The Supreme Court/The Supreme Court.iso/pc/ascii/1991/91_261/91_261.zo

Text File | 1993-03-08 | 25.5 KB | 502 lines

NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports.  Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D.C. 20543, of any typographical or other formal errors, in order that
corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
--------
Nos. 91-261 and 91-274
 --------
BUILDING AND CONSTRUCTION TRADES
COUNCIL OF THE METROPOLITAN
DISTRICT, PETITIONER
91-261               v.
ASSOCIATED BUILDERS AND CONTRACTORS
OF MASSACHUSETTS/RHODE ISLAND,
INC., et al.

MASSACHUSETTS WATER RESOURCES
AUTHORITY, et al., PETITIONERS
91-274               v.
ASSOCIATED BUILDERS AND CONTRACTORS
OF MASSACHUSETTS/RHODE ISLAND,
INC., et al.
on writs of certiorari to the united states court
of appeals for the first circuit
[March 8, 1993]

  Justice Blackmun delivered the opinion of the Court.
  The issue in this case is whether the National Labor
Relations Act, 49 Stat. 449, as amended, 29 U. S. C. 151
et seq., pre-empts enforcement by a state authority, acting
as the owner of a construction project, of an otherwise
lawful prehire collective-bargaining agreement negotiated
by private parties.

                      I
  The Massachusetts Water Resources Authority (MWRA)
is an independent government agency charged by the
Massachusetts Legislature with providing water-supply

services, sewage collection, and treatment and disposal
services for the eastern half of Massachusetts.  Mass. Gen.
Laws, ch. 92 App., 1-1 et seq. (Supp. 1992).  Following
a lawsuit arising out of its failure to prevent the pollution
of Boston Harbor, in alleged violation of the Federal
Water Pollution Control Act, 86 Stat. 816, as amended,
33 U. S. C. 1251 et seq., MWRA was ordered to clean up
the Harbor.  See United States v. Metropolitan Dist.
Comm'n, 757 F. Supp. 121, 123 (Mass. 1991).  The clean-
up project was expected to cost $6.1 billion over 10 years.
935 F. 2d 345, 347 (CA1 1991).  The District Court re-
quired construction to proceed without interruption,
making no allowance for delays from causes such as labor
disputes.  App. 71 (Affidavit of Richard D. Fox, Director
of the Program Management Division of MWRA).  MWRA
has primary responsibility for the project.  Under its
enabling statute and the Commonwealth's public-bidding
laws, MWRA provides the funds for construction (assisted
by state and federal grants), owns the sewage-treatment
facilities to be built, establishes all bid conditions, decides
all contract awards, pays the contractors, and generally
supervises the project.  See 935 F. 2d, at 347 (citing
Mass. Gen. Laws, ch. 92 App. 1-1 et seq. (Supp. 1992),
ch. 149, 44A to 44I, and ch. 30, 39M) (1991).
  In the spring of 1988, MWRA selected Kaiser Engineers,
Inc., as its project manager.  Kaiser was to be primarily
in charge of managing and supervising construction
activity.  Kaiser also was to advise MWRA on the develop-
ment of a labor-relations policy that would maintain
worksite harmony, labor-management peace, and overall
stability throughout the duration of the project.  To that
end, Kaiser suggested to MWRA that Kaiser be permitted
to negotiate an agreement with the Building and Con-
struction Trades Council and affiliated organizations
(BCTC) that would assure labor stability over the life of
the project.  App. to Pet. for Cert. in No. 91-274, p. 75a
(MWRA Pet. App.).  MWRA accepted Kaiser's suggestion,
and Kaiser accordingly proceeded to negotiate the Boston
Harbor Wastewater Treatment Facilities Project Labor
Agreement.  Ibid.  The Agreement included:  recognition
of BCTC as the exclusive bargaining agent for all craft
employees; use of specified methods for resolving all labor-
related disputes; a requirement that all employees be
subject to union-security provisions compelling them to
become union members within seven days of their employ-
ment; the primary use of BCTC's hiring halls to supply
the project's craft labor force; a 10-year no-strike commit-
ment; and a requirement that all contractors and subcon-
tractors agree to be bound by the Agreement.  935 F. 2d,
at 348.  See generally MWRA Pet. App. 107a (full text of
Agreement).  MWRA's Board of Directors approved and
adopted the Agreement in May 1989 and directed that Bid
Specification 13.1 be incorporated into its solicitation of
bids for work on the project.  935 F. 2d, at 347.  Bid
Specification 13.1 provides in pertinent part:
-[E]ach successful bidder and any and all levels of
subcontractors, as a condition of being awarded a
contract or subcontract, will agree to abide by the
provisions of the Boston Harbor Wastewater Treat-
ment Facilities Project Labor Agreement as executed
and effective May 22, 1989, by and between Kaiser
. . . on behalf of [MWRA], and [BCTC] . . . and will
be bound by the provisions of that agreement in the
same manner as any other provision of the contract.-
MWRA Pet. App. 141a-142a.
