Court Opinion

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Opinions of the United
2003 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

2-13-2003

Spectacor Mgt Grp v. NLRB
Precedential or Non-Precedential: Precedential

Docket 01-3644

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PRECEDENTIAL

       Filed February 13, 2003

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 01-3644

SPECTACOR MANAGEMENT GROUP,
       Petitioner

v.

NATIONAL LABOR RELATIONS BOARD,
       Respondent

ATLANTIC EXPOSITION SERVICES, INC.,
       Intervenor

No. 01-3694

SOUTH JERSEY REGIONAL COUNCIL OF CARPENTERS,
LOCAL 623 AFFILIATED WITH THE UNITED
BROTHERHOOD OF CARPENTERS AND JOINERS OF
AMERICA, AFL-CIO
       Petitioner

v.

NATIONAL LABOR RELATIONS BOARD,
       Respondent

ATLANTIC EXPOSITION SERVICES, INC.,
       Intervenor

No. 01-4036

NATIONAL LABOR RELATIONS BOARD,
       Petitioner

v.

SPECTACOR MANAGEMENT GROUP; SOUTH JERSEY
REGIONAL COUNCIL OF CARPENTERS, LOCAL 623,
AFFILIATED WITH THE UNITED BROTHERHOOD OF
CARPENTERS AND JOINERS OF AMERICA, AFL-CIO,
       Respondents

ATLANTIC EXPOSITION SERVICES, INC.,
       Intervenor

On Petition for Review and Cross-Application for
Enforcement of an Order and Decision of the
National Labor Relations Board
(4-CE-116-1)
Argued: October 29, 2002

Before: SLOVITER, FUENTES, Circuit Judges,
and DEBEVOISE,* District Judge

(Filed: February 13, 2003)

       James A. Matthews, III (Argued)
       Jessica L. Pollock
       Fox, Rothschild, O’Brien & Frankel
       Philadelphia, PA 19103

        Attorneys for Petitioner Spectacor
       Management Group, No. 01-3644,
       Respondent Spectacor
       Management Group, No. 01-4036
_________________________________________________________________

* The Hon. Dickinson R. Debevoise, Senior Judge, United States District
Court for the District of New Jersey, sitting by designation.

                                2

       James Katz (Argued)
       Howard S. Simonoff
       Sagot, Jennings & Sigmond
       Cherry Hill, N.J. 08034

        Attorneys for Petitioner Local 623,
       No. 01-3694, Respondent Local
       623, No. 01-4036

       Arthur F. Rosenfeld
        General Counsel
       John E. Higgins, Jr.,
        Deputy General Counsel
       John H. Ferguson
        Associate General Counsel
       Aileen A. Armstrong
        Deputy Associate General Counsel
       Robert J. Englehart
        Supervisory Attorney
       James M. Oleske, Jr. (Argued)
       National Labor Relations Board
       Washington, D.C. 20570

        Attorneys for Petitioner NLRB,
       No. 01-4036, Respondent NLRB,
       Nos. 01-3644, 01-3694

       James J. Rodgers
       Dilworth, Paxson
       Philadelphia, PA 19103

       Howard K. Trubman
       Sobol & Trubman
       Philadelphia, PA 19103

        Attorneys for Intervenor Atlantic
       Exposition Services, Inc., Nos.
       01-3644, 01-3694, 01-4036

                                 3

       Brian F. Quinn
       DeCarlo, Connor & Selvo
       Washington, DC 20001

        Attorney for United Brotherhood
       of Carpenters and Joiners,
       Amicus-Appellant, No. 01-3644

       James M. Walters
       John M. Capron
       Fisher & Phillips
       Atlanta, GA 30326

        Attorneys for GES Exposition,
       Amicus-Appellant, Nos. 01-3644,
       01-3694, Amicus-Appellee,
       No. 01-4036

OPINION OF THE COURT

SLOVITER, Circuit Judge:

At issue in this case is whether it was reasonable for the
National Labor Relations Board ("NLRB" or"Board") to find
that S 8(e) of the National Labor Relations Act ("Act"), 29
U.S.C. S 158(e), was violated by (1) an agreement between
the Union and the company managing a convention center
that provides that the installation, assembly and
dismantling of temporary tradeshow exhibits would be
subcontracted only to companies that hired Union
members and (2) to find that such work was not protected
by the construction industry proviso of S 8(e). All parties
agree that the latter issue is one of first impression.

