Colorado Building & Construction Trades

COLORADO BUILDING & CONSTRUCTION TRADES Colorado Building & Construction Trades Council and Utilities Services Engineering, Inc. Case 27-CC- 622 November 13, 1978 DECISION AND ORDER On July 28, 1977, Administrative Law Judge James T. Barker issued the attached Decision in this pro- ceeding. Thereafter, Respondent filed exceptions and a supporting brief. The General Counsel filed a brief in support of the Administrative Law Judge's Deci- sion and the Charging Party filed a brief in answer to Respondent's exceptions. In addition, briefs amici cu- riae were filed on behalf of the American Federation of Labor and Congress of Industrial Organizations, the Building and Construction Trades Department, AFL-CIO, and the Chamber of Commerce of the United States of America. Pursuant to a notice of hearing issued by the Board on February 8, 1978, oral argument in this and related proceedings was held before the Board in Washington, D.C., on February 23, 1978. In addition to arguments presented by the parties involved in the several proceedings, permission to argue orally as amici curiae was granted to the Chamber of Com- merce of the United States of America, the American Federation of Labor and Congress of Industrial Or- ganizations, the Building and Construction Trades Department, AFL-CIO, and the Laborers' Interna- tional Union of North America, AFL-CIO-CLC. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs filed by the parties, as well as the briefs filed by the amici curiae and the oral arguments made to the Board, and has decided to affirm the rulings, find- ings, and conclusions of the Administrative Law Judge and to adopt his recommended Order. The Administrative Law Judge found that Re- spondent violated Section 8(b)(4)(ii)(A) by picketing to obtain an agreement which violated Section 8(e). We agree with this finding for the reasons set forth below. The essential facts are not in dispute. Utilities Ser- vices Engineering, Inc. (hereinafter Utilities), is en- gaged in municipal utility and industrial construction Los Angeles Building and Construction Trades Council, and Local Union No. 1497 United Brotherhood of Carpenters d Joiners of America (Donald Schriwer, Inc. and Sullivan-Kelley A Associates), 239 NLRB 264 (1978); Carpenters Local No. 944. United Brotherhood of Carpenters and Joiners of America, AFL-CIO, and Carpenters Local No. 235, United Brotherhood of Carpenters and Joiners of America, A FL-CIO (Woelke a Romero Framing, Inc.), 239 NLRB 241 (1978); and International Union of Operating Engineers. Local No. 701, A FL-CIO; Oregon-Columbia Chapter, The Associated General Contractors of America, Inc. (Pacific Northwest Chapter of the Associated Builders & Contractors, Inc.), 239 NLRB 274 (1978). and in maintenance operations. A major portion of its business involves the construction of water and sewage treatment plants and pump stations. At rele- vant times. Utilities employed approximately 24 em- ployees at some 12 active projects located throughout the State of Colorado. One of these projects was a contract with Johns-Manville Corporation to per- form electrical maintenance work at the Johns-Man- ville Corporation Research and Development Cen- ter. Utilities normally does not use the service of subcontractors. However, it has engaged in subcon- tracting from time to time. In April 1976,2 several subcontractors were used at the Meeker, Colorado, project located approximately 400 miles from Den- ver, Colorado. No subcontracting was done at the Johns-Manville project. The employees of Utilities are not represented by any labor organization and Utilities has never had a collective-bargaining agree- ment with Respondent. In early April, Utilities received a letter dated April 5 and signed by Respondent's business agent. The letter stated, inter alia, that Respondent was en- gaged in a program to eliminate substandard wages in the area, that it was requesting general contractors to sign an agreement governing the subcontracting of construction jobsite work, and that it intended to in- form the public of those contractors who did not sign the subcontracting agreement by means of picketing and other modes of communication. The proposed agreement contained the following provisions: I. This contract shall govern, and be limited to, labor performed at the site of construction, alteration, painting, or repair of building, struc- ture, or other work of the Contractor by sub- contractors, and shall be limited to work which is not customarily performed by employees of the Contractor. This Agreement shall not apply to work on any project for the performance of which the Contractor has entered into a sub- contract on or before the date of execution of this Agreement. Nor shall this Agreement apply to any work performed by any employee or em- ployees in a certified or recognized collective bargaining unit, or by any employee or employ- ees who have a representative for collective bar- gaining. 2. As used in this Agreement, the term "sub- contractor" shall include any arrangement un- der which the Contractor permits any other per- son, firm or corporation, other than the Contractor's own employees, to perform work for which the Contractor has primary responsi- bility. :Al' dales are in 1976 unless otherwise indicated 253 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3. It shall be the obligation of the Contractor to include in every sub-contract for work gov- erned by this Agreement a provision requiring the payment of prevailing rates of wages for such work. In the event any sub-contractor shall fail to pay its employees the prevailing rates of wages for work within the scope of this Agree- ment, the Contractor shall make whole the em- ployees of sub-contractors for all losses and damages which they sustain by reason of the sub-contractor's default. 4. The Contractor further agrees that it will not permit a sub-contractor, or the employee of any sub-contractor, to perform any work within the scope of this Agreement, unless the sub-con- tractor has entered into a written agreement with the Contractor agreeing to pay its employ- ees the prevailing wage rates for all work gov- erned by this Agreement. * * * * * 7. It is the purpose and intention of the par- ties that this Agreement shall apply to all enter- prises of the Contractor, regardless of the nature of the entity through which the Contractor en- gages in business. It is therefore agreed that this Agreement shall inure to the benefit of, and be binding upon, any person, firm, or corporation controlled, either directly or indirectly, by the Contractor, or by a principal stockholder or owner of the Contractor. 8. It is understood and agreed by the parties that the Council is not the collective bargaining representative of any employee, and therefore, nothing herein shall be construed to recognize the Council as the collective bargaining representa- tive of any employee or employees, or to super- sede any collective bargaining contract pres- ently, or hereafter, in effect, or to derogate in any way from the authority of any collective bargaining representative of employees of the Contractor or the sub-contractor. Nor shall any provision in this Agreement be construed to es- tablish rates of compensation, conditions of work, or terms of employment for any employ- ees of the Contractor, or of a sub-contractor. 