  In March 1990, a contractors' association not a party to
this case filed a charge with the National Labor Relations
Board contending that the Agreement violated the NLRA.
The NLRB General Counsel refused to issue a complaint,
finding:  (1) that the Agreement is a valid prehire agree-
ment under 8(f) of the NLRA, 29 U. S. C. 158(f), which
authorizes such agreements in the construction industry,
and (2) that the Agreement's provisions limiting work on
the project to contractors who agree to abide by the
agreement are lawful under the construction-industry
proviso to 8(e), 29 U. S. C. 158(e).  This proviso sets
forth an exception from 8(e)'s prohibition against -hot
cargo- agreements that require an employer to refrain
from doing business with any person not agreeing to be
bound by a prehire agreement.  Building & Trades
Council (Kaiser Engineers, Inc.), Case 1-CE-71, NLRB
Advice Memo, June 25, 1990, MWRA Pet. App. 88a.
  Also in March 1990, respondent Associated Builders and
Contractors of Massachusetts/Rhode Island, Inc. (ABC), an
organization representing nonunion construction industry
employers, brought this suit against MWRA, Kaiser, and
BCTC, seeking, among other things, to enjoin enforcement
of Bid Specification 13.1.  ABC alleged pre-emption under
the NLRA, pre-emption under 514(c) of the Employee
Retirement Income Security Act, 88 Stat. 897, 29 U. S. C.
1144(c) (ERISA), violations of the Equal Protection and
Due Process Clauses of the Fourteenth Amendment,
conspiracy to reduce competition, in violation of the
Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. 1,
and various state-law claims.  Only NLRA pre-emption is
at issue here.
  The United States District Court for the District of
Massachusetts rejected each of ABC's claims and denied
its motion for a preliminary injunction.  MWRA Pet. App.
76a-83a.  The Court of Appeals for the First Circuit
reversed and directed entry of a preliminary injunction
restraining the use of Bid Specification 13.1, reaching only
the issue of NLRA pre-emption.  135 LRRM 2713 (1990).
The Court of Appeals subsequently granted a petition for
rehearing en banc, vacating the panel opinion.  MWRA
Pet. App. 84a.  Upon rehearing en banc, the Court of
Appeals, by a 3-2 vote, again reversed the judgment of
the District Court, once more reaching only the pre-
emption issue.  935 F. 2d, at 359-360.  The court held
that MWRA's intrusion into the bargaining process was
pervasive and not the sort of peripheral regulation that
would be permissible under San Diego Building Trades
Council v. Garmon, 359 U. S. 236 (1959).  See 935 F. 2d,
at 353.  It also held that Bid Specification 13.1 was pre-
empted under Machinists v. Wisconsin Employment
Relations Comm'n, 427 U. S. 132 (1976), because MWRA
was regulating activities that Congress intended to be
unrestricted by governmental power.  Because of the
importance of the issue, we granted certiorari, 504 U. S.
___ (1992).

                     II
  The NLRA contains no express pre-emption provision.
