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Wednesday, March 05, 2008

Ind. Decisions - 7th Circuit issues one Indiana decision

In United Rental Technologies v. Indiana Constructors (SD Ind., Judge Barker), a 14-page opinion, Judge Posner writes:

Anyone who travels on the interstate system in northern states understands the force of the dictum that on the interstate highways in those states there are only two seasons: winter and construction.

Road work in Indiana is done almost entirely by contractors who belong to a trade association called Indiana Constructors, which has for many years negotiated collective bargaining agreements for its members with the Laborers International Union (actually with its locals, but we can ignore that detail). In 2004, the collective bargaining agreement then in force was modified to forbid the association’s members to subcontract work at a construction site to a firm that had not signed a collective bargaining agreement with the Laborers Union. The union had pushed for the modification because it wanted as much work at construction sites as possible to be done by its members. This was a blow to United Rentals because it had a collective bargaining agreement with another union (also it didn’t want to bargain with the Laborers Union when that agreement expired); and so it filed a charge with the National Labor Relations Board that Indiana Constructors and the Laborers Union were violating the National Labor Relations Act’s “hot cargo” provision. NLRA § 8(e), 29 U.S.C. § 158(e). The provision forbids a union and employer to agree that the employer will refuse to deal with another employer (in this case a subcontractor), as Indiana Constructors has agreed with the Laborers Union to do with respect to United Rentals and any other subcontractor that does not have a collective bargaining agreement with that union.

But there is an exception to the hot cargo provision for “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,” id., including highways. * * * On the basis of the exception, the Board’s General Counsel declined to file a complaint against Indiana Constructors or the Laborers Union.

The company then filed this suit, which charges the contractors’ association and the union with conspiring to exclude United Rentals from the traffic control market in Indiana, in violation of section 1 of the Sherman Act, 15 U.S.C. § 1. * * *

The district court granted summary judgment in favor of the defendants on all counts, and United Rentals appeals. So we have an antitrust claim and a hot cargo claim to consider. We’ll start with the latter because the former is partly derivative from it. * * *

Given the absence of traditional antitrust concerns, a decision in United Rentals’ favor would be tantamount to holding that all hot cargo clauses in the construction industry violate the Sherman Act. A type of agreement affirmatively sanctioned by Congress cannot be deemed a per se violation of the Sherman Act. * * * To rule otherwise would be to make the Sherman Act, enacted in 1890, repeal a statutory provision enacted in 1959, reversing the arrow of time. AFFIRMED.

Posted by Marcia Oddi on March 5, 2008 02:37 PM
Posted to Ind. (7th Cir.) Decisions