Surf City Steel, Inc. v. Int'l Longshore & Warehouse Union

Surf City Steel, Inc. v. Int'l Longshore & Warehouse Union

Opinion

 [*470]  MEMORANDUM²

This appeal pertains to work assignment provisions in Sections 1.7, 1.71, and 1.72 of the Pacific Coast Longshore and Clerk's Agreement ("the CBA"), entered into by Appellees Pacific Maritime Association ("PMA")³ and the International Longshore and Warehouse Union ("ILWU").⁴ Appellants—Surf City Steel, Inc. and Sarens, USA, Inc. (collectively "Contractors") and the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers ("Iron Workers Union")⁵—brought suit alleging that the CBA violated antitrust and labor laws, because it prevented them from competing for and performing certain crane work at West Coast ports. Iron Workers Union also alleged ILWU's conduct breached the AFL-CIO Constitution.

The district court was presented with multiple challenges to Appellants' claims and eventually dismissed all claims.⁶ Appellants appeal those dismissals. Appellees contend the dismissals should be upheld, and argue on cross-appeal that the district court erred by rejecting an additional basis for dismissing the antitrust claims. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.⁷

1. The district court dismissed the Appellant Contractors' [**4]  labor law claims, concluding that the Second Amended Complaint ("SAC") failed to allege sufficiently and plausibly that Appellee ILWU engaged in prohibited secondary activity. Specifically, the court concluded the Appellants failed to allege any facts from which the court could infer that the purpose of the arbitration proceedings was to pressure the contractors not to allow non-ILWU signatories to work or bid on their projects. We agree with the district court's reasoning and affirm.

Appellant Contractors' labor law claims are predicated upon a violation of sections 8(b)(4)(ii)(A)  [*471]  & (B) of the NLRA, 29 U.S.C. § 158(b)(4)(ii)(A) & (B). Section 8(b)(4) prohibits only activities that have a secondary, as opposed to a primary purpose. National Woodwork Mfrs. Ass'n v. NLRB, 386 U.S. 612, 624-39, 87 S. Ct. 1250, 18 L. Ed. 2d 357 (1967) ("Nat'l Woodwork"); A. Duie Pyle, Inc. v. NLRB, 383 F.2d 772, 776 (3d Cir. 1967).⁸ "If the object of the agreement is to benefit the employees of the bargaining unit represented by the union, it is 'primary' and in such event does not fall within the proscription of § 8(e), whereas if the object is the application of pressure on an outside employer in order to require him to accede to union objectives it is 'secondary' and within the prohibition of § 8(e)." A. Duie Pyle, Inc., 383 F.2d at 776. The CBA governed labor relations between PMA and ILWU, and required PMA-member companies to assign their crane work to ILWU workers. The SAC [**5]  did not contain any allegations of a direct dispute between ILWU and the Contractors at the time the CBA was negotiated. The Contractors concede that the CBA provisions at issue did not "expressly address the issue of subcontracting." "Contractual provisions designed to create primary pressure[,] pressure brought to bear directly upon the primary employer with whom the union has a quarrel[,] are not prohibited by section 8(e)." NLRB v. Hotel & Rest. Emps. & Bartenders' Union Local 531, 623 F.2d 61, 66 (9th Cir. 1980) (citing Nat'l Woodwork, 386 U.S. at 635 and Griffith Co. v. NLRB, 545 F.2d 1194, 1198 (9th Cir. 1976)).

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