## Facts

- A trade association of hand-blown window-glass manufacturers, along with member companies and officers, coordinated with a glassworkers’ union that represented essentially all available skilled labor for hand-blown window glass.
- Hand-blown window glass cost substantially more to produce than machine-made glass, but both sold at the same market price, making hand production economically vulnerable to inefficiency.
- The industry faced a shortage of skilled glassblowers; factories could not operate continuously without sufficient labor and would incur serious losses if undermanned.
- The association and union adopted a wage-scale and employment arrangement that apportioned available labor among factories through a rotation system during the working season.
- Under the arrangement, certain factories would operate during one period while others would shut down, then switch, so workers could have continuous employment through the season and each factory would receive a share of scarce labor.
- The United States filed an equity action under the Sherman Act seeking to enjoin the arrangement as a combination or conspiracy restraining interstate trade; the district court entered an injunction.
- The manufacturers and association appealed directly to the Supreme Court.

## Issues

1. Whether an agreement between all manufacturers of a commodity and a union representing essentially all obtainable labor, governing only how labor is employed in production (not sales or distribution), constitutes a combination in unreasonable restraint of trade under § 1 of the Sherman Act.
2. Whether an arrangement whose effects on interstate commerce are indirect and incidental can support Sherman Act injunctive relief on these facts.

## Decision

- The Supreme Court reversed the district court’s decree and vacated the injunction.
- The Court held that the wage-scale and labor-rotation arrangement was not a combination in unreasonable restraint of trade, assuming it might affect interstate commerce.
- The Court treated the agreement as directed to production and labor utilization in response to labor scarcity, not as a scheme targeting prices, sales, or distribution.

## Legal Principles

- Whether a collective agreement between manufacturers and a union representing the available labor violates the Sherman Act when it concerns only the manner of employing labor in production, and not sales or distribution, depends on the particular facts.
- A restraint that arises incidentally from an arrangement focused on manufacturing conditions may fall outside Sherman Act condemnation when its impact on interstate commerce is indirect and incidental.
- Rule-of-reason analysis may apply to coordinated conduct tied to labor allocation and production practices, especially where the arrangement responds to practical industry constraints rather than aims to control market prices or distribution.

## Conclusion

The Court held that, in the economic context of scarce skilled labor and costly hand production, an employer–union rotation plan allocating labor among factories concerned manufacturing operations and did not constitute an unreasonable restraint of trade under the Sherman Act, so the government’s injunction was improper.


National Ass'n of Window Glass Mfrs. v. United States, 263 U.S. 403 (1923)