Opinion ID: 6933483
Heading Depth: 2
Heading Rank: 4

Heading: Labor Law and Multiemployer Bargaining

Text: In Wood v. National Basketball Association, 809 F.2d 954 (2d Cir.1987), we noted that “no one seriously contends that the antitrust laws may be used to subvert fundamental principles of our federal labor policy.” Id. at 959. The present case appears to have proven us wrong because just such a contention is being seriously made. As noted, multiemployer bargaining has been a conspicuous feature of collective bargaining since the very formation of unions. To hold at this late date that it — or the essence of practice under it — is illegal under the antitrust laws would cause a massive reshaping of the institution of collective bargaining. Under the National Labor Relations Act, employers and unions must bargain in good faith over mandatory subjects of bargaining. 29 U.S.C. § 158(d). Our decision in Wood held that the College Draft, Right of First Refusal, and Revenue Sharing/Salary Cap System are mandatory subjects of bargaining. Wood, 809 F.2d at 962. It is settled law that employers may formulate proposals to unions and insist upon the proposals so long as they bargain in good faith. Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 210, 85 S.Ct. 398, 402, 13 L.Ed.2d 233 (1964). It is also settled law that employers may implement terms and conditions of employment after good-faith bargaining to an impasse and also resort to economic force, including lock-outs, in support of their demands. First Nat’l Maintenance Corp. v. NLRB, 452 U.S. 666, 675, 101 S.Ct. 2573, 2579, 69 L.Ed.2d 318 (1981) (“[B]oth employer and union may bargain to impasse over [terms and conditions of employment] and use the economic weapons at their disposal to attempt to secure their respective aims.”); see also American Ship Bldg. Co. v. NLRB, 380 U.S. 300, 85 S.Ct. 955, 13 L.Ed.2d 855 (1965) (upholding employer’s right to lock out employees). In appellants’ view, however, they need not really bargain over mandatory subjects of bargaining because the employers’ conduct described above, when engaged in by a multiemployer organization, constitutes illegal price-fixing. Turning to the precise facts of the present case, the claim that the NBA Teams may not continue to impose the challenged provisions places the Teams in an impossible position. Those provisions were, of course, part of the 1988 CBA, and, under the Teams’ obligation to bargain in good faith, they were obligated to maintain the status quo until an impasse was reached. NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962). However, appellants claim that imposition of those provisions violated the antitrust laws as soon as the CBA expired, a position that views as illegal, conduct required by the NLRA. Even after impasse, moreover, if employers may impose new terms and conditions of employment, they are surely free to maintain the status quo. The only basis for the claim asserted by appellants is that multiemployer bargaining is illegal. For us, therefore, the decisive fact is that the Supreme Court has upheld multiemployer bargaining on the ground that Congress expressly considered its propriety and resolved that it should be allowed. Buffalo Linen, 353 U.S. at 95-96, 77 S.Ct. at 647-48. Buffalo Linen involved a multiem-ployer association of eight employers who were horizontal competitors in hiring labor and in providing linen services. In the course of negotiating a new agreement with the association, the union struck one of the employers. In response, the other seven employers locked out their employees. The Labor Board held that the lockout was justified as a reasonable measure to preserve multiemployer bargaining against the threat of being forced into submission one-by-one. The Court of Appeals overturned the Board, holding that preservation of the integrity of multiemployer bargaining did not justify a lockout. The Supreme Court unanimously reversed, holding that Congress expressly intended that multiemployer bargaining be allowed and that the Board had discretion to hold as it did. In speaking for the unanimous Court, Justice Brennan wrote: Multiemployer bargaining long antedated the Wagner Act, both in industries like the garment industry, characterized by numerous employers of small work forces, and in industries like longshoring and building construction, where workers change employers from day to day or week to week. This basis of bargaining has had its greatest expansion since enactment of the Wagner Act because employers have sought through group bargaining to match increased union strength. Approximately four million employees are now governed by collective bargaining agreements signed by unions with thousands of employer associations. At the time of the debates on the Taft-Hartley amendments, proposals were made to limit or outlaw multi-employer bargaining. These proposals failed of enactment. They were met with a storm of protest that their adoption would tend to weaken and not strengthen the process of collective bargaining and would conflict with the national labor policy of promoting industrial peace through effective collective bargaining. The debates over the