Coalition described the decision this way: “In a breakthrough appellate court ruling, Iron Worker Union officials can now be sued under anti-trust laws for running a union kickback scheme known as "job targeting" which has diverted $500 million in workers’ wages over the past 5 years. Job targeting schemes are primary tools used to secure a Big Labor cartel over billions of taxpayer dollars used in federal contracting (as well as many private construction projects). They are used to freeze non-union contractors out of getting work, while lining the union bosses' pockets with the wages of construction workers.”
Two years ago, several Boston area ABC and other merit shop steel erectors filed claims against Iron Workers Local 7 alleging that the union, in concert with its signatory employers, had engaged in violations of federal Anti-Trust laws by using targeting or market recovery funds to take work away from open shop employers. The union filed a Motion for Summary Judgment and the U.S. District Court decided against the merit shop contractors stating that statutory and non-statutory exemptions from Anti-Trust laws exempted unions from such actions. The case was appealed, with support from ABC’s Construction Legal Rights Foundation.
On August 1, 2008 the Circuit Court of Appeals reversed the decision of the lower court on union exemption, stating that, given the facts presented by the ABC employers, Summary Judgment is not warranted and the case must be sent back to the U.S. District Court for further review of disputed issues of material fact.
The U.S. Supreme Court has held that union activity is exempted from the anti-trust laws so long as the union acts in its self interest and does not work in concert with other groups. This is called the “Statutory Exemption” from the Anti-Trust laws. The Ironworkers Union’s Market Recovery Program allows union employers and the Union to target specific jobs for receipt of market recovery funds. Those funds allow the union employers to significantly lower their bids and keep open shop employers from winning work. This practice is not protected by the Statutory Exemption afforded unions.
The Circuit Court also noted that the Union’s use of union member dues to provide Market Recovery monies to employers was, potentially, also a violation of federal law prohibiting employee kickbacks to employers.