Facts
- A federal court ordered a large, multiyear cleanup of Boston Harbor; the Massachusetts Water Resources Authority (MWRA), a state agency, funded and supervised the construction, owned the facilities to be built, set bid conditions, awarded contracts, and paid contractors.
- MWRA’s project manager, Kaiser Engineers, recommended using a project labor agreement (PLA) to secure labor stability and avoid work stoppages.
- Kaiser and the Building and Construction Trades Council (BCTC) negotiated a prehire collective-bargaining agreement under NLRA § 8(f).
- MWRA adopted Bid Specification 13.1, requiring each successful bidder to agree to comply with the PLA.
- The PLA required use of union hiring halls, payment of union wages and benefits, compliance with union work rules, and a no-strike commitment.
- Associated Builders & Contractors (ABC), representing nonunion contractors, sought to enjoin enforcement of Specification 13.1, arguing it was preempted by the NLRA under Garmon and Machinists doctrines.
Issues
- Whether the NLRA preempts a state agency, acting as the owner of a construction project, from requiring contractors to comply with a lawful prehire project labor agreement as a condition of winning the contract.
- Whether MWRA’s bid specification constituted impermissible state “regulation” triggering Garmon or Machinists preemption, or instead proprietary conduct as a market participant.
Decision
- The Supreme Court unanimously reversed the First Circuit.
- The Court held the NLRA does not preempt a state authority, acting as a project owner, from enforcing an otherwise lawful § 8(f) prehire agreement negotiated by private parties.
- MWRA’s Specification 13.1 was permissible because MWRA acted as a market participant seeking labor peace on its own project, not as a regulator setting general labor policy.
- The case was remanded for further proceedings consistent with the Court’s opinion.
Legal Principles
- The NLRA contains no express preemption clause; implied preemption is not found absent conflict with federal law, frustration of federal objectives, or clear congressional intent to occupy the field.
- Garmon preemption bars state and local regulation of conduct arguably protected by NLRA § 7 or prohibited by § 8, preserving primary NLRB jurisdiction; it targets governmental regulation, not ordinary proprietary contracting.
- Machinists preemption bars governmental regulation of conduct Congress intended to leave to the free play of economic forces; it does not bar a government owner from choosing contract terms that private owners may lawfully choose.
- When a state acts as a proprietor in the marketplace (e.g., as a purchaser/owner managing its own project), NLRA preemption doctrines generally do not apply in the same manner as they do to state regulation.
- A state may require compliance with an otherwise lawful PLA for a specific public works project when the requirement serves legitimate proprietary interests, such as ensuring labor stability and timely completion.
Conclusion
The Court upheld a public owner’s ability to require contractors to follow a lawful project labor agreement on a particular construction project, concluding that NLRA preemption doctrines aimed at state regulation do not prevent a state agency from acting as a market participant to protect proprietary interests like labor peace.