Local Union 257, International Brotherhood of Electrical Workers v. Sebastian Electric , 121 F.3d 1180 ( 1997 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
____________
No. 96-1113
____________
Local Union 257, International *
Brotherhood of Electrical *
Workers, AFL-CIO, *
*
Plaintiff-Appellee, *
*
v. *
*
Sebastian Electric; Mike Barnes *
Electric; Rich-Ken Electric; *
Amick Electric, *
*
Defendants-Appellants. * Appeal from the United States
* District Court for the
National Electrical Contractors * Western District of Missouri
Association, St. Louis Chapter *
*
Counter Defendant - Appellee. *
*
-------------------------- *
*
Local Union 257, International *
Brotherhood of Electrical *
Workers, AFL-CIO, *
*
Plaintiff-Appellee, *
*
v. *
*
Mike Barnes Electric, *
*
Defendant-Appellant. *
*
National Electrical Contractors *
Association, St. Louis Chapter, *
*
Counter Defendant-Appellee. *
*
---------------------------- *
*
Local Union 257, International *
Brotherhood of Electrical *
Workers, AFL-CIO, *
*
Plaintiff-Appellee, *
*
v. *
*
Rich-Ken Electric, *
*
Defendant-Appellant. *
*
National Electrical Contractors *
Association, St. Louis Chapter, *
*
Counter Defendant-Appellee. *
*
----------------------------- *
*
Local Union 257, International *
Brotherhood of Electrical *
Workers, AFL-CIO, *
*
Plaintiff-Appellee, *
*
v. *
*
Amick Barnes Electric, *
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*
Defendant-Appellant. *
*
National Electrical Contractors *
Association, St. Louis Chapter, *
*
Counter Defendant-Appellee. *
____________
Submitted: November 20, 1996
Filed: August 4, 1997
____________
Before McMILLIAN, Circuit Judge, HENLEY, Senior Circuit Judge, and BOGUE,*
District Judge.
____________
McMILLIAN, Circuit Judge.
This appeal arises out of four consolidated civil actions. Amick Electric, Mike
Barnes Electric, Rich-Ken Electric, and Sebastian Electric (collectively referred to as
"defendants" or "the defendant electrical companies") together appeal from a final order
entered in the United States District Court1 for the Western District of Missouri
granting summary judgment in favor of the plaintiff below, Local Union No. 257 of the
International Brotherhood of Electrical Workers (Local 257), and dismissing
*The Honorable Andrew W. Bogue, United States District Judge
for the District of South Dakota, sitting by designation.
1
The Honorable Scott O. Wright, United States District Judge for the Western
District of Missouri.
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defendants' counterclaim/cross-claim against Local 257 and the St. Louis Chapter of
the National Electrical Contractors Association (St. Louis-NECA). Local Union 257,
IBEW v. Amick Elec., Nos. 94-4331, 94-4332, 94-4333, 94-4339 (W.D. Mo. Dec. 11,
1995) (hereinafter "slip op."). For reversal, defendants argue that the district court
erred in granting summary judgment against defendants on (1) Local 257's claim for
enforcement of arbitration awards issued by the Council on Industrial Relations (CIR)
and (2) defendants' counterclaim/cross-claim alleging that Local 257 and St. Louis-
NECA had violated various federal antitrust laws. For the reasons hereinafter
discussed, we affirm.
