense) and D. R. Wilder Mfg. Co. v. Corn Products Refining Co., 236 U.S. 165, 35 S.Ct. 398, 59 L.Ed. 520 (1915) (same) and A. B. Small Co. v. Lamborn & Co., 267 U.S. 248, 45 S.Ct. 300, 69 L.Ed. 597 (1925) (same). Various "tests" were articulated to achieve the reconciliation needed to square antitrust law with basic contract principles. Contracts "collateral" to the unlawful combination could be enforced, but "inherently illegal" agreements could not. See A. B. Small Co. v. Lamborn & Co., 267 U.S. at 252, 45 S.Ct. at 302; D. R. Wilder Mfg. Co. v. Corn Products Refining Co., 236 U.S. at 172-78, 35 S.Ct. at 400. The test was as useless as it sounds. In 1959, the Court undertook to give the question a thoroughgoing review.
In Kelly v. Kosuga, 358 U.S. 516, 79 S.Ct. 429, 3 L.Ed.2d 475 (1959), a seller brought suit on a contract for sale of 50 carloads of onions at market price to an onion grower. The contract was part of a larger scheme: the seller-plaintiff, who owned large quantities of onions, would not sell them on the futures market if the defendant and other onion growers would each buy a portion of the seller's stock and similarly withhold them from the market. The effect and intent of the scheme, it was alleged, was to inflate the market price of onions. After taking some deliveries and making some payments, the defendant backed out of the deal, and the seller sued.
The Supreme Court ruled that onions delivered or ready to be delivered had to be paid for by the defendant, notwithstanding his claim that the contract under which the onions were purchased was part of a larger price-fixing scheme which the Sherman Act would deem foul. The Court acknowledged the previous difficulties with the problem, stating:
As a defense to an action based on contract, the plea of illegality based on violation of the Sherman Act has not met with much favor in this Court. This has been notably the case where the plea has been made by a purchaser in an action to recover from him the agreed price of goods sold.
358 U.S. at 518,. 79 S.Ct. at 431 (footnote omitted). The Court, noting its extreme reluctance to supplement the express remedies provided by the antitrust laws with an additional remedy of contract avoidance, id. at 519, 79 S.Ct. at 431, restated the narrow limits within which the defense of antitrust illegality would be allowed:
Past the point where the judgment of the Court would itself be enforcing the precise conduct made unlawful by the [Sherman] Act, the courts are to be guided by the overriding general policy, as Mr. Justice Holmes put it, "of preventing people from getting other people's property for nothing when they purport to be buying it." . Supplying a sanction for the violation of the Act, not in terms provided and capricious in its operation . is avoided by treating the defense as so confined.
358 U.S. at 520-21, 79 S.Ct. at 432 (quoting from Justice Holmes' dissent in Continental Wall Paper Co. v. Louis Voight & Sons Co., supra, 212 U.S. at 271, 29 S.Ct. at 296) (citations omitted). The pith of Kelly is that the illegality of the ends being sought is not the measuring stick for deciding whether the contract should be enforced; only if the enforcement "would be to make the courts a party to the carrying out of one of the very restraints forbidden by the Sherman Act," can a court refuse to enforce the contract. 358 U.S. at 520, 79 S.Ct. at 432.
The difficulty Kaiser has in trying to fit into the tiny exception left by Kelly is obvious: how can the court be a party to an anticompetitive scheme simply by enforcing a contract which requires employers to make payments into a union's health and retirement funds? If the clause has any purpose other than that, it is, argue the Trustees, only to preserve the work and work standards of UMW workers by counteracting wage competition among coal producers. Despite its anticompetitive effects on the product market, such a purpose is permitted under federal law. Connell Construction Co. v. Plumbers Local 100, 421 U.S. 616, 621-22, 95 S.Ct. 1830, 1834, 44 L.Ed.2d 418 (1976). See generally note 5, supra.
Kaiser's response is to characterize the clause as a penalty designed to enforce a boycott against those who have not signed collective bargaining agreements with the UMW. The clause operates, Kaiser argues, as an economic sanction that induces signatory employers to buy coal only from other signatory employers, and no one else. To persuade the court of this, Kaiser details some of the tortuous history of bargaining between the UMW and the coal producers over the past thirty years and leading to the 1974 Agreement. By inviting the court to take such a journey through the annals of labor history, Kaiser reveals that this case is, in its crucial aspect, just like Kelly and every other case in which the party seeking to avoid an allegedly anticompetitive contract delves behind the element of the contract being enforced to the gist of the original bargain. Such an exploration into the purported anticompetitive purpose of a contract clause is precisely what Kelly disallows.
The affirmative defense of antitrust illegality does not lie against a contract that is "an intelligible economic transaction in itself." Kelly, 358 U.S. at 521, 79 S.Ct. at 432. The purchase-of-coal clause, as part of the overall compensation for those covered by the 1974 Agreement, meets this test. The contract has been fully performed by the members of the bargaining unit; they are entitled to the full measure of their bargained-for consideration. If onions must be paid for, so too must past services.
B. Considerations of Equity and Relative Fault
The hoary maxim that courts will not enforce an illegal bargain is, like many other maxims, only incompletely true. The rule actually employed by the courts is both more complex and more sensitive to nuances of legal relationships. Among the factors which should always be considered in deciding whether to enforce an illegal contract are "the relative guilt of the parties, and the cruelty of the forfeiture involved in a denial of remedy." 6A Corbin on Contracts § 1521, at 759 (1962). Accord, Restatement (Second) of Contracts § 420(2) & Comment at 60-61 (Tent. Draft No. 12, 1977). Along these lines, courts will characteristically deny enforcement of a contract on grounds of illegality only if both parties are "in pari delicto;" even an illegal contract can be enforced if doing so protects innocent plaintiffs or plaintiffs comparatively more innocent than the defendant, especially when the contract on the plaintiff's side has been fully performed. 6A Corbin on Contracts, supra, § 1534, at 818-820, § 1536, at 823-24; 3 Pomeroy's Equity Jurisprudence § 942 (1941); 14 Williston on Contracts, supra, § 1630A, at 18-26, § 1631, at 34-38. This is especially so for plaintiffs who serve as representatives for persons wholly innocent of wrongdoing. See In re Leasing Consultants, Inc., 592 F.2d 103, 110-11 (2d Cir. 1979); 15 Williston on Contracts, supra, § 1790.
