A-24455, SEPTEMBER 18, 1928, 8 COMP. GEN. 135

A-24455: Sep 18, 1928

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CONTRACTS - EMPLOYMENT OF UNION AND NONUNION LABOR WHERE BOTH UNION AND NONUNION LABOR ARE EMPLOYED ON GOVERNMENT WORK AND IT APPEARS THERE HAS BEEN NO SUCH INTERFERENCE BY THE EMPLOYER OF NONUNION LABOR WITH THE EMPLOYERS OF UNION LABOR IN THE PERFORMANCE OF THEIR WORK. THE EMPLOYMENT BY IT OF NONUNION LABOR IS NEITHER UNLAWFUL NOR IN VIOLATION OF THE TERMS OF ITS CONTRACT. REQUESTING DECISION WHETHER YOU ARE AUTHORIZED TO TERMINATE A CONTRACT DATED JULY 6. CONTRACT WAS ENTERED INTO WITH J. ON THE SAME DATE CONTRACT WAS ENTERED INTO WITH THE VIRGINIA ENGINEERING CORPORATION FOR THE MECHANICAL EQUIPMENT OF THE FIVE RESIDENCES. THE VIRGINIA ENGINEERING CORPORATION IS AN OPEN-SHOP ORGANIZATION.

A-24455, SEPTEMBER 18, 1928, 8 COMP. GEN. 135

CONTRACTS - EMPLOYMENT OF UNION AND NONUNION LABOR WHERE BOTH UNION AND NONUNION LABOR ARE EMPLOYED ON GOVERNMENT WORK AND IT APPEARS THERE HAS BEEN NO SUCH INTERFERENCE BY THE EMPLOYER OF NONUNION LABOR WITH THE EMPLOYERS OF UNION LABOR IN THE PERFORMANCE OF THEIR WORK, WITHIN THE MEANING OF ARTICLE 13 OF THE STANDARD GOVERNMENT CONSTRUCTION CONTRACT, AS TO AUTHORIZE TERMINATION OR ABROGATION OF THE CONTRACT OF THE NONUNION EMPLOYER BY REASON THEREOF, THE EMPLOYMENT BY IT OF NONUNION LABOR IS NEITHER UNLAWFUL NOR IN VIOLATION OF THE TERMS OF ITS CONTRACT.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, SEPTEMBER 18, 1828:

THERE HAS BEEN RECEIVED YOUR LETTER OF SEPTEMBER 12, 1928, REQUESTING DECISION WHETHER YOU ARE AUTHORIZED TO TERMINATE A CONTRACT DATED JULY 6, 1928, WITH THE VIRGINIA ENGINEERING CORPORATION, UNDER FACTS STATED AS FOLLOWS:

UNDER DATE OF JANUARY 14, 1928, THE DEPARTMENT ENTERED INTO A CONTRACT WITH JOHN GRANT AND SON FOR THE CONSTRUCTION OF THE MAIN BUILDING OF THE CLEVELAND, OHIO, MARINE HOSPITAL, THE WORK TO BE COMPLETED WITHIN 680 DAYS FROM JANUARY 24, 1928. THE WORK THEREUNDER HAS PROGRESSED SATISFACTORILY TO DATE.

UNDER DATE OF JULY 6, 1928, CONTRACT WAS ENTERED INTO WITH J. H. WIESE COMPANY FOR THE CONSTRUCTION OF FIVE RESIDENCES, NURSES' QUARTERS, ETC., FOR THE SAME MARINE HOSPITAL, AND ON THE SAME DATE CONTRACT WAS ENTERED INTO WITH THE VIRGINIA ENGINEERING CORPORATION FOR THE MECHANICAL EQUIPMENT OF THE FIVE RESIDENCES, NURSES' QUARTERS, ETC.

THE VIRGINIA ENGINEERING CORPORATION IS AN OPEN-SHOP ORGANIZATION, WHEREAS JOHN GRANT AND SON EMPLOYS UNION LABOR THROUGHOUT, AND THE J. H. WIESE COMPANY ALSO EMPLOYS UNION LABOR ON THE JOB. INCIDENT TO THE WORK OF THE VIRGINIA ENGINEERING CORPORATION IT IS NECESSARY THAT THE LATTER GO INTO THE MAIN BUILDING FOR THE INSTALLATION OF A HIGH PRESSURE BOILER AND FOR THE INSTALLATION OF THE NECESSARY TIE LINES BETWEEN THE MAIN BUILDING AND THE NURSES' QUARTERS, RESIDENCES, ETC.