9. As used herein the term "prevailing rate of wage" means that rate of wages paid in the area in which the work is to be performed to the ma- jority of workers employed in that classification in construction in the area similar to the pro- posed undertaking. In the event that there is not a majority of workers paid at the same wage rate, then the wage rate paid to the greater num- ber of workers shall be deemed to be the prevail- ing wage rate. Utilities did not respond to the letter and no further communication occurred between Utilities and Re- spondent. On April 22, the Union picketed the Johns-Man- ville Research and Development Center site. A pick- et sign was displayed containing the following state. ment: UTILITIES SERVICES ENGINEERING, INC. has no sub-contracting agreement with Colorado Building & Construction Trades Council. We have no dispute with any other person or company on this project. During the normal working hours on April 23, the picketing ceased and no picketing has occurred since that date. Neither the business office of Utilities nor any of the other jobsites at which Utilities was per- forming services were picketed by Respondent. At the Johns-Manville World Headquarters location sit- uated some 2-1/4 miles from the Research and De- velopment Center, employees of Blackinton & Deck- er ceased work during the time of the picketing at the Research and Development Center. The Blackinton & Decker job superintendent told the Company's president that the employees were quitting because the picketing at the Research and Development Cen- ter was "flowing over" to the World Headquarters si te. The General Counsel contends that the agreement sought by Respondent violates Section 8(e) because it is addressed to the secondary objective of influenc- ing the employment practices of firms which seek to do business with Utilities, to the benefit of union members generally. Respondent contends that the proposed agreement merely requires that the primary contractor engage only those subcontractors paying the prevailing wage rate. Respondent further contends that the mainte- nance of area standards has long been recognized as a legitimate union objective. Thus, it argues, the ten- dered contract is not proscribed by Section 8(e) of the Act. Section 8(e) of the Act makes it an unfair labor practice for an employer and a union to enter into an agreement, express or implied, whereby the employer agrees to cease doing business with any other per- son.3 A literal construction of this section suggests 3Sec. 8(e) provides: It shall be an unfair labor pracitce 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 254 COLORADO BUILDING & CONSTRUCTION TRADES the illegality of any agreement which results in pre- venting the employer from establishing a business re- lationship with another person. That section, how- ever, has been construed to reach only secondary pressures whereby labor seeks to further its aims by involving an employer in disputes not its own: Section 8(e) was part of a legislative program designed to plug technical loopholes in § 8(b)(4)'s general prohibition of secondary activi- ties. In § 8(e) Congress broadly proscribed using contractual agreements to achieve the economic coercion prohibited by § 8(b)(4).4 Thus, union activity directed toward primary objec- tives may be lawful even though it results in an em- ployer's ceasing to do business with another person. And contract clauses whose basic aims are to limit subcontracting so as to preserve for unit employees work which has customarily been performed by them, or in some instances to recapture work regard- ed as fairly claimable, have been found lawful.5 Simi- larly, clauses which require an employer to limit sub- contracting of such work to subcontractors who maintain the same standard of employment-so called union standard clauses-have been found law- ful. Respondent contends that its proposed clause falls within the latter category. We find no merit in this contention. The principal rationale for the lawful character of union standard clauses is that the union has a pri- mary interest in insuring that negotiated standards of employees in a contractual unit will not be under- mined by subcontractors maintaining substandard conditions of employment which enable them to per- form the unit work at cheaper labor costs.6 A union may, therefore, remove an employer's economic in- centive to subcontract by requiring that the employer subcontract only to another employer who agrees to meet prevailing standards for wages, hours, and the 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 hereto- fore or hereafter containing such an agreement shall be to such extent unenforceable and void: Provided. That nothing is this subsection (e) shall apply to an agreement between a labor organization and an em- ployer in the construction industry relating to the contracting or sub- contracting of work to be done at the site of the construction. altera- tion, painting. or repair of a building, structure or other work . . Connell Construction Co.. Inc. v. Plumbers & Steamfitiers Local Union No. 100. United Association of Journeymen & Apprentices of the Plumbhing & Pipefitting Industrs of the United Stares and Canada, AFL CIO. 421 L. S 616. 628 (1975). Heavy. HlHghXav. Building and Construction Teamsteri (ommtinttee for Northern California. International Brotherhood of Teamsters. e al ( California Dump Truck Owners Associatrion). 227 NLRB 269. 272 (1976l. and cases cited therein. 6 General Teamsters Local 386. International Brotherhood of Teamsterrs, Chauffeurs. Warehousemen and Helpers of America (Construction Muatertali Trucking, Inc.). 198 NLRB 1038 (1972), and International Union. United Mine Workers of America (Dixie Mining Compaun, 188 NLRB 753 (1971) like. If, however, the union is requiring the clause in order to further union aims generally by controlling the employment practices of firms seeking business with the employer, the action is secondary and un- lawful.7 The central question in these cases is there- fore: Does the disputed clause have the primary ob- ject of aiding employees in a contractual unit or the secondary object of aiding and assisting union mem- bers generally? Here, the clause has a secondary ob- ject. First, there is no contractual unit. Respondent does not represent any of Utilities' employees. Nor does Respondent seek an agreement of the type per- mitted by Section 8(f) which would cover employees Utilities might hire in the future. Second. even if there were such a unit, Respondent's clause would not protect the interests of employees in the unit. Instead, the clause is limited to "work which is not customarily performed by employees of the Contrac- tor." Thus, Respondent does not seek to maintain standard wages for employees in a contractual unit by insuring that unit work is not subcontracted to firms which pay substandard wages. In these circum- stances, Respondent's clause has the secondary effect of aiding its own members generally by attempting to place nonunion subcontractors