Los Angeles Building & Construction Trades Council, AFL-CIO

946 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Los Angeles Building & Construction Trades Council, AFL-CIO; International Brotherhood of Electrical Workers, Local 11 (Noble Electric) and American Brotherhood of Electrical Workers. Case 3 1-CC-493 May 13, 1975 DECISION AND ORDER BY MEMBERS JENKINS, KENNEDY, AND PENELLO Pursuant to a charge filed on May 6, 1974, by Ameri- can Brotherhood of Electrical Workers, herein called the ABEW, the General Counsel of the National Labor Relations Board, by the Regional Director for Region 31, issued a complaint on August 30, 1974, and an amendment to complaint on November 13, 1974, against Los Angeles Building & Construction Trades Council, AFL-CIO, herein called Respondent Coun- cil, and International Brotherhood of Electrical Work- ers, Local 11, herein called Respondent Electrical Workers. The complaint alleges that both Respondents engaged in certain unfair labor practices in violation of Section 8(b)(4)(ii)(B) of the National Labor Relations Act, as amended.' The Respondents filed a joint an- swer to the complaint, in which they admitted certain of the allegations, but denied the commission of any unfair labor practices. On November 15, 1974, the Respondents, the Gen- eral Counsel, and the ABEW (the charging party) en- tered into a stipulation of facts and filed a motion to transfer this proceeding directly to the Board. All par- ties to the stipulation waived the usual proceedings before an Administrative Law Judge, agreed that cer- tain documents would constitute the entire record herein,' and requested the Board to make findings of fact and conclusions of law and to issue an appropriate Decision and Order. On November 19, 1974, the Board issued an order which transferred the proceeding to the Board, approved the stipulation, and set a date for the filing of briefs by the parties. Thereafter, the General Counsel filed a brief and the Respondents filed a joint brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. 1 The amendment to complaint merely contains certain commerce allega- tions which were omitted from par 4 of the complaint and which were conceded by the Respondents in the stipulation of facts 2 The parties agreed that the charge, the complaint, the amendment to complaint, the answers thereto, and the stipulation of facts constitute the entire record in this case By supplemental stipulation dated January 28, 1975, the parties added to the record a copy of a contract between Respond- ent Electrical Workers and Los Angeles Chapter, National Electrical Con- tractors Association The-Board has considered the entire record herein, as stipulated by the parties, including the briefs, and makes the following: FINDINGS OF FACT I THE BUSINESS OF THE EMPLOYERS Gangi Construction Co., Inc., herein called Gangi Construction or the Company, a California corpora- tion with its principal place of business located in Glen- dale, California, is a general contractor engaged in the building and construction industry. During the past year, it purchased and received goods valued in excess of $50,000 from suppliers located within the State of California, which suppliers in turn purchased and re- ceived such goods in substantially the same form di- rectly from sources located outside the State. J. Phil Johnson Co., Inc., herein called Johnson, is a California corporation engaged in the building and construction industry. At all times material herein Gangi Construction, pursuant to a contract with John- son, has been engaged in the construction of a con- dominium building project for Johnson at 221 East Lexington, Glendale, California; Salvatore Gangi, an officer of Gangi Construction, has been the secretary- treasurer of Johnson; Kenwood Apartments, a general partnership consisting of Salvatore Gangi and four other persons, has been engaged in the operation and management of an apartment building at Glenoaks Boulevard, Glendale, California. Rene Papazian, an individual doing, business as No- ble Electric, herein called Noble, with his principal place of business in Los Angeles, California, is an elec- trical contractor. Noble is a member of United Electri- cal Contractors Association, herein called the Associa- tion, which exists for the purpose of engaging in collective bargaining with labor organizations for member-employers in the construction industry located in the State of California. The parties agreed, and we find, that the Association and Noble constitute a single employer for jurisdictional purposes herein. Annually, the employer-members of the Association located in California jointly purchase goods in excess of $50,000 which are shipped directly from suppliers located outside the State of California. We find, in substantial accord with the stipulation herein, that Gangi Construction; Johnson; Kenwood Apartments; and the Association and Noble as a single employer are employers and/or persons engaged in commerce or in an industry affecting commerce within the meaning of Section 2(6) and (7) and Section 8(b)(4) of the Act. 217 NLRB No. 139 LOS ANGELES BUILDING & CONSTRUCTION TRADES COUNCIL, AFL-CIO 947 II THE LABOR ORGANIZATIONS INVOLVED We find that Respondent Council, Respondent Elec- trical Workers, and ABEW are labor organizations within the meaning of Section 2(5) of the Act. III THE ALLEGED UNFAIR LABOR PRACTICES A. Stipulated Facts In early 1974, Gangi Construction, pursuant to a contract with Johnson, was engaged in the construction of a building project for Johnson. Although Gangi Construction was the general contractor, Johnson con- tracted directly with Noble to perform the necessary electrical work on the project. Noble's employees on the project were represented by the ABEW under a collective-bargaining contract. Noble's gross revenue received for the electrical- work was $26,800. Since May 8, 1973, Gangi