American Steel Erectors, Inc. v. Local Union No. 7, International Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers

United States Court of Appeals
For the First Circuit
No. 07-1832

AMERICAN STEEL ERECTORS, INC., AJAX CONSTRUCTION CO.,
AMERICAN AERIAL SERVICES, INC., BEDFORD IRONWORKS, INC.,
AND D.F.M. INDUSTRIES, INC.,

Plaintiffs, Appellants,

v.

LOCAL UNION NO. 7, INTERNATIONAL ASSOCIATION OF BRIDGE,
STRUCTURAL, ORNAMENTAL & REINFORCING IRON WORKERS,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Richard G. Stearns, U.S. District Judge]

Before

Howard, Circuit Judge,
Stahl and Siler,* Circuit Judges.

Michael E. Avakian with whom Smetana & Avakian, Carol
Chandler, Geoffrey R. Bok, Stoneman, Chandler & Miller LLP, Thomas
M. Triplett, and Schwabe Williamson & Wyatt, P.C. were on brief for
appellants.
Paul F. Kelly with whom Indira Talwani, Segal, Rottman &
Coleman, and Mickey Long, were on brief for appellees.
John C. Scully and W. James Young on brief for amicus curiae
National Right to Work Legal Defense Foundation, Inc.
Maurice Baskin and Venable LLP on brief for amicus curiae
Associated Builders and Contractors, Inc.

August 1, 2008

*
Of the Sixth Circuit, sitting by designation.
 STAHL, Circuit Judge. Five non-union New England-based

steel erectors--Aerial Services, Inc.; D.F.M. Industries, Inc.;

American Steel Erectors, Inc.; Bedford Ironworks, Inc.; and Ajax

Construction, Inc. ("Plaintiffs" or "non-union contractors")1--

brought suit against Local Union No. 7 of the International

Association of Bridge, Structural, Ornamental & Reinforcing Iron

Workers ("Local 7" or "the Union")2, an iron workers union that has

a collective bargaining agreement ("CBA") with the Building Trades

Employers' Association of Boston and Eastern Massachusetts

("BTEA"). Plaintiffs' complaint alleged that Local 7 conspired

with the BTEA and assorted named and unnamed union contractors to

shut non-union contractors out of the structural steel industry in

the greater Boston area, in violation of federal antitrust and

labor laws. Plaintiffs also alleged various state torts and

violation of the Massachusetts Fair Business Practices Act, G.L. c.

93A. The district court dismissed the state law claims as pre-

empted by federal labor law, and, in a subsequent order, granted

1
A sixth plaintiff named on the complaint, Ronald Beauregard
d/b/a/ Independent Welding, voluntarily withdrew from the case on
February 13, 2006.
2
Charles Wright, Local 7's former President and current
business agent, and the Steel Erection and Ornamental Iron Industry
Advancement Fund, were also originally named as defendants.
Plaintiffs voluntarily dismissed the fund on March 29, 2005.
Wright filed a motion to dismiss, which the district court granted
on June 10, 2005, citing Montplaisir v. Leighton, 875 F.2d 1, 4
(1st Cir. 1989) ("The [Supreme] Court has long held that 'union
agents' are not personally liable to third parties for acts
performed on the union's behalf in the collective bargaining
process."). Plaintiffs do not appeal Wright's dismissal.

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Local 7's motion for summary judgment on the federal claims.

Plaintiffs now appeal both orders. We affirm the dismissal of the

state law claims, but reverse the district court's grant of summary

judgment on the federal labor and antitrust claims, and remand for

further proceedings consistent with this opinion.

I. Background

We recite the facts in the light most favorable to

Plaintiffs, the non-movants. Franceschi v. U.S. Dep't of Veterans

Affairs, 514 F.3d 81, 84 (1st Cir. 2008).

To understand the context from which Plaintiffs'

allegations arise, some explication of the relevant industry is

warranted. The structural steel industry is comprised of steel

fabricators, who manufacture steel products to meet design

specifications, and steel erectors, who assemble the fabricated

steel. General contractors requiring structural steel work

typically solicit bids for "fab and erect" packages. The packages

are submitted by fabricators, who solicit bids for the erection

work from steel erectors. In New England there are relatively few

fabricators (around twenty) and many erectors (over 200). As a

result, the competition for erection subcontracts in the Boston

area is fierce, and the general rule is that the lowest bidder will

be awarded the erection contract. That fierce competition gave

rise to the instant dispute.

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 Local 7 negotiates collective bargaining agreements with

contractors that employ iron workers in eastern Massachusetts, such

as steel erection contractors. Among other things, employers who

sign a CBA ("signatory contractors" or "union employers") agree to

pay Local 7 workers a union scale wage. Plaintiffs have not

entered into a CBA with Local 7.

Because of the labor-intensive nature of steel erection

work, labor expenditures account for about half of the cost.

Signatory contractors are obligated to pay laborers the minimum

wage set by the CBA. Non-union contractors, such as Plaintiffs,

are not bound to the CBA minimum wage and can negotiate their labor

costs. As a result, non-union erectors are often able to submit

lower bids for erection contracts.

The gravamen of Plaintiffs' complaint relates to a job

targeting program, the Market Recovery Program ("MRP"), which Local

7 created to mitigate the disadvantage imposed on signatory

contractors by union wages.3 Under the MRP, Local 7 "targets"

certain construction projects and offers a subsidy to signatory

3
Job targeting programs have become increasingly common since
the early 1980s, as the share of the construction workforce that is
unionized experienced steep declines. In an attempt to protect
their membership and aid union contractors in competing with open
shop outfits, various unions across the country have established
funds much like the MRP at issue here, which are financed by wage
deductions and used to subsidize the bids of unionized contractors
on targeted projects. See Herbert R. Northrup & Augustus T. White,
Subsidizing Contractors to Gain Employment: Construction Union 'Job
Targeting,' 17 Berkeley J. Emp. & Lab. L. 62, 64-68 (1996).