in a position where they must meet union standards in order to do busi- ness.8 We, therefore, find that the clause is proscribed by the general provisions of Section 8(e). Respondent contends that even if the proposed clause is within the general proscription of Section 8(e), it is protected by the first proviso (hereafter the construction industry proviso or the proviso) to Sec- tion 8(e). The General Counsel contends that the Su- preme Court's decision in Connell, supra, requires a finding that the proposed agreement is not protected by the proviso because there is no collective-bargain- ing relationship between Utilities and Respondent, and the agreement is not limited to times and places when Utilities has employees whom the Union seeks to or does represent. In response to this contention, Respondent argues that the portion of the Supreme Court decision in Connell concerning the proviso is not controlling, as it deals with a clause clearly pro- hibited by Section 8(e). which admittedly was sought Respondent relies heavils on its argument that presailing wages are a legitimate objective favored by Federal law. Of course. the issue Is not whether the objective is legitimate In a broad sense-unionization is such an objective but whether it is legitimate to seek to achieve that objective by the means used herein 9 In this connection, we note that California Dump TrucA Owners Associa- tin, ¥iipra, involved considerations different than those in the present case There. the union had a bargaining relationship with the contractor and could lawfully seek a union standards subcontracting clause to protect the interest of employees in a cintraclual unit. The question was whether the clause was actually addressed to the protection of negotiated standards or whether it served a secondary purpose Here, the Union does not have a bargaining relationship with the contractor and the clause does not purport to protect the interests of employees In a contractual unit. Thus. the clause is unquestionabl, for the purpose of achieving union objectives elsewhere 255 DECISIONS OF NATIONAL LABOR RELATIONS BOARD as a means of organizing subcontractors. It asserts that the decision is, therefore, inapposite because Re- spondent is not engaged in an organizational cam- paign, but in an attempt to eliminate unfair competi- tion based upon the payment of substandard wages. We find no merit in Respondent's argument. In Woelke & Romero Framing, Inc.,9 a companion case for oral argument, we concluded that the Con- nell decision construed the construction industry pro- viso to Section 8(e) to permit subcontracting clauses such as that in the instant case in the context of a collective-bargaining relationship. We further noted that the Connell court suggested that such clauses might be protected by the proviso even without a collective-bargaining relationship if they were direct- ed toward the problems raised by the close relation- ship between contractors and subcontractors at the construction site and/or to the reduction of friction that may be caused when union and nonunion em- ployees are required to work together at the same jobsite. Here, Respondent seeks the subcontracting clause outside the context of a collective-bargaining rela- tionship and thereby loses the protection of the pro- viso, unless, possibly, the clause is addressed to prob- lems posed by the common situs relationships on a particular jobsite or to the reduction of friction be- tween union and nonunion employees at a jobsite. Respondent's clause, however, despite its different phrasing, is no more related to these concerns than was the Connell clause. The instant clause does not restrict the subcontracting of other types of work at the jobsite, nor does it apply only to jobsites where the Union's members are working. Thus, the clause allows for the possibility of union and nonunion em- ployees working side by side at a jobsite. Furthermore, as in Connell, Respondent does not seek the clause in order "to organize a nonunion sub- contractor on the building project it picketed," since no subcontracting was done at the Johns-Manville project which Respondent picketed. °0 Indeed, Utili- ties does not normally use the services of subcontrac- tors. Respondent's clause, therefore, is not aimed at avoiding problems raised by common situs relation- ships." As in Connell, the effect of the instant clause is to place too great an organizational weapon in the hands of the Union by allowing it to compel any general contractor to agree to bring economic pres- sure on any nonunion subcontractor provided the agreement covers work to be performed at any con- struction jobsite. In accord with the Court's holding in Connell, we find that this clause is not saved by the proviso. Accordingly, we find, in agreement with the Ad- ministrative Law Judge, that the proposed agreement violates Section 8(e) and Respondent's picketing to obtain the agreement violated Section 8(b)(4)(ii)(A) of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby order that the Respondent, Colorado Building & Construction Trades Council, Denver, Colorado, its officers, agents, and representatives, shall take the action set forth in the said recommended Order. 9( rpenters Lo al Vio 944, UInited Brroherhood of (arpenters and Joiners iif mn4erea. A4 Fl ('10, and (orprenters lacal No. 235. United Brotherhood of Carpenlerv and Joiners oj A merica, AIFL ('10 (Woelke <& Romero Framing. Incli 239 NLRB 241. ( onnell ( ,onsrucion Co. In(. s. Plumbers & Steamfitters Local L nion o. 10(), 421 U.S, at 631. In light of this finding, we need not and do not pass on the question of what tspe of clause would address these concerns and whether it would be authorized bh the proviso if it were sought oatside the context of a collec- tive-hargaining relationship DECISION STATEMENT OF THE CASE JAMES T BARKER. Administrative Law Judge: This case was heard before me at Denver, Colorado, on April 26, 1977, pursuant to a complaint and notice of hearing issued on March 10, 1977, by the Regional Director of the Na- tional Labor Relations Board for Region 27, and an amendment to the complaint issued by the Regional Direc- tor on March 22, 1977. The complaint and the amendment thereto are based upon an original charge filed on April 27, 1976.' by Utilities Services Engineering, Inc., hereinafter called Utilities, and an amended charge filed by Utilities on April 30. The complaint and amendment thereto allege violations of Section 8(b)(4)(ii)(A) of the National Labor Relations Act, as amended, hereinafter called the Act. The parties were accorded full opportunity to examine and cross-examine witnesses, introduce relevant evidence, and to present oral argument. Counsel for the General Counsel availed herself of the opportunity to make an opening statement and the parties timely filed briefs with me. Upon the entire record in this case, the briefs of the parties, and my observation of the witnesses, I make the following: FINDINGS OF FACT 1 THE BUSINESS OF THE EMPLOYER At all times material herein, Utilities, a corporation duly organized under the laws of the State of Colorado, has I Unless otherwise specified, all dates herein refer to the calendar year 1976. 