I.

INTRODUCTION

Spectacor Management Group ("SMG") and the South
Jersey Regional Council of Carpenters, Local 623 ("Union")
(collectively "Petitioners") petition this court for review of
the order and decision of the NLRB finding that an

                                 4

agreement entered into and enforced by Petitioners violated
S 8(e) of the National Labor Relations Act ("Act"). The
agreement, which precluded SMG from subcontracting
trade show work to employers who did not have collective
bargaining agreements with the Union, was enforced
against Atlantic Exposition Services, Inc. ("AES"), the
original Charging Party and Intervenor here.
The Administrative Law Judge ("ALJ") ruled against the
Petitioners. On appeal, the Board approved the ALJ’s
finding that the agreement violated S 8(e). The Board agreed
that the "agreement lacked a work preservation objective,
that the work covered by the agreement was not performed
on a construction site, and therefore that the agreement
was not protected by the construction industry proviso."
Decision & Order at 1, 335 NLRB No. 49 (2001). As a
result, the Board adopted the recommended order of the
ALJ which, in relevant part, directed the parties to cease
and desist from maintaining and enforcing their
subcontracting agreement.

The Petitioners attack the Board’s decision on both
grounds. Primarily, Petitioners argue that trade show work
at the Atlantic City Convention Center constitutes
construction work at a construction site, thereby entitling
their agreement to the protection of the construction
industry proviso. Alternatively, Petitioners argue that the
agreement was not illegal because it fell within the work
preservation doctrine, in that it served the primary purpose
of preserving the Union’s work at the Convention Center
rather than unlawfully sought to secondarily influence
labor relations of other employers. The Union also argues
that the agreement did not violate the Act as it failed to
disrupt or change the way AES conducted business with
SMG.

Congress has not spoken on whether a trade show floor
constitutes a construction site for purposes of the
construction industry proviso, and neither the Board nor
any court has hitherto determined the issue. Given the
deference that we owe the Board on issues within its
purview, we will accept its determination.

                                  5

II.

FACTS AND PROCEDURAL BACKGROUND

A.

Some background of the current dispute is necessary to
appreciate the issue. Between 1983 and 1995, the Atlantic
City Convention Center Authority ("ACCCA") operated and
managed the Convention Center. The Union represented
ACCCA employees who assembled and dismantled trade
show exhibits. During this time, the collective bargaining
agreements between ACCCA and the Union precluded
ACCCA from subcontracting trade show work. In or before
1995, the New Jersey Sports and Exposition Authority
became an owner of the Center and decided to manage it
through SMG, a private management company.1 When
SMG’s predecessors managed the Convention Center, they
directly hired members of the Union for trade show work.

SMG honored the terms of ACCCA’s collective bargaining
agreement. Show exhibitors contracted with SMG to provide
the labor to assemble and dismantle tradeshow exhibits.
SMG, in turn, procured the appropriate labor force from the
Union’s hiring hall. In 1996, SMG sought to remove itself as
the middleman between show exhibitors and laborers,
leaving the direct employment of labor to subcontractors or
tenants. Accordingly, it negotiated a new agreement with
the Union that no longer prohibited subcontracting at the
Convention Center. Instead, the Union and SMG agreed
that trade show work traditionally performed through the
Union’s hiring hall could be subcontracted as long as Union
workers continued as the sole providers of trade show labor
under agreements reached between the subcontractors and
the Union.

This agreement, incorporated in a letter dated April 15,
1996, stands at the center of the current dispute. It
provides:
_________________________________________________________________

1. SMG is a Pennsylvania joint venture which manages public assembly
facilities, such as convention centers, on behalf of municipal partners.