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contractors bidding on the project. The subsidy is intended to

offset the higher cost of union labor, thus enabling union

employers to bid competitively against non-union contractors. When

a signatory contractor is awarded the target project contract,

Local 7 executes an agreement with the contractor detailing the

terms and amount of the subsidy. The subsidy is taken from the

target fund (the "Fund"), which is financed with sums withheld by

union employers from Local 7 member paychecks. The job targeting

program was first established by member vote, and it was

incorporated into the Union by-laws in 1992.

In November 1993, Local 7 and the BTEA agreed to codify

the method of Fund contributions in their CBA. Section 9 of the

2000-2006 CBA provides that "the Working Dues Deduction of two

percent (2%) of the total package plus .85 for a Market Recovery

Program and .03 for the Political Action League will be withheld

out of net pay for each and every hour paid." The MRP monies are

paid directly to Local 7, which deposits them into the Fund. The

Fund then distributes wage subsidies on a case-by-case basis to

BTEA employers who successfully bid on targeted projects.

The plaintiff steel erection contractors bid on many of

the projects that Local 7 targeted. Plaintiffs allege a conspiracy

between the Union and union employers to monopolize the structural

steel industry in the Boston area and push non-union employers like

Plaintiffs out of the market. To this end, Plaintiffs claim that

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Local 7 used Fund subsidies and other tactics to ensure that

contracts were awarded to signatory contractors, rather than

Plaintiffs. Specifically, Plaintiffs assert that Local 7 used Fund

subsidies to assist signatory employers in underbidding Plaintiffs

on erection jobs. Plaintiffs also claim that Local 7 used

subsidies, threats, and picketing to pressure fabricators,

developers, owners, and general contractors (none of which directly

employ Local 7 workers) into breaching contracts with Plaintiffs

and replacing them with signatory contractors.

As a result of Local 7's efforts, Plaintiffs argue that

they were excluded from a large portion of the structural steel

market in the greater Boston area. For example, on one project,

Plaintiff D.F.M. submitted the lowest bid for the erection work to

a fabricator and was awarded the subcontract. Subsequently, the

fabricator breached its agreement with D.F.M. and gave the project

to a signatory contractor, who was the beneficiary of a subsidy

from Local 7. In another instance, D.F.M. was awarded a steel

erection contract for a new Fox25 TV station, but Local 7 picketed

the job site until the fabricator breached its agreement with

D.F.M. and hired a union contractor. Plaintiffs allege that, at

that job site, equipment belonging to D.F.M. was vandalized and

stolen after Local 7 began its picket. On yet another occasion,

according to Plaintiffs, the erection work on a Stop & Shop was

taken from Plaintiff Ajax due to a Fund subsidy. In addition, John

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J. Paulding, the president of fabricator C&I Steel, Inc., ("C&I")

submitted an affidavit averring that Local 7 agents had offered him

Fund money if he agreed to "work" with them and that, on a number

of projects, Local 7 threatened "problems" on the job if he did not

hire a signatory contractor. Paulding contended that "problems" is

well-known industry short-hand for project delays, increased

financial costs, and property destruction.

On December 2, 2004, Plaintiffs filed a complaint against

Local 7, its agent, Charles Wright, and the Steel Erection and

Ornamental Iron Industry Advancement Fund, alleging violations of

the Sherman Act and the Labor Management Relations Act ("LMRA"), as

well as the commission of various state torts. In particular,

Plaintiffs alleged a conspiracy between Local 7 and its signatory

contractors to pressure fabricators to hire only union employers,

through a combination of threats, disruptive behavior, and MRP

subsidies, in violation of § 1 and § 2 of the Sherman Act.4

Additionally, Plaintiffs argued that the MRP constituted an

unlawful restraint on trade because the Fund was the recipient of

deductions from paychecks of Local 7 members working on public

4
Under § 1 of the Sherman Act, a "contract, combination ... or
conspiracy in restraint of trade or commerce ... is ... illegal."
15 U.S.C. § 1. "The usual [§] 2 [Sherman Act] claim requires
monopoly or near monopoly power in some market, and a wrongful
exclusionary act designed to enhance such power in that market or
to achieve an improper advantage in another market."
Arroyo-Melecio v. Puerto Rican Am. Ins. Co., 398 F.3d 56, 66 (1st
Cir. 2005) (citing Town of Norwood v. New England Power Co., 202
F.3d 408, 420-21 (1st Cir. 2000)).

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projects, and subsidies were paid to signatory contractors working

on public projects, in violation of the Davis-Bacon Act and the

Massachusetts prevailing wage law.5 Plaintiffs also alleged that

Local 7's conduct violated a provision of LMRA, 29 U.S.C. § 187(a)

and (b), which prohibits unions from engaging in any unfair labor

practices as defined by § 8(b)(4) of the National Labor Relations

Act ("NLRA"). The state law claims included two counts of tortious

interference with advantageous contractual and economic relations

and one count of violation of the Massachusetts Fair Business

Practices Act, G.L. c. 93A.

Defendants Local 7 and Charles Wright moved to dismiss

the pendent state torts on February 1, 2005, arguing that the state

claims were pre-empted by federal labor law. Plaintiffs countered

5
Federally-funded construction projects are subject to the
Davis-Bacon Act, 40 U.S.C. §§ 3141-3144, which requires contractors
working on federally-funded projects to pay workers no less than
the prevailing wage, which is determined by the Secretary of Labor.
See Am. Steel Erectors, Inc. v. Local Union No. 7, Int'l Ass'n of
Bridge, Structural, Ornamental & Reinforcing Iron Workers, 480 F.
Supp. 2d 471, 474 (D. Mass. 2007). The Act also prohibits
employers from making any "subsequent deduction or rebate" from the
paychecks of employees working on federally-funded projects,
"regardless of any contractual relationship which may be alleged to
exist between the contractor or subcontractor and the laborers...."
40 U.S.C. § 3142(c)(1). The state of Massachusetts has enacted its
own prevailing wage statute, known as a "Little Davis-Bacon Act,"
which requires contractors working on state-subsidized projects to
pay no less than the Massachusetts prevailing wage. See G.L. c.
149, § 26. Plaintiffs' complaint does not allege a direct
violation of either the state or federal Davis-Bacon Act; rather,
their theory seems to be that by violating federal and state
prevailing wage laws in its administration of the MRP, Local 7 has
exposed itself to antitrust liability.