256 COLORADO BUILDING & CONSTRUCTION TRADES maintained its principal office and place of business at Denver, Colorado, and has been engaged at its Denver, Colorado. establishment in business as a municipal utility and industrial general contractor and as a maintenance contractor. In the course and conduct of its business opera- tions, Utilities annually purchases and receives goods and materials valued in excess of $50,000. directly from points and places outside the State of Colorado. Upon the foregoing, I find that at all times material herein, Utilities Services Engineering, Inc., has been an em- ployer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II THE LABOR ORG(ANIZATION INVOLVED Respondent concedes, and I find, that at all times mate- rial herein, Colorado Building & Construction Trades Council has been a labor organization within the meaning of Section 2(5) of the Act. III THE ALLEGED UNFAIR LABOR PRAC TICES A. The Issues The principal issue in this proceeding is whether the picketing and handbilling undertaken by Respondent on April 22 and 23. 1976, at a construction site on which Utili- ties was performing certain work for Johns-Manville Cor- poration, was with the object of forcing Utilities to enter into an agreement prohibited by Section 8(e) of the Act in violation of Section 8(b)(4Xii)(A) of the Act. In essential terms, the resolution of this issue rests on a determination of whether Respondent was endeavoring to engage in pro- scribed "top-down" organizing of nonunion subcontrac- tors within the meaning of the Supreme Court's Connell decision.2 B. Pertinent Facts Background facts As found, Utilities is an enterprise engaged in municipal utility and industrial construction and in maintenance op- erations. A principal facet of its operation involves the con- struction of water and sewage treantlent plants and pump stations. Services of subcontractors are sometimes but not usually utilized. Since 1969 Frank McHugh has been presi- dent and principal stockholder of Utilities. At pertinent times his wife, Jane McHugh, was employed in a full-time capacity by Utilities. In spring 1976. Utilities obtained a contract from Johns-Manville Corporation to perform electrical maintenance and allied work at the Johns-Man- ville Corporation Research and Development C'enter as a support operation to the Johns-Manville scientists and en- gineers employed at the facility. The work was not "con- struction-type work as such" but involved the use of me- chanics, maintenance electricians, and laborers. The contract was obtained by competitive bid and was in effect ( onnell (on1sirucion ('e, In, v. Plumserv & Sl nlam lltre 1 o, l I -tn Vo 1(()0, 421 tS 616 (1975). from April 1, 1976, and at all relevant times thereafter. The contract did not cover operations at the Johns-Manville World Headquarters location situated some 2-1/4 miles by road from the Research and Development Center. The two locations are not visible one from the other. At relevant times, Utilities employed approximately 24 rank-and-file employees manning approximately 12 active projects scattered throughout the State of Colorado. The employees of Utilities are not represented by any labor organization and Utilities has never had a collective-bar- gaining agreement with Respondent. C. The Alleged Unlaxsful Conduct In early April, Utilities received a letter dated April 5 signed by John J. Donlon, business manger of Respondent. Enclosed was a document designated as an agreement gov- erning subcontracting of construction site work. Utilities had not previously been contacted by Donlon or any other representative of the Respondent. The letter which was ad- dressed to Utilities Services Engineering, Inc.. contained the following: We are presently engaged in a program to eliminate substandard wages in the construction industry in this area. To assist in accomplishing this, we are requesting builders, general contractors, and project managers to sub-contract jobsite work only to contractors who agree to pay prevailing rates of wages to their employ- ees. A proposed draft of such agreement is enclosed for your consideration. You will note that it applies only to future work for which no sub-contract has been executed, and does not cover any work per- formed by employees who have a collective bargaining representative. We intend to acquaint the public, by means of pick- eting and other forms of communication, with the names of builders, general contractors and project managers who do not enter into our sub-contracting agreement for prevailing wages. In the event that your company is the subject of such picketing, it will be conducted at your general offices and other places in which you may be engaged in business. The picketing will be directed to the public, and not to your contrac- tors, suppliers or employees. Its sole purpose will be to publicize the fact that you are not a party to our pre- vailing wage sub-contracting agreement. We wish to emphasize that we are not requesting or seeking, and do not desire, you to cease or refrain from doing busi- ness with any person, firm or corporation. Nor do we claim to represent, or seek to organize, any of your employees or employees of any sub-contractor, or to bargain for them. If you have any comment or question concerning this matter, please communicate the same by letter. which will be referred to our Executive Board for ap- propriate consideration and action. Neither the under- signed, nor any other person, has authority to discuss this matter in behalf of the Council. In pertinent part the agreement enclosed contained the following provisions: 257 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 1. This contract shall govern, and be limited to, la- bor performed at the site of construction, alteration, painting, or repair of building, structure, or other work of the Contractor by sub-contractors, and shall be lim- ited to work which is not customarily performed by employees of the Contractor. This Agreement shall not apply to work on any project for the performance of which the Contractor has entered into a sub-con- tract on or before the date of execution of this Agree- ment. Nor shall this Agreement apply to any work performed by any employee or employees in a certi- fied or recognized collective bargaining unit, or by any employee or employees who have a representative for collective bargaining. 2. As used in this Agreement, the term "sub-con- tractor" shall include any arrangement under which the Contractor permits any other person, firm or cor- poration, other than the Contractor's own employees, to perform work for which the Contractor has primary responsibility. 3. It shall be the obligation of the Contractor to include in every sub-contract for work governed by this Agreement a provision requiring the payment of prevailing rates of wages for such work. In the event any sub-contractor shall fail to pay its employees the prevailing rates of wages for work within the scope of this Agreement, the Contractor shall make whole the employees of sub-contracts for all losses and damages which they sustain by reason of the sub-contractor's default. 