Background
The following facts are generally undisputed. Local 257, a labor union for
electrical workers, has members throughout central Missouri and engages in collective
bargaining with employers who hire electrical workers. St. Louis-NECA is a multi-
employer association which negotiates collective bargaining agreements on behalf of
electrical contractors. Defendants are small owner-operated electrical companies with
few or no employees. During the years 1989 through 1991, defendants each executed
a "letter of assent" setting forth an agreement between the signatory electrical company
and Local 257 in which the electrical company expressly authorized St. Louis-NECA
to represent the company "for all matters contained in or pertaining to the current and
any subsequent approved" collective bargaining agreement between St. Louis-NECA
and Local 257 covering residential electrical work; during the same period of time,
three of the four defendants executed a similar letter of assent authorizing St. Louis-
NECA to be their collective bargaining representative with respect to any labor
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agreement covering "inside" work.2 See Brief for Appellee Local 257, Addendum at
1-7 (letters of assent signed by defendants). While the letters of assent were in effect,
St. Louis-NECA entered into residential and inside collective bargaining agreements
with Local 257 for the period of March 1, 1992, through February 28, 1994. Article
1, as identically set forth in each of the two collective bargaining agreements, contained
the following "interest arbitration" clause3:
Unresolved issues in negotiations that remain on the 20th
of the month preceding the next regular meeting of the Council on
Industrial Relations, may be submitted jointly or unilaterally by
the parties to this Agreement to the [CIR] for adjudication prior
to the anniversary date of the Agreement.
Slip op. at 4 (quoting collective bargaining agreements). The CIR is a joint industry
and union arbitration panel.
The letters of assent signed by defendants contained the following provision
concerning termination of the collective bargaining authorization granted to St. Louis-
NECA: "It [the authorization] shall remain in effect until terminated by the undersigned
employer giving written notice to [St. Louis-NECA] and to [Local 257] at least one
2
"Inside" work includes work on commercial and industrial properties and
residential buildings larger than twenty-four units.
3
"An interest arbitration clause is one in which the parties agree to arbitrate
disputes over the terms of a new collective bargaining agreement in the event of a
deadlock." Sheet Metal Workers' Int'l Ass'n, Local 14 v. Aldrich Air Conditioning,
Inc., 717 F.2d 456, 456 (8th Cir. 1983) (Aldrich Air Conditioning).
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hundred fifty (150) days prior to the then current anniversary date of the applicable
approved labor agreement."
By September 21 or 22, 1993, each of the defendant electrical companies had
notified St. Louis-NECA of its intent to terminate its respective letter or letters of assent
authorizing St. Louis-NECA to bargain on the company's behalf4; by September 22,
1993, each defendant had sent Local 257 notice to terminate its respective collective
bargaining agreement or agreements. On November 23, 1993, Local 257 notified each
defendant that it intended to negotiate successor collective bargaining agreements.
Defendants refused to negotiate successor bargaining agreements with Local 257. On
January 5, 1994, Local 257 notified each defendant that it planned to submit the issue
concerning successor collective bargaining agreements to the CIR, pursuant to the
interest arbitration clause in the 1992-1994 agreements. Thereafter, Local 257
submitted the matter to arbitration, and, on February 16, 1994, the CIR issued
arbitration awards which, in essence, directed the parties to sign and immediately
implement successor collective bargaining agreements for the period of March 1, 1994,
to February 29, 1996.5
In the meantime, on January 14, 1994, Local 257 filed unfair labor practice
charges with the National Labor Relations Board (NLRB) against each of the
4
This was timely under the letters of assent because it was more than 150 days
before the anniversary date of the applicable labor agreement.
5
Consistent with this court's holding in Aldrich Air Conditioning, 717 F.2d at
458-59, the successor collective bargaining agreements which the parties were ordered
to enter into did not contain interest arbitration clauses.
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defendants. The regional director for the NLRB declined to issue complaints. Local
257 appealed the regional director's decision with respect to the charges against Amick
Electric, and the general counsel for the NLRB affirmed the decision to deny relief. See
Separate Appendix of Appellants at 359 (letter from general counsel of NLRB to Local
257).
On August 5, 1994, Local 257 filed four civil actions in federal district court.