                                6

       Trade employees who work on a part-time basis or who
       perform contracted work for SMG (e.g. "show" labor)
       will work under a Separate Agreement which will be
       negotiated as soon as is practicable. It is understood
       and agreed that the Separate Agreement will contain a
       provision stipulating that in the event SMG
       subcontracts the covered work, the covered work will
       be subcontracted to a firm which will . . . negotiate an
       agreement with the (Trade) Local having jurisdiction
       over that work with SMG. The said sub-contractor will
       be free to negotiate the terms and conditions of the
       said agreement and will not be bound by SMG’s
       agreement(s) with the applicable local union.

Decision & Order at 3. No Separate Agreement as referred
to above was negotiated but the parties proceeded to act as
if the above paragraph was binding. If a subcontractor
failed to reach its own agreement with the Union, it was
required to obtain labor through the previous method
where SMG played middleman, using Union labor.

AES, unlike many, if not all, of the other subcontractors
at the Convention Center, did not sign an agreement with
the Union but chose to use its own employees, members of
the Painters Union. In 1998, as an AES employee was
installing a tradeshow exhibit at the Center, he was ordered
to stop working by a Union foreman. Thereafter, the SMG
General Manager demanded that AES either use Union
laborers or leave the Convention Center altogether. This
current litigation ensued.

B.

On October 13, 1998, AES filed charges against the
Union and SMG for refusing to allow AES to use its own
employees to do its tradeshow work at the Convention
Center. The ALJ found that the Union and SMG had
violated S 8(e) of the Act when they entered into and
enforced the agreement that SMG would not subcontract
work to employers who did not have collective-bargaining
agreements with the Union. In so finding, the ALJ reasoned
that the agreement did not have a valid work preservation
purpose because it was "not limited to addressing the labor

                                7

relations of SMG vis-a-vis its own employees, but instead
seeks to regulate the labor policies of other, neutral
employers by requiring them to have agreements with the
Carpenters, an objective that is clearly secondary." Decision
& Order at 4. The ALJ also rejected the Petitioners’ defense
that the work involved in trade shows was protected by the
construction industry proviso to S 8(e). The ALJ held that
SMG was not an employer in the construction industry. He
further concluded that the construction industry proviso to
S 8(e) was not applicable because the work in question was
not "associated with building a structure" and was not
being performed at " ‘the site of the construction, alteration,
painting, or repair of a building, structure or other work’ as
Section 8(e) requires." Id. at 9.

In a brief Decision and Order entered August 27, 2001,
a unanimous three member panel of the Board affirmed the
ALJ’s finding that the "agreement lacked a work
preservation objective, that the work covered by the
agreement was not performed on a construction site, and
therefore that the agreement was not protected by the
construction industry proviso." Decision & Order at 1. The
Board did not reach and did not decide the ALJ’s
conclusion that SMG was not an employer in the
construction industry.

Shortly thereafter, SMG and the Union filed Petitions for
Review in this court. The Board filed a Cross-Application for
Enforcement. AES intervened in support of the Board. The
United Brotherhood of Carpenters and Joiners and GES
Exposition Services filed briefs as amici curiae.

III.

DISCUSSION

A. Jurisdiction and Standard of Review

We have jurisdiction to review final orders of the National
Labor Relations Board pursuant to Section 10(e) and (f) of
the Act. 29 U.S.C. SS 160(e) and (f). We accept the Board’s
factual findings if they are supported by substantial
evidence. We exercise plenary review over questions of law

                                8

and the Board’s application of legal precepts. NLRB v.
Attleboro Associates, Ltd., 176 F.3d 154, 160 (3d Cir. 1999).
For the Board to prevail, "it need not show its construction
is the best way to read the statute;" rather we must respect
the Board’s judgment as long as it is reasonable. Holly
Farms Corp. v. NLRB, 517 U.S. 392, 409 (1996) (emphasis
in original).