These general principles apply with equal or greater force to cases in which the basis of the illegality defense is an alleged violation of the Sherman Act. In Viacom International, Inc. v. Tandem Productions, Inc., 526 F.2d 593 (2d Cir. 1975), a broadcast network had contracted with the producer of a television series for broadcast, syndication, and distribution rights; it then assigned its distribution rights to Viacom. When Viacom sued for a declaration of its acquired rights, the producer interposed the defense that the underlying contract was violative of the antitrust law. In expressing the opinion of the court, Judge Lumbard emphasized the undesirability of allowing the producer to convert what was, on its face, a simple contract action into one encrusted with the complexities of an antitrust suit, especially when the party to suffer most from so protracting the litigation was innocent of the alleged illegality. 526 F.2d at 599-600. For that reason, it was proper, Judge Lumbard said, "to limit [the producer] to any cause of action it might have against [the broadcast network] rather than to force Viacom to meet the vagaries of an antitrust defense action." Id. at 600. The district court's refusal to consider the proffered antitrust defense was, accordingly, affirmed.
As the court in Viacom shielded the assignee from the alleged antitrust violations of its assignor, so must this court shield the Trustees, and with even more reason. As a rule, third-party beneficiaries, like the Trustees here, are subject to the contract defenses of nonperforming promisors. But the trustees of a union welfare fund are sometimes immune from contract defenses that could be asserted against the union itself because such a rule better serves the concern of federal labor policy to protect union members and their families from the actionable wrongs of their union representatives. Lewis v. Benedict Coal Corp., 361 U.S. 459, 468-71, 80 S.Ct. 489, 494, 4 L.Ed.2d 442 (1960). We see no reason for not applying that exemption here.
Not only the special status of the Trustees, but also the questionable conduct of Kaiser must be taken into account. We cannot ignore that Kaiser's way of handling this matter manifests an effort to confound the collective bargaining process and manipulate the judicial process instead.
The bargaining history of this contract and its predecessors, as well as the clear language of the 1974 Agreement, shows a concern about the legality of the purchase-of-coal clause. If the clause were adjudged to be illegal or invalid, a renegotiation plan was to go into effect under the terms of the contract. The UMW had an unambiguous contract right to review the bidding if this key clause were stricken. Kaiser does not attack the legality of these contract provisions. Neither does Kaiser challenge the legality of its affirmative obligation under the Agreement to report to the Trustees any purchases of non-UMW coal. Though the Trustees supplied Kaiser with reporting forms that provided for and invited such information, Kaiser failed to disclose it. Kaiser provided information about coal it produced, but left the spaces for purchased coal blank. Even if the purchase-of-coal clause were unlawful, there is no reason to suppose that the reporting provision would fail as well. If Kaiser truly believed the purchase-of-coal clause would not withstand judicial scrutiny, it did not have to wait for others to act. It could have brought an action for declaratory judgment against the UMW. But when another signatory employer- brought such a suit, Kaiser stood pat. It was, in sum, Kaiser's choice to adopt a strategy of ignoring its contractual obligations to the Trustees and of not pursuing its opportunities for a timely and direct adjudication of its rights. This whole pattern of conduct betokens such unclean hands that it weighs against permitting Kaiser to raise the illegality defense.
Kaiser's response is that the Trustees' conduct was not beyond reproach. The Trustees knew, Kaiser asserts, all about its outside coal purchases, but they deliberately let the dispute lie fallow until after the Agreement had run its course. Assuming that to be true, it does not affect our view of the central issue on this appeal. The basic conflict here was between Kaiser and the UMW, each attempting to maneuver into a more advantageous position from which to do legal and economic combat. Whatever maneuvering the Trustees might have done was only to stay out of the crossfire. There is nothing wrong with a party's waiting to litigate until all the money it is owed has come due. But using the courts in an effort to circumvent what one has freely bargained for is conduct of a wholly different sort.
Finally, by raising the legality issue only now, after the 1974 Agreement has expired, Kaiser can be protected from the alleged penalty only at the expense of the fund beneficiaries. If Kaiser had raised a timely challenge to the purchase-of-coal clause and won, the union (as guaranteed in the contract) would have had a chance to bargain for a lawful substitute. It might have succeeded in obtaining an increased rate of contribution for coal mined by an employer's own workers to offset what was lost by the invalidation (ex hypothesis) of the disputed clause. This would have protected both Kaiser and the beneficiaries from the union's alleged illegal scheme. Now that possibility is lost.
C. The Labor Law Illegality
The second branch of Kaiser's illegality defense fares no better than the first. Kaiser alleges that the UMW insisted on the purchase-of-coal provision to assist it in organizing the workers of a coal producer from whom Kaiser bought coal. If accepted as true, that might convert the challenged provision into a "hot cargo" clause. See National Woodwork Mfrs. Ass'n v. NLRB, 386 U.S. 612, 644-45, 87 S.Ct. 1250, 1268, 18 L.Ed.2d 357 (1967). But see note 5, supra. Even so, section 8(e), like its counterparts in the Sherman Act, cannot be used to create a windfall result. In enacting section 8(e), Congress did not intend to afford employers the subtle form of self-help Kaiser here claims is its right.
Congress added section 8(e) to the labor law as part of a wider effort to strengthen and clarify the law's existing prohibitions against "secondary boycotts" by labor organizations. Before section 8(e) was passed, a labor union could not, by strike or similar means, coerce an employer into boycotting another employer with whom the union had a dispute, but the union could lawfully exact from employers contractual promises to comply "voluntarily" with such boycotts. National Woodwork Mfrs. Ass'n v. NLRB, supra, 386 U.S. at 634, 87 S.Ct. at 1262. For Congress, this was a loophole in the law, which section 8(e) was designed to close. Id. But in taking this tack, Congress well knew the disruptive potential of judicially created remedies for labor disputes, especially where labor law and antitrust law overlap. Accordingly, Congress carefully defined the remedies that might be sought for violations of section 8(e) and apportioned those remedies to distinct tribunals, each with its own special competence.
Section 8(e) opens with the language that "[i]t shall be an unfair labor practice" for a union and an employer to agree to a "hot cargo" clause. As with other unfair labor practices, the primary enforcement mechanism for section 8(e) violations is through the Labor Board. Any party aggrieved by a "hot cargo" clause may file a charge with the Board that section 8(e) has been violated. The Board is required to give expeditious consideration to that charge and, in a proper case, to seek injunctive relief in district court. NLRA § 10(7), 29 U.S.C. § 160(7) (1976). In addition, section 303 of the Labor Management Relations Act, 1947 (LMRA), 29 U.S.C. § 187 (1976), provides a make-whole remedy in the form of an action for damages, but not injunctive relief, in the district court. This remedy is not available for violations of section 8(e) as such but only for violations of section 8(b)(4), 29 U.S.C. § 158(b)(4) (1976), which makes it an unfair labor practice for a union to engage in a strike or similar conduct where an object thereof is, inter alia, to induce an employer to agree to a "hot cargo" clause. Any person "injured in his business or property" by such conduct may sue. Even here, however, limits are imposed. First, the right to damages comes into play only when a union has struck or otherwise coerced the employer into accepting the "hot cargo" clause; it is the coercion and not the clause itself that is the gravamen of this claim. Accordingly, an employer who voluntarily accedes to a "hot cargo" clause-"coerced" only by the desire to avoid an economic strike-has no right to sue for damages but is relegated to an unfair labor practices remedy before the Board. See Atchison, Topeka & Santa Fe Ry. v. Local 70, Teamsters, 511 F.2d 1193 (9th Cir. 1975). Second, even those who may sue are limited to the recovery of "actual, compensatory damages," Teamsters Union v. Morton, 377 U.S. 252, 260, 84 S.Ct. 1253, 1258, 12 L.Ed.2d 280 (1964), not the treble damages that are available under the antitrust law for comparable forms of economic manipulation. See generally Connell Construction Co. v. Plumbers Local 100, 421 U.S. at 639 — 46, 650-54, 95 S.Ct. at 1848 (Stewart, J., dissenting) (detailing legislative history). Third, recovery in a section 303 damages suit may be obtained only from the union as an entity; the financial resources of individual union members are expressly shielded from judgment. See LMRA § 303(b), 29 U.S.C. § 187(b) (1976) (incorporating by reference procedural limitations of LMRA § 301(b), 29 U.S.C. § 185(b) (1976)). When Congress has spoken so directly on the remedies to be provided for statutory violations, it is not for the courts to add remedies of their own. Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 19-20, 100 S.Ct. 242, 246, 62 L.Ed.2d 146 (1979).
To permit an employer to assert a section 8(e) defense in a suit like this would add the remedy of contract avoidance to the other forms of relief which the statute expressly provides. Kaiser argues that this result is mandated by the language of section 8(e) itself, which states that any collective bargaining agreement containing a "hot cargo" clause "shall be to such extent unenforcible [sic] and void." This language, Kaiser contends, implies that employers are permitted to sign agreements that violate section 8(e) and then freely ignore what they have signed, defending the breach on grounds of illegality.
The existence of the statutory directive that "hot cargo" clauses are "unenforceable and void" surely must be taken into account. But the existence of such a statutory declaration does not imply that contracts of a certain sort can never be enforced under any circumstances. See Mills v. Auto-Lite Corp., 396 U.S. 375, 387-88, 90 S.Ct. 616, 623, 24 L.Ed.2d 593 (1970); Occidental Life Ins. Co. v. Pat Ryan & Associates, 496 F.2d 1255, 1265-67 (4th Cir.), cert. denied, 419 U.S. 1023, 95 S.Ct. 499, 42 L.Ed.2d 297 (1974) (upholding payment of contract price notwithstanding that contract violated securities law and statute stated that all such contracts are void). See generally 14 Williston on Contracts, supra, § 1630A, at 25-26, § 1631A, at 48. The reading which Kaiser suggests for section 8(e)'s "unenforceable and void" language would add to the remedies Congress expressly provided an independent remedy available at all times and against all parties. Because this remedy would exceed what is required to give meaning to the statutory language and would impede the effective operation of the labor law, we cannot agree that it is what Congress had in mind.
As noted above, the primary enforcement mechanism for section 8(e) violations is an unfair labor practice proceeding before the Labor Board, which may lead to a cease- and-desist order from the Board or a Board-initiated injunction from the district court. Other provisions of the NLRA further restrict a union from securing indirectly the benefits of a "hot cargo" clause. For example, even when "hot cargo" clauses were legal, a union could not conduct a secondary boycott strike under the guise that it was merely striking to enforce the previously negotiated "hot cargo" provision of its collective bargaining agreement. See NLRB v. Enterprise Ass'n of Pipefitters, 429 U.S. 507, 515-17, 97 S.Ct. 891, 896, 51 L.Ed.2d 1 (1977). In addition, when section 8(e) is read in conjunction with section 8(b)(4)(A), a union is prevented from using its economic power to compel an employer to agree in advance to honor a secondary boycott the union might impose at a later time. In this context, the "unenforceable and void" language simply provides a third prophylactic device, preventing a union from obtaining specific performance of a "hot cargo" clause should a union and an employer, unlawfully, agree to one. In short, by making "hot cargo" clauses "unenforceable and void," Congress intended to prevent unions from compelling through judicial enforcement of collective bargaining agreements the very conduct that the union could not compel by its economic might. Whether Congress meant anything more than that is not apparent from the words it used.
Allowing Kaiser to assert a section 8(e) defense in this suit would not only expand its remedies beyond what is necessary to give full effect to the language of the Act but would also interfere with protection to others that the labor law affords. In this ease, the Trustees have claimed jurisdiction under both section 301 of the LMRA, authorizing court enforcement of collective bargaining agreements, and section 502 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1132 (1976), similarly intended to enforce pension obligations. Suits like the one the Trustees bring here are, in the full gamut of modern litigation, relatively simple affairs. At most they require the court to determine what a particular contract provision means and whether its obligations have been fulfilled. In contrast, a secondary boycott case is, characteristically, more intricate and somewhat arcane. To decide whether a particular contract clause violates section 8(e), it must be determined whether, "under all the surrounding circumstances," the clause is "addressed to the labor relations of the contracting employer vis-á-vis his own employees," rather than being "tactically calculated to satisfy union objectives elsewhere." National Woodwork Mfrs. Ass'n v. NLRB, 386 U.S. at 644-45, 87 S.Ct. at 1268. The Supreme Court may have understated when it said, "[t]his will not always be a simple test to apply." Id. See NLRB v. International Longshoremen's Ass'n, 447 U.S. 490, 100 S.Ct. 2305, 65 L.Ed.2d 289 (1980). Thus, if Kaiser were allowed to go forward with its section 8(e) claim as an affirmative defense, it could interject into an otherwise simple contract-enforcement suit complex and disputed questions about the conduct and motives of those who negotiated the underlying agreement. This would be unfair to the Trustees and would unwisely interfere with the orderly remedial processes contemplated by the labor law. Cf. Viacom, supra, 526 F.2d at 599-600. This court would be loathe to foster such a result.