Local 257 sought, pursuant to § 301 of the Labor Management Relations Act (LMRA),
29 U.S.C. § 185, enforcement of the CIR arbitration awards issued against defendants.
The district court consolidated the actions, and defendants together filed counterclaims
and cross-claims (Counts I, II, and III) against Local 257 and St. Louis-NECA. In
Count I, defendants sought a declaration that the CIR decisions are unenforceable. In
Count II, defendants alleged that Local 257 had violated the LMRA. In Count III,
defendants claimed that Local 257 and St. Louis-NECA had violated antitrust provisions
of the Sherman Act, 15 U.S.C. § 1 et seq., § 302 of the LMRA, 29 U.S.C. § 186, and
the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962, by
participating in the so-called "Target Fund" -- a fund, financed by Local 257, which
provides partial payment of wages paid to members of Local 257 in circumstances
where the employer has entered into a collective bargaining agreement with Local 257.
The parties filed cross-motions for summary judgment. In a final disposition of
the case, the district court held that the CIR decisions are binding and enforceable
against defendants, slip op. at 6-13, dismissed for lack of jurisdiction defendants'
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counterclaim alleging that Local 257 had violated the LMRA,6 id. at 17-19, and
dismissed defendants' Count III counterclaim/cross-claim alleging that Local 257 and
St. Louis-NECA had violated federal antitrust laws, id. at 14-17. This appeal followed.
Discussion
Enforcement of arbitration awards
We review a grant of summary judgment de novo. The question before the
district court, and this court on appeal, is whether the record, when viewed in the light
most favorable to the non-moving party, shows that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as a matter of law. Fed.
R. Civ. P. 56(c); see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986); Get Away Club, Inc.
v. Coleman, 969 F.2d 664, 666 (8th Cir. 1992); St. Paul Fire & Marine Ins. Co. v.
FDIC, 968 F.2d 695, 699 (8th Cir. 1992). Where the unresolved issues are primarily
legal rather than factual, summary judgment is particularly appropriate. Crain v. Board
of Police Comm'rs, 920 F.2d 1402, 1405-06 (8th Cir. 1990).
Defendants first argue that the district court erred in granting summary judgment
in favor of Local 257 and ordering the enforcement of the CIR arbitration awards.
Defendants contend that the letters of assent which they each signed are void, thus
rendering the 1992-1994 collective bargaining agreements unenforceable against them.
6
Defendants have not raised this issue on appeal.
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In support of this argument, defendants assert that they were placed in an inferior
bargaining position, that they were never informed of the interest arbitration clause, that
they had no realistic opportunity to negotiate the terms of the collective bargaining
agreements, and that Local 257 acted in bad faith. We reject these assertions as
unsupported by the evidence in the record or the applicable law.
It is beyond genuine dispute that each of the letters of assent signed by the
defendant electrical companies sets forth the company's authorization of St. Louis-
NECA to be its collective bargaining representative and to enter into collective
bargaining agreements on the company's behalf. Notwithstanding defendants'
allegations that they did not fully appreciate the nature of their actions, they have failed
to establish a genuine issue of fact concerning the voluntariness of their actions in
signing the letters of assent. Nor have they identified any evidence tending to show that
they were induced to sign the letters of assent because of fraud, coercion, or
misrepresentation. The letters of assent were in effect at the time St. Louis-NECA
entered into the 1992-1994 residential and inside collective bargaining agreements, and
defendants therefore became parties to and bound by the terms of those agreements.
The residential and inside collective bargaining agreements each contained an interest
arbitration clause permitting the parties, jointly or unilaterally, to submit unresolved
issues in negotiations to the CIR for adjudication prior to the anniversary date of the
collective bargaining agreements. Local 257 timely submitted unresolved matters
concerning successor agreements to the CIR, and, while the 1992-1994 collective
bargaining agreements were still in effect, the CIR issued interest arbitration awards
which directed the parties to sign and immediately implement successor collective
bargaining agreements.
