Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Requiring employers to hire only union workers allegedly restrained trade, (Jul 25, 2014)

By Linda O’Brien, J.D., LL.M.

A longshoreman labor union has engaged in restraints of trade and attempts to monopolize crane operation work performed at West Coast port areas by amending its collective bargaining agreement to require employers signatory to the agreement to hire only its union members to perform the work, according to a complaint filed in the federal district court in Los Angeles (Surf City Steel, Inc. v. International Longshore and Warehouse Union, July 18, 2014).

Surf City Steel, Sarens USA, and United Riggers & Erectors, Inc. are building and construction companies that employ ironworkers. To obtain business, the companies submit bids to perform work within port facilities. The International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers is a labor organization whose affiliated local union members move, install, maintain, and modify cranes at port facilities on the West Coast. The International Longshore and Warehouse Union (ILWU) is a labor organization whose union members also work at all ports on the West Coast.

The complaint states that, in 2008, the ILWU amended their collective bargaining agreement to provide that crane work would be performed exclusively through its members and that bids for such work would be submitted only by employers, contractors, and subcontractors who were signatory to the ILWU collective bargaining agreement. The agreement contains grievance and arbitration procedures empowering arbitrators to deny work to employers that are not signatories to the agreement. In some instances, ILWU agreement signatories have been ordered to cancel such contracts and award such work only to signatories of the agreement, the complaint claimed.

Nonsignatory employers allegedly have been coerced into taking a position where they must use only ILWU members to perform the work in question. Such employers are not entitled to participate in the ILWU collective bargaining agreement grievance process and are precluded through picketing, job action, and threats of violence from performing port area work with non-ILWU members, the complaint charged.

By engaging in conspiratorial conduct with port owners, lessors, contractors, operators, and managers signatory to its collective bargaining agreement, the ILWU has altered the traditional scope of work so that only ILWU signatory contractors may effectively bid on such contract work. ILWU continues to insist that all work performed in port areas be assigned exclusively to employers who are signatories to the ILWU agreement. Additionally, ILWU has asserted that outside construction work, which its members have not performed in the past, is their work exclusively pursuant to its interpretation of work jurisdiction under its collective bargaining agreement.

The complaint states that there is no legitimate business purpose to justify ILWU’s anticompetitive conduct. Its conduct has impacted the members of plaintiff International Association by depriving them of work they have traditionally performed in the past and resulted in lost wages and benefits.

The plaintiffs assert claims for restraint of trade and attempted monopolization in violation of Sections 1 and 2 of the Sherman Act. The action seeks declaratory and injunctive relief, damages, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 2:14-cv-05604-BRO.

Attorneys: David A. Rosenfeld (Weinberg, Roger & Rosenfeld) and Ronald C. Gladney (Hartnett Gladney Hetterman, LLC) for Surf City Steel, Inc., Sarens USA, Inc., United Riggers & Erectors, Inc., and International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers.

Companies: Surf City Steel, Inc.; Sarens USA, Inc.; United Riggers & Erectors, Inc.; International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers; International Longshore and Warehouse Union.

News: Antitrust CaliforniaNews