Finally, this court's interpretation of section 8(e) must be informed by the overall scheme of national labor policy. A crucial aspect of that scheme is that the National Labor Relations Board is vested with primary jurisdiction for determining what is or is not an unfair labor practice. As the Supreme Court said in San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 244-45, 79 S.Ct. 773, 779, 3 L.Ed.2d 775 (1959), "courts are not primary tribunals to adjudicate such issues. It is essential to the administration of the Act that these determinations be left in the first instance to the National Labor Relations Board." Accord, Gamer v. Teamsters Union, 346 U.S. 485, 490-91, 74 S.Ct. 161, 165, 98 L.Ed. 228 (1953).
The evolution of the body of law committing certain labor law questions to the primary jurisdiction of a national body of experts has not been free of complications. But the desirability of such a doctrine has hardly been questioned by either policymakers or the courts. As Justice Harlan said in Motor Coach Employees v. Lockridge, 403 U.S. 274, 288, 91 S.Ct. 1909, 1918, 29 L.Ed.2d 473 (1971):
The rationale for pre-emption, then, rests in large measure upon our determination that when it set down a federal labor policy Congress plainly meant to do more than simply to alter the then-prevailing substantive law. It sought as well to restructure fundamentally the processes for effectuating that policy, deliberately placing the responsibility for applying and developing this comprehensive legal system in the hands of an expert administrative body rather than the federalized judicial system.
The objective of such an approach was "to avoid conflicting regulation of conduct by various official bodies which might have some authority over the subject matter." Id. at 285-86, 91 S.Ct. at 1917. Thus, the primary jurisdiction doctrine carefully defines the coordinate responsibilities of the Labor Board and the federal courts in enforcing Congress' prohibition of unfair labor practices. Because it is such a basic feature of our labor law, it is not to be lightly disturbed, especially without a clear congressional mandate for change. Id. at 302, 91 S.Ct. at 1925. Exceptions have been and will continue to be made, but they are exceptions which are accordant with the grand scheme envisioned by Congress.
Congress altered the basic scheme when it enacted section 301 of the LMRA, authorizing suits in federal district court to enforce collective bargaining agreements. Consonant with that change, federal courts have independent jurisdiction to decide cases alleging the breach of collective bargaining agreements, even though that very breach may also be an unfair labor practice. Carey v. Westinghouse Electric Corp., 375 U.S. 261, 266-68, 84 S.Ct. 401, 406, 11 L.Ed.2d 320 (1964); Smith v. Evening News Ass'n, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962). But the court's statutory authority to adjudicate contract disputes under section 301 does not imply that it has jurisdiction to entertain every conceivable affirmative defense.
If an employer were allowed to interpose the section 8(e) defense in any suit to enforce a collective bargaining agreement, there would be nothing left of the Board's primary jurisdiction for section 8(e) cases. An employer could effectively circumvent the authority of the Board simply by doing what Kaiser suggests: freely ignore an agreement it signed and then defend in an action to enforce it on the ground that it violated section 8(e) and could not be enforced. To allow that result would undermine the enforcement scheme Congress endeavored to devise and would be inconsistent with the principle of primary jurisdiction that has so long been a part of federal labor law.
We do not accept the argument that the Supreme Court's decision in Connell Construction Co. v. Plumbers Local 100, 421 U.S. 616, 95 S.Ct. 1830, 44 L.Ed.2d 418 (1975), signals a retreat from the primary jurisdiction doctrine where section 8(e) violations are concerned. Connell does not hold, nor does it imply, that employers may interpose the alleged violation of section 8(e) as a defense in a contract enforcement suit even though they have not previously pursued their remedies before the Labor Board.
In Connell, an employer filed suit complaining that an agreement it had signed under the duress of a union strike violated the Sherman Act. The union sought to interpose a defense under section 8(e), claiming that its language overrode the earlier-enacted Sherman Act. To its more general defense that section 8(e) shields unions generally from antitrust liability, the union added a more particular variation. The union asserted that as a construction union, it was shielded from antitrust liability because, in its view, the so-called construction-industry proviso of section 8(e) specifically authorized the kind of agreement being challenged in that suit. The Court in Connell rejected both of these claims to antitrust immunity.
In deciding that the construction-industry proviso did not apply to the agreement under consideration, the Court remarked that "the federal courts may decide labor law questions that emerge as collateral issues in suits brought under independent federal remedies, including the antitrust laws." 421 U.S. at 626, 95 S.Ct. at 1837 (emphasis added) (footnote omitted). Al though Connell clearly says that a federal court may decide "collateral" labor law issues in certain cases, it does not say that such issues must always, or even should always, be addressed. The overriding concern is still whether the exercise of judicial jurisdiction is consistent with the national labor policy ordained by Congress.
In Connell, it must be noted, the union was not claiming that an unfair labor practice had been committed but that the agreement sued on was explicitly allowed by the construction-industry proviso to section 8(e). That question could not have been addressed by the Labor Board because it does not have jurisdiction to decide the scope of section 8(e) absent a charge that an unfair labor practice has occurred. As a consequence, there was no mechanism for the administrative adjudication of the "collateral" labor law issue which the Court undertook to resolve. Similar factors were at play in Meat Cutters v. Jewel Tea Co., 381 U.S. 676, 687, 85 S.Ct. 1597, 1600, 14 L.Ed.2d 640 (1967) (opinion of White, J.), the primary case on which the Connell Court relied for the proposition that collateral labor law issues may be decided. In contrast, in the case now under review, there was "an available procedure for obtaining a Board determination," Meat Cutters v. Jewel Tea Co., 381 U.S. at 687, 85 S.Ct. at 1600, of precisely the labor law issue which Kaiser seeks to interpose. Kaiser could have filed a charge with the Board alleging a violation of section 8(e), but it did not. If Kaiser had been victimized by the UMW, that would have been its appropriate means of redress. But the district court does not acquire jurisdiction to decide in the first instance whether an unfair labor practice has been committed just because the party alleging it chose to forgo the administrative remedy Congress expressly provided for the illegality it defined.