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When a dispute is properly submitted to arbitration pursuant to an agreement to
arbitrate in a collective bargaining agreement, the resulting arbitration award is
ordinarily entitled to extreme judicial deference. See American Nat'l Can Co. v. United
Steelworkers, No. 96-1451, slip op. at 6-8 (8th Cir. July 25, 1997) (discussing the
"Steelworkers Trilogy"7 and the well-established standard of extreme judicial deference
to an arbitrator's award). Moreover, our court has specifically recognized that "once
included in a collective bargaining agreement, . . . interest arbitration clauses generally
are enforceable." Sheet Metal Workers' Int'l Ass'n, Local 14 v. Aldrich Air
Conditioning, Inc., 717 F.2d 456, 458-59 (8th Cir. 1983) (holding that, while interest
arbitration clauses generally are enforceable, the inclusion of an interest arbitration
clause in the successor collective bargaining agreement will not be enforced because
of the potential for collective bargaining agreements to become self-perpetuating). We
therefore afford interest arbitration awards the extreme judicial deference approved by
the Supreme Court in the Steelworkers Trilogy.
Defendants argue, however, that in the present case they were not bound by the
1992-1994 collective bargaining agreements -- and, consequently, not bound by the
interest arbitration clauses -- because the following provision contained in the letters of
assent was not satisfied:
7
United Steelworkers v. American Mfg. Co., 363 U.S. 564 (1960); United
Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960); United
Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960).
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The Employer agrees that if a majority of its employees
authorizes the Local Union to represent them in collective
bargaining, the Employer will recognize the Local Union as the
exclusive collective bargaining agent for all its employees
performing electrical construction work within the jurisdiction of
the local union of all present and future job sites.
Defendants maintain that three of them never had any employees during the
relevant time period and the fourth, Amick Electric, never had a majority of employees
who authorized Local 257 to represent them. Thus, defendants conclude, St. Louis-
NECA never acquired authority to enter into the 1992-1994 collective bargaining
agreements on their behalf. We disagree.
The above-quote provision imposed an obligation upon each defendant to
recognize Local 257 as the exclusive collective bargaining agent for the company's
employees if a majority of the employees authorized Local 257 to represent them in
collective bargaining. Conversely, in the absence of such majority employee
authorization, defendants were not required to recognize Local 257 as having such
representational status. The NLRB's refusal to issue complaints charging defendants
with an unfair labor practice for refusing to bargain with Local 257 therefore appears
to have been entirely appropriate. We emphasize, however, that the lack of majority
employee authorization of Local 257 had no effect upon defendants' authorization of St.
Louis-NECA to act on defendants' behalf in entering into the 1992-1994 residential and
inside collective bargaining agreements with Local 257. Thus, defendants' reliance on
the above-quoted majority-employee-authorization provision to challenge the
enforceability of the interest arbitration awards is misplaced.
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We also reject defendants' general argument that union representation is a
prerequisite to a binding labor agreement with enforceable terms. As the district court
explained, an employer and a union may enter into a "pre-hire" agreement pursuant to
§ 8(f) of the LMRA without a determination that a majority of employees desire
representation by the union; such pre-hire agreements are binding, enforceable, and not
subject to unilateral repudiation throughout their terms; and the union enjoys a
presumption of majority status which expires only upon expiration of the pre-hire
agreement. Slip op. at 9-10 (citing cases). Moreover, as this court has specifically held
with respect to multi-employer agreements, "[t]he correct unit for measuring Union
majority status is not the employees of one separate company, but the employees of all
the employer signatories to the contract." NLRB v. W.L. Miller Co., 871 F.2d 745, 749
(8th Cir. 1989) (W.L. Miller Co.). We also agree with the district court's holding that
enforcement of the CIR awards is not, as defendants contend, contrary to the rule of
John J. Deklewa & Sons, Inc., 282 N.L.R.B. 1375 (1987) (Deklewa), aff'd sub nom.
