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HOME BOX OFFICE, INC. v. DIRECTORS GUILD OF AMERIC

February 2, 1982

HOME BOX OFFICE, INC., Plaintiff,
v.
DIRECTORS GUILD OF AMERICA, INC., Robert B. Aldrich, Michael H. Franklin, Ernest Ricca, and Glenn Gumpel, Defendants



The opinion of the court was delivered by: SOFAER

OPINION AND ORDER

Home Box Office, Inc. ("HBO"), brought this action to enjoin defendants from enforcing certain agreements and engaging in certain conduct alleged to violate section 1 of the Sherman Act, 15 U.S.C. § 1 (1976). HBO, a subsidiary of Time, Inc., is a pioneer in the pay-television business. It transmits television programs, often via satellite, to cable television systems for purchase by subscribing consumers. Approximately two-thirds of its programming consists of motion pictures licensed from others. HBO is the industry leader, however, in developing original programming, currently consisting in large part of sports and entertainment programs. All original programming produced by HBO, or by separate production companies that sell or license their programs to HBO, requires the use of television directors, associate directors, and other personnel.

Defendant Directors Guild of America, Inc. (the "Guild"), is the collective bargaining representative of television film directors, associate directors, and other production personnel. The Guild seeks to represent all directors and accepts as a member any person who has previously worked as a director and who is willing to pay membership dues and to abide by the Guild's conditions of membership. The Guild is the successor by merger of the Screen Directors Guild, founded in 1936, and the Radio Directors Guild, founded in the mid-1940s. *fn1" At present, the Guild has approximately 3,500 director members, of whom only about one-third, or 1200, are actively engaged in directing, the others having retired or moved on to other specialties. It has collective bargaining agreements with about 1,500 employers, as well as with some 400 "loan-out companies," established to hire out the services of individual directors who are Guild members. The Guild seeks in all the ways a union usually acts to protect and advance the interests of its membership, and it is a bona fide labor organization. The other defendants are former or present officers of the Guild.

 The Guild concedes that it has engaged in the activities alleged by HBO to violate the antitrust laws. In brief, the Guild has bargained for and signed certain standardized agreements, with companies that produce programs for pay television ("signatories"), which specify the terms on which directors may provide their services. The two key Guild agreements are the Freelance Live and Tape Television Agreement of 1978 (the "Freelance Agreement"), Pl.Ex. 38, and the Basic Agreement of 1978 (the "Basic Agreement"), Def.Ex. 48 (integrated version of 1973 Basic Agreement, Pl.Ex. 42, and 1978 changes, Pl.Ex. 41). The Freelance Agreement is the Guild's agreement for programs recorded live or on videotape; the Basic Agreement is the Guild's agreement for motion pictures and television programs recorded on film. The Guild sought such agreements with all production companies, including HBO, and has repeatedly used its authority over its members to prevent their working as directors on programs intended for pay television and produced by companies that have not signed a Guild agreement ("nonsignatories").

 HBO challenges the Guild's conduct and agreements on several grounds. HBO contends that certain Guild members-freelance directors, producer-directors, and director-packagers-are independent contractors or entrepreneurs and therefore may not lawfully combine to restrain the sale of their services. HBO also attacks the Guild's agreements with "loan-out companies"-companies that are owned by Guild directors and whose only business is to provide their owners' services to production companies. HBO alleges that those agreements, which forbid the sale of directors' services to nonsignatories, are an unlawful restraint on the market in directors' services. Finally, HBO asserts that the Guild's agreements with production companies operate unlawfully to restrain competition in the market for television programs.

 The Guild contends in response that its actions and agreements are exempt from the antitrust laws. The Guild argues that its combinations with freelance directors, individually or through loan-out companies, with producer-directors, and with director-packagers are protected by the "statutory" exemption afforded unilateral labor activity. The Guild also contends that its agreements with production companies, including those owned by director-packagers, are exempt from the antitrust laws under the judicially developed "nonstatutory" exemption. Finally, the Guild asserts that its actions and agreements, even if not exempt, do not constitute an unreasonable restraint on trade and hence do not violate the Sherman Act.

 The case was tried to the Court from March 10 to March 27, 1980. Thereafter, the parties engaged in extensive briefing. Based on the findings of fact and conclusions of law set forth below, plaintiff has failed to establish any proper ground for enjoining the Guild's activities.

 I. Factual Background

 HBO's difficulties with the Guild stem from a relationship commencing with the very beginning of pay television. Guild contracts with production companies, networks, and other signatories have recognized since at least 1965 that pay television was a subject for future collective bargaining over wages and other terms and conditions of employment. The 1965 network agreement required any signatory that intended to produce a program for "initial release in home pay television" to notify the Guild prior to production. The agreement provided that the Guild and the signatory would then bargain and, failing agreement on the terms of compensation for such work, the Guild could terminate the entire agreement. Def.Ex. 38 at 28. Similar provisions exist in the current Basic Agreement and in the Freelance Agreement, except that now the Guild has only the power to instruct its members to refuse to render services with respect to pay-television programs rather than the power to terminate the entire agreement. In 1970, Guild members were specifically advised of the requirement that their terms of compensation for work on programs intended for primary use on pay television were subject to negotiation. They were told to inform the Guild before rendering any services in connection with productions intended for any use other than exhibition on commercial (or "free") television. Def.Ex. 117.

 The Guild has had much more definitive agreements concerning reruns or other subsequent use on pay television of programs produced primarily for exhibition on free television or in motion picture theaters. Compensation for reruns on pay television has been governed by the "supplemental market" provisions of the Guild's collective bargaining agreements. Those provisions grant the director and other Guild employees who work on a program additional compensation for supplemental use aggregating 1.2% of the gross receipts obtained by the signatory from such supplemental exhibitions. Pl.Ex. 39 at 79-98; Def.Ex. 44 at 117-33; Franklin Tr. 1234-35. In the event that the signatory sells or licenses its television rights in a program, the agreements provide that the signatory is absolved from its responsibility to pay additional compensation for reruns if it obtains from the buyer or licensee a separate assumption agreement for the express benefit of the Guild and its members. See Pl.Ex. 38 at 32-34.

 The Guild has never had a collective bargaining agreement with HBO, although HBO has employed Guild members in its own productions since at least 1973. The Guild initially permitted this activity, even though HBO's wages to directors were below the levels agreed on by the Guild and its signatories. The Guild apparently also permitted its members to work on projects produced by signatory companies, but intended for exhibition by HBO, on the terms generally applicable under Guild agreements. Witnesses at the trial convincingly testified that the Guild's waiver of its requirement that members work only for signatories was aimed at enabling HBO (and pay television generally) to become established. *fn2" In 1975 and 1976, Guild representatives met with HBO personnel to obtain information concerning HBO's growth and operations. In 1977, HBO entered into a collective bargaining agreement with the American Federation of Television and Radio Artists (AFTRA), at roughly 80% of network rates. The Guild thereupon proposed that HBO become a signatory to the Freelance Agreement. HBO rejected the request, refusing to pay network rates, and sought instead an agreement at lower rates.

 During 1978, the Guild withdrew its proposal and revised its demands. Acting on the advice of Michael Franklin, its newly appointed National Executive Secretary, the Guild demanded the greater of the network prime-time rate and a certain percentage of the revenues derived from pay television's exhibition of each program. Franklin was convinced that, due to ease of transmission plus relatively fixed distribution costs, pay television would have far higher returns than free television or theaters, and he urged an effort to secure for Guild members a greater share of the anticipated return. Franklin Tr. 1074-79. Percentage-of-gross provisions had previously been obtained by unions (including the Guild) with respect to supplemental uses of entertainment programs. But no entertainment union other than the union representing stage directors and choreographers had succeeded in negotiating compensation for its members based on a percentage of gross receipts from primary uses. Pl.Ex. 129; Franklin Tr. 978-88, 1075-76; Wolff Tr. 403-04.

 HBO rejected the Guild's new proposal. It regarded the percentage-of-gross provision as unprecedented, unacceptable, and in any event unworkable as applied to HBO, which charges customers a monthly, rather than a per-program, fee. On May 18, 1978, the Guild announced to its members that it had decided thenceforth to enforce its constitution's prohibition against working for nonsignatories in pay television. *fn3" It specifically informed its members that they could no longer work for HBO, either individually or through their loan-out companies, *fn4" and threatened disciplinary action. Pl.Ex. 43. Finally, the letter forbad members who were also packagers to furnish packaged programs to nonsignatories such as HBO, a position from which the Guild has since retreated, following the issuance by the NLRB of a complaint. See Pl.Exs. 21, 45, 46, 52, 62, 78, 83, 88-93, 102, 130. Shortly after the Guild's letter, HBO proposed an agreement similar to the agreement it had reached with AFTRA, but the Guild rejected the proposal. This lawsuit was filed on July 10, 1978.

 Negotiations between HBO and the Guild resumed in September 1978 and continued intermittently until February 1979. HBO sought compensation levels below the rates set in the Freelance Agreement and rejected entirely the notion of percentage compensation for use of such film in its primary market. The Guild, on the other hand, insisted on network rates plus some additional compensation, either in the form of a percentage of gross receipts or in a form measured by HBO's subscriber growth.

 Meanwhile, the Guild began to negotiate new forms of arrangements with production companies desiring to make programs for pay television and to enforce its prohibition against Guild members who worked for HBO or other nonsignatories on pay-television programs. In general, the Guild prepared what it termed a Special Amendment to the Freelance and Basic Agreements. The Special Amendment requires all signatories, among other things: to pay Guild directors who work on programs for pay television the higher of the prime-time network rate of 4% of the gross revenues obtained from licensing the program; to transfer the right to exhibit such films on pay television for no more than one year; and to obtain from every licensee, buyer, or other transferee of exhibition rights a commitment (called an Assumption Agreement) to assume the signatory's compensation- and exhibition-related obligations to the Guild. Several independent companies producing programs for television have reached agreements with the Guild that modify the Special Amendment in important ways-among them, by substituting a security assignment for the Assumption Agreement.

 At the same time, the Guild enforced its constitution's prohibition against its members' working for nonsignatories. Several members were warned emphatically against working for HBO or for any other nonsignatory in the pay-television field. *fn5" Others were disciplined, at times through the imposition of substantial fines. *fn6" The Guild even sought investigations and preventive action by the Immigration and Naturalization Service to prevent aliens from entering the United States to work for HBO as directors. Pl.Exs. 56-57. In short, the Guild has since 1978 made determined efforts to prevent its freelance director members from working in Guild capacities for any nonsignatory production company, including HBO. It is only the lawfulness, not the existence, of those efforts that is contested.

 II. The Governing Law

 Section 1 of the Sherman Act provides that "(e)very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." 15 U.S.C. § 1 (1976). Much collective labor activity falls within this prohibition. See Allen Bradley Co. v. Local 3, International Brotherhood of Electrical Workers, 325 U.S. 797, 801-03, 65 S. Ct. 1533, 1536-1537, 89 L. Ed. 1939 (1945). But Congress has enacted several statutes restricting both the applicability of the Sherman Act to labor and the power of federal courts to enjoin labor activity. Based on those statutes and on the policies embodied in the federal labor laws, the courts have fashioned two labor exemptions from the antitrust laws-the "statutory" and "nonstatutory" exemptions. See Connell Constr. Co. v. Plumbers & Steamfitters Local 100, 421 U.S. 616, 621-22, 95 S. Ct. 1830, 1834-1835, 44 L. Ed. 2d 418 (1975). Union conduct that falls within either exemption is immunized from challenge under the Sherman Act.

 The labor-antitrust exemptions are based on several statutes enacted by Congress in the wake of judicial decisions holding labor conduct violative of the Sherman Act. See United States v. Hutcheson, 312 U.S. 219, 229-31, 61 S. Ct. 463, 464-465, 85 L. Ed. 788 (1941). Section 6 of the Clayton Act, adopted in 1914, states:

 
The labor of a human being is not a commodity or article of commerce. Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor ... organizations, instituted for the purposes of mutual help, ... or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws.

 15 U.S.C. § 17 (1976). Simultaneously, Congress restricted the equitable powers of federal courts over conduct in the course of a labor dispute. Section 20 of the Clayton Act requires a burdensome showing to justify issuing any injunction against actions taken in a dispute over the "terms or conditions of employment," and it unqualifiedly forbids federal courts from enjoining specified activities, including concerted refusals to work. The section also reiterates the declaration of section 6 that certain specified activities do not violate any federal law. 29 U.S.C. § 52 (1976).

 In the 1920s the Supreme Court read the Clayton Act to apply only to union activities directed against an employer by its own employees. Duplex Printing Press Co. v. Deering, 254 U.S. 443, 41 S. Ct. 172, 65 L. Ed. 349 (1921). Congress therefore enacted the Norris-LaGuardia Act in 1932, restricting even further the power of federal courts to issue any injunction in a case growing out of a "labor dispute," and forbidding the issuance of an injunction contrary to the "public policy of the United States," declared to approve the efforts of workers to organize and bargain collectively. 29 U.S.C. §§ 101 & 102 (1976). In addition, Section 4 of the Act places many specific types of labor activity beyond the jurisdiction of federal courts to enjoin, including:

 
(a) Ceasing or refusing to perform any work or to remain in any relation of employment;
 
(b) Becoming or remaining a member of any labor organization or of any employer organization, regardless of any ("yellow dog" contract);
 
....
 
(g) Advising or notifying any person of an intention to do any of the acts heretofore specified;
 
(h) Agreeing with other persons to do or not to do any of the acts heretofore specified; and
 
(i) Advising, urging, or otherwise causing or inducing without fraud or violence the acts heretofore specified, regardless of any ("yellow dog" contract).

 29 U.S.C. § 104 (1976). Finally, section 5 states the Act's intended effect with respect to the antitrust laws. It provides that no injunction may issue on the ground that "any of the persons participating or interested in a labor dispute constitute or are engaged in an unlawful combination or conspiracy because of the doing in concert of the acts enumerated" in section 4.

 In the Wagner Act of 1935 ("NLRA"), Congress expanded the organizational rights of labor. Employees were expressly accorded the rights to organize, to bargain collectively, and to engage in concerted actions. Employers were forbidden to interfere with those rights. 29 U.S.C. §§ 157, 158, 163 (1976). The National Labor Relations Board ("NLRB") was established to regulate labor-management activities.

 In the Labor Management Relations Act of 1947 ("LMRA") and in the Labor Management Reporting and Disclosure Act of 1959 ("LMRDA"), Congress prohibited various labor practices and thereby sowed the seeds of the great complexities involved in labor-antitrust law. The LMRA prohibited unions from, among other things, causing employers to discriminate, engaging in certain forms of "secondary" boycotts, and using secondary pressure to enforce lawful "hot cargo" operations. The LMRDA made it unlawful to threaten or coerce secondary employers and outlawed all hot cargo agreements except in the garment and construction trades. These restrictions on labor activities have provided a basis for affording far more leeway to antitrust enforcement, even though no legislative history suggests that the labor-law restrictions were intended by Congress to free courts to apply antitrust law as well. See Connell Constr. Co. v. Plumbers & Steamfitters Local 100, supra, 421 U.S. at 634-35, 95 S. Ct. at 1840-1841; id. at 638-55, 95 S. Ct. at 1842-1851 (Stewart, J., dissenting).

 In attempting to reconcile the competing policies embodied in the antitrust and labor laws, the federal courts have relied in part on the federal labor policy expressed in the NLRA and its amendments. That policy recognizes unorganized labor's disadvantage in bargaining power and promotes collective bargaining as the proper means for resolving disputes over terms of employment. 29 U.S.C. § 151 (1976). It is in light of this policy, designed "to equalize before the law the position of workingmen and employer as industrial combatants," Duplex Printing Press Co. v. Deering, supra, 254 U.S. at 484, 41 S. Ct. at 182-183, that the labor-antitrust exemptions have been judicially defined. On the other hand, the courts have found in the more recent labor statutes, and in antitrust policy, reasons for subjecting labor activities to antitrust proscription.

 Modern labor-antitrust law divides the problems in the field into two distinct groups. In one group are the problems presented by antitrust challenges to unilateral labor activity; in the second are the problems presented by antitrust challenges to labor combinations with nonlabor persons or entities. In cases challenging unilateral labor activity, the Court applies the "statutory" exemption from the antitrust laws; in cases challenging combinations with nonlabor entities, the Court applies the "nonstatutory" labor-antitrust exemption. Both exemptions limit the scope of antitrust law's prescriptions by reference to labor law's protection of a broad range of concerted labor activity.

 A. The Statutory Exemption for Unilateral Activity

 In United States v. Hutcheson, supra, the Supreme Court announced that the Sherman, Clayton, and Norris-LaGuardia Acts must be read as a single "harmonizing text" to define labor's exemption from the antitrust laws, 312 U.S. at 231, 61 S. Ct. at 465-466, and defined the statutory exemption as follows:

 
So long as a union acts in its self-interest and does not combine with non-labor groups, the licit and the illicit under § 20 (of the Clayton Act) are not to be distinguished by any judgment regarding the wisdom or unwisdom, the rightness or wrongness, the selfishness or unselfishness of the end of which the particular union activities are the means.