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that the claims were exempt from federal pre-emption. The district

court found that Plaintiffs' allegations clearly fell within

activity protected or prohibited by the NLRA because Plaintiffs had

alleged that the same conduct violated both the NLRA and state tort

laws. The court held that Plaintiffs' allegations could not

benefit from the relevant exceptions to pre-emption, as the factual

allegations of the complaint did not implicate conduct so related

to local responsibility that state regulation would be expected.

Rather, the court found that "[t]he gravamen of the Complaint is

that Local 7 use[d] economic weapons to coerce nonunion employers

into hiring union workers [which was] an allegation that [lay] at

the heart of the regulatory province of the NLRB." Am. Steel

Erectors, Inc. v. Local Union No. 7, Int'l Ass'n of Bridge,

Structural, Ornamental & Reinforcing Iron Workers, No. Civ. A.

04-12536RGS, 2006 WL 300422 at *4 (D. Mass. Feb. 6, 2006).

Accordingly, the district court dismissed the state claims as pre-

empted by federal law.

Local 7 filed an Amended Motion for Summary Judgment on

the remaining claims on August 1, 2006. The district court issued

a Memorandum and Order on March 30, 2007, finding that (1) the

conduct of Local 7 in administering the MRP was sheltered from

antitrust liability by the statutory labor exemption, and (2) the

conduct of Local 7 in using Fund subsidies to encourage the use of

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signatory contractors was not coercive conduct prohibited by the

LMRA.

Plaintiffs now appeal the district court's dismissal of

the state law claims and grant of summary judgment on the remaining

counts.

II. Discussion

We review the district court's grant of summary judgment

de novo, with all reasonable inferences resolved in favor of the

nonmoving party. Fenton v. John Hancock Mut. Life Ins. Co., 400

F.3d 83, 87 (1st Cir. 2005). Nonetheless, we must ignore

"conclusory allegations, improbable inferences, and unsupported

speculation." Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d

5, 8 (1st Cir. 1990). Summary judgment is appropriate where there

is no genuine issue of material fact, and the moving party is

entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c).

"A dispute is genuine if the evidence about the fact is such that

a reasonable jury could resolve the point in the favor of the

non-moving party. A fact is material if it carries with it the

potential to affect the outcome of the suit under the applicable

law." Sánchez v. Alvarado, 101 F.3d 223, 227 (1st Cir.

1996)(citations omitted).

Local 7 has raised the statutory and nonstatutory

exemptions from antitrust liability as affirmative defenses against

Plaintiffs' Sherman Act claims, and thus would bear the burden at

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trial of proving those defenses apply. To be entitled to summary

judgment, the party with the burden of proof must provide evidence

sufficient for the court to hold that no reasonable trier of fact

could find other than in its favor. See Torres Vargas v. Santiago

Cummings, 149 F.3d 29, 35-36 (1st Cir. 1998).

A. Antitrust Liability

We turn first to the district court's finding that

Local 7's conduct is protected from antitrust liability by virtue

of the statutory labor exemption.6

"[T]here is an inherent tension between national

antitrust policy, which seeks to maximize competition, and national

labor policy, which encourages cooperation among workers to improve

the conditions of employment." H.A. Artists & Assocs., Inc. v.

Actors' Equity Ass'n, 451 U.S. 704, 713 (1981). In an effort to

balance these competing interests, Congress passed the Clayton Act

and the Norris-LaGuardia Act, which immunize certain organized

labor conduct from antitrust liability. See id. at 713-714; see

also Connell Constr. Co., Inc. v. Plumbers & Steamfitters Local

Union No. 100, 421 U.S. 616, 621 (1975) ("The basic sources of

organized labor's exemption from federal antitrust laws are [§§] 6

and 20 of the Clayton Act, ... 15 U.S.C. [§] 17 and 29 U.S.C. [§]

52, and the Norris-LaGuardia Act, ... 29 U.S.C. [§§] 104, 105, and

6
We express no opinion regarding the substance of Plaintiffs'
underlying antitrust claims.

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113."). A review of Supreme Court jurisprudence on the dichotomy

between federal labor and federal antitrust law renders it pellucid

that antitrust laws must not be applied to vitiate congressional

intent to permit organized labor activity; the Court has noted that

"the [Sherman] Act is aimed primarily at combinations having

commercial objectives and is applied only to a very limited extent

to organizations, like labor unions, which normally have other

objectives." Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S.

207, 213 n.7 (1959).

Nonetheless, unions, particularly when acting in concert

with non-labor groups, are not given carte blanche to engage in

anticompetitive activities. As the Supreme Court has explained,

"[i]t would be a surprising thing if Congress, in order to prevent

a misapplication of [antitrust] legislation to labor unions, had

bestowed upon such unions complete and unreviewable authority to

aid business groups to frustrate its primary objective." Allen

Bradley Co. v. Local Union No. 3, Int'l Bhd. of Elec. Workers, 325

U.S. 797, 809-810 (1945).

To balance the competing federal policies supporting

organized labor on one hand and business competition on the other,

two labor exemptions from the antitrust laws have been developed,

one statutory and one nonstatutory. The Supreme Court articulated

the statutory exemption in United States v. Hutcheson, 312 U.S.

219, 231 (1941), determining that the Sherman, Clayton, and

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Norris-LaGuardia Acts must be read in harmony to effectuate

Congress's intent to free organized labor from certain constraints

imposed by the antitrust laws. Reading the three statutes

together, the Supreme Court held that union activity is exempt from

antitrust liability "so long as [the] union acts in its

self-interest and does not combine with non-labor groups."