B. Section 8(e) and the Work Preservation Doctrine

At oral argument, the Union conceded that its agreement
with SMG would be illegal under S 8(e) were it not entitled
to the protection of the construction industry proviso. Tr. of
Oral Argument, Oct. 29, 2002, at 4. However, in their briefs
the Petitioners press the argument that their agreement is
not proscribed by S 8(e). In doing so, they invoke the work
preservation doctrine.2 Notwithstanding the Union’s
concession, it is important that we consider whether the
Union/SMG agreement falls within the proscription ofS 8(e)
as that was the predicate for the decisions of both the
Board and the ALJ.

Section 8(e), which was added to the Act by the 1959
Landrum-Griffin Act, provides:

       It shall be an unfair labor practice for any labor
       organization and any employer to enter into any
       contract or agreement, express or implied, whereby
       such employer ceases or refrains or agrees to cease or
       refrain from handling, using, selling, transporting or
       otherwise dealing in any of the products of any other
       employer, or to cease doing business with any other
       person, and any contract or agreement entered into
_________________________________________________________________

2. The Union’s argument that the Board erred as a matter of law in
concluding that it violated S 8(e) because the agreement did not result in
disruption or cessation of AES’s existing business relationship with SMG
or change the way AES had been doing business at the Center before the
agreement, is satisfactorily answered by the Board’s earlier decision that
"[t]he cease-doing business element of Sec. 8(e) is satisfied by proof of
prohibitions against forming business relationships in the first place as
well as requirements that one cease business relationships already in
existence." Northeast Ohio Dist. Council of Carpenters (Alessio
Construction), 310 N.L.R.B. 1023, 1025 n.9 (1993).

                                9

       heretofore or hereafter containing such an agreement
       shall be to such extent unenforcible and void.

29 U.S.C. S158(e).

It is apparent that the literal language of the SMG/Union
agreement comes clearly within the prohibition ofS 8(e) of
the Act. In National Woodwork Mfrs. Ass’n v. NLRB, 386
U.S. 612 (1967), the Supreme Court explained thatS 8(e)
was designed to invalidate so-called "hot cargo" clauses, or
agreements between a union and an employer whereby the
employer agrees not to deal with other employers with
whom the union either has a labor dispute or who it deems
to be unfair to organized labor. Id. at 634-37. Looking to
the legislative history of S 8(e), the Supreme Court
interpreted the section to invalidate only those contract
clauses with secondary objectives, while those with a
primary purpose, such as work preservation, remained
lawful. See id. at 637-645. If the purpose of the agreement
is to benefit the employees of the bargaining unit, the
agreement is primary and thus lawful, but if its aim is to
pressure outside employers to concede to union objectives,
the agreement is unlawfully secondary. In re Bituminous
Coal Wage Agreements, 756 F.2d 284, 289 (3d Cir. 1985).
As the Supreme Court stated in an oft-repeated sentence,
"the touchstone is whether the agreement or its
maintenance is addressed to the labor relations of the
contracting employer vis-a-vis his own employees." National
Woodwork, 386 U.S. at 645.

The Supreme Court further stated that a lawful work
preservation agreement must pass two tests. First, the
agreement must seek to preserve work traditionally
performed by employees represented by the union. Second,
the contracting employer must have the power to give the
employees the work in question, which is known as the
"right of control" test. NLRB v. Int’l Longshoremen’s Ass’n,
447 U.S. 490, 504 (1980) ("ILA I"). The rationale is that if
the contracting employer does not have the power to assign
the work, it is reasonable to infer that the agreement has
the secondary objective to influence the person or entity
that has such power. Id. at 504-05.