Construction and Re- spondent Council have been parties to a collective-bar- gaining agreement which requires Gangi Construction to subcontract all jobsite construction work to employ- ers who are signatory to an agreement with the appro- priate uniol: affiliated with Respondent Council,3 as is Respondent Electrical Workers herein. Respondent Council and Respondent Electrical Workers have at all times been engaged in a labor dispute with Noble, as Noble has never been signatory 3 In part, the agreement provides as follows I. This agreement shall apply to and cover all building and construction work performed by the Employer, Developer and/or Owner-Builder within the Iunsdiction of any Union affiliated with the Councils and the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, repair or demolition of a building, structure or other work. II. The Employer, Developer and/or Owner-Builder agrees that all work performed within the jurisdiction of any Union affiliated with the Councils shall be performed pursuant to an executed agreement with the appropriate Union having work and territorial jurisdiction and af- filiated with the Council in the area in which the work is performed. to a collective-bargaining agreement with either Re- spondent. On or about March 7, 1974, on which date both Respondents entered into a plan, program, and campaign to force or require Gangi Construction to honor and abide by the terms of the foregoing agree- ment, Respondent Electrical Workers threatened to sue Gangi Construction unless it complied with the subcontracting clause (article IV) of the agreement by ceasing to do business with Noble_ On or about May 2, Respondent Electrical Workers threatened to take legal action against Gangi Construction, Johnson, and Sal- vatore Ganti as "related entities"-pursuant to the terms of articles IV and VI of the agreement-seeking a temporary restraining order and damages in an amount not less than $250,000 because in its view, Gangi Con- struction, Johnson, and Salvatore Gangi were doing business with Noble, in breach of article IV of the agreement. On or about May 9, Respondent Council filed a complaint for an injunction and damages against Gangi Construction, Johnson, Kenwood Apartments, and Salvatore Gangi as "related entities" in the Superior Court of the State of California for the county of Los Angeles. This action charges the defendants with a breach of Respondent Council's contract with Gangi Construction for contracting or subcontracting electri- cal work to Noble at the Glendale project herein and at two other projects in Glendale, all within the ter- ritorial jurisdiction of Respondent Electrical Workers. As a result of this alleged breach of contract, the com- plaint asserts, Respondent Council's reputation among its affiliated labor unions for being capable to enforce its agreements, secure work opportunities for members of its affiliated unions, and maintain and preserve standards and conditions of work for workers in the affiliated crafts has been irreparably damaged, the damage to Respondent Council being "not less than the sum of $250,000." B. The Parties' Contentions IV. The employer, Developer and/or Owner-Builder agrees that he shall contract or subcontract all jobsite work set forth in article 1 above to a person, firm, partnership or corporation that is party to an ex- ecuted, current Agreement with the appropriate Union having work and territorial jurisdiction, affiliated with the Council in which area the work is performed. VI The provisions of the agreement shall be binding upon the Em- ployer Developer and/or Owner-Builder and upon any firm, partner- ship, company or corporation in which the Employer, Developer and- /or Owner-Builder or any of its owners, partners, officers or stockholders has a substantial ownership interest In the event of any change of ownership, or in the form of the Employer's Developer's and/or Owner-Builder's business organization, the terms and obliga- tions herein contained shall continue in full force and effect,as to such organization The General Counsel concedes that the threatened court action and the lawsuit itself would not be viola- tive of the Act had Respondents4 claimed damages measured by actual losses stemming from a breach of the contract.' But, since Respondents' claim is, accord- ing to the General Counsel, for excessive and punitive damages, which are wholly unrelated to any actual loss occasioned. by the breach of contract or any other legiti- mate, internal interest; and the action taken was cal- culated to force or require Gangi Construction to cease 4 Respondent Electrical Workers made the threat to sue herein and Re- spondent Council filed the suit. But both have been regarded as a single party herein and we shall similarly make no distinction between them in our discussion hereinafter. 948 - DECISIONS OF NATIONAL LABOR RELATIONS BOARD doing business with Noble,' 'Section 8(b)(4)(ii)(B) has been violated. - The Respondents contend that one of the measures of damages, namely, the amount of fringe benefits and wages lost by employees, is substantially less than $250,000. But it claims that that is not the only meas- ure of damages herein. And it argues that the protec- tion of defendants from a suit for unreasonable or puni- tive damages is a matter that rests with the court; and it is not proper for the Board to examine prayers made in court papers and to dictate to the law courts what prayers for relief they will be permitted to hear in con- tract actions. C. Conclusions As framed by the parties, the critical issue posed by this case is whether the threat to sue and the suit itself filed in the state court threatened, coerced, or re- strained the Company within the contemplation of sub- section (ii) of Section 8(b)(4)(B). It is well established that a subcontracting clause such as is involved herein is protected by the construc- tion industry