Associated Builders and Contractors of Massachusetts/rhode Island, Inc. v. The Massachusetts Water Resources Authority ( 1991 )

BREYER, Chief Judge,

with whom CAMPBELL, Circuit Judge joins (dissenting).

The Commonwealth of Massachusetts, acting through the Massachusetts Water Resources Authority, will let contracts for more than $6 billion of construction work on the Boston Harbor Clean-Up Project. The MWRA requires, as a condition for a contract award, that the winning bidder abide by (and insist that its subcontractors abide by) a prehire bargaining agreement. That agreement requires the contractors and subcontractors to recognize the Building Trades Council as bargaining representative for all craft employees, to hire workers through the hiring halls of the Council’s constituent unions, to require hired workers to join the relevant union within seven days, to follow specified dispute-resolution procedures, to apply the Council’s wage, benefit, seniority, apprenticeship and other rules, and to make contributions to the Council unions’ benefit funds. In return for the MWRA’s promise to insist that contractors sign the agreement, the Council has promised the MWRA labor peace throughout the 10-year life of the construction project.

Were the industry here involved other than the construction industry, we could understand how the majority would consider this agreement a rather intrusive effort by a state agency to control the labor relations of subcontractors with their employees. The construction industry, for labor-relations purposes, however, is special. As all parties concede, the special construction-industry provisions in §§ 8(e) & (f) of the National Labor Relations Act, 29 U.S.C. §§ 158(e) & (f), would permit the MWRA, were it a private party letting construction contracts, to act just as it wishes to act here. Indeed, general contractors in the construction industry often enter into pre-hire agreements of this sort. The only question in this case is whether the NLRA forbids the MWRA, because it is a state agency, to do what the Act explicitly permits a private contractor to do.

The NLRA does not contain any language that explicitly forbids a state, acting like a general construction contractor, from entering into a prehire agreement. Rather, the majority believes that the Act implicitly forbids it from doing so, i.e., that the Act implicitly removed, or preempted, a state’s power to act as the MWRA has acted here. Applying general principles of pre-emption, the majority must therefore believe (1) that the MWRA’s action “conflicts with” the Act, (2) that it “frustrate[s] the federal [statutory] scheme,” or (3) that it appears “from the totality of the circumstances that Congress sought to occupy the field to the exclusion of the states.” Malone v. White Motor Corp., 435 U.S. 497, 504, 98 S.Ct. 1185, 1189, 55 L.Ed.2d 443 (1978) (setting forth general conditions for pre-emption); see also Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 300, 108 S.Ct. 1145, 1150, 99 L.Ed.2d 316 (1988). We do not see how permitting a state agency, when acting like a general contractor, to make labor agreements just like those that private general contractors make, could “conflict with” the NLRA, "frustrate” the NLRA “scheme,” or otherwise interfere with the regulatory system that the NLRA creates. We therefore dissent.

The Supreme Court has described two related sets of concerns that led Congress, implicitly, to forbid certain kinds of state activities. First, Congress intended to grant the National Labor Relations Board exclusive authority to determine whether § 8 of the Act prohibits or § 7 of the Act protects certain particular labor-related activities and to provide remedies for violations. Thus, (with a few narrow exceptions) a state may not regulate activities that the Act arguably prohibits or protects. See San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 244-45, 79 S.Ct. 773, 779, 3 L.Ed.2d 775 (1959). Nor may it add to, or subtract from, the remedies that the federal scheme provides. See Garner v. Teamsters Local Union No. 776, 346 U.S. 485, 498-99, 74 S.Ct. 161, 169-70, 98 L.Ed. 228 (1953).

