On Petition for Review and Cross-Application for Enforcement of an Order and Decision of the National Labor Relations Board (4-CE-116-1)
Before: Sloviter, Fuentes, Circuit Judges,
and DEBEVOISE,*fn1 District Judge
The opinion of the court was delivered by: Sloviter, Circuit Judge
At issue in this case is whether it was reasonable for the National Labor Relations Board ("NLRB" or"Board") to find that S 8(e) of the National Labor Relations Act ("Act"), 29 U.S.C. S 158(e), was violated by (1) an agreement between the Union and the company managing a convention center that provides that the installation, assembly and dismantling of temporary tradeshow exhibits would be subcontracted only to companies that hired Union members and (2) to find that such work was not protected by the construction industry proviso of S 8(e). All parties agree that the latter issue is one of first impression.
Spectacor Management Group ("SMG") and the South Jersey Regional Council of Carpenters, Local 623 ("Union") (collectively "Petitioners") petition this court for review of the order and decision of the NLRB finding that an agreement entered into and enforced by Petitioners violated S 8(e) of the National Labor Relations Act ("Act"). The agreement, which precluded SMG from subcontracting trade show work to employers who did not have collective bargaining agreements with the Union, was enforced against Atlantic Exposition Services, Inc. ("AES"), the original Charging Party and Intervenor here.
The Administrative Law Judge ("ALJ") ruled against the Petitioners. On appeal, the Board approved the ALJ's finding that the agreement violated S 8(e). The Board agreed that the "agreement lacked a work preservation objective, that the work covered by the agreement was not performed on a construction site, and therefore that the agreement was not protected by the construction industry proviso." Decision & Order at 1, 335 NLRB No. 49 (2001). As a result, the Board adopted the recommended order of the ALJ which, in relevant part, directed the parties to cease and desist from maintaining and enforcing their subcontracting agreement.
The Petitioners attack the Board's decision on both grounds. Primarily, Petitioners argue that trade show work at the Atlantic City Convention Center constitutes construction work at a construction site, thereby entitling their agreement to the protection of the construction industry proviso. Alternatively, Petitioners argue that the agreement was not illegal because it fell within the work preservation doctrine, in that it served the primary purpose of preserving the Union's work at the Convention Center rather than unlawfully sought to secondarily influence labor relations of other employers. The Union also argues that the agreement did not violate the Act as it failed to disrupt or change the way AES conducted business with SMG.
Congress has not spoken on whether a trade show floor constitutes a construction site for purposes of the construction industry proviso, and neither the Board nor any court has hitherto determined the issue. Given the deference that we owe the Board on issues within its purview, we will accept its determination.
II. FACTS AND PROCEDURAL BACKGROUND
Some background of the current dispute is necessary to appreciate the issue. Between 1983 and 1995, the Atlantic City Convention Center Authority ("ACCCA") operated and managed the Convention Center. The Union represented ACCCA employees who assembled and dismantled trade show exhibits. During this time, the collective bargaining agreements between ACCCA and the Union precluded ACCCA from subcontracting trade show work. In or before 1995, the New Jersey Sports and Exposition Authority became an owner of the Center and decided to manage it through SMG, a private management company.*fn2 When SMG's predecessors managed the Convention Center, they directly hired members of the Union for trade show work.
SMG honored the terms of ACCCA's collective bargaining agreement. Show exhibitors contracted with SMG to provide the labor to assemble and dismantle tradeshow exhibits. SMG, in turn, procured the appropriate labor force from the Union's hiring hall. In 1996, SMG sought to remove itself as the middleman between show exhibitors and laborers, leaving the direct employment of labor to subcontractors or tenants. Accordingly, it negotiated a new agreement with the Union that no longer prohibited subcontracting at the Convention Center. Instead, the Union and SMG agreed that trade show work traditionally performed through the Union's hiring hall could be subcontracted as long as Union workers continued as the sole providers of trade show labor under agreements reached between the subcontractors and the Union.
This agreement, incorporated in a letter dated April 15, 1996, stands at the center of the current dispute. It provides:
Trade employees who work on a part-time basis or who perform contracted work for SMG (e.g. "show" labor) will work under a Separate Agreement which will be negotiated as soon as is practicable. It is understood and agreed that the Separate Agreement will contain a provision stipulating that in the event SMG subcontracts the covered work, the covered work will be subcontracted to a firm which will . . . negotiate an agreement with the (Trade) Local having jurisdiction over that work with SMG. The said sub-contractor will be free to negotiate the terms and conditions of the said agreement and will not be bound by SMG's agreement(s) with the applicable local union.
Decision & Order at 3. No Separate Agreement as referred to above was negotiated but the parties proceeded to act as if the above paragraph was binding. If a subcontractor failed to reach its own agreement with the Union, it was required to obtain labor through ...