Therefore, in accordance with settled pre-emption princi-
ples, we should not find MWRA's bid specification pre-
empted -`- . . . unless it conflicts with federal law
or would frustrate the federal scheme, or unless [we]
discern from the totality of the circumstances that Con-
gress sought to occupy the field to the exclusion of the
States.-'-  Metropolitan Life Ins. Co. v. Massachusetts, 471
U. S. 724, 747-748 (1985) (citations omitted).  We are
reluctant to infer pre-emption.  See Cippolone v. Liggett
Group, Inc., 504 U. S. _____, _____-_____ (1992) (slip op.
9-10); Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230
(1947).  -Consideration under the Supremacy Clause starts
with the basic assumption that Congress did not intend
to displace state law.-  Maryland v. Louisiana, 451 U. S.
725, 746 (1981).  With these general principles in mind,
we turn to the particular pre-emption doctrines that have
developed around the NLRA.
  In Metropolitan Life Ins. Co. v. Massachusetts, 471
U. S., at 748, we noted: -The Court has articulated two
distinct NLRA pre-emption principles.-  The first, -Garmon
pre-emption,- see San Diego Building Trades Council v.
Garmon, supra, forbids state and local regulation of
activities that are -protected by 7 of the [NLRA], or
constitute an unfair labor practice under 8.-  359  U. S.,
at 244.  See also Garner v. Teamsters, 346 U. S. 485,
498-499 (1953) (-[W]hen two separate remedies are
brought to bear on the same activity, a conflict is immi-
nent-).  Garmon pre-emption prohibits regulation even of
activities that the NLRA only arguably protects or prohib-
its.  See Wisconsin Dept. of Industry v. Gould Inc., 475
U. S. 282, 286 (1986).  This rule of pre-emption is de-
signed to prevent conflict between, on the one hand, state
and local regulation and, on the other, Congress' -inte-
grated scheme of regulation,- Garmon, 359 U. S., at 247,
embodied in 7 and 8 of the NLRA, which includes the
choice of the NLRB, rather than state or federal courts,
as the appropriate body to implement the Act.  Metropoli-
tan Life Ins. Co. v. Massachusetts, 471 U. S., at 748-749,
and n. 26.
  In Garmon, this Court held that a state court was
precluded from awarding damages to employers for
economic injuries resulting from peaceful picketing by
labor unions that had not been selected by a majority of
employees as their bargaining agent.  359 U. S., at 246.
The Court said: -Our concern is with delimiting areas of
conduct which must be free from state regulation if
national policy is to be left unhampered.-  Ibid.  In Gould,
we held that the NLRA pre-empts a statute that disquali-
fies from doing business with the State persons who have
violated the NLRA three times within a 5-year period.
We emphasized there that -the Garmon rule prevents
States not only from setting forth standards of conduct
inconsistent with the substantive requirements of the
NLRA, but also from providing their own regulatory or
judicial remedies for conduct prohibited or arguably
prohibited by the Act.-  475 U. S., at 286 (citing 359
U. S., at 247).
  A second pre-emption principle, -Machinists pre-emp-
tion,- see Machinists v. Wisconsin Employment Relations
Comm'n, 427 U. S., at 147, prohibits state and municipal
regulation of areas that have been left -`to be controlled
by the free play of economic forces.'-  Id., at 140 (citation
omitted).  See also Golden State Transit Corp. v. Los
Angeles, 475 U. S. 608, 614 (1986) (Golden State I);
Golden State Transit Corp. v. Los Angeles, 493 U. S. 103,
111 (1989) (Golden State II).  Machinists pre-emption
preserves Congress' -intentional balance `-between the
uncontrolled power of management and labor to further
their respective interests.-'-  Golden State I, 475 U. S.,
at 614 (citations omitted).
