OPINION OF THE COURT
WEIS, Circuit Judge.
Area standards picketing by a construction union directed at a contractor but carried on at a housing developer's sales office is the subject of this appeal. A divided National Labor Relations Board refused to find that the union's activity was within the prohibition against secondary picketing included in the 1959 amendments to the National Labor Relations Act. We conclude that the Board erred in characterizing the picketing as primary and failing to apply the settled merged product rule. Accordingly, the Board's order will be set aside and the case will be remanded for appropriate action.
The Panther Valley construction site in Allamuchy, New Jersey encompasses an irregularly shaped area about two and a half miles long and two miles wide. It is owned by Panther Valley, Ltd. which over a period
After a hearing, an administrative law judge (ALJ) dismissed the § 8(b)(4)(i)(B) charge, but found a violation of § 8(b)(4)(ii)(B). By a divided vote the Board reversed, finding that the picketing was directed at the primary employer and, hence, was protected activity.
During the time of the picketing, access to the construction area was by the main gate and two reserved gates located at the other extreme of the property, two to three miles from the shopping mall. One of the reserved gates was designated for the use of K & K employees and the other was for the other construction trades personnel. The housing areas where K & K was working were about equidistant from the boundaries of the property but were not visible from any of the gates because of the terrain. The two reserved gates were left unattended during the daytime but were secured at night. Neither was ever picketed by Local 399.
Security personnel of Panther Valley controlled the main gate. At times a truck with a K & K decal was seen in the shopping mall and using the main gate. The evidence did not disclose whether construction employees driving in private automobiles used the main gate, or, if so, who their respective employers might have been.
Before the picketing began, Local 399 had written to K & K about its wage standards and the possibility of picketing. The company responded, stating separate reserved gates for K & K and for all other construction workers would be designated and that the main gate would be used by neutral employees as well as others not involved in the primary dispute.
On two dates in November, 1975, and on Saturdays and Sundays in April and June of 1976, pickets appeared at the main gate and the shopping center. Three pickets patrolled the main entrance of the construction site, at the southeastern edge of the property, and two were stationed behind the shopping center, south of the main entrance. On Sunday, April 4, 1976, pickets were also present in the shopping center entrance near the sales office of Panther Valley Ltd. The pickets carried signs reading:
The pickets also passed out handbills setting out union pay scales and stating that members were neighbors and taxpayers trying
The ALJ found that the picketing and handbilling were clearly aimed at prospective purchasers of houses from Panther Valley. In his decision he wrote: "In appealing to a customer and giving him the `facts' in regard to the work being done by K & K, the only conceivable result which could be sought by the Union is to have Panther Valley prospective customers shy away from buying Panther Valley's products i. e. the houses, because of K & K's part in producing that product." The ALJ also noted that weekend picketing at the main entrance and at the mall where the office was located had as a purpose hindering the sale of Panther Valley's homes, with the illegal objective of having that company terminate its relationship with K & K.
Over a strong dissent, the Board disagreed, stating that area standards picketing by Local 399 was lawful activity directed at the primary, K & K. The dissenting member argued that the Board was departing from established precedent prohibiting secondary picketing where the struck product could not be separated from that of the secondary party.
Resolution of the issue in this case turns upon the interpretation of § 8(b)(4)(ii)(B), which makes it an unfair labor practice "to threaten, coerce, or restrain any person engaged in commerce . . . where . . . an object . . . is . . . (B) forcing or requiring any person to cease using, selling . . . or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person." Congress adopted this amendment to § 8(b)(4) as part of the Labor-Management Reporting and Disclosure Act of 1959, Pub.L. No. 86-257, § 704(a), 73 Stat. 542 (1959), because of a desire to restrict picketing at secondary sites. The amendment was a reaction to dissatisfaction with a growing tendency of labor-management disputes to be carried over to neutral parties as a means of forcing settlements between the principals.
In NLRB v. Fruits & Vegetable Packers & Warehousemen, Local 760, 377 U.S. 58, 84 S.Ct. 1063, 12 L.Ed.2d 129 (1964) (Tree
In the Tree Fruits case, a labor dispute between a union and certain Washington state fruit packers led to picketing of the Safeway chain of retail stores that sold apples of the struck firms. The pickets confined their efforts to urging a boycott of nonunion Washington apples and were careful to avoid interference with customers of Safeway, making no attempt to extend the boycott request to other products sold by the stores. The Court distinguished between that situation, where there was peaceful picketing directed only at one product of many carried by the secondary's stores, and one in which an appeal was made to customers to refrain from trading altogether with the secondary employer. In the former case, the union's public appeal is confined to its dispute with the primary; in the latter, however, the appeal goes beyond the struck goods as the union seeks by curtailing the public's patronage to force the secondary to cooperate with the union in its primary dispute. The Court reasoned that under those circumstances, the union created a separate dispute with the secondary employer, an evil sought to be eliminated by the 1959 amendment.