Hutcheson, 312 U.S. at 232. Regarding the first prong of this

"two-prong test," our court has stated that "activities are in the

self-interest of a labor organization if they bear a reasonable

relationship to a legitimate union interest." Allied Int'l, Inc.

v. Int'l Longshoremen's Ass'n, 640 F.2d 1368, 1379 (1st Cir.

1981)(internal quotations omitted). The union conduct at issue

must satisfy both prongs of the Hutcheson test in order to qualify

for the statutory exemption. See USS-POSCO Industries v. Contra

Costa County Bldg. & Constr. Trades Council, 31 F.3d 800, 807 (9th

Cir. 1994)(citing H.A. Artists & Assocs., 451 U.S. at 704).

It soon became apparent, however, that much legitimate

collective bargaining activity, which Congress did not intend to be

quelled by the lumbering behemoth of antitrust liability,7

nevertheless fell outside the purview of the statutory exemption.

7
Local 7, quite correctly, points out that antitrust suits
ordinarily entail massive discovery and are expensive to defend.
See, e.g., Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1967
(2007)(raising the pleading requirements for an antitrust claim, in
light of the "unusually high cost of discovery in antitrust
cases").

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Such activity was vulnerable to antitrust attack because it

constituted a combination between labor unions and non-labor

employers. Accordingly, the Supreme Court recognized "that a

proper accommodation between the congressional policy favoring

collective bargaining under the NLRA and the congressional policy

favoring free competition in business markets requires that some

union-employer agreements be accorded a limited nonstatutory

exemption from antitrust sanctions." Connell Constr. Co, 421 U.S.

at 622. The nonstatutory exemption shields some restraints on

competition imposed through the bargaining process, where the

alleged anticompetitive conduct is anchored in the collective-

bargaining process, concerns only the parties to the collective

bargaining relationship, and relates to wages, hours, conditions of

employment, or other mandatory subjects of collective bargaining.

Brown v. Pro Football, Inc., 518 U.S. 231, 250 (1996); see also

California ex rel. Lockyer v. Safeway, Inc., 371 F. Supp. 2d 1179,

1185 n. 5 (C.D. Cal. 2005).

The district court entered judgment for Local 7 on

Plaintiffs' antitrust claims on the grounds that the Union's

job-targeting program was protected by the statutory labor

exemption. In reviewing this determination, we focus first on the

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second part of the Hutcheson test: whether, in administering the

MRP, Local 7 was acting in combination with a non-labor group.8

There is no serious dispute that Local 7, as an iron

workers union, is a "labor group," and that the signatory

contractors, as employers of the members of Local 7, are a "non-

labor group." See H. A. Artists & Assocs., Inc., 451 U.S. at

715-16, 717 n. 21 (stating that "[e]mployers almost always will be

a 'nonlabor group'"). The only question remaining, then, in

determining whether the disputed activity here fails the second

prong of Hutcheson, is whether the MRP constitutes a "combination"

between Local 7 and the signatory contractors.

Local 7 argues that the MRP is the brainchild of the

Union alone, and was established and incorporated into the Union's

by-laws over a year before the wage deduction provision was added

to its CBA with the BTEA. According to Local 7, only the Union

determines which jobs to target, and sets the amount of the wage

deductions and subsidies. Plaintiffs concede that the MRP was

established and administered unilaterally by the Union, but argue

that it was funded by deductions from member paychecks pursuant to

8
In arriving at its decision, the district court focused
almost entirely upon the MRP alone. Thus, for the purpose of
determining whether the statutory exemption applies, we need go no
further; if the MRP alone cannot be afforded the protection of the
statutory exemption, that settles the question. We are aware,
however, that Plaintiffs have alleged a smorgasbord of exclusionary
conduct including, but not limited to, the MRP. We will examine
the other allegations and their impact upon any labor exemption
available to Local 7 further below.

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a CBA between the Union and signatory contractors. Additionally,

Plaintiffs contend that Local 7 and signatory contractors

collaborated in identifying target projects, and that Fund

subsidies were doled out pursuant to ad-hoc agreements between the

Union and the signatory contractor successful in its bid on a

targeted project.

Upon examination of how the MRP operates, it is a thin

fiction to pretend that the program does not represent a

combination between labor and non-labor groups. The MRP may have

been initially conceived by Local 7 alone, but the method and

amount of wage deductions that entirely finance the Fund are

written into the CBA between Local 7 and the BTEA; the agreement

that $0.85/hr would be deducted from each employee's wages and

earmarked for the "Market Recovery Program" is codified within the

text of a negotiated CBA between the Union and a non-labor

employers' group. A collective bargaining agreement is by

definition a combination between a labor group and a non-labor

group. Brown, 518 U.S. at 237. Additionally, funds were

distributed to signatory contractors working on targeted projects

pursuant to separate agreements between Local 7 and those

contractors on a project-by-project basis. Thus with regard to

both the input and output of its funds, the MRP could not operate

except in tandem with signatory contractors. Furthermore, although

Local 7 disputes this, there is evidence in the record from which

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a rational fact-finder could reasonably infer that the Union and

signatory contractors worked together to identify and "win"