Second, Congress intended to “leave some activities unregulated and to be controlled by the free play of economic forces.” Lodge 76, Int’l Ass’n of Machinists v. Wisconsin Employment Relations Comm’n, 427 U.S. 132, 144, 96 S.Ct. 2548, 2555, 49 L.Ed.2d 396 (1976). Thus, states may not regulate “economic warfare between labor and management,” New York Tel. Co. v. New York State Labor Dep’t, 440 U.S. 519, 530, 99 S.Ct. 1328, 1335, 59 L.Ed.2d 553 (1979), when doing so significantly interferes with the “intentional balance” that Congress contemplated “between the uncontrolled power of management and labor to further their respective interests.” Golden State Transit Corp. v. City of Los Angeles, 475 U.S. 608, 614, 106 S.Ct. 1395, 1398, 89 L.Ed.2d 616 (1986). They may not, for example, award damages for peaceful secondary picketing, see Local 20, Teamsters Union v. Morton, 377 U.S. 252, 258, 84 S.Ct. 1253, 1257, 12 L.Ed.2d 280 (1964), or forbid a union’s concerted refusal to work overtime, see Machinists, 427 U.S. at 149, 96 S.Ct. at 2557, for, in both instances, Congress intended “to preserve” those “means of economic warfare for use during the bargaining process.” New York Tel., 440 U.S. at 530, 99 S.Ct. at 1335.

The majority finds this second kind of pre-emption present here. It concludes that the MWRA has regulated the relationship between labor and management in a way that upsets the “balance” between labor and management that Congress intended. In our view, however, the special construction industry exceptions in the Act itself show that Congress did not intend pre-emption. Insofar as the MWRA’s purchasing decision affects labor-management relations, it does so only to the extent that Congress foresaw and (with respect to general contractors) explicitly authorized. Moreover, the relevant Supreme Court cases in this area reinforce our view that the MWRA’s actions do not “conflict with” or otherwise “frustrate” the NLRA or its objectives.

1. The Act’s Construction-Industry Exceptions. The construction-industry exceptions of the NLRA make clear that the conditions that the MWRA wishes to impose do not represent an effort by the state to tilt the economic playing field, that is to say, to interfere with the “free play of economic forces” between subcontractors and their employees, in a manner that Congress did not intend to permit. Rather, Congress defined the playing field in the construction industry (but not elsewhere) in a special way: it permitted a general contractor to insist that subcontractors enter into prehire agreements of the very sort here at issue. Thus, when the MWRA, acting in the role of purchaser of construction services, acts just like a private contractor would act, and conditions its purchasing upon the very sort of labor agreement that Congress explicitly authorized and expected frequently to find, it does not “regulate” the workings of the market forces that Congress expected to find; it exemplifies them.

To understand how this is so, consider how the construction-industry exceptions work within the context of the Act. The Act, in §§ 8(a), (b) and (e), 29 U.S.C. §§ 158(a), (b) & (e), lists a set of “unfair labor practices.” For example, it says in §§ 8(a)(1) and 7 that employers may not interfere with their employees’ efforts to organize collectively or discriminate against union members, id. §§ 158(a)(1) & 157; it says in § 8(b)(4) that labor organizations may not engage in secondary boycotts, id. § 158(b)(4); and, it requires in §§ 8(a)(5) and 8(b)(3) that both employers and labor organizations bargain collectively, id. §§ 158(a)(5) & 158(b)(3). Then, in § 8(f), the Act creates a specific construction-industry exception. That exception says:

(f) It shall not be an unfair labor practice under subsections (a) and (b) ... for an employer engaged primarily in the building and construction industry to make an agreement covering employees engaged (or who, upon their employment will be engaged) in the building and construction industry with a labor organization [in the construction industry] ... because (1) the majority status of such labor organization has not been established ..., or (2) such agreement requires as a condition of employment, membership in such labor organization after the seventh day following the beginning of such employment ..., or (3) such agreement requires the employer to notify such labor organization of opportunities for employment with such employer, or gives such labor organization an opportunity to refer qualified applicants for such employment, or (4) such agreement specifies minimum training or experience qualifications for employment or provides for [seniority requirements]....

