Nonunion contractors recover damages against labor union

A small group of open shop steel erectors have prevailed against an ironworkers union in a federal court case with a tortured history. The 1st Circuit Court of Appeal has recently confirmed a jury verdict, awarding damages to the contractors for the union’s violations of the Labor Management Relations Act (LMRA). The case is Amer. Steel Erectors v. Local Union No. 7, 2016 U.S. App. LEXIS 3386 (Feb. 25, 2016), available here.

The steel erection companies sued the labor union, claiming damages arising from unfair labor practices. The contractors presented evidence of several projects. On each project the union applied pressure to the owner, prime contractor and/or first-tier sub, for the purpose of forcing each owner/contractor/sub to dump the open shop erector and proceed with a union erector. Testimony covered instances where an open shop erector had been awarded the work, only to have it pulled away at the last minute or even after the open shop contractor had mobilized. The union defended on the basis that it had done nothing more than lobby or picket as permitted under the LMRA. But the jury, under instructions from the judge as to actions that are allowed under the LMRA, still awarded the open shop contractors about $280,000 total on four projects.

On appeal, the union continued to argue that its members were simply exercising rights under the LMRA. The Court of Appeal reiterated some of the underlying facts in its response –

Despite the narrow prism of liability available to the plaintiffs as a result of our holding in [a prior appeal in this case] and the district court's jury instructions, we have viewed the record as a whole and hold that there was sufficient evidence to justify the jury's findings. After the [open shop] plaintiffs entered into a subcontract with each fabricator at each site, Local 7 targeted the mid-size to larger project in order to seize the work from the prominent nonunion erectors. While Local 7 had pressured fabricators before, on these four occasions the fabricators responded (albeit reluctantly) to the site troubles by agreeing to cancel Ajax's and DFM's subcontracts and to hire replacement union signatories. None of the fabricators took this action for otherwise legitimate business reasons, such as saving money or saving the job site from deficient or untimely performance by Ajax or DFM. In fact, the replacement subcontracts cost more than the cancelled ones, sometimes significantly so. And, on each occasion, the fabricator took the counterintuitive action almost immediately after the union had stirred up trouble on the site, and in the midst of kickoff, when any potential work delays threaten to be a particularly expensive proposition. The jury rationally could have seen these circumstances as signifying a tacit agreement, attributable to the coercion itself, between each fabricator and Local 7 for a specific course of action: oust the targeted nonunion erector and hire a union signatory replacement for the benefit of Local 7 in order to vitiate union obstacles that had been causing project interference. . .

Local 7 protests this reading of the record and contends that it was the general contractors or owners, rather than Local 7, who sought and secured agreements with each fabricator to cease doing business with either Ajax or DFM at the four construction projects. No doubt there is evidence in the record that would also support a jury finding that the fabricators principally acted at the behest of the site owners and general contractors. And perhaps we, sitting as a factfinder in the first instance, might have come to the same conclusion that Local 7 implores us to arrive at on appeal. But that is not our job.

Here, the evidence is quite sufficient to infer that Local 7 took a multi-pronged approach and applied pressure at multiple points to achieve the maximum intended effect. The fact that direct evidence may show that pressure was applied to one party does not somehow negate circumstantial evidence that shows that pressure was applied to another party. The task of weighing these pressures and considering whether these facts, in the aggregate, satisfied the jury instructions provided by the court falls within the province of the jury, and we will only upset that determination if no reasonable jury could have arrived at the same conclusion.

Thus, a labor union’s liability to open shop steel erectors has been upheld on appeal, as a violation of the LMRA. Further appeal to the U.S. Supreme Court may be filed, but it is not likely that the high court would entertain a case that the Court of Appeal has affirmed based on factual findings.