Court Opinion

ID: 9469196
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:34:59.253958+00
Date Added: 2024-06-11T17:41:16.799690
License: Public Domain

K. K. HALL, Circuit Judge,
dissenting:
Through its blind application of the per se rule against price fixing, the majority ignores the realities of this case and, as a consequence, reaches a manifestly inequitable result. As I believe that the facts before us do not justify an extension of the per se price fixing rule, I must respectfully dissent.
Under a provision in the collective bargaining agreement between the National Electrical Contractors Association (NECA) and the International Brotherhood of Electrical Workers (IBEW), the IBEW could not sign any employment contract unless the employer agreed to pay one percent of its gross monthly labor payroll into the National Electrical Industry Fund. Finding that this requirement acts to increase the labor costs to non-NECA contractors and “would tend to stabilize the price of electrical construction contracts,” the majority concludes that the agreement is per se illegal under the Sherman Act, 15 U.S.C. § 1.
This case, however, is inherently different from those relied on by the majority in that all of the parties involved here receive an extremely important benefit from the NECA/IBEW negotiations, that being the establishment of a fixed wage level. “Assenting” non-NECA contractors (i.e., those who agree to follow the terms of the NECA/IBEW agreement through either “A” or “B” Letters of Assent or International Agreements) receive the benefit directly by accepting all of the gains and concessions secured by NECA during the course of the negotiations.
Non-assenting contractors who bargain directly with the Union enjoy the benefit in a similar, albeit indirect, manner. They have the terms of the NECA/IBEW agreement, especially the wage level, on which they can rely during the course of their independent negotiations. The salary level agreed to by NECA may be employed as a ceiling on the Union’s demands. Indeed, the Union has an incentive to obtain a high wage rate from NECA which it will then attempt to carry over into its non-NECA contracts. See generally P. Samuelson, ECONOMICS 586-87 (10th ed. 1976). Thus, any wage concessions NECA is able to draw out of IBEW spill over to the benefit of all non-assenting non-NECA contractors.
*504Since all electrical contractors benefit from NECA’s collective bargaining, it is only fair that they share in the costs of such bargaining. In this regard, it is clear that one of the main purposes of the industry fund is to help defray the costs of the negotiation process. Under the majority’s ruling, however, although both assenting and non-assenting non-NECA contractors would continue to enjoy the benefits of NECA’s bargaining, neither can be required to contribute to the fund. Moreover, they will receive a windfall in the form of treble damages.
In Smitty Baker Coal Co. v. United Mine Workers of America, 620 F.2d 416 (4th Cir.), cert. denied, 449 U.S. 870, 101 S.Ct. 207, 66 L.Ed.2d 89 (1980), we ruled that a protective wage clause, requiring a union to demand the same wage scale from all employers who were not members of the multi-employer bargaining unit, did not constitute a per se violation of the Sherman Act. Rather,
[t]o amount to an antitrust violation the agreement must be rooted in an anti-competitive purpose, and must effect an anti-competitive result, as evidenced by action “ruining” a competitor’s business or driving him “out of business.” Unless there is such an agreement between the labor organization and the non-labor group and such an anti-competitive result, there is no conspiracy actionable under the antitrust laws.
Id. at 431-32 (emphasis supplied).
Since the one percent industry fund charge at issue here has no greater effect on electrical contractor prices than would a protective wage clause, I would follow the Smitty Baker standard and avoid the majority’s untenable extension of the per se rule.
As a final matter, I also disagree with the majority’s conclusion that the trial judge did not err in finding defendants Colgan Electric Co. (Colgan) and Miller Electric Co. (Miller) within the venue of the court. The record indicates that their most significant contact with the judicial district of Maryland was the payment of dues to NECA which has its national office located in that state. The holding that mere membership and payment of trade association dues is enough to constitute “transaetpng] business” under § 12 of the Clayton Act, 15 U.S.C. § 22, flies in the face of the well established rule that a defendant’s contacts with the forum state must be of a “substantial character” in order for venue to be proper. See Bartholomew v. Virginia Chiropractors Association, 612 F.2d 812, 815 (4th Cir. 1979), cert. denied, 446 U.S. 938, 100 S.Ct. 2158, 64 L.Ed.2d 791 (1980). Consequently, the district court clearly erred in failing to dismiss the complaint against defendants Colgan and Miller.
For the foregoing reasons, I respectfully dissent.