International Ass'n of Bridge, Structural & Ornamental Iron Workers, Local 3 v. NLRB,
843 F.2d 770 (3d Cir.), cert. denied, 488 U.S. 889 (1988), which has been upheld as the
law in this circuit. W.L. Miller Co., 871 F.2d at 748. Defendants maintain that, in
Deklewa, the NLRB implicitly held that an interest arbitration clause may not survive
the termination of a § 8(f) pre-hire agreement. Brief for Appellants at 16. Thus,
defendants suggest, the interest arbitration clauses at issue in the present case did not
survive defendants' termination of the letters of assent and the collective bargaining
agreements. In rejecting defendants' interpretation and application of Deklewa, the
district court correctly reasoned as follows:
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The issue of whether interest arbitration clauses survive the
termination of a collective bargaining agreement was not addressed
in Deklewa. Several courts, however, have held that interest
arbitration clauses survive the expiration of a section 8(f) pre-hire
agreement. "The fact that the employer may have had no statutory
duty to bargain . . . did not eliminate [the employer's] contractual
obligations." As a result, this Court finds that the interest
arbitration clause here survived the illegal termination of the
collective bargaining agreement by defendants.
Slip op. at 12 (citations omitted).
We further reject defendants' assertion that the NLRB's disposition of Local 257's
unfair labor practices charges precludes enforcement of the interest arbitration awards.
Contrary to defendants' argument on appeal, the present circumstances are not similar
to those of United Ass'n of Journeymen & Apprentices of Plumbing & Pipefitting
Indus., Local 342 v. Valley Engineers, 975 F.2d 611, 613 (9th Cir. 1992) (Valley
Engineers) (affirming district court's grant of summary judgment in favor of defendants-
employers where NLRB had declined to file an unfair labor practices complaint against
the defendants-employers). In Valley Engineers, the Ninth Circuit explained:
Representational issues fall within the NLRB's primary
jurisdiction. Thus, "[w]e have recognized repeatedly that courts
must refuse to exercise jurisdiction over claims involving
representational issues." This deference is rooted in both the
superior expertise of the Board and the incompatibility of the "the
orderly function of the process of judicial review" with initial
district court consideration of representational issues.
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....
[T]he court should look at whether "the major issues to be
decided . . . can be characterized as primarily representational or
primarily contractual." Where "[t]he interpretation of the contract
depends entirely on the resolution of the question of whom the
union represents," the matter is "properly left to the Board."
This case falls on the "primarily representational," rather
than the primarily contractual," side of the line.
Id. at 613-14 (citations omitted).
In the present case, the NLRB determined that defendants were not legally
obligated to negotiate with Local 257, presumably because Local 257 could not
establish itself as the elected representative of defendants' employees. By contrast, the
primary issue before the district court was whether the interest arbitration clause, as
identically contained in the residential and inside collective bargaining agreements, was
binding and enforceable against defendants at the time it was invoked. The issues in the
present case are primarily contractual and are distinct from the issues that were before
the NLRB. Collateral estoppel does not apply. See slip op. at 11. For similar reasons,
we also agree with the district court's disposition of defendants' statute of limitations
defense which relies upon the incorrect assumption that Local 257's claim in the present
case involves representational issues. See slip op. at 11. As the district court
concluded, the six-month statute of limitations in § 10(b) of the LMRA, 29 U.S.C.
§ 160(b), is inapplicable because Local 257's claim against defendants in the present
case does not allege defendants' improper refusal to bargain but, rather, seeks
enforcement of the interest arbitration awards. See id. at 11-12.
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In sum, we hold that the record, even when viewed in the light most favorable
to defendants, shows that there is no genuine issue as to any material fact, that the
interest arbitration clause was binding and enforceable against defendants at the time
Local 257 invoked its rights under the interest arbitration clause, and that Local 257 is
entitled to judgment as a matter of law on its claims for enforcement of the CIR
arbitration awards.