Id. § 158(f). Without this exception a construction-industry prehire agreement might constitute an unfair labor practice, for such an agreement (naming the unions to which all employees of all contractors and subcontractors must belong) might be seen as interfering with employees’ rights to bargain through representatives of their own choosing, in violation of §§ 8(a)(1) and 7, see id. §§ 158(a)(1) & 157, or unreasonably discriminating against those who are not union members, in violation of § 8(a)(3). See id. § 158(a)(3).

Section 8(e) supplements the list of unfair labor practices contained in §§ 8(a) and (b) of the Act. It says that it is an unfair labor practice for a labor organization and an employer to enter into what is known, colloquially, as a hot-cargo agreement, an agreement whereby a secondary employer agrees to help a union (engaged in a dispute with a different, primary, employer) by refusing to do business with that other, primary, employer. See id. § 158(e). However, a special construction-industry exception, attached to section (e), says:

[N]othing in this subsection shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction....

Id. Without this second exception, a construction-industry prehire agreement might violate the hot-cargo prohibition, for it requires a signing contractor to “cease doing business” with a subcontractor unless the subcontractor enters into a similar hiring agreement with the union.

The background of these subsections makes clear why Congress chose to create an exception for the construction industry, and those reasons have nothing at all to do with the private or public nature of the general contractor. Labor and management in the construction industry engaged in prehire bargaining long before Congress passed the NLRA. See To Amend the National Labor Relations Act, 19Jp7, with Respect to the Building and Construction Industry: Hearings on S. 1973 Before the Subcomm. on Labor and Labor-Management Relations of the Senate Comm, on Labor and Public Welfare, 82d Cong., 1st Sess. 42 (1951) [hereinafter Hearings ] (testimony of William E. Maloney, Vice Pres., Building and Construction Trades Dep’t, Pres., Operating Engineers, A.F. of L.). The language of the 1935 Wagner Act seemed to outlaw prehire agreements, because, for example, the unions with whom employers would negotiate these agreements typically did not meet the Act’s representational requirements. Nonetheless, the prehire bargaining practice continued. The NLRB initially refused to extend its jurisdiction to the construction industry. It said that activity in the construction industry did not “affect commerce.” See S.Rep. No. 1509, 82d Cong., 2d Sess. 4 (1952) (citing In re Brown & Root, Inc., 51 N.L.R.B. 820 (1943)).

By the late 1940s, however, federal courts had held that the Board must exercise jurisdiction over this industry. See S.Rep. No. 1509, supra, at 4. And, the Board eventually concluded that the Taft-Hartley Act of 1947 required it to do so. Consequently, the Board began to invalidate union-security clauses in prehire agreements, and it began to require union-certification elections. This effort to force elections proved unsuccessful. Id. at 5. The Board then announced that it would no longer insist on certification elections, but it would continue to invalidate clauses in prehire agreements when it confronted them. Id. at 5-6.

Soon thereafter, the Senate Subcommittee on Labor and Labor-Management Relations held hearings on the construction industry. See Hearings, supra. Representatives of both labor and management testified that the special characteristics of the construction industry made it impracticable, unnecessary and undesirable to comply with the requirements of the Wagner Act (as amended by the Taft-Hartley Act). They pointed out that a construction worker typically works at a particular work site only for a short time. In such a context, to require formal certification elections is impracticable, for particular employees would not stay on the job long enough to elect representatives who then would bargain with the employer. Those testifying feared that the alternative to prehire bargaining would be no bargaining at all. Without prehire bargaining, unions would not be able to bargain for union security, while contractors would not be able to estimate their labor expenses in advance and would not be able tp rely on a steady supply of labor from union hiring halls. See generally S.Rep. No. 1509, supra, at 3-6 (summarizing testimony at hearing).