Tree Fruits created an exception to § 8(b)(4), one whose limitations must be defined in a variety of circumstances. In that case the secondary employer stocked many items and the easily identifiable struck product was sold in essentially the same form as when obtained from the primary. Quite a different problem is presented when the primary's product or service is merged with the secondary's and the union cannot limit its public appeal for a boycott without enmeshing the neutral in its dispute.
In Honolulu Typographical Union No. 37 v. NLRB, 401 F.2d 952 (D.C. Cir. 1968), the Court of Appeals for the District of Columbia agreed with the Board that Tree Fruits was inapplicable where the struck product had become an integral part of the retailer's entire offering, so that the product boycott of necessity encompassed the entire business of the secondary employer. Agreeing with Honolulu Typographical Union No. 37 that a boycott of the struck product was illegal when the struck product has "so merged into the seller's total business as to be indistinguishable therefrom," 131 U.S.App.D.C. at 5, 401 F.2d at 956, the Court of Appeals for the Sixth Circuit in American Bread Co. v. NLRB, 411 F.2d 147
The Board in the foregoing cases consistently interpreted Tree Fruits as not controlling where because of the merged product the union's picketing had the effect of advocating a complete boycott of the secondary. In this case, however, the Board has shifted its stance. Noting that the union had a bona fide area standards disagreement and had couched its picket signs in language expressly informing the public that its dispute was with the primary only,
The Board appeared to be concerned that in light of the special circumstances of the construction industry, the merged product doctrine would be applicable in almost all instances, thus depriving construction unions of an opportunity available to others to inform the public of their disputes.
In the field of labor-management relations, the construction industry has in fact received special treatment from Congress whenever it was thought to be appropriate.
It is true that in a sense the case law interpreting Tree Fruits gives broader immunity to those secondary sellers who retail struck primary products that are so merged in their total business as to be indistinguishable. But, as the D.C. Circuit observed in Honolulu Typographical Union No. 37 v. NLRB, supra 131 U.S.App.D.C. at 5, 401 F.2d at 956:
The distinction between primary and secondary activity is not always easy to delineate but we have no difficulty in determining that the union's picketing here was in violation of the statute.
Moreover, this case does not rest upon "mere publicizing" of an area standards dispute, as the Board characterized the union's activity. It is picketing, not mere publicizing, which is the basis of the unfair labor practice charged here. Had the Local chosen to utilize only handbilling or other advertising to publicize its dispute, there would have been no violation of the Act under the publicity proviso of § 8(b)(4).
Accordingly, the order of the Board dismissing the complaint will be set aside and
WE ARE PICKETING THE K & K CONSTRUCTION CO. INC., WHICH IS PERFORMING CARPENTRY WORK ON THIS JOBSITE UNDER NON AFL-CIO UNION CONDITIONS, WHICH HAVE THE EFFECT OF DESTROYING THE WAGE STRUCTURES, FRINGE BENEFITS AND GOOD WORKING CONDITIONS WHICH HAVE BEEN ESTABLISHED AS AREA STANDARDS FOR THIS TYPE OF WORK PERFORMED IN THIS COUNTY. OUR MEMBERS ARE RESIDENTS AND TAXPAYERS IN THIS COUNTY. THEY ARE YOUR NEIGHBORS. THEY ARE TRYING TO PROTECT THE WAGES AND CONDITIONS WHICH TOOK MANY YEARS TO ACHIEVE.
The reverse side of the handbill contained a diagram encaptioned "Housing Costs" which stated that on-site labor should represent "16% of your overall cost."
The Board, moreover, ignored pertinent findings of the ALJ that "[w]eekends are generally the time that people go househunting" and that "[p]icketing at the main entrance to Panther Valley and at the Panther Valley Mall where the sales office is located . . . must have as one purpose, hindering Panther Valley's sales of its homes." We are persuaded in this case that the timing and location of the picketing reveal an objective unlawful under § 8(b)(4)(ii)(B).