597 F. 2d 133 - Amalgamated Meat Cutters Butchers Workmen of North America Local Union No v. Wetterau Foods Incorporated Iga

This is an appeal from the dismissal, for failure to state a claim upon which relief can be granted, of appellants' complaint seeking treble damages1 for an alleged violation of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2 (1973),2 and the Missouri antitrust law, Mo.Rev.Stat. § 416.010 Et seq. (1969). The District Court3 found that the complaint portrayed a labor dispute between union and employer and held that since federal labor laws clearly sanctioned the conduct involved, it could not give rise to an antitrust violation.4 We affirm.

The five individual appellants are employees in the meat department of Briggs & Dailey IGA, a grocery store in Moberly, Missouri. They constitute a bargaining unit represented by the Amalgamated Meat Cutters & Butchers Workmen of North America, Local Union No. 576, which is also an appellant. The union, as the certified bargaining agent, negotiated for a collective bargaining agreement with Briggs & Dailey for three months without result. When negotiations came to an impasse on March 10, 1978, the union called an economic strike. In order to continue the operation of the meat department, Briggs & Dailey replaced the striking workers with personnel provided by Wetterau, Incorporated, a wholesale food supplier, which supplied food products to Briggs & Dailey. Wetterau continued to pay the salaries of these personnel, and merely loaned them to Briggs & Dailey on a temporary basis to perform retail meat cutting. After only a few weeks Wetterau withdrew the replacement workers when the union allegedly threatened to strike Wetterau. Appellants claim that the agreement between Wetterau and Briggs & Dailey to supply replacement workers constitutes a combination in restraint of trade.5

Although generally a motion to dismiss does not satisfactorily dispose of a complex antitrust action, See Bales v. Kansas City Star Co., 336 F.2d 439 (8th Cir. 1964), we have approved its use in actions where the pleaded allegations are not sufficient to base a claim upon which relief can be granted. In Hiland Dairy, Inc. v. Kroger Co., 402 F.2d 968, 973 (8th Cir. 1968), Cert. denied, 395 U.S. 961, 89 S.Ct. 2096, 23 L.Ed.2d 748 (1969), we stated:

A motion to dismiss for failure to state a cause of action can serve a useful purpose in disposing of legal issues with a minimum of time and expense to the interested parties and is applicable to an anti-trust complaint. In testing the legal sufficiency of the complaint the well-pleaded allegations are taken as admitted but conclusions of law and unreasonable inferences or unwarranted deductions of fact are not admitted. See, 2A Moore's Federal Practice § 12.08, p. 2244.

This observation is particularly appropriate in the instant case because appellants' arguments are premised upon an unreasonable characterization of the facts.

Appellants rely upon the proposition that: "Clearly this is conduct which lies wholly outside the context of any collective bargaining relationship and any 'normal labor dispute.' " The fallacy of this thesis is blatant. Briggs & Dailey merely used Wetterau employees to temporarily replace the striking meatcutters in order to counter the union's economic pressure on the contract negotiations. The agreement had no purpose or effect beyond the scope of the labor dispute.

The union and striking employees were exercising their right to bring economic pressure upon an employer to meet their demands. Under the law they have the right to refuse to work, the right to strike and the right to picket to bring economic pressure upon management to accede to their demands, but neither the striking employees nor the union have unlimited control over the employer. In NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333, 345, 58 S.Ct. 904, 82 L.Ed. 1381 (1938), the United States Supreme Court recognized the right of an employer in a labor dispute regarding negotiations for a collective bargaining agreement to resist the pressures created by a union's economic strike by replacing striking employees in an effort to carry on business. The continued operation of a business by replacement of economic strikers furthers competition and free interchange of goods in commerce. This court has supported an employer's right to carry on his business by replacing striking employees on numerous occasions. See, e. g., Little Rock Airmotive, Inc. v. NLRB, 455 F.2d 163, 166 (8th Cir. 1972); Wilkinson Manufacturing Co. v. NLRB, 456 F.2d 298, 305 (8th Cir. 1972); First National Bank of Omaha v. NLRB, 413 F.2d 921, 925 (8th Cir. 1969); NRLB v. Gopher Aviation, Inc., 402 F.2d 176, 183 (8th Cir. 1968); NRLB v. L. G. Everist, Inc., 334 F.2d 312, 317 (8th Cir. 1964).