In concluding that the "unenforceable and void" language of the statute does not permit a party to interpose an alleged violation of section 8(e) as an affirmative defense to a contract enforcement suit, we have relied on the language of the entire statutory section, its interrelationship with other statutory provisions, and its role in the overall statutory scheme. A statutory construction thus derived is preferred unless the legislative history of the disputed provision clearly shows that Congress meant something else. See Transamerica Mortgage Advisors, Inc. v. Lewis, supra, 444 U.S. at 20, 100 S.Ct. at 247; National Small Shipments Conference, Inc. v. CAB, 618 F.2d 819, 828 (D.C.Cir.1980). We have carefully reviewed the legislative history of the "unenforceable and void" language of sec tion 8(e) and are satisfied that it does not indicate a contrary intent.
For the foregoing reasons we conclude that an alleged violation of section 8(e) may not be raised as a defense in a suit under section 301 to enforce the underlying collective bargaining agreement by a party that has abstained from first pursuing its remedies before the Labor Board.
D. Availability of Other Remedies
Our decision today does not eliminate Kaiser's right to a remedy but only its asserted right to a remedy at a time, in a forum, and against a party of its choosing. Kaiser has had adequate opportunities to test its claim that the union overreached in obtaining the purchase-of-coal clause in the 1974 Agreement.
If the clause violated the provisions of section 8(e), Kaiser could have sought the processes of the Board to right the wrong. After a charge that the purchase-of-coal clause violated section 8(e) had been made, the Board's General Counsel would be responsible for determining whether to issue a complaint and thus commence the Board's process of adjudication. See NLRA § 10(b), 29 U.S.C. § 160(b) (1976). That the General Counsel has unreviewable discretion to refuse to issue an unfair labor practice complaint, see Associated Builders & Contractors v. Irving, 610 F.2d 1221, 1226 (4th Cir. 1979); National Alliance of Postal Employees v. Klassen, 514 F.2d 189, 197 (D.C.Cir.), cert. denied, 423 U.S. 1037, 96 S.Ct. 574, 46 L.Ed.2d 413 (1975), is itself further proof that Congress wanted decisions of this sort to be made initially by the national repository of labor expertise. See generally Associated Builders & Contractors v. Irving, supra, 610 F.2d at 1224-26. To allow an employer to bypass the Board by stating its objection for the first time in court as a defense to a lawsuit by other parties on other issues would destroy the congressional plan.
The same is true about Kaiser's claims under the Sherman Act. If Kaiser had cause, that Act gave it the right to sue the union directly, and seek damages threefold for what it had suffered. Presumably, such a claim would encompass any improper amounts paid the Trustees. In any event, such a suit would pit the proper parties against each other in a contest raising squarely the competing considerations of antitrust policy and labor law. That is a dispute that courts can and would resolve.
It is an entirely different question whether Kaiser should have still another means of redress, especially a remedy like the illegality defense which is not favored by the law. As the Supreme Court has said:
It has been often stated in similar cases that the defence [of illegality] is a very dishonest one, and it lies ill in the mouth of the defendant to allege it, and it is only allowed for public considerations and in order the better to secure the public against dishonest transactions.
McMullen v. Hoffman, 174 U.S. 639, 669, 19 S.Ct. 839, 851, 43 L.Ed. 1117 (1899), quoted in Kelly v. Kosuga, supra, 358 U.S. at 519, 79 S.Ct. at 431. When other avenues are open, the defense is even more unseemly. "Unless the public interest requires, we are reluctant to nullify a contract which has been executed, and this is especially true where the parties have other remedies at their disposal which will produce an equitable result." Occidental Life Ins. Co. v. Pat Ryan & Associates, Inc., supra, 496 F.2d at 1267 (empahsis in original) (interpreting Securities Exchange Act § 29(b), 15 U.S.C. § 78cc(b) (1976), which declares that contracts in violation of that act "shall be void"). In fact, the defense of contract illegality should ordinarily be allowed only when the public interest served by permitting the defense clearly outweighs the public interests that militate in favor of contract enforcement. See A. C. Frost & Co. v. Coeur D'Alene Mines Corp., 312 U.S. 38, 44, 61 S.Ct. 414, 417, 85 L.Ed. 500 (1941); In re Leasing Consultants, Inc., 592 F.2d at 110; California Pacific Bank v. Small Business Adm'n, 557 F.2d 218, 224 (9th Cir. 1977); 3 Pomeroy's Equity Jurisprudence, supra, § 941; cf. Bruce's Juices, Inc. v. American Can Co., 330 U.S. 743, 752-54, 67 S.Ct. 1015, 1019, 91 L.Ed. 1219 (1947). When the contract in question is a collective bargaining agreement, those countervailing interests are especially acute.
A collective bargaining agreement is more than a contract between private parties; it is a charter for the "system of industrial self-government" envisioned by federal labor law. United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 580, 80 S.Ct. 1347, 1351, 4 L.Ed.2d 1409 (1960). Recognizing this, the courts have not been reluctant to refashion more general principles of contract law when they conflict with the overriding goals of national labor policy. John Wiley & Sons v. Livingston, 376 U.S. 543, 550, 84 S.Ct. 909, 914, 11 L.Ed.2d 898 (1964); United Steelworkers v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 582-83, 80 S.Ct. at 1352; Lewis v. Benedict Coal Corp., supra, 361 U.S. at 467-71, 80 S.Ct. at 494. At times, those goals require that otherwise lawful prerogatives must "be balanced by some protection to the employees from a sudden change in the employment relationship." John Wiley & Sons v. Livingston, 376 U.S. at 549, 84 S.Ct. at 914. At other times, access to a judicial remedy is made conditional on the parties' prior resort to other remedial processes, so as to better achieve the "stabilizing influence of the collective bargaining contract." Drake Bakeries Inc. v. Local 50, Bakery Workers, 370 U.S. 254, 263-64, 82 S.Ct. 1346, 1352, 8 L.Ed.2d 474 (1962).
Those same considerations are applicable here. The twin goals of protecting the integrity of the collective bargaining agreement and of fostering the orderly administration of federal labor law would be weakened if an employer could simply ignore putatively unlawful provisions of a collective bargaining agreement and then challenge the lawfulness of those provisions as an affirmative defense after the contract expired. Given the facts of this case, it would better serve both equity and national labor policy if the Trustees were allowed to recover the required contributions to the welfare funds unimpeded by Kaiser's belated assertion of illegality.
III. ATTORNEYS' FEES
The district court awarded attorneys' fees to the Trustees. The parties dispute whether the district court had authority to make such an award.