The Senate Committee on Labor and Public Welfare then favorably reported a bill that would permit prehire agreements. It said:

The committee finds that the normal election procedures of the Board have proven unadaptable to this industry because of the short-term, casual employment that is typical to it. The General Counsel’s efforts to devise special means ... have proven fruitless. We conclude that the obstacles to conducting satisfactory elections in sufficient numbers are formidable, if not insuperable.

S.Rep. No. 1509, supra, at 6. The bill did not become law for some time. But, in 1959, Congress enacted a similar bill. Both the House and Senate Reports accompanying the 1959 bill indicate that the reasons for the exception of § 8(f) were those identified in the 1951 hearings, namely, the short-term nature of employment, the impracticability of holding certification elections, the contractors’ need for predictable cost and a steady supply of labor, and the longstanding custom of prehire bargaining in the industry. See S.Rep. No. 187, 86th Cong., 1st Sess., 27-29 (1959), reprinted in 1 NLRB, Legislative History of the Labor-Management Reporting and Disclosure Act of 1959, 423-25 (1985) [hereinafter Legislative History ] (set out in Appendix); H.R.Rep. No. 741, 86th Cong., 1st Sess., 19-20 (1959), reprinted in 1 Legislative History, supra, at 777-78; see also 105 Cong.Rec. S5731 (daily ed. April 21, 1959), reprinted in 2 Legislative History, supra, at 1064 (remarks of Sen. Javits); 105 Cong. Rec. S5767 (daily ed. April 21, 1959), reprinted in 2 Legislative History, supra, 1082 (remarks of Sen. Goldwater); 105 Cong.Rec. S9117 (daily ed. June 8, 1959), reprinted in 2 Legislative History, supra, at 1289 (prepared statement of Sen. Goldwater); 105 Cong.Rec. H14,204 (daily ed. Aug. 11, 1959), reprinted in 2 Legislative History, supra, at 1577 (prepared statement of Rep. Rayburn); 105 Cong.Rec. H16,630 (daily ed. September 4, 1959), reprinted in 2 Legislative History, supra, at 1715 (remarks of Sen. Kennedy); 105 Cong. Rec. A4308 (daily ed. May 21, 1959), reprinted in 2 Legislative History, supra, at 1750 (remarks of Rep. Kearns). At the same time, Congress enacted an exception to § 8(e), so that its prohibition of hot-cargo clauses would not prevent parties in the construction industry from entering into prehire agreements, which, traditionally, in-eluded a provision requiring the general contractor to award bids only to subcontractors who would sign the prehire agreement. See 105 Cong.Rec. S16,414 (daily ed. September 3,1959), reprinted in 2 Legislative History, supra, at 1432 (remarks of Sen. Kennedy) (stating that the proviso of § 8(e) was “necessary to avoid serious damage to the pattern of collective bargaining in [the construction] industry]”); 105 Cong.Rec. S16,414 (daily ed. September 3, 1959), reprinted in 2 Legislative History, supra, at 1721 (remarks of Rep. Thompson) (same).

As the majority correctly points out, the construction-industry exceptions use the word “employer,” and § 2(2) of the Act specifically excludes “any State” from its definition of the word “employer.” Ante, at 354-55, 358. That fact, however, does not destroy the relevance of the exceptions as an indication of Congress’s pre-emptive intent. For one thing, the provisions show that Congress specifically focused upon the conduct in question, prehire bargaining, that Congress found that conduct prevalent in the construction industry, and that it wrote the exceptions with the expectation that the conduct would continue in that industry.

For another thing, the reasons Congress gave for authorizing the conduct have nothing to do with the public or the private nature of the employer. The special circumstances in the construction industry making meaningful posthire collective bargaining difficult; the corresponding custom in the industry; a general contractor’s need to predict labor costs; his need to have available a steady supply of labor: these reasons have to do with the nature of the construction industry and collective bargaining in that industry, conditions likely to remain the same whether a public or private contractor lets contracts for the work.