4. The Contractor further agrees that it will not per- mit a sub-contractor, or the employee of any sub-con- tractor, to perform any work within the scope of this Agreement, unless the sub-contractor has entered into a written agreement with the Contractor agreeing to pay its employees the prevailing wage rates for all work governed by this Agreement. . * . * * 7. It is the purpose and intention of the parties that this Agreement shall apply to all enterprises of the Contractor, regardless of the nature of the entity through which the Contractor engages in business. It is therefore agreed that this Agreement shall inure to the benefit of, and be binding upon, any person, firm, or corporation controlled, either directly or indirectly, by the Contractor, or by a principal stockholder or owner of the Contractor. 8. It is understood and agreed by the parties that the Council is not the collective bargaining representa- tive of any employee, and therefore, nothing herein shall be construed to recognize the Council as the col- lective bargaining representative of any employee or employees, or to supersede any collective bargaining contract presently, or hereafter, in effect, or to dero- gate in any way from the authority of any collective bargaining representative of employees of the Con- tractor or the sub-contractor. Nor shall any provision in this Agreement be construed to establish rates of compensation, conditions of work, or terms of em- ployment for any employees of the Contractor, or of a sub-contractor. 9. As used herein the term "prevailing rate of wage" means that rate of wages paid in the area in which the work is to be performed to the majonty of workers employed in that classification in construction in the area similar to the proposed undertaking. In the event that there is not a majority of workers paid at the same wage rate, then the wage rate paid to the greater num- ber of workers shall be deemed to be the prevailing wage rate. The letter and proposed agreement came to the attention of Frank McHugh, but neither he nor any other represen- tative of Utilities responded to the letter. No further direct communication by mail, telephone, or otherwise was re- ceived by Utilities from Respondent. At no relevant time had Utilities sub-contracted work on the Johns-Manville project. On April 22, McHugh received a telephone call from his foreman at the Research and Development Center advising him that picketing was transpiring at the center. Addition- ally. McHugh received a call from a Johns-Manville repre- sentative inquiring whether or not Utilities' employees had reported to work at the center. As a consequence of these telephone communications, Jane McHugh went to the Re- search and Development site and observed Utilities' em- ployees working. She also observed a picket stationed prox- imate to the only entrance to the center. On display was a picket sign containing the following legend: UTILITIES SERVICES ENGINEERING, INC. has no sub-contracting agreement with Colorado Building & Construction Trades Council. We have no dispute with any other person or compa- ny on this project. In possession of the picket were some yellow flyers con- taining the following: MESSAGE TO THE PUBLIC We are picketing UTILITIES SERVICES ENGI- NEERING, INC. because of its refusal to sign a sub- contracting agreement providing for payment of PRE- VAILING WAGES. If you believe in the cause of fair wages for American workers, please telephone or write to UTILITIES SERVICES ENGINEERING, INC., and request them to sign our sub-contracting agree- ment for prevailing wages. Our picket is not directed against any other em- ployer, and we have no dispute with any other em- ployer on this project. Thank you! COLORADO BUILDING & CONSTRUCTION TRADES COUNCIL The person giving you this leaflet is not authorized to discuss this or any other matter in behalf of the Colorado Building and Construction Trades Council. From the Research and Development Center Jane Mc- Hugh drove to the World Headquarters site and observed that, contrary to previous visits to the site. there was little or no visible activity taking place. Jane McHugh drove into 258 COLORADO BUILDING & CONSTRUCTION TRADES the World Headquarters area at approximately I a.m. and did not observe any picketing. She returned to the office of Utilities and imparted to Frank McHugh what she had observed and the information she had received. On April 22, McHugh contacted John Martin, labor re- lations representative of the Associated General Contrac- tors Association of which Utilities was a member; placed a telephone call to Dan Porter of Blackinton & Decker, a firm whom McHugh knew to be performing work at the World Headquarters; and also spoke by telephone with a labor relations attorney. The following day, April 23, Frank McHugh was in- formed that picketing was again transpiring at the entrance to the Research and Development Center. Employees of Utilities reported to work on April 23 at the center and performed their duties. During the normal working hours on April 23 the picketing ceased, and no picketing has transpired since April 23. At no time, including April 22 or April 23, was the business office of Utilities picketed, nor was picketing conducted at any of the other jobsites at which Utilities was then performing services, either in met- ropolitan Denver or elsewhere. At the time in question, Utilities was employing subcontractors on a project in Meeker, Colorado, some 400 miles from Denver. In the meantime, on Thursday, April 22, Daniel Porter, president of Blackinton & Decker, Inc., a general contract- ing firm, a subcontractor of Turner Construction. the con- struction manager for the construction of the Johns-Man- ville World Headquarters, received a telephone call from his job superintendent, Marshall Blanchard. Blanchard in- formed Porter that Blackinton & Decker employees were ceasing work. It was Blanchard's representation to Porter that the employees were quitting because picketing was being conducted at the Research and Development site and was "flowing over" to the headquarters site. Blanchard imparted to Porter the information that the Blackinton & Decker employees had commenced work at their usual starting time but had thereafter ceased working. As a con- sequence of this information, Porter consulted with a labor relations representative of the Association of General Con- tractors and contacted Turner Construction. Later in the day, he spoke with representatives of the Carpenters and Laborers, which represented Blackinton & Decker employ- ees? In the early afternoon, the project manager dis- patched the following telegram to Blackinton & Decker: THIS IS A CONFIRMATION COPY OF A PREVIOUSLY PHONE-DELIV- ERED TELEGRAM RE JOHNS-MANVILLE WORLD HEADQUARTERS AS OF 4-22-76 YOU AND YOUR SUBCONTRACTORS ARE NOT PRO- VIDING SUFFICIENT MANPOWER AND ARE IN VIOLATION OF ARTI- CLE 3 OF YOUR SUBCONTRACT AGREEMENT. PLEASE CORRECT THIS SITUATION IMMEDIATELY TO AVOID WORKING OVERTIME AT YOUR OWN COST AS REQUIRED BY ARTICLE 3. PLEASE HAVE MANAGEMENT ATTEND JOB SITE MEETING TODAY 4-22-76 AT 4 OCLOCK PM. Blackinton & Decker compensated its employees on the 3 Daniel Porter credibly testified that Blackinton & Decker emplosed la- borers, carpenters, ironworkers, cement finishers, and operating