Since Briggs & Dailey's conduct clearly complies with the acceptable framework of labor negotiations contemplated by federal labor policy, it is necessary to examine congressional intent in the context of accommodating the Sherman Act to the policies of federal labor laws. The antitrust laws were enacted to prevent restraints to free competition in business and commercial transactions that tend to restrict production, control prices or otherwise control the market to the detriment of consumers. Apex Hosiery Co. v. Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311 (1940). They were not enacted to regulate labor relations.

Congress provided a statutory labor exemption from the antitrust laws. 15 U.S.C. §§ 17 and 26; 29 U.S.C. §§ 52, 104, 105 and 113; See Connell Construction Co., Inc. v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616, 621, 622, 95 S.Ct. 1830, 44 L.Ed.2d 418 (1975). Although these statutes do not directly address the activities involved in this case where the agreement is between two employers, these statutes demonstrate a congressional purpose to restrict the application of the antitrust laws when they unduly interfere with the goals of federal labor law. In resolving conflicts in areas where federal antitrust and labor policies seemingly overlap, the Supreme Court has recognized a nonstatutory labor exemption. Federal Maritime Commission v. Pacific Maritime Association, 435 U.S. 40, 58, 98 S.Ct. 927, 55 L.Ed.2d 96 (1978); Connell Construction Co., Inc. v. Plumbers & Steamfitters Local Union No. 100, supra, 421 U.S. at 622, 95 S.Ct. 1830; Volkswagenwerk Aktiengesellschaft v. Federal Maritime Commission, 390 U.S. 261, 287, 88 S.Ct. 929, 19 L.Ed.2d 1090 (Harlan, J., concurring), Modified regarding taxation of costs, 392 U.S. 901, 88 S.Ct. 2049, 20 L.Ed.2d 1361 (1968); Local Union No. 189, Amalgamated Meatcutters & Butcher Workmen v. Jewel Tea Co., Inc., 381 U.S. 676, 691-97, 85 S.Ct. 1596, 14 L.Ed.2d 640 (1965); United Mine Workers of America v. Pennington, 381 U.S. 657, 666, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965); See also California State Council of Carpenters v. Associated General Contractors of California, Inc., 404 F.Supp. 1067 (N.D.Cal.1975). Defining the boundaries of this exemption has not proved an easy task. A court must balance the degree of interference with federal labor policy with the magnitude of the restraint of trade and whether the restraint directly or indirectly affects market prices and free competition for the consuming public.6

Briggs & Dailey temporarily accepted the use of Wetterau employees to counteract the effect of the strike and continue operation of the meat department. Appellant union argues that this restrained it in its trade in terms of attracting membership and representing employees. The individual appellants argue that they were restrained in their business and enterprise of earning wages. Since any injury to appellants would flow naturally from the replacement of striking workers, which conduct federal labor policy sanctions, See Mackay, supra, the agreement between Briggs & Dailey and Wetterau cannot constitute a violation of the antitrust law. Federal labor policy sanctions both the goal of resisting union demands and the method of replacing striking workers and the magnitude and nature of any restraint of trade or commerce in this case directly follows from the sanctioned conduct. The agreement had no anticompetitive effect unrelated to the collective bargaining negotiations.7

Appellants rely upon "sham labor union" cases to support their claim. Tugboat, Inc. v. Mobile Towing Co., 534 F.2d 1172 (5th Cir. 1976); Carpenters District Council v. United Contractors Association of Ohio, Inc., 484 F.2d 119 (6th Cir. 1973), Modified, 539 F.2d 1092 (6th Cir. 1976); International Association of Heat and Frost Insulators and Asbestos Workers v. United Contractors Association, Inc. of Pittsburg, Pennsylvania, 483 F.2d 384 (3d Cir. 1973), Modified, 494 F.2d 1353 (3d Cir. 1974). Although these cases can be distinguished upon various grounds, the mere absence of any "sham" labor organization in the instant case sufficiently destroys their precedential value here. Briggs & Dailey does not dispute the union's status as the certified bargaining representative of the meatcutters in its Moberly, Missouri, store. It did not seek to establish a company-dominated labor organization or to affect any commercial or trade relationship other than its collective bargaining agreement with the union. Briggs & Dailey's sole purpose in using the temporary replacements supplied by Wetterau was to continue its business in order to reinforce its bargaining power in the negotiations regarding a collective bargaining agreement with the union, while the union sought by its economic strike to make unprofitable Briggs & Dailey's operation, and thus enhance the union's bargaining power in the labor dispute. Neither side had the absolute right to unilaterally control the other and the collective bargaining process was free to be carried to its ultimate conclusion.

The judgment of the District Court is affirmed.