targeted projects away from non-union employers.9 Accordingly,

because the MRP was codified by and operated through agreements

between a labor group and a non-labor group, the statutory

exemption cannot apply.10 See Connell Constr. Co., 421 U.S. at 622

(statutory exemption does not apply to "concerted action or

agreements between unions and nonlabor parties"); see also Phoenix

Elec. Co. v. Nat'l Elec. Contractors Ass'n, 81 F.3d 858, 860 (9th

9
For example, there is a letter in the record from Griffin
Iron Works, Inc., a signatory contractor, to Local 7, which states
that "[t]hrough a concentrated effort with the New England District
Council and Griffin Iron Works, Cardi's Furniture's new store was
turned around from a non-union project to a union project," and
notes that "Local 7 ... agreed to pay $10,000.00 towards the New
England District Council's effort to turn this project around."
10
Local 7 misreads the law by muddling the question whether the
statutory exemption is applicable with cases where the nonstatutory
exemption was found inapplicable. The Union cites to Allen
Bradley, 325 U.S. at 809, and Connell, 421 U.S. at 623-24, for the
proposition that "the test requires evidence of a restraint of
trade entered into by non-labor groups." That is not the second
prong of the Hutcheson test for the statutory exemption, however;
rather, both of those cases dealt with the applicability of the
nonstatutory exemption. The Court already having found therein a
combination between labor and non-labor that removed the disputed
activity from the protection of the statutory exemption, it was
left to decide only whether the combination was engaged in activity
permitted by federal labor policy favoring collective bargaining
(and thus protected by the nonstatutory exemption), or activity
that constituted an illegal restraint on trade (and thus
unprotected by the nonstatutory exemption). It is disingenuous for
Local 7 to argue that the MRP has no impact on business competition
when its very purpose is to render union employers more
competitive. Whether the Fund constitutes an illegal restraint on
competition is a question to be taken up under our discussion of
the nonstatutory exemption, infra.

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Cir. 1996)(job targeting program established through collective

bargaining between electrical workers union and signatory

contractors association protected by nonstatutory exemption from

antitrust laws); Local Union 257, Int'l Bhd. of Elec. Workers v.

Sebastian Elec., 121 F.3d 1180, 1186-87 (8th Cir. 1997)(same).11

The fact of that combination takes the MRP out of the

purview of the statutory exemption but does not necessarily render

it vulnerable to antitrust liability. The nonstatutory exemption

was created for this express purpose; through it, courts recognized

that in order "to give effect to federal labor laws and policies

and to allow meaningful collective bargaining to take place, some

restraints on competition imposed through the bargaining process

must be shielded from antitrust sanctions." Brown, 518 U.S. at

237. Because the district court chose not to make a finding as to

the applicability of the nonstatutory exemption to this case, it is

left to us to determine whether Local 7 adduced sufficient evidence

to prove its entitlement to that exemption or whether we must

remand the question for further development of the record. See

Hodgens v. Gen. Dynamics Corp., 144 F.3d 151, 173 (1st Cir.

1998)(holding that this court may affirm a grant of summary

11
Because the conduct at issue need fail only one prong of the
Hutcheson test in order to remove it from the protection of the
statutory exemption, we find it unnecessary to review the district
court's determination that Local 7 was acting in its own legitimate
self-interest.

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judgment "on any independently sufficient ground made manifest by

the record").

The case for the applicability of the nonstatutory

exemption is strongest where the alleged restraint operates

primarily in the labor market and has only tangential effects on

the business market. Clarett v. Nat'l Football League, 369 F.3d

124, 134 n. 14 (2d Cir. 2004); see also California ex rel. Lockyer,

371 F. Supp. 2d at 1188 n.8. Conversely, the Supreme Court has

generally refused to exempt union-employer agreements "that were

alleged to have injured or eliminated a competitor in the

employer's business or product market ... in spite of any resulting

detriment to the labor policies favoring collective bargaining."

Clarett, 369 F.3d at 131-33 (providing overview of Supreme Court's

nonstatutory exemption jurisprudence). As the Court has explained,

[t]he nonstatutory exemption has its source in
the strong labor policy favoring the
association of employees to eliminate
competition over wages and working conditions
…. Labor policy clearly does not require,
however, that a union have freedom to impose
direct restraints on competition among those
who employ its members. Thus, while the
statutory exemption allows unions to
accomplish some restraints by acting
unilaterally … the nonstatutory exemption
offers no similar protection when a union and
a nonlabor party agree to restrain competition
in a business market.

Connell Constr. Co., 421 U.S. at 622-23 (internal citations

omitted). The Court most recently found the nonstatutory exemption

applicable where the disputed "conduct took place during and

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immediately after a collective-bargaining negotiation. It grew out

of, and was directly related to, the lawful operation of the

bargaining process. It involved a matter that the parties were

required to negotiate collectively. And it concerned only the

parties to the collective-bargaining relationship." Brown, 518

U.S. at 250.

Other circuits have found that job targeting programs,

similar in structure and implementation to the program at issue

here, do fall within the bailiwick of the nonstatutory exemption.

See Phoenix Elec. Co., 81 F.3d at 863 ("A subsidy program that

targets some jobs for more competitive wage components of signatory

union subcontractor bids, and does not bar nonunion bidders from

bidding on the same jobs, is in harmony with the policies of both

the labor and antitrust laws."); Local Union 257, 121 F.3d at 1186-

87 (holding that job targeting program was protected by

nonstatutory exemption because "the Target Fund primarily affects

only the parties to the collective bargaining relationship, [] the

wage reimbursement arrangement at issue concerns a mandatory

subject of collective bargaining (i.e., wages), and [] the

arrangement is the product of bona fide arm's-length bargaining").

But Plaintiffs' allegations do not relate only to the MRP; rather,

they paint the MRP as only one part--if the central part--of a

wider conspiracy between Local 7, its signatory contractors, and

the general contractors and steel fabricators from which they

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solicit steel erection work, to shut open-shop outfits such as

Plaintiffs out of the steel erection market in the greater Boston

area. We must consider the entirety of the alleged activity when

determining the applicability of the nonstatutory exemption,

casting aside only those allegations that amount to no more than

"conclusory allegations" or "unsupported speculation." See

Medina-Munoz, 896 F.2d at 8.12

We find there are sufficient genuinely disputed issues of

material fact here to render summary judgment inappropriate.