In the case before us, the ALJ, in reasoning adopted by

                                10

the Board, found the agreement to be unlawfully secondary
in nature because it "was not intended to preserve work but
was intended to satisfy the union’s objectives elsewhere."
Decision & Order at 4. The ALJ found that the SMG/Union
agreement violated National Woodwork’s touchstone as it
was not limited to SMG’s labor relations vis-a-vis its own
employees but sought to regulate the labor policies of other
neutral employers (subcontractors, such as AES) by
requiring them to contract with the Union, an unlawful
secondary objective. SMG had removed itself from the role
of employer when it began subcontracting, and accordingly
the Union workers were no longer SMG employees. Adding
support to the ALJ’s finding that the agreement sought to
regulate other employers’ labor policies was the fact that
the Union rejected AES’ offer to contract with it for work
done at the Convention Center but insisted that AES also
enter an agreement that covered seven counties in southern
New Jersey.3

Petitioners argue that because SMG manages the
Convention Center, it exercises control over the work
conducted there. However, SMG’s agreement with the
Union, which removed SMG from the role of employer by
allowing it to subcontract, eliminated SMG’s ability to "give
the employees the work in question." ILA I , 447 U.S. at 504.
The agreement forced the subcontractors to negotiate their
own agreements with the Union, thereby giving these
subcontractors the power to assign employees the work in
question, namely installing, assembling and dismantling
trade show exhibits. It is therefore apparent that the
SMG/Union agreement did not satisfy the work
preservation doctrine’s touchstone as it was not limited to
labor relations of SMG vis-a-vis its own employees. Instead,
the SMG/Union agreement plainly affects the labor
relations of employers other than SMG.

In its oral argument, SMG argued that even though it
_________________________________________________________________

3. Those subcontractors who signed agreements with the Union received
significant benefits, such as the elimination of double time on weekends,
elimination of nonworking personnel, and revised jurisdictional lines
allowing the subcontractors to use cheaper employees represented by
another union on certain jobs.

                                11

had subcontracted trade show work, it retained the right
directly to employ Union members when the show promoter
opted to hire a subcontractor who did not have a contract
with the Union (a nonsignatory employer). SMG stated that
because it could hire and supervise Union members and
provide them to the contractor, it should be treated as the
direct employer. However, SMG was unable to provide the
court with any estimate as to how often this situation arose
and it produced no records in that connection. Tr. of Oral
Argument, Oct. 29, 2002, at 17. Assuming the existence of
some such situations, we fail to see why it would undercut
the ALJ’s determination that the SMG/Union agreement
falls precisely within the prohibition of S 8(e) as that
agreement requires neutral employers to contract with the
Union.

Reiterating its argument based on the work preservation
doctrine, the Union emphasizes that it has provided trade
show exhibition work at the Convention Center for decades,
and its agreement with SMG merely seeks to preserve the
Union’s historical work at that venue. This argument fails
for two reasons. First, it completely avoids the"touchstone"
of the work preservation doctrine because it does not even
attempt to challenge the ALJ’s critical finding that the
agreement was not limited to labor relations of SMG vis-a-
vis SMG’s own employees. Second, the Union fails to justify
its efforts to use the agreement covering the Center to
expand its reach into seven other counties.

In contrast to the Union, SMG glides quickly over the
work preservation argument and largely relies on the
Union’s brief on this issue. Nonetheless, SMG distances
itself from the Union by arguing that if a violation of S 8(e)
did occur, it was limited to an as-applied violation by the
Union in its dealings with AES. SMG’s position is not
persuasive. We have made clear that hot cargo clauses may
be invalid per se if the provision is " ‘secondary in [its]
purpose as well as [its] result.’ " In re Bituminous Coal Wage
Agreements, 756 F.2d at 290 (quoting A. Duie Pyle, Inc. v.
N.L.R.B., 383 F.2d 772, 777 (3d Cir. 1967)). This per se
violation becomes apparent when the clause’s " ‘necessary
effect is to make the continuance of the relationship
between the [signatory] employer and an independent

                                12

contractor depend on the latter’s decision to become a
member of the union.’ " Id. The SMG/Union agreement fits
this description precisely as SMG, the signatory employer,
could not subcontract to an independent contractor unless
that contractor first contracted with the Union. The
violation of S 8(e) was not limited to AES but was generally
applicable and therefore is per se invalid. Accordingly, there
is ample basis to support the Board’s determination that
the agreement violated S 8(e) of the Act.