proviso to Section 8(e) of the Act, and is valid. However, breaches of such an agreement may be enforced only by lawsuits, but not by such threats, restraint, or coercion as is proscribed by subsection (ii).' This proscribed conduct has been held to encom- pass "non-judicial acts of a compelling or restraining nature, applied by way of concerted self help consisting of a strike, picketing or other economic retaliation or pressure in a background of a labor dispute."' With respect to the suit brought by Respondents, the General Counsel argues that it does not qualify as a privileged judicial proceeding to enforce a construction industry site exempt agreement because it seeks an amount greatly in excess of any lost wages or fringe benefits. In support of this proposition, the General Counsel relies on cases arising under Section 8(a)(1) of the Act which also proscribes restraint and coercion, as does Section 8(b)(1)(A). The leading case in this area is Clyde Taylor, d/b/a Clyde Taylor Company.' In that case, even though the Board found that the employer violated Section 8(a)(l) 5 The General Counsel has chosen to argue his case in this fashion, although the complaint alleged that Respondents' purpose was to cause a disruption of the business relationship between Gangi (the general contrac- tor) and Johnson (who directly contracted the electrical work to Noble) in order to compel Johnson to cease doing business with Noble. 6 See Ets-Hokin Corporation, et al, 154 NLRB 839, 842 (1965), enfd. sub nom. N.L.R.B. v International Brotherhood of Electrical Workers, AFL-CIO, Local No. 769, 405 F 2d 159, 162-163 (C.A. 9, 1968), cert denied 395 U S 921, (1969); Muskegon Bricklayers Union # 5, Bricklayers, Masons and Plasterers International Union of America (AFL-CIO), 152 NLRB 360 (1965), Local Union No. 48 of Sheet Metal Workers Interna- tional Association v Hardy Corporation, 332 F 2d 682 (C.A. 5, 1964). 7 Local Union No. 48 of Sheet Metal Workers v. Hardy, supra at p. 686 8 127 NLRB 103 (1960) by a threat to sue employees for libel because the threat was a tactic calculated to restrain the employees, it refused to base any violation of Section 8(a)(1) upon the actual suit, holding that it "should accommodate its enforcement of the Act to the right of all persons to litigate their claims in court, rather than condemn the exercise of such right as an unfair labor practice." Since Clyde Taylor, the Board has consistently affirmed the principle that the filing of a civil suit cannot be found to constitute a violation of the Act by an employer' or by a union.10 If, therefore, Respondents suffered dam- ages because of a breach of the contract by the Com- pany, Respondents were entitled to file suit in a court of competent jurisdiction for the purpose of establish- ing the breach of contract and proving the extent to which they were injured thereby. Accordingly, the ap- plication of the Clyde Taylor line of cases herein does not warrant finding an 8(b)(4)(B) violation based on the suit brought by Respondents. Moreover, even accepting the General Counsel's proposition that a suit in which damages claimed ex- ceed actual or reasonable damages flowing from a con- tract breach should be found to constitute subsection (ii) restraint or coercion, we would still not find a viola- tion herein. Thus, Respondents' suit alleges contract violations at three locations, including the one immedi- ately involved, and does not claim damages confined to items such as the loss of pay and fringe benefits suffered by employees. Its emphasis is on the damage done to Respondent Council's reputation among affiliated la- bor unions, on account of the alleged contract breaches, which, it asserts, has been "irreparably damaged if not completely destroyed" in the amount of $250,000. Insofar as the General Counsel contends that Re- spondents' claim is excessive, the final and binding determination of the damages suffered on account of the contract breaches will be made in the court where the suit is pending on the basis of rules of evidence and according to the law of damages obtaining in that juris- diction. Especially in view of the meager evidence con- stituting this stipulated record, and, even if of a mind to do so, we are in no position to evaluate the true worth of Respondents' suit, as it will be ultimately decided by the California Superior Court; that would be the sheerest kind of speculation. Being also mindful of the fact that exaggerated claims are common in dam- age suits, we are in no better position to determine whether the damages Respondents claim are so exces- sive that their suit ought not be privileged for 9 See Fashion Fair, Inc., et al., 159 NLRB 1435, 1449 (1966); United Aircraft Corporation, 192 NLRB 382, 384 (1971); West Point Pepperell, Inc., 200 NLRB 1031, 1039-40 (1972). 10 Local 283, United Automobile, Aircraft, and Agricultural Workers of America UAW-AFL-CIO (Wisconsin Motor Corporation), 145 NLRB 1097, 1121 (1964). LOS ANGELES BUILDING & CONSTRUCTION TRADES COUNCIL, AFL-CIO 8(b)(4)(B) purposes under the General Counsel's the- ory of the case. There remains the threat to bring this suit. As al- ready indicated, the Board held in Clyde Taylor that a threat to resort to the courts is a violation of Section 8(a)(1) if it is a tactic calculated to restrain employees in the exercise of rights protected by the Act. But even applying this rationale to the 8(b)(4) case before us, in the circumstances described above, we are not per- suaded that Respondents' threat to sue, followed as it was by the actual filing of the suit , was a groundless 949 threat simply calculated to unlawfully harass and co- erce the Company. Accordingly, we shall dismiss the complaint in its entirety. ORDER Pursuant to Section 10(c) of the National Labor Re- lations Act, as amended, the National Labor Relations Board hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety.