## Facts

- The International Association of Sheet Metal Workers (International) viewed “double-breasted” contracting—operating both union and nonunion shops—as a recurring problem in the sheet-metal industry.
- International announced a policy directing local unions to seek an “integrity clause” in collective-bargaining agreements.
- The integrity clause treated a signatory contractor as a “bad faith employer” if the contractor (1) also operated a nonunion sheet-metal shop or (2) was affiliated with a company that operated a nonunion shop.
- The clause required the contractor to notify the local union if it became a “bad faith employer.”
- If the contractor became a “bad faith employer,” the clause gave the local union the right to rescind (terminate) the collective-bargaining agreement.
- International instructed locals to demand the integrity clause in existing agreements, and indicated that an employer that refused would lose a contractual or bargaining-related advantage it otherwise would have received.
- Sheet Metal Workers Local 91 (the Union) followed International’s approach in dealings with multiple employers; some accepted the clause.
- One employer resisted the Union’s demand and filed an unfair labor practice charge with the National Labor Relations Board (NLRB).
- The NLRB concluded the Union’s efforts to obtain and maintain the integrity clause violated the National Labor Relations Act (NLRA), and issued a remedial order.
- The Union petitioned for review in the D.C. Circuit, and the NLRB cross-applied for enforcement of its order.

## Issues

1. Whether the integrity clause constituted an agreement prohibited by NLRA § 8(e) because its object and effect were to pressure signatory employers to avoid or sever business relationships with nonunion affiliates or related entities.
2. Whether the Union violated NLRA § 8(b)(4)(ii)(A) by threatening, coercing, or restraining an employer with an object of forcing the employer to enter into an agreement prohibited by § 8(e).
3. Whether substantial evidence supported the NLRB’s findings about the clause’s purpose and the Union’s conduct, and whether the Board’s interpretation of the Act was reasonable.

## Decision

- The court upheld the NLRB’s determination that the integrity clause was unlawful under NLRA § 8(e) because it operated as a secondary restraint tied to the employer’s relationship with nonunion operations or affiliates, rather than a term confined to the bargaining unit’s wages, hours, or working conditions.
- The court upheld the NLRB’s finding that the Union violated NLRA § 8(b)(4)(ii)(A) by using coercive pressure to obtain employer assent to a clause prohibited by § 8(e).
- The court denied the Union’s petition for review and granted the NLRB’s cross-application for enforcement of the Board’s order.

## Legal Principles

- Under NLRA § 8(e), unions and employers may not enter into “hot cargo” agreements—contract terms that, in substance and objective effect, require or pressure an employer to cease or refrain from doing business with another person or entity.
- In distinguishing lawful primary objectives from unlawful secondary objectives, the NLRB may examine a provision’s text, how it functions, and the surrounding bargaining context to determine whether the provision targets the labor relations of neutral or related entities outside the bargaining relationship.
- Contract language that penalizes a signatory employer for operating, owning, or affiliating with a nonunion shop—such as by authorizing rescission of the collective-bargaining agreement—can be treated as a secondary restraint when it is aimed at changing the employer’s relationships with other entities rather than regulating unit terms and conditions.
- NLRA § 8(b)(4)(ii)(A) prohibits a union from threatening, coercing, or restraining an employer where an object is to force the employer to enter into an agreement prohibited by § 8(e).
- A court of appeals will uphold the NLRB’s factual findings if supported by substantial evidence on the record as a whole, and will generally sustain the Board’s reasonable construction of the NLRA.

## Conclusion

The D.C. Circuit enforced the NLRB’s order against Sheet Metal Workers Local 91, agreeing that the integrity clause—treating an employer as acting in “bad faith” based on nonunion operations or affiliations and allowing rescission of the collective-bargaining agreement—constituted an unlawful § 8(e) secondary agreement, and that the Union’s pressure to secure acceptance of that clause violated § 8(b)(4)(ii)(A).


Sheet Metal Workers Local 91 v. National Labor Relations Board, 905 F.2d 417 (1990)