C. The Construction Industry Proviso of Section 8(e)

The Petitioners place most, if not all, of their emphasis on
the contention that their agreement is not in violation of the
Act because it receives the protection of the "construction
industry proviso" to Section 8(e). The proviso states:

       [N]othing in this subsection shall apply to an
       agreement between a labor organization and an
       employer in the construction industry relating to the
       contracting or subcontracting of work to be done at the
       site of the construction, alteration, painting, or repair
       of a building, structure or other work.

29 U.S.C. S 158(e). There is a dearth of applicable case law
that could help interpret the meaning and scope of the
proviso.

There are three phrases in the proviso to be considered
in this case: The protected agreement must be between a
union and (1) an employer in the construction industry; (2)
it must relate to work to be done at the site; (3) of the
construction, alteration, painting, or repair of building,
structure or other work. As to (1) above, the ALJ held that
SMG was not an "employer in the construction industry,"
Decision & Order at 10, but the Board, having found that
S 8(e) was violated on another basis, did not decide that
issue or the subsidiary question whether it possessed
relevant control over labor relations.

The Petitioners argue that the Board could not reach the
"construction site" issue without first deciding whether
SMG was an employer in the construction industry because
SMG’s counsel explained at oral argument that the
"employer in the construction industry" comes first in the

                                13
statutory language. Tr. of Oral Argument, Oct. 29, 2002, at
21. We decline to pursue a "chicken or the egg first"
argument. The construction industry proviso is inapplicable
if either the employer is not in the construction industry or
the site is not a construction site. The ALJ decided both
adversely to the Petitioners. The Board chose to limit its
focus on the construction site. It was free to do so.

Instead, the ALJ found, and the Board agreed, that trade
show floors do not constitute construction sites. In
challenging this conclusion, the Union focuses on the ALJ’s
statement that some work of skilled carpenters is needed
and performed at the Convention Center, although the
amount remains in question. The ALJ further stated that
"[t]he work at trade shows requires the same sorts of skills,
utilizes the same sorts of materials, and involves the same
sorts of tools as traditional, recognized construction work.
It is the kind of work, with the kind of skills, that, if
performed at a construction project and as a component of
that construction, might be exempt under the proviso."
Decision & Order at 8.

Other similarities, noted by the ALJ and emphasized by
Petitioners, are that "the assignment process is through a
hiring hall, the majority of jobs are of short duration, and
carpenters who work trade shows are employed by a
number of employers." Id. at 8-9. The ALJ noted that "there
are normally at least two groups of employees working at
the Center to set up and break down trade shows,
employees represented by the Painters [with whom AES had
a contract] and the Carpenters [the Union with which SMG
made the agreement]." Id. at 9.

Despite the similarities between some trade show work
and traditional construction work, the ALJ focused on the
requirement in the proviso that "the agreement must apply
only to work ‘to be done at the site.’ " Id. The ALJ stated:
"The Center would not be referred to as a construction
project, in the sense that appears in the legislative history
or in the Supreme Court’s decision in Woelke & Romero
Framing. No occupancy inspections occur and neither
construction nor zoning permits are required. Hard hats are
not worn, and safety boots are not required." Id. (footnote
omitted). The ALJ summarized his discussion by stating

                                14

that "the Center is an exhibition hall typically used to
display items for sale. The Center is not the subject of
construction or building." Id.

Having found that a trade show floor did not qualify as a
construction site, the ALJ determined that the agreement
did not fit within the proviso. Id. ("whatever work is
performed by the Carpenters on the floor of the Center is
not being performed at ‘the site of the construction.’ "). The
Board expressly approved, as it too stated "that the work
covered by the agreement was not performed on a
construction site." Id. at 1. The Petitioners argue that the
statutory words "at the site" do not exclude remote job
sites. However, in Woelke & Romero Framing, Inc. v. NLRB,
456 U.S. 645, 654-62 (1982), the Supreme Court speaks of
the proviso only in terms of a "construction site," and there
is no basis to extend "site" beyond the statutory context of
the phrase.