 Id. at 232, 61 S. Ct. at 466 (footnote omitted). Any labor action passing the test is not only immune from injunction but also exempt from the Sherman Act for purposes of any other remedy sought for an antitrust violation. Id. The two-part Hutcheson test-has the union acted in its self-interest and apart from any non-labor group?-remains the governing test for whether labor actions fall within the statutory exemption from the antitrust laws. See H. A. Artists & Assoc., Inc. v. Actors' Equity Ass'n, 451 U.S. 704, 101 S. Ct. 2102, 2109, 68 L. Ed. 2d 558 (1981).

 Several Supreme Court cases have examined whether particular labor actions are exempt from the antitrust laws as unilateral and self-interested. Prior to Hutcheson, the Court held in Apex Hosiery Co. v. Leader, 310 U.S. 469, 60 S. Ct. 982, 84 L. Ed. 1311 (1940), that a union's violent takeover of a factory and subsequent sit-down strike are exempt from antitrust challenge because the Norris-LaGuardia and National Labor Relations Acts permit the "elimination of price competition based on differences in labor standards." Id. at 503, 60 S. Ct. at 997. The pre-Hutcheson Court also upheld a union's secondary activity against antitrust challenge. In Milk Wagon Drivers Local 753 v. Lake Valley Farm Products, Inc., 311 U.S. 91, 61 S. Ct. 122, 85 L. Ed. 63 (1940), the union picketed retailers to pressure milk wholesalers to accept the union's proposal for the terms on which the wholesalers could use independent-contractor vendors, rather than union drivers, to deliver milk; the union sought as well to induce the vendors to join that union, rather than a rival union the vendors had organized, and to abandon their independent contracting arrangement with the wholesalers. The Court held that, though the union activity was secondary in nature and the conflict included a controversy between two unions, the picketing grew out of a labor dispute and was therefore exempt from injunction under the Norris-LaGuardia Act. Id. at 96-103, 61 S. Ct. at 124-128.

 In Hutcheson, supra, the Court refused to permit "conventional, peaceful activities" (a refusal to work, picketing, and a boycott), undertaken by one union in a controversy with a rival union, to be punished as criminal violations of the Sherman Act. 312 U.S. at 227, 61 S. Ct. at 464. Thereafter, in Hunt v. Crumboch, 325 U.S. 821, 65 S. Ct. 1545, 89 L. Ed. 1954 (1945), the Court found exempt a union's refusal to admit a company's employees to membership and its refusal to sell its members' services to the company. The union's actions put the company out of business, and the company alleged that the "refusal to accept employment was due to personal antagonism against the (company) arising out of the killing of a union man." Id. at 824, 65 S. Ct. at 1547. The Court held, however, that the statutory exemption recognized in Hutcheson accorded employees "an absolute right ... to work or cease working according to their own judgments" as long as the "only combination ... (is) one of workers alone." Id. at 824, 825 n.1, 65 S. Ct. 1547 n.1.

 In Local 24, International Brotherhood of Teamsters v. Oliver, 358 U.S. 283, 79 S. Ct. 297, 3 L. Ed. 2d 312 (1959) ("Oliver I "), the Supreme Court declared that federal labor policy protects from regulation by state antitrust laws a collective bargaining agreement between the Teamsters union and several motor carriers that set minimum rental fees when a carrier leased a truck owned by its driver. The Court observed that the union's objective was to protect its member-drivers' wage scale from being undermined by the lessor-drivers. Moreover, the Court found that the union had acted unilaterally, even though the owner-drivers were entrepreneurs. The union could lawfully regulate their terms of employment, the Court held, because those terms were "of vital concern to the carrier's employed drivers." Id. at 294, 79 S. Ct. at 304. In Local 24, International Brotherhood of Teamsters v. Oliver, 362 U.S. 605, 80 S. Ct. 923, 4 L. Ed. 2d 987 (1960) ("Oliver II "), the Court referred back to Oliver I to uphold the union's requirement that carriers use their own employees, if available, to drive leased trucks and that they use their own trucks, if available, rather than lease.