  In Machinists, we held that the Wisconsin Employment
Relations Commission could not designate as an unfair
labor practice under state law a concerted refusal by a
union and its members to work overtime, because Con-
gress did not mean such self-help activity to be
regulable by the States.  427 U. S., at 148-150.  We said
that it would frustrate Congress' intent to -sanction state
regulation of such economic pressure deemed by the
federal Act `desirabl[y] . . . left for the free play of con-
tending economic forces . . . .-  Id., at 150 (citation
omitted).  In Golden State I, we applied the Machinists
doctrine to hold that the city of Los Angeles was pre-
empted from conditioning renewal of a taxicab operating
license upon the settlement of a labor dispute.  475 U. S.,
at 618.  We reiterated the principle that a -local govern-
ment . . . lacks the authority to `-introduce some standard
of properly `balanced' bargaining power- . . . or to define
-what economic sanctions might be permitted negotiating
parties in an `ideal' or `balanced' state of collective bar-
gaining.-'-  Id., at 619 (quoting Machinists, 427 U. S., at
149-150) (internal citation omitted).  In Golden State II,
493 U. S. 103 (1989), we determined that the taxicab
employer who was challenging the city's conduct in Golden
State I was entitled to maintain an action under 42
U. S. C. 1983 for compensatory damages against the
city.  In so holding, we stated that the Machinists rule
created a zone free from all regulations, whether state or
federal.  493 U. S., at 112.

                     III
  When we say that the NLRA pre-empts state law, we
mean that the NLRA prevents a State from regulating
within a protected zone, whether it be a zone protected
and reserved for market freedom, see Machinists, or for
NLRB jurisdiction, see Garmon.  A State does not regu-
late, however, simply by acting within one of these
protected areas.  When a State owns and manages proper-
ty, for example, it must interact with private participants
in the marketplace.  In so doing, the State is not subject
to pre-emption by the NLRA, because pre-emption doc-
trines apply only to state regulation.
  Our decisions in this area support the distinction
between government as regulator and government as
proprietor.  We have held consistently that the NLRA was
intended to supplant state labor regulation, not all legiti-
mate state activity that affects labor.  In Machinists, for
example, we referred to Congress' pre-emptive intent to
-leave some activities unregulated,-  427 U. S., at 144
(emphasis added), and held that the activities at
issue-workers deciding together to refuse overtime
work-were not -regulable by States.-  Id., at 149 (empha-
sis added).  In Golden State I, we held that the reason
Los Angeles could not condition renewal of a taxicab
franchise upon settlement of a labor dispute was that
-Machinists pre-emption . . . precludes state and municipal
regulation `concerning conduct that Congress intended to
be unregulated.'-  475 U. S., at 614 (emphasis added)
(quoting Metropolitan Life Ins. Co. v. Massachusetts, 471
U. S., at 749).  We refused to permit the city's exercise
of its regulatory power of license nonrenewal to restrict
Golden State's right to use lawful economic weapons in its
dispute with its union.  See 475 U. S., at 615-619.  As
petitioners point out, a very different case would have
been presented had the city of Los Angeles purchased taxi
services from Golden State in order to transport city
employees.  Brief for Petitioners 35.  In that situation, if
the strike had produced serious interruptions in the
services the city had purchased, the city would not
necessarily have been pre-empted from advising Golden
State that it would hire another company if the labor
dispute were not resolved and services resumed by a
specific deadline.
  In Gould, we rejected the argument that the State was
acting as proprietor rather than regulator for purposes of
Garmon pre-emption when the State refused to do busi-
ness with persons who had violated the NLRA three times
within five years.  We noted in doing so that in that case,
-debarment . . . serves plainly as a means of enforcing the
NLRA.-  475 U. S., at 287.  We said there that -[t]he
State concedes, as we think it must, that the point of the
statute is to deter labor law violations-; we concluded that
"[n]o other purpose could credibly be ascribed.-  Ibid.
