The National Electrical Contractors’ Association (NECA) is a national trade association composed of electrical contractors. NECA negotiates a nationwide collective bargaining agreement with the International Brotherhood of Electrical Workers (IBEW). The electrical contractors who belong to NECA pay annual dues and a service charge in exchange for the benefits of being an NECA member. One such benefit is the single NECA labor agreement that covers the IBEW members employed by the electrical contractors. Approximately 50 percent of the electrical work in the United States is performed by NECA member companies, with the remainder being performed by non- NECA contractors who negotiate separately with the IBEW, employ members of other unions, or are nonunion.
NECA member companies realized that non-NECA companies had a competitive advantage over NECA contractors when they bid for jobs because they did not have to recover the cost of NECA membership in their quoted price. Therefore, IBEW and NECA placed a provision in their national agreement requiring that in any job involving a party to the agreement, the employer would pay one percent of its gross labor payroll into the National Electrical Industry Fund to be jointly administered by NECA and IBEW. Because the agreement was binding on all IBEW locals, its effect was to force non-NECA contractors employing IBEW members to pay into the fund.
Non-NECA contractors brought an action claiming that the industry fund provision constituted price fixing by NECA and IBEW, an antitrust violation under the Sherman Act. They requested an injunction against IBEW and NECA’s agreement. IBEW and NECA argued that no injunction could be issued.
May an injunction be issued by a court against the NECA-IBEW agreement? If so, should an injunction issue in this case? Decide. [NECA, Inc. v. National Contractors’ Association, 110 LRRM 2385 (4th Cir.)]