 A clear instance of nonunilateral action was presented in Los Angeles Meat & Provision Drivers Union v. United States, 371 U.S. 94, 83 S. Ct. 162, 9 L. Ed. 2d 150 (1962). Independent-contractor grease peddlers had combined with a union to enhance their bargaining power. The Court held that the independent contractors could be divested of union membership, because "sellers of commodities" could not immunize their conduct by calling themselves collectively a union. Id. at 102, 83 S. Ct. at 166. The Court added, however, that "a labor organization might ... often have a legitimate interest in soliciting self-employed entrepreneurs as members.... But here ... there was no job or wage competition or economic interrelationship of any kind between the grease peddlers and other members of the ... union." Id. at 103, 83 S. Ct. at 167.

 The Supreme Court soon made clear that Meat Drivers did not presage any absolute prohibition of combinations between unions and independent contractors or entrepreneurs. In American Federation of Musicians v. Carroll, 391 U.S. 99, 88 S. Ct. 1562, 20 L. Ed. 2d 460 (1968), band leaders challenged the regulations of the musicians' union governing, among other things, the minimum prices that the leaders could charge for "club dates." The Supreme Court held that the regulation, though a direct price restraint, fell within the statutory exemption. The leaders were independent contractors, even entrepreneurs. But they nevertheless constituted a labor group because there was " "job or wage competition or some other economic interrelationship affecting legitimate union interests between the union members and the independent contractors.' " Id. at 106, 88 S. Ct. at 1567 (quoting Carroll v. American Federation of Musicians, 241 F. Supp. 865, 887 (S.D.N.Y.1965)). The band leaders competed with union-member musicians for shares in the fee charged for a club date, so regulation of the club-date fees was necessary to protect the wages and job security of musicians in the band. Id. 391 U.S. at 110-13, 88 S. Ct. at 1569-1571.

 The Supreme Court recently reaffirmed the Carroll principle in H. A. Artists & Assoc., Inc. v. Actors' Equity Ass'n, supra. The Court reiterated the warning in Hutcheson that "a party seeking refuge in the statutory exemption must be a bona fide labor organization, and not an independent contractor or entrepreneur." 101 S. Ct. at 2110 n.20. Yet the Court rejected a challenge by agents for stage actors to a system by which the actors' union licensed the agents and regulated the fees the agents could charge. The agents were independent contractors and did not even compete with actors for jobs or wages. But the facts came within the "other economic interrelationship" branch of the Carroll standard, because they greatly influenced, even controlled, actor access to jobs and, as a result, could easily undermine producer compliance with the wage structure established by the actors' union and producers. 101 S. Ct. at 2111-12.

 Thus, not all combinations of unions with entrepreneurs or independent contractors fall outside the statutory exemption. The second part of the Hutcheson requirement of unilateral conduct authorizes a broad interpretation of "labor group." Even though a challenged combination includes independent contractors or entrepreneurs, it may come within the statutory exemption if the non-employee parties to the combination are in job or wage competition with the employee parties, or in some other economic interrelationship that substantially affects the legitimate interests of the employees.

 B. The Nonstatutory Exemption for Combinations with Nonlabor Groups

 The nonstatutory exemption for labor actions in combination with nonlabor groups has been squarely addressed by the Supreme Court on only four occasions since the 1930s. Those cases, moreover, do not spell out a standard of the sort articulated in Hutcheson and interpreted in Carroll ; each case was decided fairly narrowly on its facts. Nonetheless, the language in those cases, as well as that in related Supreme Court decisions, define at least the contours of the nonstatutory exemption.

 The Court first confronted the problems presented by an antitrust challenge to a labor-nonlabor combination in Allen Bradley Co. v. Local 3, Electrical Workers, supra. The Court recognized that such a combination raised different antitrust problems from those raised by unilateral labor actions. When labor does not act alone, said the Court, "we have two declared congressional policies which it is our responsibility to try to reconcile. The one seeks to preserve a competitive business economy; the other to preserve the rights of labor to organize to better its conditions through the agency of collective bargaining." Id. 325 U.S. at 806, 65 S. Ct. at 1538. Allen Bradley involved a combination of contractors and manufacturers that included several hot cargo agreements; the combination "(quite) obviously ... violated both §§ 1 and 2 of the Sherman Act, unless ... immunized by the participation of the union." Id. at 800, 65 S. Ct. at 1535 (footnote omitted). The Court assumed that no antitrust liability would attach to the union's agreements if made ...


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