Los Angeles Building & Construction Trades Council, AFL-CIO

National Labor Relations Board - Board Decisions

May 13, 1975

217 N.L.R.B. 946 (N.L.R.B. 1975)

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.