engineers. all of whom were represented by labor organizalions World Headquarters project for I hour of work on April 22. They received no compensation for Apnl 23.4 Conclusions The complaint alleges violations of Section 8(h)(4)(ii)(A) of the Act, arising from Respondent's April 22 and 23 pick- eting and handbilling of Utilities at the Johns-Manville Re- search & Development Center where Utilities had a con- tract to perform maintenance electrical work. The complaint avers that the object of the picketing was to force Utilities to enter into an agreement prohibited by Section 8(e) of the Act. It is the General Counsel's conten- tion that the proposed agreement is on its face secondary and unlawful in that it is addressed to the employment practices of firms which seek to do business with Utilitics and was calculated to accomplish "top-down" organizing of nonunion subcontracting only, to the benefit of union members generally and not for the legitimate purpose of maintaining area wage or job standards. It is the General Counsel's further contention that the proposed agreement must be deemed outside the contemplation of the first pro- viso to Section 8(e) under the rationale of the decision of the U. S. Supreme Court in Connell Construction Co., Inc.. supra. and that, even assuming the subcontracting clause of the proposed agreement falls within the exemption fash- ioned by the first proviso to Section 8(e), the picketing and handbilling was revealed by the record evidence not to have been for legitimate "area standard" purposes but was directed toward the impermissible organizing of nonunion subcontractors by means of the proposed agreement with Utilities. On the other hand, Respondent contends that the pro- posed agreement contains no provision prohibited by Sec- tion 8(e) and seeks in no manner to infringe upon the free- dom of any contractor to do business with any subcontractor but, rather, legitimately obligates a signatory contractor to require his subcontractors to pay prevailing rates of wages. It is Respondent's contention that, in the circumstances of this case, the General Counsel's reliance upon Connell is misplaced in that the contract language which was the subject of Court scrutiny in Connell clearly contravened Section 8(e), and the union therein defended on the ground that the agreement was saved by the first proviso of Section 8(e). Respondent contends that, in the instant matter, the proposed agreement is not subject to the proscription of Section 8(e) because it has as its purpose and effect only the elimination of unfair competition in the construction industry based upon payment of substandard wages. Therefore, avers Respondent, the question of the applicability of the first proviso to Section 8(e) does not arise. Section 8(e) provides: It shall be an unfair labor practice for any labor 4 The General Counsel introduced this evidence in support of the thesis that Ihe picketing at the Research and Development Center was conducted with the intent and foreseeable effect of causing a work stoppage at the World Headquarters. thereby bringing pressure to bear against Johns-Man- ville resulting in Sec 8(hbX4)(ii)(A) threats, coercion. and restraint. The esi- dence was received over Respondent's objections based on relevance. mate- nality. and lack of due process notice. 259 DECISIONS OF NATIONAL LABOR RELATIONS BOARD organization and any employer to enter into any con- tract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or re- frain 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: Pro- vided, That nothing in this subsection (e) shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or re- pair of a building, structure or other work.... Section 8(b)(4)(ii)(A) makes it an unfair labor practice for a labor organization or its agents: [T]o threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is: (A) forcing or requiring any employer or self-em- ployed person to join any labor or employer organiza- tion or to enter into any agreement which is prohibited by section 8(e). It is now well established that in enacting Section 8(e), Congress meant to reach only secondary pressures. How- ever, equally clear is the proposition that agreements and boycotts tactically calculated to "satisfy union objectives elsewhere" become secondary and are proscribed by Sec- tion 8(e). National Woodwork Manufacturers Association, et al. v. N.L.R.B., 386 U.S. 612 (1967). Section 8(e) of the Act makes it an unfair labor practice for an employer and a union to enter into an agreement, express or implied, whereby the employer agrees to cease dealing in the prod- ucts of any other employer or to cease doing business with any other person. A literal construction of this section sug- gests the illegality of any agreement which results in pre- venting the employer from establishing a business relation- ship with another employer or which causes him to break off a relationship already established. The section, how- ever, has not been construed to outlaw all agreements which produce such results. Heavy, Highway, Building and Construction Teamsters Committee for Northern California, et al. (California Dump Truck Owners Association), 227 NLRB 269, 272 (1976). In assessing whether a proposed agreement covering the subcontracting of work has as its sole objective the protection of the legitimate economic in- terests of the signatories, rather than "union objectives elsewhere," it is permissible and essential that the various provisions comprising the proposed agreement be analyzed in pari materia and be given logical and empirical applica- tion. California Dump Truck Owners Association, supra; Connell Construction Co., Inc. v. Plumbers Local 100, supra,; National Woodwork Manufacturers Association, et al. v. N.L.R.B., supra. As observed in the last cited case at 645, "[T]he touchstone is whether the Agreement [under scruti- ny in a given case] or its maintenance is addressed to the labor relations of the contracting employer vis-a-vis his own employees." In its decision in California Dump Truck Owners Associa- tion, supra, the Board defined parameters pertinent to the instant inquiry. Thus, in discussing in the abstract the range and type of contract clauses involved in applying Section 8(e) of the Act to factual situations arising in litiga- tion before it, the Board observed at 272: Contract clauses which purport to limit subcon- tracting to employers who are signatories to union contracts, so-called signatory clauses, and contract clauses which purport to acquire for bargaining unit employees work which has traditionally been per- formed by employees of other employers, so-called work acquisition clauses, have been held to violate the Act. Such clauses are viewed as not being designed to protect the wages and job opportunities of unit em- ployees covered by the contract, but as directed at furthering general union objectives and undertaking to regulate the labor policies of other employers. Absent a direct relationship to protection of the work of unit employees, such clauses are considered as having an unlawful secondary effect and are proscribed by Sec- tion 8(b)(4) and (e). On the other hand, however, contract clauses whose basic aims