California Cartage Co. v. National Labor Relations Board
Docket: Nos. 86-1135, 86-1176 and 86-1183
Court: Court of Appeals for the D.C. Circuit; July 14, 1987; Federal Appellate Court
Seventeen years ago, the Pacific Maritime Association (PMA) and the International Longshoremen’s and Warehousemen’s Union (ILWU) established a supplement to their master collective bargaining agreement, stipulating that only longshoremen at PMA container freight stations would handle the stuffing and unstuffing of shipping containers within fifty miles of West Coast ports. In June 1971, the ILWU directed its longshoremen not to load or unload containers for California Cartage Company, Inc. (CalCart), which is not a PMA member and employs Teamsters rather than longshoremen. CalCart filed unfair labor practice charges with the National Labor Relations Board (NLRB), claiming that the PMA-ILWU Supplement constituted an illegal "hot cargo" agreement under section 8(e) of the National Labor Relations Act and that ILWU's enforcement actions were secondary boycotts under section 8(b)(4). The NLRB agreed, ruling in 1974 that the Supplement was illegal for requiring PMA and longshoremen to restrict non-PMA steamship lines from using non-longshore labor for container handling, and that it lacked a legitimate work preservation objective. In 1980, the Supreme Court's ruling in a similar case prompted a remand to the NLRB, which, in 1986, determined that while the Supplement was lawful concerning PMA containers due to its work preservation objective, it remained illegal for non-PMA containers. Both PMA and ILWU are appealing parts of this decision, while CalCart seeks to have the entire Supplement deemed illegal. The court upholds the NLRB's finding for PMA containers but remands for further clarification regarding the legality of the Supplement with respect to non-PMA containers. The ILWU represents a defined collective bargaining unit of longshoremen affiliated with PMA member employers, certified nearly fifty years ago.
Steamship lines were included in the collective bargaining unit due to their close ties to longshore labor, despite subcontracting longshore work to stevedoring firms and terminal operators. The unit was defined broadly to encompass virtually all employers of longshoremen on the West Coast, reflecting their collective strength in negotiating labor agreements. The ILWU has historically fought to maintain longshoremen's roles amidst modernization in cargo transport. Prior to World War II, longshoremen handled cargo in separate packages, but post-war changes in cargo handling led the ILWU to negotiate collective bargaining agreements to ensure job security through "make work" requirements. In 1960, the ILWU signed the Mechanization and Modernization Agreement (M.M. Agreement) with PMA, which allowed for more efficient handling of containers but ultimately resulted in a greater loss of longshore work than anticipated. Although longshoremen gained some container stuffing work, much of it was shifted to locations away from the docks. This shift led to a new agreement—referred to as the Supplement—aimed at securing all stuffing and unstuffing work within proximity to the docks. Section 8(e) of the Act prohibits secondary agreements where employers agree to cease business with others, applicable only to secondary agreements targeting neutral employers in unrelated labor disputes.
An agreement is classified as primary if the union aims to influence the signatory employer’s labor relations with its employees, highlighting the employer's lack of neutrality. Such agreements, including those to cease business operations, are considered primary when they seek to protect traditional work performed by unit employees or the functional equivalent of that work. Conversely, agreements are secondary if aimed at securing new jobs or benefiting employees other than those of the signatory employer. The Board ruled that the PMA and ILWU did not violate section 8(e) by restricting PMA-owned or leased containers to longshoremen, as this was intended to preserve the traditional work of the ILWU unit. The Board found a functional relationship between consolidating cargo and stuffing containers, despite some work occurring off docks. CalCart’s argument that the Supplement adversely affects its business or gives the ILWU excessive control is irrelevant to the validity of the agreement. CalCart primarily challenges the Board's interpretation of the ILWU's intent with the M.M. Agreement and Supplement, but the Board's findings must be upheld if supported by substantial evidence, and courts typically defer to the Board’s expertise in factual determinations of intent.
CalCart contends that the ILWU permanently waived any claims related to container stuffing and unstuffing prior to signing the Supplement, asserting this waiver stemmed from the M.M. Agreement signed in 1960 and extended in 1966. According to CalCart, the PMA acquired from the ILWU all rights to future reductions in longshore work due to new technologies like containers, thus precluding the ILWU from claiming work equivalent to what was eliminated. However, the Board refuted this argument, noting that longshoremen continued to perform container stuffing even under the M.M. Agreement when cargo was delivered as break bulk. The Board further clarified that the M.M. Agreement was not designed to permanently define the parties' rights regarding the economic impacts of containerization, allowing them to reassess and adapt after its expiration.