Further, to permit private general contractors, but not states, to enter into construction-industry prehire agreements would likely produce an odd crazy-quilt of prehire practices. Whether one finds such an agreement would often reflect, not size of the project, or desire of the parties, or special conditions of the industry, but simply whether or not the entity letting the contracts is an arm of the state or private. And, even among state projects, the presence or absence of such an agreement would depend upon whether state law permits the state in question to hire a private general contractor (who, then, presumably, would be free to enter into a prehire agreement), or, as in Massachusetts, requires the state agency to sign the relevant contracts itself. See Mass.Gen.L. ch. 30, § 39M; id. ch. 149, § 44A et seq. We do not understand what purpose, related to labor law, these legal distinctions could serve.

Finally, Congress had two perfectly good reasons for not making the construction-industry exceptions explicitly applicable to states, and neither of these reasons suggests any pre-emptive intent. First, the obvious reason is that the list of forbidden practices, to which the exceptions apply, itself applies only to an “employer,” defined to exclude “any State,” thereby leaving the regulation of labor relations between a state and its own employees primarily to state law. A drafter, writing a statutory exception to the resulting prohibition, would not normally extend its scope beyond those subject to the prohibition in the first place. Second, Congress, particularly when it enacted the construction-industry exceptions in 1959, had little reason to believe that a court might find, hidden in the silence of the Act, some other relevant prohibition applicable to a state.

In sum, the construction-industry exceptions in the Act, including their history and rationale, indicate that when a state acts as an ordinary private purchaser of construction services, it can enter into a typical prehire agreement without “frustrat[ing]” the “federal [statutory] scheme.” Malone, 435 U.S. at 504, 98 S.Ct. at 1190.

2. Supreme Court Precedent. Unlike the majority, we believe that the relevant Supreme Court decisions offer fairly strong support for our conclusions. For one thing, the Machinists case itself makes clear that the Act does not forbid all state action that might favor labor, but, rather, only those state actions that interfere with Congress’s “intentional balance.” See Golden State, 475 U.S. at 614, 106 S.Ct. at 1398 (citing Machinists, 427 U.S. at 146, 96 S.Ct. at 2556) (emphasis added). Here, for reasons just mentioned, we believe Congress intended a “balance” in the construction industry that includes prehire agreements.

For another thing, the Supreme Court has looked to legislative history (indeed, the language and history of other congressional statutes), as we have done here, to find the existence or absence of a congressional pre-emptive intent. After examining legislative history that would seem no more significant than that present here, for example, the Court upheld a state law providing unemployment benefits to striking workers, a law that would seem to tip the playing field in the strikers’ favor. See New York Tel., 440 U.S. 519, 99 S.Ct. 1328.

Further, the Court has indicated that the kind of state activity involved is relevant to the pre-emption question. After all, the NLRA seems basically intended to supplant state labor regulation, not to supplant all legitimate state activity that might affect labor. Thus, it is not surprising that the relevant Supreme Court cases, speaking of the area where Congress implicitly intended labor-management relations “to be controlled by the free play of economic forces,” refer to freedom from state regulation. In Machinists itself, for example, the Supreme Court refers to the relevant congressional pre-emptive intent as an intent to “leave some activities unregulated.” 427 U.S. at 144, 96 S.Ct. at 2555. It said that the “activities” in question— workers deciding in concert to refuse overtime work — “were not to be regulable by States....” Id. at 149, 96 S.Ct. at 2557 (emphasis added). And, in Golden State, the Court, finding that California could not condition the renewal of a taxicab franchise upon settlement of a labor dispute, said that “Machinists pre-emption ... precludes state and municipal regulation ‘concerning conduct that Congress intended to be unregulated.’ ” 475 U.S. at 614, 106 S.Ct. at 1398 (quoting Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 749, 105 S.Ct. 2380, 2394, 85 L.Ed.2d 728 (1985)) (emphasis added). At the same time, the Court has noted that even though Machinists pre-emption “does not involve in the first instance a balancing of state and federal interests,” an “appreciation of the State’s interest in regulating a certain kind of conduct may still be relevant in determining whether Congress in fact intended the conduct to be unregulated.” Metropolitan Life, 471 U.S. at 749-50 n. 27, 105 S.Ct. at 2394 n. 27.

