In Teamsters Local 251, 356 NLRB No. 135 (2011), the Board recorded a welcome win for employers, holding that the union violated the National Labor Relations Act when it demanded that a construction contractor comply with an agreement not to use the services of two nonunion trucking companies to haul construction materials to its jobsite, and when it engaged in a strike against the contractor to enforce that agreement.

The primary employer in the case, a signatory to a multi-employer union agreement, is a heavy highway construction contractor that employs ten Teamsters-represented drivers to deliver sand, stone, gravel, and asphalt to construction job sites.  When the employer’s workload exceeds the capacity of its available trucks and drivers, it contracts out work to independent trucking operations, including nonunion trucking companies.  In 1999, the union threatened to call a strike among the represented drivers unless the employer would agree to stop sending work to the nonunion businesses.  To avoid a strike, the employer entered into a written agreement with the union that the services of the nonunion companies would not be used.

In 2001, the employer again began contracting with one of the nonunion companies, and the union relied on the 1999 agreement to demand that the employer cancel its contracts.  When the employer failed to do so, the union first threatened to strike and then commenced a strike against the employer.

In considering whether the agreement between the union and the company was unlawful, the Board explained that it has historically drawn a line between agreements designed to protect the work and economic benefits of the primary employer’s employees, which are generally lawful, and agreements designed to use the union’s leverage with the primary employer to put pressure on other (“secondary”) employers and thereby aid the union in accomplishing its objectives with those other employers, which are generally unlawful. 

For example, the Board has held that prohibitions that prohibit the contracting out of all bargaining unit work are directly focused on maintaining work for bargaining unit members, and thus are lawful primary agreements.  Similarly, prohibitions that require employers to contract only with entities that match the economic terms of the labor agreement between the primary employer and the union are held to be lawful primary agreements, because they are designed to preserve the bargaining unit’s economic position by preventing the primary employer from sending covered work to employers who provide inferior compensation packages.  By contrast, agreements that allow a primary employer to subcontract bargaining unit work, but only to secondary employers who have entered into collective bargaining agreements with the union, likely have an unlawful secondary objective.  They do not protect the primary employer’s employees, but rather aid the union in its efforts to organize the employees at other companies.

In Teamsters Local 251, the Board held that the agreement between the employer and the union fell into the second category of restrictive agreements and violated Section 8(e) of the NLRA.  The agreement did not prohibit the contracting of all bargaining unit work, nor did it simply limit contracting to employers whose compensation practices would not undermine the bargaining unit’s wage and benefit package.  Rather, the agreement narrowly targeted two particular subcontractors, while leaving the company free to send bargaining unit work to any number of other employers.  Under these circumstances, the Board concluded that the agreement was intended to further the union’s objectives with regard to the two secondary contractors.

The application of Section 8(e) to particular factual circumstances can become fairly complicated.  Employers should keep in mind that any time a union pressures a represented employer to cease doing business with non-union companies, the union’s activities may run afoul of Section 8(e) and 8(b)(4) of the Act.  Employers that believe a union may be making unlawful demands should preserve any written demands and/or threats the union makes, carefully document any verbal demands or threats, and contact counsel to review the situation further.

This entry was written by Jeffrey M. Place.

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