Plaintiffs have alleged concerted union-employer action that

extended beyond merely the wage deduction provided for in the CBA

and the job-by-job subsidy agreements, to collaboration in the

identification and acquisition of target projects. Local 7 has

12
In its order granting summary judgment to Local 7 on
Plaintiffs' federal law claims, the district court appeared to
almost entirely ignore these other allegations and focused solely
on the MRP. The court did state, within the discussion of
Plaintiffs' LMRA claim, that "[t]here is nothing in the record to
support plaintiffs' assertion that the Union resorted to coercive
restraints or tactics," perhaps indicating that it was refusing to
credit Plaintiffs' other allegations. However, with only that
cryptic remark to guide us, we remain somewhat mystified as to why
the district court passed over these allegations entirely in its
discussion of Plaintiffs' antitrust claims. Whether we are
entitled to credit these allegations is certainly material to our
legal analysis: if Plaintiffs' allegations are taken as true, they
would appear to nudge this case away from an allowable restraint
arrived at through collective bargaining, as job targeting programs
alone have been found to be, see, e.g., Local Union 257, 121 F.3d
at 1186-87, and towards the type of illegal restraint on business
competition considered verboten by the Supreme Court in cases such
as United Mine Workers of America v. Pennington, 381 U.S. 657
(1965) and Connell.

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steadfastly maintained, however, that target projects are

identified solely by the Union and then announced to signatory

contractors simultaneously via a "blast fax." Furthermore,

Plaintiffs have argued that signatory contractors and the

fabricators or general contractors who employ them are complicit in

the union's efforts to shut non-union employers out of the market,

pointing to evidence that fabricators broke contracts with non-

union employers and replaced them with union employers in response

to threats and/or monetary inducements by Local 7. The Union

counters that Plaintiffs have proffered no reliable evidence of

exclusionary agreements between Local 7 and fabricators or general

contractors, citing to deposition testimony by Plaintiffs'

representatives admitting no general or specific knowledge of any

such agreements. The district court did not squarely address these

disputes, and standing as we do one step removed from the record,

we are not in a position to resolve them. Accordingly, we reverse

the district court's grant of summary judgment to defendant Local

7 on Plaintiffs' antitrust claims. Cf. Ramirez-Carlo v. United

States, 496 F.3d 41, 46 (1st Cir. 2007)(grant of summary judgment

will be reversed if "the evidence on record is sufficiently

open-ended to permit a rational fact finder to resolve the

[liability] issue in favor of either side."). We remand for

further fact-finding with regard to the extent of the collaboration

between Local 7, signatory contractors, and the construction

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companies that hire them, to determine whether Local 7 is protected

from antitrust liability by the nonstatutory exemption.

We make one final observation regarding Plaintiffs'

antitrust claims. Much argument has been devoted throughout this

case to the question whether the MRP violates the Davis-Bacon Act

and the comparable Massachusetts prevailing wage statute. It seems

apparent from the record that the MRP is funded in part by

deductions from union members working on Davis-Bacon projects, and

that signatory contractors bidding on Davis-Bacon projects have

availed themselves of subsidies from the Fund. Thus, the MRP may

very well violate the Davis-Bacon Act; a string of recent circuit

decisions seems to indicate as much. See generally Can-Am

Plumbing, Inc. v. Nat'l Labor Relations Bd., 321 F.3d 145 (D.C.

Cir. 2003); Int'l Bhd. of Elec. Workers v. Brock, 68 F.3d 1194 (9th

Cir. 1995); Bldg. & Constr. Trades Dep't v. Reich, 40 F.3d 1275

(D.C. Cir. 1994). But Plaintiffs have alleged no cause of action

under the Davis-Bacon Act, and, in any case, most likely would not

have standing to do so. Cf. United States v. Binghamton Constr.

Co., 347 U.S. 171, 177 (1954)("The language of the [Davis-Bacon]

Act and its legislative history plainly show that it was not

enacted to benefit contractors, but rather to protect their

employees from substandard earnings by fixing a floor under wages

on Government projects.").

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 Plaintiffs, however, have made an acrobatic attempt to

shoehorn a possible Davis-Bacon violation into their antitrust

claims, arguing that Local 7's putative Davis-Bacon violation is

relevant to the first prong of the Hutcheson analysis. Plaintiffs

contend that the MRP could not be characterized as within the

Union's legitimate self-interest if it were administered in

violation of prevailing wage statutes. Because we need not address

the first prong of Hutcheson, we do not reach this issue. We note

that Reich and its progeny do not appear to stand for the

proposition that a Davis-Bacon violation exposes an otherwise

exempt job targeting program to antitrust liability. Nevertheless,

it may be that it is not within the interest of federal labor

policy to protect the unlawful provision of subsidies to signatory

contractors on prevailing wage jobs.13

B. LMRA Claim

In addition to their antitrust claims, Plaintiffs allege

a violation of § 303 of the LMRA, 29 U.S.C. § 187. "Section 303(a)

[of the LMRA], 29 U.S.C. § 187(a), makes it unlawful for a labor

organization to engage in conduct defined as an unfair labor

13
Because the district court issued its ruling on the antitrust
claims solely on the basis of the statutory exemption, neither
party on appeal has sufficiently raised or adequately briefed the
question whether a Davis-Bacon violation could render union
activity ineligible for the nonstatutory exemption. We thus
decline to opine on that question at this time. See United States
v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990)("[I]ssues adverted to in
a perfunctory manner [on appeal], unaccompanied by some effort at
developed argumentation, are deemed waived.").

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practice under § 8(b)(4)of the NLRA." Summit Valley Indus., Inc.

v. Local 112, United Bhd. of Carpenters & Joiners of Am., 456 U.S.

717, 722 (1982). Under § 8(b)(4)(ii), it is an unfair labor

practice for a union to threaten, coerce, or restrain an employer

with an object of forcing the employer (A) to join any labor or

employer organization or enter into an agreement prohibited by §

8(e) of the NLRA,14 or (B) to cease doing business with another

party. 29 U.S.C. § 158(b)(4)(ii)(A)&(B); Intercity Maint. Co. v.

Local 254, Serv. Employees Int'l Union, 241 F.3d 82, 87 (1st Cir.

2001).

The district court refused to read Plaintiffs' complaint

to allege a § 8(b)(4)(ii)(B) "cease doing business" violation. It

seems to us that the complaint clearly does allege such a

violation; Paragraph 177 of the complaint states:

Since on or about July 1999 Local 7 has
violated § 8(b)(4)(ii)(A) and (B) of the Labor
Act, 29 U.S.C. §§ 158(b)(4)(ii)(A) & (B), by
engaging in threats of picketing and other
restraint and coercion against Plaintiffs and
other contractors to obtain agreements
prohibited by § 8(e) ... and where an object
is to cause Non-Labor businesses to ... cease
doing business with Plaintiffs.