Finally, when the Court has considered state purchasing, it has carefully considered the nature of the state’s action and the legitimacy of the restriction’s purpose. In Wisconsin Department of Industry, Labor and Human Relations v. Gould, Inc., 475 U.S. 282, 106 S.Ct. 1057, 89 L.Ed.2d 223 (1986), the Court found preemption of a Wisconsin purchasing-related rule — a rule that disqualified as a supplier any firm found to have committed several unfair labor practices. In doing so, the Court stressed the lack of any such legitimate relation in the case before it. The Court said that “debarment ... serves plainly as a means of enforcing the NLRA,” id. at 287, 106 S.Ct. at 1061, that it “functions unambiguously as a supplemental sanction for violations of the NLRA,” id. at 288, 106 S.Ct. at 1062 (emphasis added), and “[n]o other purpose could credibly be ascribed.” Id. at 287, 106 S.Ct. at 1061 (emphasis added). The Court concluded that, because “Wisconsin simply is not functioning as a private purchaser of services, for all practical purposes, Wisconsin’s debarment statute is tantamount to regulation.” Id. at 289, 106 S.Ct. at 1062 (emphasis added). To emphasize the point — that Wisconsin was not acting like “a private purchaser of services”— the Court added:

We do not say that state purchasing decisions may never be influenced by labor considerations, any more than the NLRA prevents state regulatory power from ever touching on matters of industrial relations. Doubtless some state spending policies, like some exercises of the police power, address conduct that is of such ‘peripheral concern’ to the NLRA, or that implicates ‘interests so deeply rooted in local feeling and responsibility,’ that pre-emption should not be inferred. Garmon, 359 U.S., at 243-244 [79 S.Ct., at 778-779]; see also, e.g., Belknap, Inc. v. Hale, 463 U.S. 491, 498 [103 S.Ct. 3172, 3177, 77 L.Ed.2d 798] (1983). And some spending determinations that bear on labor relations were intentionally left to the States by Congress. See New York Tel. Co. v. New York State Labor Dept., 440 U.S. 519 [99 S.Ct. 1328, 59 L.Ed.2d 553] (1979). But Wisconsin’s debarment rule clearly falls into none of these categories. We are not faced here with a statute that can even plausibly be defended as a legitimate response to state procurement constraints or to local economic needs, or with a law that pursues a task Congress intended to leave to the States. The manifest purpose and inevitable effect of the debarment rule is to enforce the requirements of the NLRA.

Id. at 291, 106 S.Ct. at 1063-64 (emphasis added).

In the case before us, the record makes clear that the MWRA is participating in a market place as a general contractor, like a private buyer of services. Its role as buyer is not, in any sense, a sham designed to conceal an effort to regulate. That role is direct, normal, and necessary for purchasing, not regulatory, reasons. The MWRA wants to condition its contracts in the same way as, and for the same reasons as, private contractors normally insist upon similar conditions, namely to obtain peaceful working conditions, necessary to get the job done on time. The record requires us to take as given that, without a prehire agreement, hundreds of collective-bargaining agreements would expire during the life of the project, making labor strife likely. Because the major work site, Deer Island, is connected by a narrow isthmus to the mainland, a small number of pickets would find it easy to stop the entire project. Court-ordered deadlines mean that delay would cause unusually serious problems. The record therefore supports the MWRA’s contention that the prehire agreement serves its economic self-interest as a purchaser, that it is a “legitimate response to state procurement constraints or to local economic needs.” Id.

