Opinion ID: 373491
Heading Depth: 1
Heading Rank: 5

Heading: the labor exemption

Text: 19 Generally, organized labor has two types of exemptions from the antitrust laws: statutory and non-statutory. Dump Truck, supra, 562 F.2d at 610. The statutory exemption is derived from the Clayton and the Norris-LaGuardia Acts where specific union activities, including secondary picketing and boycotts, (are excepted) from the operation of the antitrust laws. Connell Construction, supra, 421 U.S. at 621-622, 95 S.Ct. at 1835. This does not apply to concerted action or agreements between unions and non-labor parties. Id. The non-statutory exemption, which is more limited in scope, then comes into play. Id. The source of the non-statutory exemption is the strong labor policy favoring the association of employees to eliminate competition over wages and working conditions. 4 Id. at 622, 95 S.Ct. at 1835. It is the non-statutory exemption which is involved in the present case. 20 Granddad argues that Article IV of the collective bargaining agreement was illegal and void under the National Labor Relations Act. Therefore, according to Granddad, Continental cannot benefit from the protection of the labor exemption. Moreover, Granddad contends that the jury properly resolved this question and its verdict should not have been questioned. 21 The court below found that Article IV of the collective bargaining agreement was a valid work preservation clause and that the jury should not have been allowed to consider it as a basis for imposing antitrust liability against Continental. We agree. 22 Pursuant to Section 8(e) of the National Labor Relations Act, a contract or agreement between any labor organization and any employer under which the employer agrees to refrain from doing business with any other person is an unfair labor practice. 5 29 U.S.C. § 158(e). Despite the sweeping language of Section 8(e), the Supreme Court has held that primary work preservation clauses do not fall within the broad prohibition. Woodwork Manufacturers v. NLRB, 386 U.S. 612, 639, 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967). 23 The determination as to whether an agreement is Primarily for work preservation depends upon whether it was entered into, or applied, for the purpose of preserving work traditionally performed by the union members or for some secondary purpose to satisfy union objectives elsewhere. NLRB v. Pipefitters, 429 U.S. 507, 511, 97 S.Ct. 891, 51 L.Ed.2d 1 (1977). 24 It is clear that Article IV was entered into for the purpose of preserving Local 227's jobs. In the Seattle area, members of Local 227 had traditionally picked up the bread from the wholesale bakers and delivered it to the retail establishments. They had traditionally serviced the retailer's bread racks for which they received extra compensation. 25 In 1960, one of the Seattle bakeries, Ashbrook, began selling to Associated Grocers and allowing Associated Grocers to send their own drivers to pick up the baked goods. As a result, this became a crucial issue when the collective bargaining agreement came up for renegotiation (between Local 227 and the wholesale bakers) in 1962. Local 227 realized that if the other bakeries adopted similar methods of distribution, then there would be substantial losses of union jobs and memberships. The bakers only agreed to Article IV after it became apparent that it was a strike issue to the members of Local 227. 26 Nevertheless, Granddad argues that the purpose behind Article IV was to injure or limit the business of others who were not signators of the agreement (an illegal secondary purpose). This contention is supported by neither the terms of the agreement nor the facts. Article IV contained a grandfather clause so that any baker which was then using a non-Local 227 delivery method (i. e., Ashbrook) could continue. Additionally, Granddad could not have been within the contemplation of the parties since it was not in existence at the time that Article IV was made a part of the collective bargaining agreement. 27 Contrary to Granddad's assertions, there was no evidence which could support a finding that Article IV involved prohibited secondary activity, either in its original intendment or in its application. The preservation of union jobs was a matter properly considered in the collective bargaining agreement. The bakers had the right to control the methods by which their products were delivered to retailers. See Chamber of Commerce of U. S., etc. v. N. L. R. B., 574 F.2d 457, 462 (9th Cir. 1978). As Granddad admits, Local 227 never used Article IV in an attempt to organize Granddad's employees. See Connell, supra, 421 U.S. at 626, 95 S.Ct. 1830. 28 Granddad also argues that the district court correctly instructed the jury on the labor issue and that the findings of the jury should be final. Granddad, however, failed to introduce sufficient evidence to justify submitting the issue to the jury. The primary evidence before the jury was Article IV which was a valid work preservation clause in a collective bargaining agreement. There was also evidence showing that the parties to the agreement had abided by its terms. There was no evidence that the bakers or Local 227 had either entered into Article IV or used it to control the wholesale bread market or to injure competitors. The isolated instances of activity by the representatives from Local 227 are not sufficient to predicate a claim of antitrust liability against Continental. The jury should not have been allowed to consider the labor-related aspects of this case. 29 Article IV simply does not have the same type of direct and immediate effect on competition in a product market similar to those cases where the labor exemption has been found inapplicable. See, e. g., Connell, supra, 421 U.S. at 623-626, 95 S.Ct. 1830; United Mine Workers v. Pennington, 381 U.S. 657, 666-669, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965).