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September 18, 1973

Bernard L. Balicer, Acting Regional Director of the Twenty-Second Region of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner,
International Longshoremen's Association, AFL-CIO et al., Respondents

Lacey, D.J.

The opinion of the court was delivered by: LACEY


This proceeding is before the Court on a petition filed by the Acting Regional Director of the Twenty-second Region of the National Labor Relations Board (Board), pursuant to § 10(1) of the National Labor Relations Act, as amended, 29 U.S.C. § 160(1) (hereinafter referred to as the Act), for a preliminary injunction pending the final disposition of the matters involved herein and now pending before the Board on charges filed by Consolidated Express, Inc. (CEI). *fn1" It is alleged that respondent International Longshoremen's Association, AFL-CIO (hereinafter referred to as ILA or Union), has engaged in, and is engaging in, an unfair labor practice within the meaning of § 8(b) (4) (ii) (B) of the Act (see text infra), which proscribes so-called secondary boycotts and other secondary pressure to require another employer to cease doing business with other employers; and that the Union and respondent New York Shipping Association, Inc. (NYSA), have engaged in, and are engaging in, an unfair labor practice within the meaning of § 8(e) of the Act, which proscribes entering into and maintaining so-called "hot cargo" contracts.

 This petition follows from the petitioner having concluded that there is reasonable cause to believe respondents have engaged in the aforesaid unfair labor practices charged, and that a complaint of the Board based on the charges should issue.

 The following constitutes my findings of fact and conclusions of law pursuant to Fed. R. Civ. P. 52.

 CEI at its Maspeth, New York facility consolidates, containerizes and forwards cargoes for sea shipment and removes incoming cargoes from containers; and in the operation of its business annually provides and performs such services valued in excess of $50,000 within states and territories of the United States other than the State of New York.

 NYSA, with offices in New York City, is an incorporated association of employers engaged in various operations involved in the shipment of cargo, freight and transportation of passengers in and out of the Port of New York. NYSA conducts collective bargaining negotiations and enters into collective bargaining agreements on behalf of its employer-members, including Sea-Land Service, Inc. (Sea-Land), Elizabeth, New Jersey; Seatrain Lines, Inc. (Seatrain), Weehawken, New Jersey; and Transamerican Trailer Transport, Inc. (TTT), Richmond, New York. Employer-members of NYSA carry general cargo in interstate and foreign commerce valued in excess of $1,000,000 out of the various piers of the Port of New York destined directly to foreign countries and to states of the United States other than the States of New York and New Jersey.

 Council of North American Shipping Associations (CONASA) with offices in New York City, is an association of shipping associations whose members, which include NYSA, engage in the business of conducting collective bargaining negotiations on behalf of their employer-members and enter into collective bargaining agreements covering the employees of their employer-members.

 The Union is a labor organization within the meaning of the Act [ S S 2 (5), 8(b) (4) (ii) (B), 8(e) and 10(l)] and at all times material herein has been engaged within this District in transacting business and promoting and protecting the interests of its employee-members. The labor practices complained of occurred within this District. Thus venue is proper and this Court has jurisdiction over this matter. See § 10(l) of the Act.

 For many years, the Union has been the certified bargaining representative of the longshoremen employed by the employer-members of NYSA, and has negotiated and entered into a series of collective bargaining agreements with NYSA covering the terms and conditions of employment of these employees.

 From 1965, when CEI began business operations under its present identity, *fn2" it has been engaged as a non-vessel operating common carrier (NVOCC) in the trade between the Port of New York and Puerto Rico, at its premises, first in New York, New York, and subsequently, in Maspeth, New York, and in Carolina, Puerto Rico. CEI is also known in the shipping industry as a consolidator. As such, it receives less than container-size cargoes (LCL or LTL) from those desiring to ship same, unitizes or consolidates these crates within containers, and forwards them to the steamship companies to be loaded on board Puerto Rico-bound ships. Conversely, incoming cargoes are delivered in containers to CEI's premises, located away from the waterfront, where the containers are opened and the crates separated for delivery to the ultimate consignees.

 Prior to the beginning of August 1973 CEI did not have any trucking employees, but had contracted with U.S. Trucking Co., whose employees were represented by Local 807, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, to do all their loading and delivery work at, and to and from CEI's Maspeth facility, and the various shipping lines in the Port of New York, including Port Newark, New Jersey. Local 807 members employed directly by U.S. Trucking Co. also performed the work of filling (stuffing) the containers with respect to outgoing cargoes and the unloading (stripping) of incoming containers on CEI's Maspeth premises. At present CEI has terminated its relationship with U.S. Trucking Co., but does the identical work using its own direct employees, represented by the same Local 807, Teamsters. Neither CEI nor U.S. Trucking Co. is or has been a member of NYSA or a party to any collective bargaining agreement between the Union and NYSA, or between the Union and CONASA.