Defendants' counterclaim/cross-claim alleging antitrust violations
Defendants also argue that the district court erred in dismissing their Count III
counterclaim/cross-claim alleging that Local 257's and St. Louis-NECA's participation
in the Target Fund violated the Sherman Act, the LMRA, and RICO. The Target Fund
is a program, financed by members of Local 257, which provides partial reimbursement
for wages paid to members of Local 257 where the employer is a party to a collective
bargaining agreement with Local 257. As a consequence, employers who participate
in the Target Fund are generally able to submit lower bids for jobs than they otherwise
could without the fund's financial assistance. Defendants argue that Local 257's and
St. Louis-NECA's operation of the Target Fund is a form of price-fixing designed to
force out competition and is not protected by statutory or nonstatutory exemptions from
the antitrust laws applicable to certain labor activities. Alternatively, defendants argue
that there are at least genuine issues of material fact concerning the application of such
labor exemptions and, thus, summary judgment was improperly granted.
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In dismissing defendants' Count III counterclaim/cross-claim, the district court
held that statutory and nonstatutory exemptions from the antitrust laws apply in the
present case. See slip op. at 14-17, citing Connell Constr. Co. v. Plumbers Local Union
100, 421 U.S. 616, 621-22 (1975) (discussing statutory antitrust exemption for labor
unions in 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, 113), and Powell v. National Football League,
930 F.2d 1293, 1297 (8th Cir. 1989) (Powell) (citing Mackay v. National Football
League, 543 F.2d 606, 614 (8th Cir. 1976) (Mackay), cert. dismissed, 434 U.S. 801
(1977)), cert. denied, 498 U.S. 1040 (1991). We now affirm on the basis of the district
court's holding that Local 257's and St. Louis-NECA's conduct is protected under the
nonstatutory exemption discussed in Powell and Mackay.
In Mackay, this court set forth the circumstances in which the nonstatutory
exemption applies as follows:
We find the proper accommodation to be: First, the labor
policy favoring collective bargaining may potentially be given pre-
eminence over the antitrust laws where the restraint on trade
primarily affects only the parties to the collective bargaining
relationship. Second, federal labor policy is implicated sufficiently
to prevail only where the agreement sought to be exempted
concerns a mandatory subject of collective bargaining. Finally, the
policy favoring collective bargaining is furthered to the degree
necessary to override the antitrust laws only where the agreement
sought to be exempted is the product of bona fide arm's-length
bargaining.
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543 F.2d at 614 (citations and footnotes omitted). In the present case, Local 257 and
St. Louis-NECA have demonstrated, and defendants have not genuinely controverted,
that the Target Fund primarily affects only the parties to the collective bargaining
relationship, that the wage reimbursement arrangement at issue concerns a mandatory
subject of collective bargaining (i.e., wages), and that the arrangement is the product of
bona fide arm's-length bargaining. See slip op. at 15-16. Thus, we hold that, when the
record is viewed in the light most favorable to defendants, there is no genuine issue as
to any material fact and Local 257 and St. Louis-NECA are entitled to judgment as a
matter of law. Accordingly, we affirm the district court's summary judgment dismissal
of defendants' Count III counterclaim/cross-claim. Accord Phoenix Elec. Co. v.
National Elec. Contractors Ass'n, 81 F.3d 858 (9th Cir. 1996) (in action against local
IBEW union and local NECA chapter alleging that job targeting program violated
antitrust laws, holding that no genuine issue of fact existed and defendants were
protected as a matter of law by nonstatutory exemption articulated in Mackay and
adopted by the Ninth Circuit).
Conclusion
For the reasons set forth above, we affirm the district court's order granting
summary judgment in favor of Local 257 on its claims for enforcement of the CIR
arbitration awards and affirm the district court's dismissal of defendants' Count III
counterclaim/cross-claim. In addition, the motion by St. Louis-NECA to dismiss
defendants' appeal and St. Louis-NECA's request for double costs and attorney's fees
are denied.
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A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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