.The Trustees argue that jurisdiction of this section is conferred by both section 301 of the LMRA and section 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3) (1976). For actions brought under the latter, the district court has explicit statutory authority to award such attorneys' fees as, in its discretion, are appropriate. ERISA § 502(g), 29 U.S.C. § 1132(g). Kaiser replies that the gist of this action is the alleged violation of a collective bargaining agreement-properly maintainable under section 301 but not under section 502 of ERISA. It is true that as a general rule, attorneys' fees may not be awarded in a section 301 suit unless there is a showing of "bad faith." See National Ass'n of Letter Carriers v. United States Postal Serv., 590 F.2d 1171, 1176 & n.5 (D.C.Cir.1978); Cronin v. Sears, Roebuck & Co., 588 F.2d 616, 619-20 (8th Cir. 1978). But see Seymour v. Hull & Moreland Engineering, 605 F.2d 1105, 1116-17 (9th Cir. 1979). We do not believe, however, that section 301 of the LMRA and section 502 of ERISA are so surgically discrete that an action to compel welfare fund contributions required by the terms of a collective bargaining agreement cannot be maintained under both sections. In numerous cases, both within this circuit and elsewhere, district courts have allowed suits like this to proceed under both LMRA and ERISA, and have awarded attorneys' fees pursuant to ERISA § 502(g), 29 U.S.C. § 1132(g). We conclude, therefore, that the district court had jurisdiction of this action under section 502 of ERISA, as well as under section 301 of LMRA. We further conclude that the district court did not abuse its discretion in awarding attorneys' fees to the Trustees.
The judgment of the district court is
Affirmed.
. The district court's opinion is reported at 466 F.Supp. 911 (D.D.C.1979).
. Article XX(d)(l) of the 1974 Agreement reads as follows, except that the specified rates of contribution have been eliminated:
During the life of this Agreement, for the periods of time indicated below, each signatory Employer engaged in the production of coal shall contribute to the Trusts established in this Article the amounts specified below based on cents per ton on each ton of two thousand (2,000) pounds of bituminous coal produced by such Employer for use or for sale, and, in addition, each signatory Employer (including those engaged in the production of coal and those not engaged in the production of coal) shall contribute to the Trusts established in this Article the amounts specified below based on cents per hour worked by each of the Employer's Employees who perform classified work under this Agreement.
In addition to the contributions indicated above, during the life of the Agreement, each signatory Employer shall, for the periods of time indicated below, contribute to the Trusts established in this Article in the amounts shown below based on cents per ton on each ton of two thousand (2,000) pounds of bituminous coal after production by another operator, procured or acquired by such Employer for use or for sale on which contributions to the appropriate Trusts as provided for in this Article have not been made (amounts shown below include cents per hour worked contributions converted to tonnage equivalents):
The parties hereto mutually agree that, if at any time during the term of this Agreement a court or tribunal of competent jurisdiction determines by a final decision that is not appealable that the provision appearing in the paragraph just preceding is invalid or in violation of the National Labor Relations Act, 1947, as amended, or other Federal or state law, the parties shall, at the option of and upon demand by the Union without affecting the integrity of any other provision of this Section or any other provision of the National Bituminous Coal Wage Agreement, meet and engage in good faith negotiations to agree upon a clause to be inserted into this Agreement in replacement of the provision found invalid or unlawful.
Article XXIX(b) of the 1974 Agreement reads as follows:
In the event the parties are restrained or prohibited by any agency or branch of the federal or state government from implementing or effectuating the economic benefits, including health and retirement fund payments, required by this Agreement, either party hereto may, after the imposition of such restraint, give sixty days notice of termination of this Agreement and, thereafter shall meet and discuss and attempt to agree on the basis for a continuation of the Agreement for its term. If no agreement is reached within the 60-day period, the Agreement will terminate.
. There is a dispute as to when the Trustees first found out about Kaiser's outside purchases. Kaiser insists that the Trustees knew all along about such purchases but declined to bring suit until the Agreement had expired. The Trustees reply that they discovered the problem only in late 1977, when the Agreement was at or near completion. Because this is an appeal from summary judgment, we must assume that Kaiser's version of this disputed fact is correct. We note, however, that the relevance of that fact to the legal issues on appeal is marginal.
. In the district court, Kaiser offered affirmative defenses other than its claims of illegality. These other defenses were summarily denied, and Kaiser has not raised them on this appeal.
. There is, in fact, good reason to think that the purchase-of-coal clause is consistent with both federal antitrust and federal labor law. Because there is a "strong labor policy favoring the association of employees to eliminate competition over wages and working conditions," courts will sometimes tolerate that "lessening of business competition" which necessarily results from a union's success in standardizing workers' pay. Connell Construction Co. v. Plumbers Local 100, 421 U.S. 616, 622, 95 S.Ct. 1830, 1835, 44 L.Ed.2d 418 (1976). In American Federation of Musicians v. Carroll, 391 U.S. 99, 88 S.Ct. 1562, 20 L.Ed.2d 460 (1968), for example, the Supreme Court upheld against an antitrust challenge a union regulation requiring all orchestra leaders to charge their customers the same minimum rates, a rule which lessened wage competition among the musicians whom the orchestra leaders hired. Over the years, courts have drawn under the ambit of the labor exemption to the antitrust laws union protective devices having much greater anticompetitive effects than the purchase-of-coal clause here under review. See Granddad Bread, Inc. v. Continental Baking Co., 612 F.2d 1105 (9th Cir. 1979); California Dump Truck Owners Ass'n v. Associated General Contractors, 562 F.2d 607 (9th Cir. 1977); Iodice v. Calabrese, 512 F.2d 383 (2d Cir. 1975); Intercontinental Container Transport Corp. v. New York Shipping Ass'n, 426 F.2d 884 (2d Cir. 1970). In fact, one district court has already held that the purchase-of-coal clause itself does not violate the Sherman Act. United States Steel Corp. v. International Union, UMW, C.A. No. 75-1966 (D.D.C. Oct. 5, 1977).