14
Section 8(e), 29 U.S.C. § 158(e), provides in relevant part:
"It shall be an unfair labor practice 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 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 ...."

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However, Plaintiffs' arguments before the district court and on

appeal focused almost entirely on unlawful § 8(e) agreements, which

implies a violation of § 8(b)(4)(ii)(A) only. We recognize that

the statute is not without its complexities. There is, however, a

difference between a claim brought under § 8(b)(4)(ii)(A) and a

claim brought under § 8(b)(4)(ii)(B), which is apparent from the

plain language of the statute: a successful § 8(b)(4)(ii)(A) claim

requires proof that a union is acting to coerce employers into an

unlawful agreement to cease doing business with another party,

while a successful § 8(b)(4)(ii)(B) claim requires proof that the

union's coercive tactics are intended to force an employer to cease

doing business with another party, regardless of any agreement.15

In their appellate papers, Plaintiffs somewhat

confusingly assert that their § 8(b)(4)(ii)(B) claim was

acknowledged by the district court, although that court plainly

stated that it did "not read the Complaint, despite its prolixity,

15
The unlawful agreements at issue, as defined by § 8(e) of the
NLRA, are commonly referred to as "hot cargo agreements." The
statute was intended to bar "an employer and union from entering
into an agreement under which the employer ceases handling or
otherwise dealing with the products of other employers." R.M.
Perlman, Inc. v. New York Coat, Suit, Dresses, Rainwear & Allied
Workers' Union Local 89-22-1, 33 F.3d 145, 151 (2d Cir. 1994).
Section 8(b)(4)(ii)(B), on the other hand, targets union activity
such as strikes and secondary boycotts, where an object of such
activity is to "'force or require [the striking workers'] employer
or another person to cease doing business with a third party.'"
Allied Int'l, 640 F.2d at 1374 (quoting Local 1976, United Bhd. of
Carpenters v. N.L.R.B., 357 U.S. 93, 98 (1958)).

-26-
to allege an alternative 'cease doing business' violation of the

LMRA." Am. Steel Erectors, Inc., 480 F. Supp. 2d at 479 n. 16.

But then Plaintiffs themselves seem to ignore any § 8(b)(4)(ii)(B)

claim they may have had, characterizing the LMRA issue on appeal as

"[w]hether the district court erred in holding, as a matter of law,

that contract breaches and terminations obtained by Local 7 from

neutral fabricators and general contractors through threats,

coercion, and restraints were permissible under 29 U.S.C. §

158(e)." If Plaintiffs cannot sort out their allegations and

develop their arguments sufficiently, it is not for us to do so for

them; accordingly, we consider the § 8(b)(4)(ii)(B) issue waived.

See United States v. Slade, 980 F.2d 27, 31 (1st Cir. 1992)("[A]

party is not at liberty to articulate specific arguments for the

first time on appeal simply because the general issue was before

the district court."); see also Zannino, 895 F.2d at 17.

We thus turn our attention to whether summary judgment

was warranted on Plaintiffs' § 8(b)(4)(ii)(A) claim, regarding

Local 7's alleged use of coercive tactics to pressure neutral

employers into unlawful § 8(e) agreements. The Supreme Court has

held that

[T]he relevant inquiry under ... 8(e) is
whether a union's activity is primary or
secondary--that is, whether the union's
efforts are directed at its own employer on a
topic affecting employees' wages, hours, or
working conditions that the employer can
control, or, instead, are directed at
affecting the business relations of neutral

-27-
 employers and are 'tactically calculated' to
achieve union objectives outside the primary
employer-employee relationship.

N.L.R.B. v. Int'l Longshoremen's Ass'n, 473 U.S. 61, 81 (1985).

However, an agreement between an employer and a union representing

that employer's employees is not prohibited by § 8(e), even if it

may impact the business of a secondary party, as long as the

union's objective is the preservation of work for those employees.

See Nat'l Woodwork Mfrs. Ass'n v. N.L.R.B., 386 U.S. 612, 645-46

(1967)(agreement within negotiated CBA between carpenters' union

and general contractor providing that carpenters would not handle

prefabricated doors did not violate § 8(e), even though

manufacturer of prefabricated doors lost contractor's business as

a result).

Plaintiffs contend Local 7 used coercive tactics--

including picketing, threats, and the lure of lucre--to pressure

fabricators and general contractors (i.e., "neutral employers" who

do not themselves hire Local 7 members or have a collective

bargaining relationship with Local 7) into agreements to hire only

union erectors. As evidence, Plaintiffs point to substantially the

same factual allegations underlying their antitrust claims,

discussed above. Therefore, the same factual disputes remain. For

example, Local 7 argues that there is no evidence the Union entered

into generalized agreements with fabricators for across-the-board

exclusion of all non-union employers from jobs in the relevant

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market. This argument both mischaracterizes Plaintiffs' factual

allegations and misapprehends the law. There is no requirement

that an agreement need be of a generalized exclusionary nature to

fall afoul of § 8(e); rather, the use of coercive measures by a

union to pressure a single neutral employer into a single agreement

to cease doing business with a single non-union employer, or the

application of such measures on a project-by-project basis (both of

which Plaintiffs have alleged), would suffice. See, e.g., N.L.R.B.

v. Bangor Bldg. Trades Council, 278 F.2d 287, 289-90 (1st Cir.

1960)(union violated NLRA by picketing job site to pressure

contractor not to use non-union subcontractor). It is also worth

noting that the law does not require a written contract; the

statute specifically references "any contract or agreement, express

or implied." 29 U.S.C. § 158(e)(emphasis added).