The majority says that the language from Gould set out above contains only “dicta,” and points out that the pre-emption at issue in Gould was Garmon pre-emption (pre-emption of state action regulating conduct that is arguably protected or forbidden by the NLRA), not Machinists preemption (pre-emption of state action regulating conduct that Congress intended to be controlled by the free play of economic forces only). Nonetheless, the “dicta” seem carefully considered, in a unanimous opinion. The fact that Garmon rather than Machinists pre-emption was at issue seems beside the point. Why would Congress want to leave the states greater freedom to interfere with control by the NLRB than to interfere with control by economic forces? Most important, the “dicta” suggest that the state’s reasons for a labor-affecting condition are highly relevant, at least when the state is acting as an ordinary buyer. And, as we have just pointed out, the MWRA’s reasons are legitimate.

In sum, the MWRA is acting like a buyer, and its reasons for the labor-related condition are legitimate. Furthermore, Congress specifically focused on the conduct in question and, in the case of private contractors, sanctioned it. In this context, we cannot say that the MWRA's actions “conflict” with the NLRA or would “frustrate” its purposes. We conclude that Congress did not pre-empt this state activity. Accordingly, we dissent. (We see no reason, since we are in dissent, to express our views on the other issues in the case, though we add that our views are similar to those of the district court.)

APPENDIX:

S.Rep. No. 187, 86th Cong., 1st Sess., 27-29 (1959).

The problems of the building and construction industry under the Taft-Hart-ley Act have been the subject of considerable comment by authorities in the field; and Congress in previous years has made several attempts to correct the shortcomings of the act as applied to the industry. The occasional nature of the employment relationship makes this industry markedly different from manufacturing and other types of enterprise. An individual employee works for many employers and for none of them continuously. Jobs are frequently of short duration, depending upon various stages of construction.

During the Wagner Act period, the National Labor Relations Board declined to exercise jurisdiction over the industry not only because of these complexities but also because the industry was substantially organized and hence had no need of the protection by the act. Concepts evoked by the Board therefore developed without reference to the construction industry. In 1947, after passage of the Taft-Hartley amendments, the Board applied the provisions of the act to the building and construction industry.

That this application of the act to the construction industry has given rise to serious problems is attested by the following in which the difficulties of the industry are set forth in detail:

[citing congressional hearings and presidential messages].

The bill endeavors to resolve certain most urgent problems, leaving to the future other difficulties which require attention.

Characteristics of the industry and the bill

In the building and construction industry it is customary for employers to enter into collective bargaining agreements for periods of time running into the future, perhaps 1 year or more or in many instances as much as 3 years. Since the vast majority of building projects are of short duration, such labor agreements necessarily apply to jobs which have not been started and may not even be contemplated. The practice of signing such agreements is not entirely consistent with the Wagner Act rulings of the NLRB that exclusive bargaining contracts can lawfully be concluded only if the union makes its agreement after a representative number of employees have been hired. One reason for this practice is that it is necessary for the employer to know his labor costs before making the estimate upon which his bid will be based. A second reason is that the employer must be able to have available a supply of skilled craftsmen ready for quick referral. A substantial majority of the skilled employees in this industry constitute a pool of such help centered about their appropriate craft union. If the employer relies upon this pool of skilled craftsmen, members of the union, there is no doubt under these circumstances that the union will in fact represent a majority of the employees hired.

The bill, as did [an earlier version], contains other provisions which take into account the occasional nature of employment in the building and construction employee. It does so by reducing from 30 days to 7 the grace period before which the employee may be required to join the union. The reduction in this time allowance reflects the normally short employment period for construction employees. Also similar to [the earlier version] are provisions permitting an exclusive referral system or hiring hall based upon objective criteria for referral. Such criteria as are spelled out in the bill are not intended to be a definitive list but to suggest objective criteria which shall be applied without discrimination. Thus it is permissible to give preference based upon seniority, residence, or training of the sort provided by the apprenticeship programs sponsored by the Department of Labor. These provisions are not intended to diminish the right of labor organizations and employers to establish an exclusive referral system of the type permitted under existing law.