Comparable considerations apply to the alleged "hot cargo" violation. The Supreme Court has cautioned against reading the NLRA's prohibitions against secondary boycott activities by unions in a way that would preclude pressuring employers to improve their employees' wages, hours, and working condi tions. National Woodwork Manufacturing Ass'n v. NLRB, 386 U.S. 612, 643, 87 S.Ct. 1250, 1267, 18 L.Ed.2d 357 (1967). It can no longer be doubted that a union does not run afoul of section 8(e) merely by insisting on a "union standards" clause, that is, one which prohibits an employer from subcontracting work to other employers whose economic benefits and working standards are not commensurate with those of the union's collective bargaining agreement. E. g., Teamsters Local 216 v. NLRB (Bigge-Drayage), 520 F.2d 172, 177-78 (D.C.Cir. 1975); Local 433, Carpenters v. NLRB, 509 F.2d 447, 452-53 (D.C.Cir. 1974); Truck Drivers 413 v. NLRB, 334 F.2d 539, 548 (D.C.Cir.), cert. denied, 379 U.S. 916, 85 S.Ct. 264, 13 L.Ed.2d 186 (1964); Orange Belt Dist. Council of Painters v. NLRB, 328 F.2d 534, 537-39 (D.C.Cir. 1964). Even a clause that, by economic disincentives, serves to dissuade an employer from subcontracting below "union standards" does not necessarily violate section 8(e). George Ryan Co. v. NLRB, 609 F.2d 1249, 1254 (7th Cir. 1979). It may well be that the provision Kaiser challenges here is a kind of "union standards" clause and, hence, lawful under section 8(e). In fact, another employer signatory of the 1974 Agreement has previously charged that the purchase-of-coal clause violates section 8(e), but the Board's General Counsel refused to issue a complaint. International Union, UMW (Consolidated Coal Co.), NLRB Case No. 6-CE-17 (March 28, 1979). The implication of this action is that the General Counsel did not regard the claim as "sufficiently meritorious to warrant Board consideration." NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 139, 95 S.Ct. 1504, 1511, 44 L.Ed.2d 29 (1975). In any event, the issue of the legality of the clause cannot be addressed finally in this lawsuit.
. The dissent contends that a court confronted with the allegation of contract illegality can enforce the disputed clause only in two cases;
(1) if it concludes that the clause is legal notwithstanding the allegation to the contrary or (2) if it assumes (or concludes) that the clause is illegal as alleged but enforceable nevertheless. Dissenting Opinion 642 F.2d at 1321-1322. We do not believe, however, that this exhausts the possibilities. As a third alternative, the court can simply refuse to entertain the illegality defense. See Viacom Int'I, Inc. v. Tandem Prods. Inc., 526 F.2d 593, 600 (2d Cir. 1975) (sustaining district judge's "refusal to consider [defendant's] proffered antitrust defense"). Accordingly, we here decide neither that the purchase-of-coal clause was legal nor that it is enforceable notwithstanding its illegality but only that the district court properly declined to entertain the defense.
The dissent also contends that the illegality of the disputed clause must be assumed because this is an appeal from a summary judgment. Dissenting Opinion 642 F.2d at 1322-1323, 1331. This, however, confuses allegations of fact with legal conclusions drawn from those facts. See generally 5 C. Wright & A. Miller, Federal Practice and Procedure § 1368, at 692-93 (1969). Neither case law nor analysis supports the proposition that on appeal from summary judgment, the court must accept as correct the losing party's assertions as to the legality of a disputed contract clause. Moreover, it is not accurate to say-as our dissenting colleague does-that judgment for the Trustees in this case would "enforce a contract clause which plainly violates the law." Dissenting Opinion 642 F.2d at 1320 (emphasis added). For even if all of Kaiser's factual allegations are true, the purported illegality of the disputed clause is far from clear. See note 5 supra.
. To distinguish this case from Kelly, the dissent propounds an analogy between the purchase-of-coal here and the nondelivery agreement alluded to in Kelly. Dissenting Opinion 642 F.2d at 1324-1325. That analogy, however, is fundamentally misconceived.
In Kelly the Court distinguished the nondelivery agreement (i. e., the agreement to withhold onions from the market) from the contract for the sale of onions. The former, it said, could not be enforced if violative of the antitrust law. 358 U.S. at 521, 79 S.Ct. at 432. The latter would be enforced even though it was allegedly in furtherance of the monopolistic scheme. The analogue to the nondelivery agreement in this case is not the purchase-of-coal clause, as the dissent asserts, but rather the alleged agreement to boycott non-UMW coal producers. An agreement like that between a union and group of employers is violative of the antitrust law, see United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965), and is unenforceable under the Kelly rule. In contrast, the purchase-of-coal clause (like the sale contract for onions) is enforceable under Kelly even though its alleged purpose and effect was to further an illegal boycott plan.
The dissent seems to be of the view that the purchase-of-coal clause is a "penalty" on its face simply because "nonunion parties receive no benefits" from its operation. See Dissenting Opinion 642 F.2d at 1325. We disagree. See note 8, supra. On its face, and apart from any consideration of its purpose and effect in a particular context, the purchase-of-coal clause "constitutes an intelligible economic transaction in itself." Kelly, 358 U.S. at 521, 79 S.Ct. at 432. Accordingly, Kelly requires that the illegality defense be disallowed.
. At times a court will look to the underlying purpose and effect of a contract to determine whether it is so contrary to public policy that the contract will not be enforced. That is essentially what the Court did in McMullen v. Hoffman, 174 U.S. 639, 653-54, 19 S.Ct. 839, 844, 43 L.Ed. 1117 (1899), in which enforcement of a written partnership contract was denied because it was part of a larger oral agreement to bid collusively on certain public works projects. But if Kelly is to mean anything, it must mean that such an inquiry is not permitted when it is asserted as an affirmative defense that the contract sued on contravenes federal antitrust law.
. We cannot accept the dissent's assertion that the payments at issue here were "unearned" and that Kaiser's workers were paid fully for the work they did even though contractually-required payments were not made. Dissenting Opinion 642 F.2d at 1326. The economic rationality and legal propriety of the purchase-of-coal clause is not suspect just because it measures welfare fund contributions by the amount of coal the employer buys from someone else. We know of nothing in reason or federal labor law that requires workers to measure their rate of compensation solely by the number of hours performed or the output of their employer.
In Walsh v. Schlecht, 429 U.S. 401, 97 S.Ct. 679, 50 L.Ed.2d 641 (1977), there was at issue a clause in a collective bargaining agreement that required an employer to contribute to a union employee-benefit fund at a rate of 96 cents per hour for carpentry work done by non-union wooers employed by a subcontractor, which was not itself a signatory of the collective bargaining agreement. The Court enforced the agreement even though the subcontractor's employees were not beneficiaries of the fund and even though the signatory employer had already paid those employees wages at the union scale plus an extra 96 cents per hour as a fringe benefit. The Supreme Court apparently saw no unfairness in this result; we see none here.