THE ATTENTION OF THE DEPARTMENT HAVING BEEN BROUGHT TO THE FACT OF PROBABLE LABOR DIFFICULTIES ON THIS WORK, A REPRESENTATIVE OF THE VIRGINIA ENGINEERING CORPORATION WAS CALLED INTO A CONFERENCE IN THE OFFICE OF THE SUPERVISING ARCHITECT, AND WHILE NO PROMISE WAS MADE BY HIM AS TO JUST WHAT HIS PROCEDURE WOULD BE, IT WAS BELIEVED FROM HIS STATEMENTS THAT HE INTENDED TO SUBLET ALL WORK INVOLVED WHICH TIES UP WITH THE WORK PERFORMED OR TO BE PERFORMED UNDER THE CONTRACT OF JOHN GRANT AND SON ON THE MAIN BUILDING AND CONNECTING LINES, IT BEING ANTICIPATED THAT THIS SUBLETTING WOULD BE TO CONTRACTORS WHO EMPLOYED UNION LABOR. THIS WOULD HAVE AVOIDED DIFFICULTY.

IT NOW DEVELOPS THAT THE VIRGINIA ENGINEERING CORPORATION HAS EMPLOYED NON-UNION LABOR ON THIS WORK, AND, IN VIEW OF A THREATENED STRIKE, THE MATTER WAS REFERRED TO THE DEPARTMENT OF LABOR FOR POSSIBLE CONCILIATION. UNDER DATE OF SEPTEMBER 5, 1928, MR. A. L. FAULKER, U.S. COMMISSIONER OF CONCILIATION, ADVISED THE SUPERVISING ARCHITECT THAT HE SUCCEEDED, IN CONFERENCE WITH THE UNION LEADERS REPRESENTING THE UNION BUILDING-TRADES WORKMEN ENGAGED UPON THE CONSTRUCTION WORK OF THE MARINE HOSPITAL, IN HAVING THE THREATENED STRIKE DEFERRED UNTIL SEPTEMBER 17, 1928.

THE SPECIFICATIONS UPON WHICH BIDS WERE RECEIVED FOR THE MECHANICAL EQUIPMENT CONTAIN THE FOLLOWING PARAGRAPH:

"OTHER CONTRACTS, ETC.--- THE GOVERNMENT MAY AWARD OTHER CONTRACTS FOR ADDITIONAL WORK, AND THE CONTRACTOR OPERATING UNDER THIS SPECIFICATION SHALL NOT PREVENT SUCH OTHER CONTRACTORS FROM ENTERING THE PREMISES AND PERFORMING THEIR WORK, AND HE SHALL FULLY COOPERATE WITH SUCH OTHER CONTRACTORS AND CAREFULLY FIT HIS OWN WORK TO THAT PROVIDED UNDER OTHER CONTRACTS (SEE ARTICLE 13 OF STANDARD GOVERNMENTAL FORM OF CONTRACT).'

ARTICLE 13 OF THE STANDARD FORM NO. 23, STANDARD GOVERNMENT FORM OF CONTRACT, READS AS FOLLOWS:

"OTHER CONTRACTS.--- THE GOVERNMENT MAY AWARD OTHER CONTRACTS FOR ADDITIONAL WORK, AND THE CONTRACTOR SHALL FULLY COOPERATE WITH SUCH OTHER CONTRACTORS AND CAREFULLY FIT HIS OWN WORK TO THAT PROVIDED UNDER OTHER CONTRACTS AS MAY BE DIRECTED BY THE CONTRACTING OFFICER. THE CONTRACTOR SHALL NOT COMMIT OR PERMIT ANY ACT WHICH WILL INTERFERE WITH THE PERFORMANCE OF WORK BY ANY OTHER CONTRACTOR.'