 The containers used by CEI, presently approximately 40 feet long, were, prior to late March 1973, furnished it by the steamship-stevedoring companies engaged in the New York-Puerto Rican trade, Sea-Land, Seatrain and TTT, all NYSA members. These companies, owners of the containers, employ members of the Union. These members had previously loaded CEI-stuffed containers on board ship and unloaded the incoming containers, for delivery to CEI's premises. The Board contends that this loading and unloading had been performed by these Union members until March 1973 almost invariably without stripping or stuffing the containers on the piers before starting them on their way. *fn3" From in or about the last week in March 1973, the Board alleges, the Union has been successful in getting NYSA, including its employer-members, Sea-Land, Seatrain, and TTT, to cease furnishing containers to CEI and to stop handling freight for CEI. As a result, CEI claims to have suffered severe financial loss and to be close to being driven out of business.

 It is charged that the Union has brought about this halt to the dealings between Sea-Land, Seatrain, TTT, and CEI, by enforcing, and threatening further to enforce, the liquidated damages provision in the Union's Memorandum of Understanding with CONASA, *fn4" executed in mid-February 1972, and effective from November 14, 1971, to September 30, 1974. This Memorandum sets forth Rules on Containers (hereinafter sometimes referred to as Rules) and provides therein for liquidated damages of $1,000 per container payable for each act of evasion.

 The Rules are intended to establish a system under which, with certain exceptions, inbound and outbound containers handled through the Port of New York are stripped and stuffed at the waterfront by members of the Union employed by employer-members of NYSA at the longshore pay rate, whether or not the containers require such further treatment.

 The Rules, which have been in the Union's collective bargaining agreements with the NYSA since 1968, *fn5" currently provide in pertinent part as follows:


Rules on Containers


The following provisions are intended to protect and preserve the work jurisdiction of longshoremen and all other ILA crafts at deepsea piers or terminals. . . .


Rule 1. Definitions and Rule as to Containers Covered


Stuffing -- means the act of placing cargo into a container.


Stripping -- means the act of removing cargo from a container.


Loading -- means the act of placing containers aboard a vessel.


Discharging -- means the act of removing containers from a vessel.


These provisions relates solely to containers meeting each and all of the following criteria:


(a) Containers owned or leased by employer-members (including containers on wheels) which contain LTL loads or consolidated full container loads.


(b) Such containers which come from or go to any person (including but not limited to a consolidator who stuffs containers of outbound cargo or a distributor who strips containers of inbound cargo and including a forwarder, who is either a consolidator of outbound cargo or a distributor of inbound cargo) who is not the beneficial owner of the cargo.


(c) Such containers which come from or go to any point within a geographical area of any port in the North Atlantic District described by a 50-mile circle with its radius extending out from the center of each port.


Rule 2. Rule of Stripping and Stuffing Applied to Such Containers


A container which comes within each and all of the criteria set forth in Rule 1 above shall be stuffed and stripped by ILA longshore labor. Such ILA labor shall be paid and employed at longshore rates under the terms and conditions of the General Cargo Agreement. Such stuffing and stripping shall be performed on a waterfront facility, pier or dock. No container of cargo shall be stuffed or stripped by ILA longshore labor more than once. Notwithstanding the above provisions, LTL loads or consolidated container loads of mail, of household goods with no other type of cargo in the container, and of personal effects of military personnel shall be exempt from the rule of stripping and stuffing.


Rule 3. Rules on No Avoidance or Evasion


* * *


(e) Failure to stuff or strip a container as required under these rules will be considered a violation of the contract between the parties. Use of improper, fictitious or incorrect documentation to evade the provisions of Rule 2 shall also be considered a violation of the contract. If for any reason a container is no longer at the waterfront facility at which it should have been stuffed or stripped under the rules, then the steamship carrier shall pay, to the joint Container Royalty Fund, liquidated damages of $1,000 per container which should have been stuffed or stripped. Such damages shall be used for the same purposes as the first Container Royalty is used in each port. If any carrier does not pay liquidated damages within 30 days after exhausting its right to appeal the imposition of liquidated damages to the Committee provided in (g) below, the ILA shall have the right to stop working such carrier's containers until such damages are paid.