Most of Petitioners’ fire is reserved for the interpretation
applied to the third, and inextricably related, requirement,
that the site be "of the construction, alteration, painting, or
repair of a building, structure or other work." The word
"construction" was interpreted by the Board for purposes of
S 8(f) of the Act (the provision allowing pre-hire agreements
under certain circumstances) in its decision in Carpet,
Linoleum and Soft Tile Local Union No. 1247, 156 N.L.R.B. 951
(1966) (Indio Paint). In that decision, the Board carefully
parsed technical, common, and legal definitions of the word
"construction" as found in Construction Review (a 1957
joint publication of the U.S. Departments of Labor and
Commerce), the Standard Industrial Classification Manual,
and Mechanics Lien Law respectively. Amalgamating the
various definitions, the Board defined "building and
construction" as "the provision of labor whereby materials
and constituent parts may be combined on the building site
to form, make or build a structure." Id. at 959. Using this
definition, the Board held that the provision of labor and
materials for floor covering installations constitutes
building and construction work. Id. The Indio Paint
definition is significant because the parties agree that the
Board uses the same standard for "construction" in SS 8(e)
and (f) cases.

                                15

Upon examining the proviso’s legislative history, the
Supreme Court determined that Congress wished to
" ‘preserve the status quo’ " regarding agreements between
unions and contractors in the construction industry.
Woelke & Romero Framing, 456 U.S. at 657 (quoting
National Woodwork, 386 U.S. at 637). According to the
Board, that preservation applies to the status quo in the
industry as of 1959, the year Congress enacted S 8(e).
Alessio Construction, 310 N.L.R.B. 1023, 1027 (1993). For this
reason, there is a historical basis for the focus by the
General Counsel of the Board on permanency, as the
Departments of Labor and Commerce’s 1957 Construction
Review defines buildings or structures for construction
purposes as work "built into or affixed to the land." Br. of
Bd. at 32.

In his brief for the Board, the General Counsel argues
that "structure" is the critical word in the Board’s standard
enunciated in Indio Paint and that such structure excludes
trade show exhibits. Br. of Bd. at 27. He notes that the
Board has never treated as a construction site a location
where the work provided did not involve building or affixing
to the land.4 Trade show exhibits, certainly the ones in
_________________________________________________________________
4. In its Reply Brief the Union states that if"construction" is limited to
something "built into or affixed to the land" numerous activities
previously considered construction work would no longer be covered. The
three cases cited by the Union disprove its argument. In International
Union of Operating Engineers, Local Union No. 12 (Tri-Counties), 131
N.L.R.B. 520 (1961), the construction at issue was of streets, sewers,
gutters, and utility installations. It is difficult to imagine construction of
items more built into or affixed to the land. In Ohio Valley District Council
(Zidell Explorations), 175 N.L.R.B. 887 (1969), the work involved
dismantling of ballistic missile sites, which speaks for itself. In U.S.
Abatement, Inc., 303 N.L.R.B. 451 (1991), the work considered
"construction" was the removal of asbestos, and the Board itself said,
"[i]t is evident that the asbestos removal activities in which Respondent
is engaged affect the structure of buildings and equipment, such as
boilers and pipes, which, after installation, have become an integral part
of the structure, itself." Id. at 456. Finally, in SMG’s Reply Brief, it
contends that the Board’s intervening decision in Freeman Decorating
Co., 336 NLRB No. 1 (2001), is inconsistent with its decision in the
current case. SMG’s argument is unpersuasive. In Freeman Decorating,
the Board never reached the "construction" question of the S 8(f) issue

                                16

question, are not built into or affixed to the land; the only
building associated with this dispute is the Convention
Center. Thus, the Board’s brief argues that because the
Center is not being constructed or altered, it is not a
construction site.

