Allen Bradley Co. v. Electrical Workers
In Allen Bradley Co. v. Electrical Workers, 325 U.S. 797 (1945), the Court held that a union had violated the Sherman Act when it combined with manufacturers and contractors to erect a sheltered local business market in order "to bar all other business men from [the market], and to charge the public prices above a competitive level." Id., at 809.
The Court indicated that the union efforts would, standing alone, be exempt from antitrust liability, ibid., but because the union had not acted unilaterally, the exemption was denied.
Congress "intended to outlaw business monopolies. A business monopoly is no less such because a union participates, and such participation is a violation of the Act." Id., at 811.
In Allen Bradley Co. v. Local 3, IBEW, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945), one union represented both the employees of New York City electrical equipment manufacturers and the employees of contractors in the business of installing electrical equipment, who were the manufacturers' chief local customers. Through conventional labor union methods the union made closed shop collective bargaining agreements with the contractors which provided that the contractors would buy equipment only from local manufacturers who also had closed shop agreements with the union.
The manufacturers agreed with the union to confine their New York City sales to contractors employing union members. As a result the New York City market was completely closed to outside manufacturers because no in-city contractors would buy from them. In-city prices and wages rose steeply.
The Supreme Court found no antitrust exemption, holding that when the unions participated with a combination of business men who had complete power to eliminate all competition among themselves and to prevent all competition from others, a situation was created not included within the exemptions of the Clayton and Norris-La Guardia Acts. (325 U.S. at 809, 65 S.Ct. at 1540, 89 L.Ed. at 1948.)
In Allen Bradley v. Local Union No. 3, IBEW, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945), the Court upheld a finding of the district court which had found Local 3 of IBEW guilty of a violation of the Sherman Act for acting in concert with business organizations and with manufacturers of goods to restrain competition in and monopolize the marketing of such goods in New York City.
The Court found that "... the same labor union activities may or may not be in violation of the Sherman Act, dependent upon whether the union acts alone or in combination with business groups." 325 U.S. at 810, 65 S.Ct. at 1540.
The gist of the Court's reasoning, which is applicable here, is found on the same page of the opinion where it said: "For if business groups, by combining with labor unions, can fix prices and divide up markets, it was little more than a futile gesture for Congress to prohibit price fixing by business groups themselves."
The Supreme Court in Allen Bradley did require a modification of the decree "so as to enjoin only those prohibited activities in which the union engaged in combination 'with any person, firm or corporation which is a non labor group' ". p. 812, 65 S.Ct. p. 1541.
In Allen Bradley Co. v. Local 3, Int'l Brotherhood of Electrical Workers, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945), the Court held that a union and an employer group that conspired to restrain trade were guilty of violating the antitrust laws even though the conspiracy developed from a labor dispute between the union and the employer group.
Although the Court noted that the union's conduct fell squarely within the "specified acts" declared by the Clayton and Norris-LaGuardia Acts not to be violations of federal law, 325 U.S. at 807, 65 S.Ct. at 1538-1539, the Court declared that the purpose of the antitrust laws was to outlaw business monopolies and that "(a) business monopoly is no less such because a union participates " Id., 325 U.S. at 811, 65 S.Ct. at 1540.
The Court further explained that:
The primary objective of all the Anti-trust legislation has been to preserve business competition and to proscribe business monopoly. It would be a surprising thing if Congress, in order to prevent a misapplication of that legislation to labor unions, had bestowed upon such unions complete and unreviewable authority to aid business groups to frustrate its primary objective. For if business groups, by combining with labor unions, can fix prices and divide up markets, it was little more than a futile gesture for Congress to prohibit price fixing by business groups themselves. 325 U.S. at 809-810, 65 S.Ct. at 1540.
In Allen Bradley Co. v. Local No. 3, IBEW, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945), the Court took a different turn, holding that the distinction between union efforts aimed at the labor market and those aimed at the product market applied even to a collective bargaining agreement.
In that case a union successfully negotiated, by legitimate means, refusal-to-deal clauses with local electrical equipment manufacturers and contractors. The union's success in obtaining those agreements created a product market cartel in the New York area, which in time came to look not only "to terms and conditions of employment but also to price and market control." Id. at 800, 65 S.Ct. at 1535.
In Allen Bradley Co. v. Local Union No. 3, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945), the Court found that the collective agreement there involved "did not stand alone.
It was but one element in a far larger program in which contractors and manufacturers united with one another to monopolize all the business in New York City, to bar all other business men from that area, and to charge the public prices above a competitive level." Id., 325 U.S. at 809, 65 S.Ct. at 1540.
The union, the Court held, "aided and abetted business men to do the precise things which the Sherman Act prohibits." Id. at 801, 65 S.Ct. at 1536.
In Allen Bradley Co. v. Union, 325 U.S. 797 (1945), the Supreme Court made explicit what had been merely a qualifying expression in United States v. Hutcheson, 312 U. S. 219 (1941) and held that "when the unions participated with a combination of business men who had complete power to eliminate all competition among themselves and to prevent all competition from others, a situation was created not included within the exemptions of the Clayton and Norris-LaGuardia Acts." (Id., at 809.)
In Allen Bradley Co. v. Union, supra, the union was promoting closed shops in the New York City area. It got contractors to purchase equipment only from local manufacturers who had closed-shop agreements with the union; and it got manufacturers to confine their New York City sales to contractors employing the union's members.
Agencies were set up to boycott recalcitrant local contractors and manufacturers and bar from the area equipment manufactured outside its boundaries.
As the Supreme Court said:
"The combination among the three groups, union, contractors, and manufacturers, became highly successful from the standpoint of all of them. The business of New York City manufacturers had a phenomenal growth, thereby multiplying the jobs available for the Local's members. Wages went up, hours were shortened, and the New York electrical equipment prices scared, to the decided financial profit of local contractors and manufacturers." (325 U. S., at 800.)