* * *

 On January 29, 1973, to obtain enforcement of the Rules, representatives of CONASA, on behalf of its employer-members, including NYSA, and representatives of the Union, meeting in Dublin, Ireland, executed a supplemental agreement concerning these Rules which provides in pertinent part as follows:


Enforcement of Rules on Containers


* * *


1. (a) All outbound (export) consolidated or LTL container loads (Rule 1 containers) shall be stripped from the container at the pier by deep-sea ILA labor and cargo shall be stuffed into a different container for loading aboard ship.


1. (b) All inbound (import) consolidated or LTL cargo (Rule 1 containers) for distribution shall be stripped from the container and the cargo placed on the pier where it will be delivered and picked up by each consignee.


2. No carrier or direct employer shall supply its containers to any facilities operated in violation of the Rules on Containers including but not limited to a consolidator who stuffs containers of outbound cargo or a distributor who strips containers of inbound cargo and including a forwarder who is either a consolidator or a distributor. No carrier or direct employer shall operate a facility in violation of the Rule on Containers which specifically require that all containers be stuffed or stripped at a waterfront facility (pier or dock) where vessels normally dock.


A list shall be maintained of consolidation and distribution stations which are operated in violation of the Rules for the information of all carriers and direct employers. Any container consolidated at or distributed from such facilities shall be deemed a violation and subject to the rules on stuffing and stripping.


* * *

 Petitioner charges that since the execution of the January 1973 agreement, the Union, by threatening to and by actually assessing liquidated damages at the rate of $1,000 per container per alleged evasion, has caused NYSA and its members, Sea-Land, Seatrain, and TTT, to cease handling freight for CEI, and to no longer furnish CEI with containers necessary for the operation of its consolidation business. Sea-Land, Seatrain, and TTT could still continue to do business with CEI, as before, but all containers received at the pier bound to or from CEI would have to be stripped and restuffed by members of the Union at the expense of those companies, causing not only an onerous financial burden upon them, but according to CEI, disruption of its packing plan per container and consequent damage to its business. Since about the middle of March 1973, it is charged, the 3 named carriers have refused to furnish containers to CEI, or to handle or transport CEI's freight.

 Additionally, the Board alleges that the Union's tactics are further evidenced by the notice, to all carriers and direct employers, issued by the Contract Board of NYSA and ILA, and dated April 13, 1973, announcing that carriers had been assessed liquidated damages for violations of the Rules on containers stuffed or stripped at the premises of 14 companies listed in the notice. CEI is one of the 14 listed therein.

 Thus it is the Board's contention that the Union has violated § 8(b) (4) (ii) (B) of the Act by threatening, coercing and restraining NYSA, Sea-Land, Seatrain, TTT and other persons engaged in commerce or in industries affecting commerce, with an object of forcing or requiring NYSA, Sea-Land, Seatrain and TTT, and other persons, to cease doing business with CEI.

 Section 8(b) (4) (ii) (B) of the Act provides:


(b) It shall be an unfair labor practice for a labor organization or its agents --


* * *


(4) . . . (ii) to threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is:


* * *


(B) forcing or requiring any person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person, or forcing or requiring any other employer to recognize or bargain with a labor organization as the representative of his employees unless such labor organization has been certified as the representative of such employees under the provisions of section 9: Provided, That nothing contained in this clause (B) shall be construed to make unlawful, where not otherwise unlawful, any primary strike or primary picketing . . .

 This section, customarily referred to as the section prohibiting secondary boycotts, does not prohibit a union from taking traditional primary action against an employer, e.g., by appealing to his employees not to perform services in furtherance of a labor dispute with that employer. It does, however, prevent a union from bringing pressure to bear on the primary employer through another employer, commonly referred to as a "secondary" employer, in furtherance of such a dispute. *fn6" The Board contends that the Union's enforcement of the liquidated damages provisions of the Memorandum of Understanding with CONASA is unlawful secondary activity proscribed by this section of the Act.

 The Board also charges that the Union and NYSA have violated § 8(e) of the Act by entering into, maintaining, and enforcing the 1968 Rules on Containers and subsequent enforcement rules of January 29, 1973, against CEI.

 Section 8(e) of the Act provides in pertinent part:


It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforceable and void. . . .