In an analysis that Petitioners vigorously attack, the ALJ
distinguished the earlier Board decisions that held that the
construction of a retail store fell within S 8(e)’s proviso on
the ground that the employer in those cases "was involved
in the construction of a building, something tangible and
permanent, even installing carpeting." Decision & Order at
8. The Petitioners complain that in interpreting the
language of the proviso to require some permanence to the
structure, the ALJ and the Board have added a requirement
Congress never intended. We do not agree. The
contemporary references cited by the ALJ define
construction in terms of structures being "built into or
affixed" to the land, which necessarily excludes temporary
trade show work. Decision & Order at 9.

The Petitioners suggest that there is no statutory basis
for the Board’s requirement for a structure. They criticize
the Board for ignoring the words "other work" in the proviso
while focusing on "site of construction." Br. of Union at 39.
However, the Petitioners provide no decisions in which the
Board or any court discusses "other work." In such a
situation, the General Counsel is not unreasonable in
referring to the maxim that "a word is known by the
company it keeps." Br. of Bd. at 31.

The Union supports its position by reference to what
some courts have deemed to be the legislative intent behind
the proviso, which is minimizing jobsite tension within the
construction industry. Br. of Union at 37 (citing Milwaukee
& Southeast Wis. Dist. Council of Carpenters v. Rowley-
Schlimgen, 2 F.3d 765, 767 (7th Cir. 1993)). The Union
_________________________________________________________________

before it, and thus the ALJ’s discussion of the erection and dismantling
of exposition shows in that case was dicta. Petitioners concede as much.
That dicta, articulated by an administrative law judge and not addressed
by the Board on review, does not render the Board’s determination in
this case unreasonable.

                                17

then states that because having different groups at the
Center causes friction, it would be arbitrary not to conclude
that the Convention Center is a requisite location for
application of the proviso. Br. of Union at 38. However, as
the Supreme Court said in Woelke & Romero Framing, the
proviso was "only partly concerned with jobsite friction."
456 U.S. at 662. Instead, the Woelke Court found that
Congress was more concerned with preserving the"status
quo" in the construction industry. Id. at 657. The Board
has concluded that under established principles of
statutory construction, the construction industry proviso
"should not be given an expansive reading" but should
protect only " ‘those subjects expressly exempted by the
proviso.’ " Operating Engineers Local 520 (Massman
Construction), 327 N.L.R.B. 1257, 1257-58 (1999) (quoting
Alessio Construction, 310 N.L.R.B. 1023, 1029 (1993)). The
Board’s interpretation of the proviso as limited to more
traditional notions of construction appears to be consistent
with that principle and Congress’ purpose.

We are presented with two vastly different interpretations
of the construction industry proviso. Under the ALJ’s and
Board’s interpretation of the proviso, the proviso covers,
and is limited to, traditional construction sites, such as
building homes, offices, and similar relatively permanent
structures. Under the interpretation of construction site
proffered by the Petitioners, any location where installing,
assembling and disassembling occurs feasibly could fit
within the construction industry proviso, ranging from
construction of intricate movie sets to platforms at malls for
performers and the appearance of Santa Claus. Petitioners
have produced no evidence that Congress envisioned that
movie set builders and the like would fall within the
construction industry proviso.

Under the circumstances, where the United States
Supreme Court, this court, and no other federal appellate
court has addressed the issue of the application of the
construction industry proviso to the installing and
dismantling of trade show exhibits, we believe it is
appropriate to defer to the reasonable statutory
interpretation of the Board, the agency primarily charged
with the Act’s implementation and administration. See

                                18

Meyer v. Holley, No. 01-1120, slip op. at 7 (U.S. Jan. 22,
2003); Chevron U.S.A. Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 842-45 (1984). 5 We will
therefore deny the Petition for Review and grant the Board’s
cross-application for enforcement.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit
_________________________________________________________________

5. One of the amici, the United Brotherhood of Carpenters and Joiners
of America ("UBC"), urges that if we affirm the Board, we limit the
Board’s decision to the facts of the current case, and adopt a case-by-
case, totality of circumstances approach without drawing a broad rule
that trade show work does not fall within the construction industry
proviso. See Br. of UBC at 5. It will be up to the Board to determine the
applicability of its interpretation of the construction industry proviso in
different circumstances.

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