  Respondents quote the following passage from Gould,
arguing that it stands for the proposition that the State
as proprietor is subject to the same pre-emption limita-
tions as the State as regulator:
     -Nothing in the NLRA, of course, prevents private
purchasers from boycotting labor law violators.  But
government occupies a unique position of power in our
society, and its conduct, regardless of form, is rightly
subject to special restraints.  Outside the area of
Commerce Clause jurisprudence, it is far from unusu-
al for federal law to prohibit States from making
spending decisions in ways that are permissible for
private parties . . . .  The NLRA, moreover, has long
been understood to protect a range of conduct against
state but not private interference . . . .  The Act
treats state action differently from private action not
merely because they frequently take different forms,
but also because in our system States simply are
different from private parties and have a different role
to play.-  Id., at 290.
  The above passage does not bear the weight that
respondents would have it support.  The conduct at issue
in Gould was a state agency's attempt to compel conform-
ity with the NLRA.  Because the statute at issue in Gould
addressed employer conduct unrelated to the employer's
performance of contractual obligations to the State, and
because the State's reason for such conduct was to deter
NLRA violations, we concluded: -Wisconsin `simply is not
functioning as a private purchaser of services,' . . .  [and
therefore,] for all practical purposes, Wisconsin's debar-
ment scheme is tantamount to regulation.-  Id., at 289.
We emphasized that we were -not say[ing] that state
purchasing decisions may never be influenced by labor
considerations.-  Id., at 291.
  The conceptual distinction between regulator and
purchaser exists to a limited extent in the private sphere
as well.  A private actor, for example, can participate in
a boycott of a supplier on the basis of a labor policy
concern rather than a profit motive.  See id., at 290.  The
private actor under such circumstances would be attempt-
ing to -regulate- the suppliers and would not be acting as
a typical proprietor.  The fact that a private actor may
-regulate- does not mean, of course, that the private actor
may be -pre-empted- by the NLRA; the Supremacy Clause
does not require pre-emption of private conduct.  Private
actors therefore may -regulate- as they please, as long as
their conduct does not violate the law.  As the above
passage in Gould makes clear, however, States have a
qualitatively different role to play from private parties.
Id., at 290.  When the State acts as regulator, it performs
a role that is characteristically a governmental rather
than a private role, boycotts notwithstanding.  Moreover,
as regulator of private conduct, the State is more powerful
than private parties.  These distinctions are far less
significant when the State acts as a market participant
with no interest in setting policy.
  In Gould, we did not address fully the implications of
these distinctions.  We left open the question whether a
State may act without offending the pre-emption principles
of the NLRA when it acts as a proprietor and its acts
therefore are not -tantamount to regulation,- or policy-
making.  As explained more fully below, we now answer
this question in the affirmative.

                     IV
  Permitting the States to participate freely in the mar-
ketplace is not only consistent with NLRA pre-emption
principles generally but also, in this case, promotes the
legislative goals that animated the passage of the 8(e)
and 8(f) exceptions for the construction industry.  In 1959,
Congress amended the NLRA to add 8(f) and modify
8(e).  Section 8(f) explicitly permits employers in the
construction industry-but no other employers-to enter
into prehire agreements.  Prehire agreements are collec-
tive-bargaining agreements providing for union recognition,
compulsory union dues or equivalents, and mandatory use
of union hiring halls, prior to the hiring of any employees.
935 F. 2d, at 356; Jim McNeff, Inc. v. Todd, 461 U. S.
260, 265-266 (1983).  The 1959 amendment adding a
proviso to subsection (e) permits a general contractor's
prehire agreement to require an employer not to hire
other contractors performing work on that particular
project site unless they agree to become bound by the
terms of that labor agreement.  See Woelke & Romero
Framing, Inc. v. NLRB, 456 U. S. 645, 657 (1982).
Section 8(f) contains a final proviso that permits employ-
ees, once hired, to utilize the NLRB election process under
9(c) and 9(e) of the Act, 29 U. S. C. 159(c) and (e),
if they wish to reject the bargaining representative or to
cancel the union security provisions of the prehire agree-
ment.  See NLRB v. Iron Workers, 434 U. S. 335, 345
(1978).
  It is undisputed that the Agreement between Kaiser and
BCTC is a valid labor contract under 8(e) and (f).  As
noted above, those sections explicitly authorize this type
of contract between a union and an employer like Kaiser,
which is engaged primarily in the construction industry,
covering employees engaged in that industry.
  Of course, the exceptions provided for the construction
industry in 8(e) and 8(f), like the prohibitions from
which they provide relief, are not made specifically
applicable to the State.  This is because the State is
excluded from the definition of the term -employer- under
the NLRA, see 29 U. S. C. 152(2), and because the
State, in any event, is acting not as an employer but as
a purchaser in this case.  Nevertheless, the general goals
behind passage of 8(e) and 8(f) are still relevant to
determining what Congress intended with respect to the
State and its relationship to the agreements authorized
by these sections.
  It is evident from the face of the statute that in enact-
ing exemptions authorizing certain kinds of project labor
agreements in the construction industry, Congress intend-
ed to accommodate conditions specific to that industry.
Such conditions include, among others, the short-term
nature of employment which makes post-hire collective
bargaining difficult, the contractor's need for predictable
costs and a steady supply of skilled labor, and a long-
standing custom of prehire bargaining in the industry.
See S. Rep. No. 187, 86th Cong., 1st Sess., 28, 55-56
(1959); H.R. Rep. No. 741, 86th Cong., 1st Sess., 19-20
(1959).
  There is no reason to expect these defining features of
the construction industry to depend upon the public or
private nature of the entity purchasing contracting servic-
es.  To the extent that a private purchaser may choose a
contractor based upon that contractor's willingness to
enter into a prehire agreement, a public entity as pur-
chaser should be permitted to do the same.  Confronted
with such a purchaser, those contractors who do not
normally enter such agreements are faced with a choice.
They may alter their usual mode of operation to secure
the business opportunity at hand, or seek business from
purchasers whose perceived needs do not include a project
labor agreement.  In the absence of any express or
implied indication by Congress that a State may not
manage its own property when it pursues its purely
proprietary interests, and where analogous private conduct
would be permitted, this Court will not infer such a
restriction.  See, e.g., Maryland v. Louisiana, 451 U. S.,
at 746 (-Consideration under the Supremacy Clause starts
with the basic assumption that Congress did not intend
to displace state law-).  Indeed, there is some force to
petitioners' argument, Brief for Petitioners 25, that
denying an option to public owner-developers that is
available to private owner-developers itself places a
restriction on Congress' intended free play of economic
forces identified in Machinists.

                      V
  In the instant case, MWRA acted on the advice of a
manager hired to organize performance of a clean-up job
over which, under Massachusetts law, MWRA is the
proprietor.  There is no question but that MWRA was
attempting to ensure an efficient project that would be
completed as quickly and effectively as possible at the
lowest cost.  As petitioners note, moreover, Brief for
Petitioners 26, the challenged action in this case was
specifically tailored to one particular job, the Boston
Harbor clean-up project.  There is therefore no basis on
which to distinguish the incentives at work here from
those that operate elsewhere in the construction industry,
incentives that this Court has recognized as legitimate.
See Woelke & Romero Framing Co. v. NLRB, 456 U. S.,
at 662, and n. 14.
  We hold today that Bid Specification 13.1 is not govern-
ment regulation and that it is therefore subject to neither
Garmon nor Machinists pre-emption.  Bid Specification
13.1 constitutes proprietary conduct on the part of the
Commonwealth of Massachusetts, which legally has
enforced a valid project labor agreement.  As Chief Judge
Breyer aptly noted in his dissent in the Court of Appeals,
-when the MWRA, acting in the role of purchaser of
construction services, acts just like a private contractor
would act, and conditions its purchasing upon the very
sort of labor agreement that Congress explicitly authorized
and expected frequently to find, it does not `regulate' the
workings of the market forces that Congress expected to
find; it exemplifies them.-  935 F. 2d, at 361.
  Because we find that Bid Specification 13.1 is not pre-
empted by the NLRA, it follows that a preliminary
injunction against enforcement of this bid specification was
improper.  We therefore reverse the judgment of the Court
of Appeals and remand the case for further proceedings
consistent with this opinion.
                            It is so ordered.