The Board's interpretation was supported by evidence, including the absence of the term 'container' in the M.M. Agreement and the understanding that the full impact of containerization was not foreseeable in 1960 or 1966. The ongoing nature of collective bargaining means that agreements should not be interpreted as permanently freezing relationships. CalCart also argued that the Supplement sought to achieve union objectives beyond merely protecting the bargaining unit's work, suggesting it benefited 'terminal warehousemen' from a separate bargaining unit. While the Board acknowledged that many workers at newly created container freight stations were non-registered warehousemen and casuals, it maintained that these operations mirrored dock work and that longshoremen could be assigned to either setting. The Board concluded that the union's primary objective was to protect the interests of bargaining unit employees, and the minor differences between the agreements were insignificant. Therefore, any incidental benefits to non-union members did not undermine the union’s objective, and the Board found the evidence supporting its interpretation to be strong.
The case revolves around the Board's determination that the Supplement violates section 8(e) because it pertains to containers owned or leased by non-PMA members. The Board argued that PMA, as the signatory, lacked control over the work related to these non-member containers, thus making PMA a neutral party in disputes involving the ILWU and these non-members. This stance, however, appears to lack substantive evidence of an actual dispute between the ILWU and the non-PMA members, as the latter did not participate in the proceedings. The Board's assumption that PMA has no 'right of control' is questioned, particularly given testimony indicating that PMA's operations and voting procedures involve both member and non-member steamship lines. Evidence suggests non-member lines contribute financially to PMA and that grievances can be filed against them under PMA-ILWU agreements, implying a more complex relationship where PMA may exert some control. The Board’s analysis must consider this relationship more thoroughly to assess whether either PMA or the non-member steamship lines can be deemed neutral in disputes with the ILWU, as established case law suggests that interconnections between employers can negate neutrality. The inquiry should extend beyond mere formal control to encompass the actual dynamics of the relationships involved.
The Board is tasked with determining the significance of the absence of control by a signatory employer while also considering other evidence of the employer's neutrality. The Supreme Court clarified that the Board’s analysis must be comprehensive and not merely mechanical, indicating that if an employer is not genuinely neutral, union pressures may not constitute a violation of labor laws. The case at hand requires further clarification from the Board regarding claims that the distinction between member and non-member steamship companies is superficial.
Shipping containers, typically measuring 8 by 8 by 30 feet and designed for transport on various vehicles, are subject to specific labor agreements regarding the processes of 'stuffing' and 'unstuffing.' A significant portion of containers (about 85%) are classified as 'shippers’ load' and are excluded from certain agreements. Additional labor charges arose following amendments made to a prior agreement in 1972, and the status of steamship lines in relation to the PMA bargaining unit remains unclear.
Under Section 8(b)(4) of the National Labor Relations Act, coercive actions aimed at forcing an employer to cease business with others are prohibited. A point raised by CalCart regarding the distinction between stuffing/unstuffing and traditional longshoreman work was not previously addressed before the Board, rendering it outside the court's consideration. The Board previously determined that the ILWU had only waived certain 'make work' rights. The Teamsters argue that any temporary waiver of traditional work claims is permanent; however, the court found no legal basis for this assertion, referencing relevant case law that supports the notion that waivers can be temporary.
In 1968, ILWU Local 13 began representing terminal warehousemen who worked at PMA-member container freight stations, performing tasks unrelated to longshoremen. CalCart questions the PMA's authority to negotiate longshore employment terms, arguing that PMA’s inclusion of steamship lines—entities that do not directly employ longshoremen—renders any agreements secondary. Conversely, the Teamsters argue that the stevedoring firms and terminal operators are neutral, as steamship lines ultimately determine which union services specific container freight stations. Both positions challenge the bargaining unit determination made by the Board in 1938, which had been previously rejected by the Board in 1974 and not revisited during remand. PMA and ILWU contend that the Board erred by not allowing additional evidence regarding the relationship between PMA members and non-members post-1986 decision. The court refrains from ruling on this matter, stating that it is for the Board to decide whether to accept further evidence concerning the member/non-member distinction, which relates to the definition of the bargaining unit.
