Antitrust laws regulate business monopolies in the interest of promoting competition. The National Labor Relations Act preempts state antitrust laws. Federal antitrust laws apply to certain union activities. Labor unions are exempted from antitrust laws when involved in a “labor dispute” for the purpose of protecting their own interests and must not be combined with any non-labor group.
A common example of antitrust law violations in the construction industry follows. A building trades union was party to a multi-employer collective bargaining agreement with a mechanical contractors’ association (the union). The agreement contained a clause ensuring that if the union gave more favorable terms to any other employer it would extend those terms to all association members. The union picketed a general contractor that subcontracted all work and had no employees who the union wished to represent. The goal of the picketing was to force the general contractor to only subcontract with firms that had a current contract with the union. The general contractor sued claiming a violation of antitrust laws.
The contractor won because the restrictive agreement imposed a direct restraint on the business market, had anti-competitive effects, and “contravened antitrust policies to a degree not justified by congressional labor policy.” Also, because the union had no interest in representing the general contractor’s employees, it was not justified in contending that federal labor policy entitled the union to an antitrust exemption.
An example of no violation of antitrust laws is where a multi-employer subcontracting agreement gave exclusive jurisdiction to one union. A union that was prohibited from performing work under the agreement sued alleging antitrust violations. But the agreement was lawful since it was the result of a bona fide arms’ length agreement and another union had been prohibited from participating in the disputed work.
The bottom line is that unions are granted wide protection from antitrust laws but in rare circumstances they can be found guilty of antitrust violations. This is tricky – even for most lawyers – so tread with caution and seek advice from competent labor counsel before filing claims asserting unions violated antitrust laws.
Matt Austin is a Columbus, Ohio employment lawyer who owns Austin Legal, LLC, a boutique law firm with offices in central and northeast Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at 614.285.5342 or email him at Austin@LaborEmploymentOSHA.com.