proposals demonstrate that Congress refused to interfere with such bargaining because there was cogent evidence that in many industries the multi-employer bargaining basis was a vital factor in the effectuation of the national policy of promoting labor peace through strengthened collective bargaining. The inaction of Congress with respect to multi-employer bargaining cannot be said to indicate an intention to leave the resolution of this problem to future legislation. Rather, the compelling conclusion is that Congress intended “that the Board should continue its established administrative practice of certifying multi-employer units, and intended to leave to the Board’s specialized judgment the inevitable questions concerning multi-employer bargaining bound to arise in the future.” [Truck Drivers Local Union No. 449 v. NLRB, 231 F.2d 110, 117-18 (2d Cir.1956).] Although the Act protects the right of the employees to strike in support of their demands, this protection is not so absolute as to deny self-help by employers when legitimate interests of employees and employers collide. Conflict may arise, for example, between the right to strike and the interest of small employers in preserving multi-employer bargaining as a means of bargaining on an equal basis with a large union and avoiding the competitive disadvantages resulting from nonuniform contractual terms. The ultimate problem is the balancing of the conflicting legitimate interests. The function of striking that balance to effectuate national labor policy is often a difficult and delicate responsibility, which the Congress committed primarily to the National Labor Relations Board, subject to limited judicial review. 353 U.S. at 94-96, 77 S.Ct. at 646-48 (footnotes omitted). Buffalo Linen simply cannot be reconciled with appellants’ antitrust claim. The facts in that case plainly involved conduct that, if antitrust principles apply, were price-fixing and a joint boycott, per se violations of the Sherman Act. However, the decision not only permitted the conduct but also stated that Congress had expressly considered mul-tiemployer bargaining and had resolved to allow it subject only to the limitations of labor law as interpreted by the Labor Board. At oral argument, the Players sought to distinguish Buffalo Linen on the ground that it deals solely with issues relating to the use of economic force. That reading of the decision is simply unsupportable. Indeed, the suggested distinction between employers proposing terms and conditions of employment and employers’ resorting to economic force to back up the proposals is at war with appellants’ antitrust claim. A cartel that proposes common terms hardly ceases to be a cartel when it resorts to economic force to enforce those terms. If anything, the resort to economic force enhances rather than diminishes the effect on competition. Finally, the Players correctly note that multiemployer bargaining is generally a voluntary matter and that employers or unions are free to withdraw from it. See Bonanno Linen, 454 U.S. at 412, 102 S.Ct. at 725. Even so, the consequences of this voluntariness for the parties before us is left to proceedings under the NLRA before the Labor Board. This is particularly the case because the Board and one court of appeals have held that sports leagues are an exception to the principle of voluntariness. See North American Soccer League v. NLRB, 613 F.2d 1379 (5th Cir.) (requiring teams in a soccer league to bargain as a “joint employer”), cert. denied, 449 U.S. 899, 101 S.Ct. 267, 66 L.Ed.2d 128 (1980). We thus agree with the decision in Powell, 930 F.2d 1293, in which the Eighth Circuit held that the nonstatutory labor exemption precluded an antitrust challenge to various terms and conditions of employment implemented after impasse by National Football League teams. The Court noted the soup-to-nuts array of rules and remedies afforded under the labor laws and concluded that application of antitrust principles to a collective bargaining relationship would disrupt collective bargaining as we know it. We agree. The claim before us, if adopted, would prevent employers in all industries from jointly bargaining hard with a common union. Although the Players’ claim as presently formulated would allow employers jointly to make proposals, they could not maintain the status quo after expiration of the agreement and before bargaining to an impasse, nor could they implement new terms after impasse without fear of antitrust sanctions. The claim, of course, cannot be limited to sports leagues because it relies upon general antitrust principles. Under the interpretation of these principles urged by appellants, if, after expiration of a CBA, a group of printers were to agree to seek to limit wage increases to 5% and the union demanded 10%, the employers could shield themselves from antitrust liability only by implementing the 10% raise. The agreement among the printers is, after all, a “naked restraint[] between competitors; [it] prevents] competition; [it] fix[es] prices; [it] suppresses] salaries.” Appellants’ Brief at 11. This is not collective bargaining as intended by Congress. Indeed, it is not bargaining at all.