United Rentals is in the "traffic control" segment of the highway construction market. The firms in this market help to protect highway construction workers from being hit by vehicles using the stretch of the highway that the workers are building, repairing, or rebuilding. When construction activity is about to begin, employees of the traffic control firm place cones, barrels, concrete blocks, or other barricadesin position to block or alter traffic lanes. The workers also paint stripes on the road to indicate the new lanes, install warning signs to guide drivers using the highway, and place guardrails to keep vehicles from veering off onto what may be a nonexistent shoulder.

The traffic control firm owns and stores the barricades, signs, guardrails, and other safety devices and brings them to the construction site as needed. The firm installs its devices before construction begins and removes them when it is finished. If flaggers are required, they may be supplied by the traffic control firm or by the general contractor. Road work in Indiana is done almost entirely by contractors who belong to a trade association called Indiana Constructors, which has for many years negotiated collective bargaining agreements for its members with the Laborers International Union.

In 2004, the collective bargaining agreement in force was modified to forbid the association's members to subcontract work at a construction site to a firm that had not signed a collective bargaining agreement with the Laborers Union. This was a blow to United Rentals because it had a collective bargaining agreement with another union. Also, it did not want to bargain with the Laborers Union when that agreement expired. It filed a charge with the NLRB that Indiana Constructors and the Laborers Union were violating the NLRB's hot cargo provision. Section 8(e) of the provision forbids a union and an employer to agree that the employer will refuse to deal with another employer, as Indiana Constructors had agreed with the Laborers Union to do with respect to United Rentals.

The Board's General Counsel declined to file a complaint, and United Rentals brought suit against the union in federal court under Section 303 of the Taft Hartley Act, which forbids a union to enter an agreement prohibited by the hot cargo provision. The federal district court granted summary judgement in favor of the union, and United Rentals appealed.] POSNER, C. J.... Before Congress enacted the hot cargo provision, along with its exception for the construction industry, in 1959, hot cargo clauses had been pervasive in the industry, had been upheld repeatedly as lawful, and had not caused the problems associated with closed shops-though one reason, inapplicable to this case, was that most construction workers are hired from hiring halls;

the halls are operated by unions but the unions are required to refer all comers, and not just workers represented by a union, to contractors and subcontractors, Woelke & Romero Framing, Inc., v. NLRB, 456 U.S. 645, 664-65 (1982); Lucas v. NLRB, 333 F.3d 927, 932 (9th Cir. 2003). So one reason for the construction-industry exception was just a desire to ratify an acceptable status quo.... But another was to prevent friction at construction jobsites....

More than just work stoppages were at stake. Much construction work is dangerous, including road construction in the presence of highway traffic; and there was concern that the frictions engendered by union workers working side by side at a construction job site with nonunion workers or workers belonging to another union would reduce safety as well as efficiency. Woelke & Romero Framing, Inc., v. NLRB, supra, 456 U.S. at 662. Before there was a separate market in traffic control there was no impediment to the general contractor's requiring whatever subcontractor performed traffic control for the contractor to bargain collectively with the general contractor's union.

For a time after traffic control broke off and became a separate business, general contractors and construction workers' unions did not insist that the employees of traffic control subcontractors be represented by the general contractor's union, though even in that transitional period the collective bargaining agreement between the Indiana Constructors and the Laborers Union said that the union "encourages its members to utilize subcontractors who are signatory to collective bargaining agreements with the Laborers Union. Such subcontractors help to promote peace and harmony of the jobsite and to avoid labor dispute interruption of work."

The modification in the collective bargaining agreement of which United Rentals complains restores fully the practice that prevailed before traffic control became a separate market.... United Rentals points out that its employees are not engaged in construction, but rather in a preparatory or ancillary activity. But the statutory exception is not for construction workers as such; it is for workers at a construction site; and traffic control workers work at highway construction sites....

Placing traffic controlworkers within the exception.... creates a clear rule. March down the road of attempting to distinguish "real" construction workers from other workers at the construction site and you will quickly find yourself in a trackless wilderness.... [The court determined that the hot cargo provision in this case did not raise any "traditional antitrust concerns" and was not in violation of the Sherman Act.]

Case Questions
1. What rationale exists for the construction industry proviso allowing unions in the construction industry to negotiate hot cargo provisions in their collective bargaining agreements?

2. Since United Rentals employees are not engaged in construction, are they exempt.