In evaluating Plaintiffs' § 8(b)(4)(ii)(A) claim, the

district court again focused only on the MRP and did not address

Plaintiffs' other allegations. Viewing the facts in the light most

favorable to Plaintiffs, as we must, we find that there are genuine

issues of material fact with regard to the nature and extent of

Local 7's allegedly coercive tactics, and whether Local 7 through

use of those tactics pressured neutral employers into agreements to

refrain from using non-union contractors in violation of § 8(e).

We therefore reverse the district court's grant of summary judgment

-29-
to defendant Local 7 on Plaintiffs' LMRA claim, and remand for

further proceedings.

C. State Law Claims

We review de novo the district court's dismissal of

Plaintiffs' state law claims, accepting as true all well-pleaded

facts and drawing all reasonable inferences in Plaintiffs' favor.

See Santos-Rodriguez v. Doral Mortgage Corp., 485 F.3d 12, 15 (1st

Cir. 2007).

Federal law preempts state law (1) when Congress has

expressly so provided, (2) when Congress intends federal law to

"occupy the field" and (3) to the extent that state law conflicts

with any federal statute. See Crosby v. Nat'l Foreign Trade

Council, 530 U.S. 363, 372-73 (2000)(internal citations omitted).

"[T]he NLRA itself contains no express pre-emption

provision," but "Congress implicitly mandated two types of pre-

emption as necessary to implement federal labor policy." Chamber

of Commerce of U.S. v. Brown, 128 S.Ct. 2408, 2412 (2008). The

first, familiarly known as "Garmon pre-emption," prohibits states

from regulating activities that are arguably protected or

prohibited by § 7 and § 8 of the NLRA.16 See San Diego Bldg. Trades

16
Section 7 of the NLRA protects employees' right "to
self-organization, to form, join, or assist labor organizations, to
bargain collectively through representatives of their own choosing,
and to engage in other concerted activities for the purpose of
collective bargaining or other mutual aid or protection." 29
U.S.C. § 157. Section 8 prohibits employers and employees
respectively from engaging in certain "unfair labor practices." 29

-30-
Council v. Garmon, 359 U.S. 236, 244 (1959); see also Bldg. &

Constr. Trades Council of Metro. Dist. v. Associated Builders &

Contractors of Mass./R.I., Inc., 507 U.S. 218, 224-25 (1993). The

second, "Machinists pre-emption," is a recognition of Congress's

intention to occupy the field of labor dispute regulation,

prohibiting state regulation of areas outside the four corners of

the NLRA if Congress intended them "to be controlled by the free

play of economic forces." Machinists v. Wis. Employment Relations

Comm'n, 427 U.S. 132, 140 (1976)(citation omitted).

There are three exceptions to federal labor law pre-

emption. Tamburello v. Comm-Tract Corp., 67 F.3d 973, 977 (1st

Cir. 1995). "The first is where Congress has expressly carved out

an exception to the [National Labor Relations Board]'s primary

jurisdiction." Id. Second, the NLRA does not pre-empt state law

"when the regulated activity touches 'interests so deeply rooted in

local feeling and responsibility that, in the absence of compelling

congressional direction,' courts 'could not infer that Congress had

deprived the States of the power to act.'" Id. (citing Sears,

Roebuck & Co. v. San Diego County Dist. Council of Carpenters, 436

U.S. 180, 195 (1978)). And the final exception applies "if the

regulated activity is merely a peripheral or collateral concern of

the labor laws." Id.

U.S.C. § 158.

-31-
 We agree with the district court's pre-emption analysis,

and we need not rehash it here at length. See Talbott v. C.R.

Bard, Inc., 63 F.3d 25, 30-31 (1st Cir. 1995)("where [a] district

judge produces a well-reasoned opinion that reaches the correct

result, a reviewing court should not write at length merely to put

matters in its own words")(citing In re San Juan Dupont Plaza Hotel

Fire Litig., 989 F.2d 36, 38 (1st Cir. 1993)). Plaintiffs' state

law claims incorporate by reference all the factual allegations

that form the basis for Plaintiffs' federal claims, and assert no

others. Plaintiffs have thus effectively conceded that the same

conduct that gives rise to their state claims is conduct "arguably

protected or prohibited" by federal labor law; accordingly,

Plaintiffs' state law claims are pre-empted as per Garmon.

There being no applicable express carve out from federal

jurisdiction, Plaintiffs' state law claims could only be saved from

pre-emption by the second or third exception delineated above.

However, Plaintiffs have not pled allegations that sufficiently

implicate interests "so deeply rooted in local feeling and

responsibility" or of "peripheral or collateral concern" to federal

labor laws so as to except them from federal pre-emption.17 Local

17
Plaintiffs also argue that the district court's decision is
inconsistent with case law finding no pre-emption of state
prevailing wage statutes, but Plaintiffs' complaint asserted no
claim under the Massachusetts prevailing wage statute and
Plaintiffs did not directly advance that argument below in their
opposition to defendants' motion to dismiss. We therefore will not
consider it here. See McCoy v. Mass. Instit. of Tech., 950 F.2d

-32-
7's conduct may be prohibited rather than protected by the NLRA,

but either way it is well within the regulatory purview of federal

labor law rather than that of state police power. See Garmon, 359

U.S. at 244 ("When it is clear or may fairly be assumed that the

activities which a State purports to regulate are protected by [§]

7 of the [NLRA], or constitute an unfair labor practice under [§]

8, due regard for the federal enactment requires that state

jurisdiction must yield. . . . Nor has it mattered whether the

States have acted through laws of broad general application rather

than laws specifically directed towards the governance of

industrial relations."). We affirm the district court's dismissal

of Plaintiffs' state law claims as pre-empted by federal labor law.

III. Conclusion

For the reasons stated above, we affirm the dismissal of

Plaintiffs' state law claims, but reverse the district court's

summary judgment order and remand for further proceedings

consistent with this opinion. Each party should bear its own

costs.

13, 22 (1st Cir. 1991)("It is hornbook law that theories not raised
squarely in the district court cannot be surfaced for the first
time on appeal.").

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