 Section 8(e) was added by the 1959 amendments to the Act to close a loophole in the secondary boycott provisions effectuated through the use of voluntary "hot cargo" agreements. Simply stated, a "hot cargo" agreement is one between an employer and a union in which the employer agrees not to handle or work on any freight or product coming from another person with whom the union has a dispute. See Amalgamated Lithographers of America (Graphic Arts Employers Ass'n), 130 NLRB 985, 47 L.R.R.M. 1374 (1961). Prior to the 1959 amendments, although a union could not strike or induce employees to refuse to work in order to force an employer not to handle "hot cargo" without such an agreement or to induce such an agreement, if such union pressure was not applied, and the employer voluntarily so agreed, or voluntarily adhered to such agreement previously made, the boycott was not unlawful under the Act. See Local 1976, United Brotherhood of Carpenters and Joiners of America v. NLRB (Sand Door), 357 U.S. 93, 2 L. Ed. 2d 1186, 78 S. Ct. 1011 (1958). The amendment was aimed at eliminating such voluntary agreements with such objectives. National Woodwork Manufacturers Ass'n. v. NLRB, 386 U.S. 612, 634, 18 L. Ed. 2d 357, 87 S. Ct. 1250 (1967).

 While the language in § 8(e) is sweeping, the Supreme Court in National Woodwork Manufacturers Ass'n v. NLRB, supra, held that this section, like § 8(b) (4) (B), was intended by Congress to reach only secondary pressures, and did not apply to primary work preservation agreements. The Court concluded:


Although the language of § 8(e) is sweeping, it closely tracks that of § 8(b) (4) (A), and just as the latter and its successor § 8(b) (4) (B) did not reach employees' activity to pressure their employer to preserve for themselves work traditionally done by them, § 8(e) does not prohibit agreements made and maintained for that purpose. 386 U.S. at 635, 87 S. Ct. at 1263.

 The National Woodwork case involved an employer, a signatory to a collective bargaining agreement which provided that "no member of the union will handle . . . any doors . . . which had been fitted prior to being furnished on the job," who had agreed not to use prefit doors after the union invoked the quoted provision. 386 U.S. at 615, 87 S. Ct. 1253. Charges were filed with the NLRB alleging that the "will not handle" clause was an agreement whereby " an employer . . . agrees to cease or refrain from handling . . . any of the products of any other employer . . ." in violation of § 8(e). It was also alleged that the union's action enforcing the clause violated § 8(b) (4) (B) of the Act. In determining whether the "will not handle" clause violated these sections the Court focused on the union's objective, to wit: whether it was the preservation of work or aimed at satisfying union objectives elsewhere (386 U.S. at 644-45, 87 S. Ct. at 1268):


The determination whether the "will not handle" sentence of Rule 17 and its enforcement violated § 8(e) and § 8(b) (4) (B) cannot be made without an inquiry into whether, under all the surrounding circumstances, n. 38 the Union's objective was preservation of work for the contractor's employees, or whether the agreements and boycott were tactically calculated to satisfy union objectives elsewhere. Were the latter the case the contractor, the boycotting employer, would be a neutral bystander, and the agreement or boycott would, within the intent of Congress, become secondary. There need not be an actual dispute with the boycotted employer, here the door manufacturer, for the activity to fall within this category, so long as the tactical object of the agreement and its maintenance is that employer, or benefits to other than the boycotting employees or other employees of the primary employer thus making the agreement or boycott secondary in its aim. The touchstone is whether the agreement or its maintenance is addressed to the labor relations of the contracting employer vis-a-vis his own employees. [footnotes 39 and 40 omitted]

 Thus, after applying the above test, if it is determined that a union objective is one of valid work preservation, and that its activity is primary in nature, no statutory violation exists, regardless of the fact that neutral third parties may be adversely affected by that union's actions. As the Court stated, "however severe the impact of primary activity on neutral employees, it was not thereby transformed into activity with a secondary objective." 386 U.S. at 627, 87 S. Ct. at 1259. *fn7"

 It is noted, however, that in focusing on the union's objectives, and finding the preservation of work traditionally performed to be a permissible objective, the Court was careful to distinguish those cases where the union was seeking not to preserve traditional work, but was reaching out to acquire new work:


It is arguable that Congress may have viewed the use of the boycott as a sword as different from labor's traditional concerns with wages, hours, and working conditions. But the boycott in the present cases was not used as a sword; it was a shield carried solely to preserve the members' jobs. We therefore have no occasion today to decide the questions which might arise where the workers carry on a boycott to reach out to monopolize jobs or acquire new job tasks when their own jobs are not threatened by the boycotted product. [footnote omitted] 386 U.S. at 630-631, 87 S. Ct. at 1261.

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