are to limit subcontracting so as to preserve for unit employees work which has customarily been performed by them, or in some instances to recapture work regarded as fairly claimable, so-called unit pro- tection clauses, and contract clauses designed to limit subcontracting of unit work to employers who main- tain the same standards of employment, thus minimiz- ing the economic incentive to subcontract, so-called union standard clauses, have been held to be lawful. The underlying rationale for the lawful character of unit protection and union standard clauses is that the union has a primary interest in preserving unit work for unit employees and to insure that negotiated stan- dards will not be undermined. In the instant case, the Charging Party correctly con- tends that in its decision in Connell, the Supreme Court recognized the general validity of unit protection and union standards clauses in the construction industry, and in a cogent analogue to the Board's discussion of the un- lawful nature of union signatory clauses and acquisition clauses, the Supreme Court in Connell stated at 631: If we agreed with Local 100 that the construction industry proviso authorizes subcontracting agreements with "stranger" contractors, not limited to any particular jobsite, our ruling would give construction unions an almost unlimited organizational weapon. The unions would be free to enlist any general constractor to bring economic pressure on nonunion subcontractors, as long as the agreement recited that it only covered work to be performed on some jobsite somewhere. The proviso's jobsite restriction then would serve only to prohibit agreements relating to subcontractors that deliver their work complete to the jobsite. It is highly improbable that Contress intended such a result. One of the major aims of the 1959 Act was to 260 COLORADO BUILDING & CONSTRUCTION TRADES limit "top-down" organizing campaigns, in which unions used economic weapons to force recognition from an employer regardless of the wishes of his em- ployees. These careful limits [defined by Section 8(f)] on the economic pressure unions may use in aid of their orga- nizational campaigns would be undermined seriously if the proviso to Section 8(e) were construed to allow unions to seek subcontracting agreements at large, from any general contractor vulnerable to picketing. Absent a clear indication that Congress intended to leave such a glaring loophole in its restrictions on "top-down" organizing, we are unwilling to read the construction industry proviso as broadly as Local 100 suggests. Instead, we think its authorization extends only to agreements in the context of collective bar- gaining relationships and. in light of congressional ref- erences to the Denver Building Trades problem, possi- bly to common-situs relationships on particular jobsites as well. It seems thus apparent from an amalgam of the cited precedents that, as argued explicitly in the Charging Party's brief and articulated inferentially by the General Counsel, in order for Respondent's tendered subcontractor agreement to have threshold validity, it would be essential that (I) the provisions of the proposed agreement be either of the union standards or work protection variety; (2) the agreement must be designed to protect legitimate interests of particular unit employees rather than the furtherance of general union objectives elsewhere, or the regulation of la- bor policies of employees other than Utilities; (3) the ten- dered subcontractor agreement must be limited to a partic- ular jobsite; and (4) the subcontractor agreement must arise in the context of a collective-bargaining relationship. The General Counsel and Charging Party are clearly cor- rect in urging the relevancy of these criteria to a resolution of the instant matter, for, in my view of the record, there is insufficient support for Respondent's contention that the sole obligation Respondent was seeking by virtue of its subcontracting agreement to impose upon Utilities was the prevailing rates of wages. Rather, it is apparent from care- ful scrutiny of the proposed agreement that its terms would not apply to employees of Utilities or to any work custom- arily performed by them in Utilities' employ. Moreover, the agreement is specifically limited in its application to nonunion subcontractors and the unrepresented employees of those subcontractors. 1This strongly rebuts the notion that the clauses were intended or fashioned to serve a pri- mary purpose, and the concomitant conclusion is warrant- ed that their purpose was secondary. Moreover, analysis of the terms of the proposed subcontracting agreement re- veals that Respondent was willing to countenance a duality in wages and fringe benefits as between unrepresented em- ployees of subcontractors whom Utilities might utilize and employees of employers represented by a labor organiza- tion. By establishing a "prevailing wage rates" standard for subcontractors of signatory employers while exempting from the coverage of the proposed agreement all employ- ees "who have a representative for collective-bargaining," Respondent was contributing to a situation wherein the wages of employees of Utilities' subcontractors could be adversely eroded. This is so because, under operation of the terms of the proposed agreement, a competitor subcon- tractor of Utilities' subcontractor who had a collective-bar- gaining agreement covering his employees would be ex- empt from the standards prescribed by paragraph I of the proposed agreement even if his collective-bargaining agree- ment provided for the payment of wage rates lower than those which Utilities' subcontractor paid its employees. Thus, the concept of equivalency in wages and working conditions which the Board has approved as a legitimate labor relations objective 5 is not here present as a saving consideration amplifying the Respondent's objective in seeking to force Utilities to accept the proposed subcon- tracting agreement. The General Counsel correctly con- tends, in substance, that rather than fostering equivalency, the proposed agreement countenances potential disparity to the foreseeable detriment of the wage and fringe benefits standards available to the employees of potential subcon- tractors of Utilities. Cf. Heavv, Highway, Building and Con- struction Teamsters Committeefor Northern California, et al. (California Dump Truck Owners Association), 227 NLRB 269, 273 (1976); see Local Union No. 98, of the Sheet Metal Workers' International Association, et al. (Cincinnati Sheet Metal & Roofing Company A /K/A Ajax Company), 174 NLRB 104. 