Before KALODNER, STALEY and SMITH, Circuit Judges.
SMITH, C. J.: This proceeding, under Section 10, subdivisions (e) and (f) of the Labor Management Relations Act of 1947, 29 U.S.C.A. 160(e) and (f), is before the Court on a petition for review filed by the District Council and a cross-petition for enforcement filed by the Board. The decision of the Board is reported in 141 NLRB No. 80, 1963; 52 LRRM 1416. The narrow question raised has been considered and decided by the United States Court of Appeals for the Ninth Circuit and its decision is adverse to the position here taken by the Board. Construction, Production & Main. Lab. U. Local 383 v. NLRB, 323 F.2d 422 (1963); accord, Cuneo v. International Union of Operating Eng., Local 825, 216 F. Supp. 173 (D.N.J. 1963); Cuneo v. Essex County & Vic. Dist. Coun. of Carpenters, etc ., 207 F. Supp. 932 (D.N.J. 1962); Kennedy v. Construction, Production & Main. Laborers' U ., 199 F. Supp. 775 (D. Ariz. 1961); Lebus v. Local 60, etc ., 193 F. Supp. 392 (E.D. La. 1961). The essential facts as found by the Board are not in dispute; as we view this case, the only question we need decide is one of law, and this involves an interpretation of the statute.
The Associated Contractors of Essex County, Inc., an association of employers engaged in the construction industry, and the District Council, the authorized representative of several trade unions, were parties to a collective bargaining agreement which, by its terms, expired on May 31, 1962. The agreement contained the usual provisions relating to the adjustment and arbitration of disputes and, in addition, the following clause:
". . . No cessation of work shall take place for any reason except for non-union condition. . . . A non-union condition shall prevail when employees are employed without a collective bargaining agreement ON ANY CONSTRUCTION WORK which is normally performed by employees working under a collective bargaining agreement with a Union affiliated with the Building Trades Department of the AFL-CIO. In such event it shall not be deemed a violation of this Agreement for employees hereunder to individually refuse to work on the job site where such non-union condition exists. To the extent legal, the Union may request employees hereunder to leave such jobs."
This clause, as we construe it, covered only a "non-union condition" if maintained by an employer on the construction site.
Approximately three months prior to the termination of the existing agreement the parties entered into negotiations in anticipation of a new contract. They exchanged written specifications of proposals which each sought to have incorporated in the new agreement. These proposals, none of which related to the above quoted clause, were discussed at several meetings held by the negotiators for the respective parties prior to and including May 31, the termination date of the existing contract. When this last meeting adjourned there were three issues remaining unresolved. The negotiators met again on June 1, at which time the representatives of the Association proposed the deletion of the "non-union condition" clause. This proposal met immediate opposition from the representatives of the District Council. The meeting thereupon ended without agreement on any of the remaining issues. A strike was called on June 4, the next working day, and on the same date the Association filed with the Board an unfair labor practice charge on the basis of which a complaint issued and was served upon the District Council.
Thereafter the negotiators, as well as other representatives of the respective parties, met in bargaining sessions on June 11 and 19, the latter session extending into the early hours of the 20th. There is some conflict in the testimony as to what issues were resolved at these meetings but it is apparent that the negotiators for each side assumed that a basis for settlement had been reached. However, as we view the instant case, the limited conflict in the testimony is of no relevance. The strike ended on the morning of June 20, and the District Council instructed its members to return to work. Thereafter the parties referred the matter to their respective attorneys.
The attorney for the District Council prepared a "short form agreement" in which the terms and conditions of the old contract, except those which had been modified by negotiation, were incorporated by reference. This agreement was forwarded to the Association, the representatives of which thereupon instructed its attorney to draft an entirely new contract. The new contract, with the "non-union condition" clause omitted, was drafted and forwarded to the District Council which rejected it. The attorney for the District Council then prepared a contract, the terms and conditions of which differed from those of the Association's draft in several respects, but particularly in its inclusion of the "non-union condition" provision. Thereafter, on Monday, July 16, the bargaining committees of the respective parties met and discussed their differences, all of which were resolved except one. The Association insisted upon the elimination of the disputed clause and the District Council insisted upon its retention.
The attorney for the District Council and two officials of the Association met on the morning of July 19, at which time further efforts were made to resolve the one remaining issue, but without success. The attorney informed the officials that unless the contract submitted by the Council was signed a strike would be called on the following Monday, July 23. The threatened strike was called, and on Monday morning the employees of nine employers, Association members, struck at thirteen construction sites. Shortly thereafter these employers capitulated and signed separate contracts which contained the "non-union condition" clause. Some of the other employers soon followed suit. It seems unnecessary to summarize in detail the events which occurred during the course of the strike.
It was found by the Trial Examiner that the District Council "threatened to strike, and then on July 23, 1962, did strike the Association's members solely for the purpose of compelling them and the Association to continue, as part of their new contract, the 'non-union condition' provision of the previous contract which had expired on June 1, 1962." This finding, which was affirmed and adopted by the Board, is supported by substantial evidence on the record considered as a whole. The Trial Examiner concluded that the conduct of the District Council constituted an unfair labor practice within the meaning of § 8(b)(4)(A) as amended by the Act of September 14, 1959. § 8(b)(4)(i) and (ii)(A), 29 U.S.C.A. 158 (b)(4)(i) and (ii)(A). We are of the opinion that this conclusion, which was likewise affirmed and adopted by the Board, was based upon an erroneous interpretation of the statute as amended.
It seems essential to the proper construction of the applicable statutory provisions that we first consider the law as it was, and as it applied to the construction industry, prior to the amendments of 1959. Section 8(b)(4)(A) of the Act of 1947, 29 U.S.C.A. 158(b)(4)(A), declared it an unfair labor practice for a labor organization "to engage in, or to induce or encourage the employees of any employer to engage in, a strike or concerted refusal in the course of their employment to use, . . . transport, or otherwise handle or work on any goods, articles, materials, . . . where an object thereof is: forcing or requiring any employer . . . to cease using, selling, handling . . . the products of any other producer, processor or manufacturer, or to cease doing business with any other person; . . ."
In June of 1951, the Supreme Court, construing the quoted provision, held that a strike, an object of which was to coerce a general contractor to terminate a subcontract held by another employer engaged in the performance of electrical work at the construction site, was an unfair labor practice within the meaning of the statute. Labor Board v. Denver Bldg. Council, 341 U.S. 675, 685-692. Approximately seven years later the Court held that a "boycott voluntarily engaged in by a secondary employer for his own business reasons," and pursuant to the terms of a hot cargo clause contained in a collective bargaining agreement, was not an unfair labor practice within the meaning of the said section. Carpenters Union v. Labor Board, 357 U.S. 93, 98-104 (1958). It was further held that "a union was free to approach an employer to persuade him to engage in a boycott, so long as it refrains from the specifically prohibited means of coercion through inducement of employees." Ibid, 99. However, the court went on to hold that it was an unfair labor practice for a labor union to encourage or induce a strike or a concerted work stoppage to enforce compliance with the hot cargo clause. Ibid, 105-111. It should be noted that in this case the clause provided that employees "shall not be required to handle non-union material."
The widespread resort to the hot cargo clause as a means to circumvent the prohibitions of § 8(b)(4)(A), particularly by the Teamsters Union, led to the enactment of the amendments with which we are here concerned. See Vol. II, Leg. Hist. of the Labor-Management Reporting and Disclosure Act of 1959, 1433, 1707-1709; 2 U.S. Code Cong. and Admin. News (1959), 2382-2384. The parties to this proceeding agree that these ...