A federal appeals court panel in Richmond yesterday found the nation's largest electrical contractors' trade association and electrical workers union guilty of price fixing by attempting to charge fees to nonmember contractors. Damages could exceed $100 million.
The three-judge panel, in a 2-to-1 decision, upheld a lower-court ruling by a federal judge in Baltimore who said the International Brotherhood of Electrical Workers and the National Electrical Contractors Association violated antitrust law when they attempted to require all contractors, including those not belonging to the NECA, to pay one percent of their labor payroll to the association. The association represents management in negotiations with the IBEW.
"There can be no doubt that the agreement in question here . . . falls within the definition of price fixing," the court said. "The industry fund would tend to stabilize the price of electrical construction contracts, a practice illegal per se under the Sherman Act."
Lawyers for the NECA and the IBEW said they hadn't heard about the decision and couldn't say whether it will be appealed. A member of the National Constructors Association, which filed the lawsuit against the two groups, said he had heard of the decision but had no statement. The NCA represents the nation's largest construction firms.
The NCA had argued that its members negotiate their labor agreements at the national level and don't need the services of the NECA, making it unnecessary to pay another association for labor services.
The Baltimore judge said that, by trying to force all contractors to pay a fee to the NECA, the union and the association were engaged in what amounted to price fixing in the construction industry. He said that, by requiring the fee, the NECA was attempting to remove any edge in competitive bidding that nonmembers might have.
According to depositions in the lower-court case, the NECA already had collected about $25 million a year in dues from its members before going after nonmembers. From 1977 through 1979, the NECA collected about $30 million from nonmembers. Since the case was filed as a class action, the NECA and the IBEW could be liable for treble damages.
The IBEW, responding to the lower-court decision, had called that ruling "erroneous in at least two fundamental respects. First, he has misconstrued and misapplied antitrust law to the circumstances of the case. Second, his decision granting summary judgment to the plaintiff in a case where there are serious disputes concerning critical facts is improper as a matter of law."