It is not unfair to Kaiser that it be required to contribute to the UMW funds after having indi rectly paid a comparable amount to other workers, see Dissenting Opinion 642 F.2d at 1326, for this is exactly what it contracted to do. Neither would enforcing the contract as written create a "windfall" for the Trustees. See id. It is in the nature of employee-benefit funds — like all transfer-payment schemes— that benefits to some are funded by contributions from others. And it is often the case that payments to beneficiaries do not perfectly correspond to the amount of work they themselves have done. Attempting to ensure the continued viability of such funds by broadening the base of contribution is often actuarially sound.
If the contributions sought had not already been earned by performance, then the Trustees' claim for contract enforcement in this context would have had less force. See Huge v. Long's Hauling Co., supra, 590 F.2d at 460; Associated Press v. Taft-Ingalls Corp., 340 F.2d 753 (6th Cir.), cert. denied, 382 U.S. 820, 86 S.Ct. 47, 15 L.Ed.2d 66 (1965); Pennington v. United Mine Workers, 325 F.2d 804, 818 (6th Cir. 1963), cert. denied, 381 U.S. 949, 85 S.Ct. 1796, 14 L.Ed.2d 723 (1965). That, however, is not this case.
. United States Steel Corp. v. International Union, UMW, C.A. No. 75-1966 (D.D.C., filed Nov. 24, 1975, decided Oct. 5, 1977) (judgment that Sherman Act not violated by purchase-of-coal clause).
. Ordinarily, one thinks of the doctrine of unclean hands as the sin of the plaintiff — he who "comes to court with unclean hands." But the doctrine can also apply when the plaintiff establishes a right at law and the defendant attempts to interpose a defense which, like the defense of illegality, is overlaid with equitable considerations. See H. McClintock, Handbook of Principles of Equity 65 (1948).
. Kaiser argues that the contrary is indicated by a comment of Justice Stewart in Connell So, too, does the dissent. Dissenting Opinion 642 F.2d at 1333. But the comment referred to was made in a footnote to Justice Stewart's dissent in that case, 421 U.S. at 649 n.9, 95 S.Ct. at 1849 n.9, and is not controlling here. More important, the comment, when read in context, is not inconsistent with the view expressed in this opinion.
Justice Stewart addresses in his footnote the legal consequences that befall an employer who signs voluntarily a "hot cargo" clause. He notes that if the employer complies with the clause and refuses to deal with another business, that business may have a valid antitrust action against the boycotting or "neutral" employer. This possible liability for damages can be avoided, Justice Stewart says, simply by the employer's refusal to comply with the "hot cargo" clause. He then concludes, "Since § 8(e) provides that any prohibited agreement is 'unenforceable and void,' any union effort to invoke legal processes to compel the neutral employer to comply with his purely voluntary agreement would obviously be unavailing." 421 U.S. at 649 n.9, 95 S.Ct. at 1848.
Taken in context, all this means is that the court will not compel an employer to engage in conduct violative of the antitrust law by granting specific performance of an illegal, "hot cargo" clause. See 642 F.2d at 1312, supra. However, the case here under reviéw is not a suit for specific performance but for payment of a sum owing and due. A court order compelling Kaiser to make payments to the Trustees now that the 1974 Agreement has expired would not force Kaiser to do anything prohibited by either section 8(e) or the Sherman Act and would not subject Kaiser to antitrust liability from someone else. The problem Justice Stewart was addressing in his footnote does not arise.
. The "unenforceable and void" language was first introduced during floor debate by Senator Smathers in an amendment that would also have brought section 8(e) violations within the mandatory injunction provisions of section 10(1). 105 Cong.Rec. 6033 (daily ed. Apr. 25, 1959), reprinted in II Legislative History of The Labor-Management Reporting and Disclosure Act of 1959, at 1242 (1959) [hereinafter cited as Legis.Hist.] Senator Smathers' remarks clearly show that it was his understanding that the policing mechanism for section 8(e) violations would be the mandatory injunction provisions of section 10(1). See id. Remarks by Senator Goldwater some weeks later reflect a similar understanding. 105 Cong.Rec. 9118 (col. 2) (daily ed. June 8, 1959), reprinted in II Legis. Hist, at 1290. In the course of debate, several legislators remarked that what is now section 8(e) would make "hot cargo" clauses "unenforceable and void," but very rarely did these legislators clearly articulate what they thought that meant.
The most substantial support for the view that "hot cargo" illegality might be raised as an affirmative defense in a contract enforcement suit is found in a statement by Senator Goldwater, in which he said:
[Section 8(e)] means that ["hot cargo"] contractual clauses are per se illegal. It is unlawful for either party even to execute such an agreement, to insist that the other party bargain about or enter into it, to use
any form of coercion or restraint—economic or otherwise—to compel the other party to enter into it or to live up to it even if his refusal to do so is in breach of a voluntary agreement to abide by the agreement, and finally, such breach does not constitute a good cause of action in a suit at law to recover damages for the breach or to secure specific performance of the agreement.
105 Cong.Rec. A8523 (col. 3) (daily ed. Oct. 2, 1959), reprinted in II Legis.Hist. at 1857. This statement was included in an "extension of remarks"-not something actually said in the course of legislative debate but rather a statement appended to the official record at some other time-after the bill had already been signed into law. The statement is not inconsistent with our construction of section 8(e). Whether a union can obtain specific performance, or even damages for breach, on a contract that is still executory and clearly violative of section 8(e) is a different question from whether the trustees of a welfare fund may recover money due on a contract already fully performed on the union side and only arguably violative of section 8(e). Accordingly, Senator Goldwater's statement is not controlling evidence of congressional intent as to the meaning of the "unenforceable and void" language of section 8(e), as that language relates to the issue on this appeal.
. See, e. g., Mullins v. Reitz Coal Co., C.A. No. 78-0715 (D.D.C. Mar. 23, 1979); Huge v. Reid, 468 F.Supp. 1024 (N.D.Ala. 1979); Huge v. Maximeadows Mining Co., 459 F.Supp. 267 (N.D.Ala.1978); Bugher v. Southland Fabricators, Inc., 452 F.Supp. 870 (W.D.La.1978); Sheet Metal Workers Pension Fund v. Young's Roofíng, Inc., C.A. No. 77-1849 (D.D.C. May 3, 1978); Huge v. Overly, 445 F.Supp. 946 (W.D. Pa. 1978); IAM National Pension Fund v. Ward La France Truck Corp., C.A. 77-1206 (D.D.C. Feb. 1, 1978); Bugher v. Frash, 98 L.R.R.M. 3010 (S.D.Ind.1977).