TO DATE THE VIRGINIA ENGINEERING CORPORATION IS NOT IN DEFAULT ON ITS CONTRACT NOR IN THE CHARACTER OF THE WORK PERFORMED THEREUNDER. HOWEVER, IF THE CONSTRUCTION CONTRACTOR FOR THE MAIN BUILDING AND THE CONSTRUCTION CONTRACTOR FOR THE NURSES' QUARTERS, RESIDENCES, ETC., WHO ALSO EMPLOY UNION LABOR, ARE HELD UP ON THEIR WORK BY REASON OF STRIKE, THE PROGRESS OF THE WHOLE WORK WILL BE INTERRUPTED, SINCE THE MECHANICAL-EQUIPMENT MAN CAN NOT PROCEED UNLESS THE CONSTRUCTION WORK CONTINUES SATISFACTORILY.

IN VIEW OF THE CIRCUMSTANCES AS ABOVE OUTLINED, YOUR CONSIDERATION AND DECISION ARE RESPECTFULLY REQUESTED, AS TO WHETHER THE DEPARTMENT MAY TERMINATE THE RIGHT OF THE VIRGINIA ENGINEERING CORPORATION TO PROCEED UNDER ITS CONTRACT, UNDER THE SECOND SENTENCE OF ARTICLE 13 OF THE STANDARD CONTRACT FORM, OR WHETHER SUCH CONTRACT MAY BE CANCELLED. OTHER WORDS, DOES THE FACT OF EMPLOYMENT OF NONUNION LABOR BY A SUBSEQUENT CONTRACTOR ON A JOB IN CONNECTION WITH WHICH HE HAS KNOWLEDGE THAT PRIOR CONTRACTORS ON THE SAME JOB ARE EMPLOYING UNION LABOR CONSTITUTE SUCH INTERFERENCE WITH "THE PERFORMANCE OF WORK BY ANY OTHER CONTRACTOR" AS TO BE A VIOLATION OF THE TERMS OF ARTICLE 13 OF THE STANDARD CONTRACT FORM, AND BECAUSE OF THE EFFECT UPON THE ENTIRE PROJECT WILL THE DEPARTMENT BE LEGALLY AUTHORIZED TO ABROGATE THE CONTRACT?

THE THREE CONTRACTS ARE ON THE STANDARD FORM OF GOVERNMENT CONSTRUCTION CONTRACT, AND ARTICLE 13 THEREOF PROVIDES THAT:

OTHER CONTRACTS.--- THE GOVERNMENT MAY AWARD OTHER CONTRACTS FOR ADDITIONAL WORK, AND THE CONTRACTOR SHALL FULLY COOPERATE WITH SUCH OTHER CONTRACTORS AND CAREFULLY FIT HIS OWN WORK TO THAT PROVIDED UNDER OTHER CONTRACTS AS MAY BE DIRECTED BY THE CONTRACTING OFFICER. THE CONTRACTOR SHALL NOT COMMIT OR PERMIT ANY ACT WHICH WILL INTERFERE WITH THE PERFORMANCE OF WORK BY ANY OTHER CONTRACTOR.

IT DOES NOT APPEAR THAT THE VIRGINIA ENGINEERING CORPORATION HAS INTERFERED WITH THE WORK OF JOHN GRANT AND SON UNDER ITS CONTRACT OF JANUARY 14, 1928, OR WITH J. H. WIESE CO., UNDER ITS CONTRACT OF JULY 6, 1928. ON THE CONTRARY, THE THREATENED INTERFERENCE IS ON THE PART OF WORKMEN OF THE GRANT AND WIESE CONTRACTORS WITH THE VIRGINIA ENGINEERING CORPORATION, AND BECAUSE THE VIRGINIA CORPORATION IS AN OPEN-SHOP ORGANIZATION. THE FACTS ARE THUS SIMILAR IN ESSENTIAL RESPECTS TO THOSE CONSIDERED BY THE CIRCUIT COURT OF APPEALS FOR THE SIXTH CIRCUIT IN THE CASE OF O-BRIEN ET AL. V. FACKENTHAL, 5 FED.REP. (2D) 389, 393, WHICH WAS A CASE ARISING IN CLEVELAND, OHIO, WHERE THIS MARINE HOSPITAL IS UNDER CONSTRUCTION. THERE THE CONTROVERSY WAS BETWEEN THE SHEET-METAL WORKERS' UNION AND THE CARPENTERS' UNION, AS TO WHICH UNION SHOULD PERFORM CERTAIN WORK AND THE SHEET-METAL WORKERS' UNION THREATENED TO STRIKE UNLESS THE CITY OF CLEVELAND, WHICH HAD THE BUILDINGS UNDERCONSTRUCTION, WOULD DISCHARGE ONE OF THE SUBCONTRACTORS. THE DISTRICT COURT GRANTED AN INJUNCTION FORBIDDING THE FURTHER CONTINUANCE OF SUCH COURSE OF CONDUCT AND THE DECREE WAS AFFIRMED ON APPEAL. IT WAS SAID BY THE COURT THAT:

* * * THESE ACTS ARE DIRECTED TOWARDS THIRD PERSONS AND ARE PROPERLY CLASSIFIABLE AS SECONDARY BOYCOTTS. EVEN IF IT BE ADMITTED THAT PEACEABLE REQUESTS OR PERSUASION MIGHT BE USED TO INDUCE PLAINTIFF TO DISCHARGE ITS UNION CARPENTERS OR TO INDUCE OWNERS AND PRINCIPAL CONTRACTORS NOT TO LET CONTRACTS TO PLAINTIFF BECAUSE OF PLAINTIFF'S UNWILLINGNESS TO EMPLOY ONLY MEMBERS OF THE SHEET-METAL WORKERS' UNION, IT IS NEVER LAWFUL TO INDUCE OR TO ATTEMPT TO INDUCE PEACEABLY OR BY PERSUASION, MUCH LESS BY THREATS, COERCION, THE CALLING OF STRIKES, AND THE STARTING OF BOYCOTTS, ONE TO BREAK AN EXISTING CONTRACT WITH ANOTHER. WHENEVER THIS IS THE OBJECT OF THE CONSPIRACY, IT IS ALWAYS HELD TO BE AN ILLEGAL CONSPIRACY, AND ALL INTERFERENCE TO PREVENT ITS PERFORMANCE, WITH KNOWLEDGE OF ITS EXISTENCE, IS UNLAWFUL.

THE COURT ALSO REFERRED TO DECISION IN IRVING V. JOINT DISTRICT COUNCIL, 180 FED.REP. 896, WHEREIN IT WAS SAID:

THE RIGHT OF WORKING MEN TO UNITE FOR THEIR OWN PROTECTION IS UNDOUBTED,AND SO IS THEIR RIGHT TO STRIKE PEACEABLY BECAUSE OF GRIEVANCES; BUT THEIR RIGHT TO COMBINE FOR THE PURPOSE OF CALLING OUT THE WORKMEN OF OTHER EMPLOYERS WHO HAVE NO GRIEVANCES, OR TO THREATEN OWNERS, BUILDERS, AND ARCHITECTS THAT THEIR CONTRACTS WILL BE HELD UP IF THEY OR ANY OF THEIR SUBCONTRACTORS USE THE COMPLAINANTS' TRIM, IS QUITE ANOTHER AFFAIR. TO TAKE THE CONVERSE OF THE PROPOSITION: WILL THE DEFENDANTS ADMIT THAT EMPLOYERS MAY COMBINE TO PREVENT ANY EMPLOYER FROM USING UNION LABOR? MAY THE EMPLOYERS AGREE NOT TO SELL TO OR CONTRACT WITH ANY ONE WHO DEALS WITH AN EMPLOYER WHO USES UNION LABOR?

EITHER OF THESE PROPOSITIONS IS DESTRUCTIVE OF THE RIGHT OF FREE MEN TO LABOR FOR OR TO EMPLOY THE LABOR OF ANY ONE THE LABORER OR THE EMPLOYER WISHES. * * *

IT APPEARS THERE HAS BEEN AND IS NO SUCH INTERFERENCE BY THE VIRGINIA CORPORATION, WITH THE OTHER TWO CONTRACTORS IN THE PERFORMANCE OF THEIR WORK WITHIN THE MEANING OF ARTICLE 13 OF THE STANDARD GOVERNMENT CONSTRUCTION CONTRACT, AS TO AUTHORIZE TERMINATION OR ABROGATION OF THE CONTRACT OF THE VIRGINIA ENGINEERING CORPORATION BY REASON THEREOF. THE EMPLOYMENT OF NONUNION LABOR BY SAID CORPORATION IS NEITHER UNLAWFUL NOR IN VIOLATION OF THE TERMS OF ITS CONTRACT.