111-112 (1969). The practical effect would be to leave to subcontractors seeking a potential business rela- tionship with Utilities the options of either executing a col- lective-bargaining agreement with a union or of refraining from entering into or severing any existing business rela- tionship with Utilities, i.e., a cease doing business effect, an effect which, on this record, may not properly be classified as merely incidental to the accomplishment of an object relating principally to terms and conditions of employment of employees in an established and existing bargaining unit. Cf. Newspaper & Periodical Drivers & Helpers Union Local 921, International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America (San Francisco Newspaper Printing Co.. Inc.), 204 NLRB 440, 441 (1973). Stripped of its trappings, and giving cognizance to the ef- fort of Respondent to force by picketing and handbilling Utilities at the construction site to enforce its demand that Utilities adopt its terms, the subcontracting agreement must be viewed as possessing an object of "top-down" or- ganizing and not merely the preservation of unit work or the maintenance of union standards. Cf. General Teamsters Lrocal 386, International Brotherhood of Teamsters. Chauf- feurs. 4 Warehousemen and Helpers of America (Construction Materials Trucking, Inc.), 198 NLRB 1038 (1972). 6 The General Counsel is correct in his contention that Respon- dent's choice of the work situs as the locus of the picketing to the exclusion of the main office of Utilities is a factor See Relta, ( l,A , /wI lrnatonaIl 4 a stillot LI, ta I 'hin S,' SY9.4 ftl (/0 ,, ! at,, St fart. In,, d h a (,rant food., 166 NtlRB 818 (1967) 1 lh.l .i UinI i hisl, a legitin.lte interesl in preenting Ihe underrnining or Ihe . rk ipprltlrlnilles and sl.ndards of enlpIloees In a i' ratl rualll halrglin ritn ludii h\ , uhconlriaclors ,h,. do not meet pre.a;liIng ,.age scales and empiltee heilefils t,l ln b dht Mei, tirilr here recognlied his ilsuec i nol hefore the Irier f flit[ 261 DECISIONS OF NATIONAL LABOR RELATIONS BOARD which may properly be weighed in determining the exis- tence of a secondary object. See Local 294, International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America, et al. (K-C Refrigeration Transport Company, Inc.), 124 NLRB 1245, 1252-53 (1959). 1 have considered this evidence in reaching the conclusion, based materially on other cogent evidentiary and analytical fac- tors, that Respondent's object was secondary and pro- scribed. The effect, albeit indirect, of Respondent's conduct, was an attempt to dictate and prescribe the wages and working conditions of the employees of employers stranger to the immediate labor dispute. See Orange Belt District Council of Painters # 48, AFL-CIO, et al. (Calhoun Drywall Com- pany), 153 NLRB 1196 (1965), enfd. 365 F.2d 540 (D.C. Cir. 1966). The effort at "top-down organizing of non- union contractors" constitutes conduct proscribed by Sec- tion 8(e), which finds no protection in the proviso to Sec- tion 8(e). No collective-bargaining relationship existed be- tween Respondent and Utilities; the agreement, by its terms, is not applicable to employees of Utilities which the Union would represent, thus precluding Respondent from claiming relevant representation status in a unit of Utili- ties' employees; and the agreement would apply only to work not traditionally or customarily performed by Utili- ties employees. See Connell Construction Co., Inc. v. Plumb- ers Local 100, supra. In the circumstances, I find, in agreement with the Gen- eral Counsel, that the proposed agreement violates Section 8(e) and Respondent's picketing to obtain the agreement was in violation of Section 8(b)(4)(ii)(A) of the Act. Ets- Hokin Corporation, 154 NLRB 839, 842-843 (1965).7 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above, occurring in connection with the operations of Util- ities Services Engineering, Inc., described in section I, above, have a close, intimate, and substantial relationship to trade, traffic, and commerce among the several States and tend to lead to labor disputes, burdening and obstruct- ing commerce and the free flow of commerce. V. THE REMEDY Having found that Respondent has engaged in unfair labor practices in violation of Section 8(b)(4)(ii)(A) of the Act, I shall recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. CONCLUSIONS OF LAW I. Utilities Services Engineering, Inc., is an employer en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Colorado Building & Construction Trades Council is a labor organization within the meaning of Section 2(5) of the Act. 3. The agreement governing subcontracting of construc- tion site work is one into which the Respondent and Utili- ties may not lawfully enter, under the provisions of Section 8(e) of the Act. 4. By picketing and handbilling Utilities at the premises of the Johns-Manville Research and Development Center where Utilities was honoring a contract to perform mainte- nance electrical work, Respondent threatened, coerced, and restrained Utilities and did thereby engage in unfair labor practices in violation of Section 8(b)(4)(ii)(A) of the Act. Upon the foregoing findings of fact, conclusions of law, and the entire record and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER 8 The Respondent, Colorado Building & Construction Trades Council, Denver, Colorado, its officers, agents, and representatives, shall: 1. Cease and desist from picketing or handbilling Utili- ties Services Engineering, Inc., for the purpose of requiring Utilities to enter into the proposed agreement governing subcontracting of construction site work transmitted to Re- spondent by covering letter dated April 15, 1976. 2. Take the following affirmative action, which is neces- sary to effectuate the policies of the Act: (a) Post at its business office and meeting halls copies of the attached notice marked "Appendix." 9 Copies of said notice, on forms provided by the Regional Director for In reaching this conclusion. it is unnecessary to rely on record evidence relating to the effect of the picketing on the progress of construction work at the World Headquarters site. and no weight is given that evidence. In the event no exceptions are filed as provided by Sec. 102 46 of the Rules and Regulations of the National Labor Relations Board. the findings. conclusions, and recommended Order herein shall. as provided in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclu ion. and Order. and all objections thereto shall be deemed waived for all purposes. 9In the event that this Order is enforced by ajudgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National l.abor Relations Board. 262 COLORADO BUILDING & CONSTRUCTION TRADES Region 27. after being duly signed by an authorized repre- sentative of Respondent, shall be posted by it immediately upon receipt thereof and be maintained by it for 60 consec- utive days thereafter, in conspicuous places including all places where notices to members are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (b) Sign and deliver to the Regional Director for Region 27 sufficient copies of said notice, to be furnished by the Regional Director, for posting at the premises of Utilities, if willing. (c) Notify the Regional Director for Region 27, in writ- ing, within 20 days of the date of this Order, what steps the Respondent has taken to comply herewith. APPENDIX NOTICE To MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT threaten, coerce, or restrain Utilities Services Engineering, Inc., by picketing and handbill- ing Utilities at the Johns-Manville Research and De- velopment Center, where an object thereof is to force or require Utilities to enter into an agreement which is prohibited by Section 8(e) of the Act, as amended. COLORADO BUILDING & CONSTRUCTION TRADES COUNCIL 263