This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If the interference with the formation of future contracts is the result of legitimate competition, and consists in offering lower rates, better facilities, a higher grade product, and the like, no wrongful act has been committed, and no action lies, no matter how great the damage may be.1 Even where a combination to wreck a business for the purpose of injuring the owner thereof, is a tort,2 it is held that a combination between a wholesale oil company and certain oil producers, by which the wholesale company induced the producers to ship by a pipe line controlled by such oil company, the oil company refusing to buy oil unless it is shipped by that line, does not give the right of action in tort to another pipe line from which a great amount of business has thus been diverted.3 For like reasons, a strike for the purpose of compelling the employer to award the whole of a given class of work to the strikers, instead of dividing it between two competing organizations, is not wrongful.4 At the same time, wrecking the business of another by unreasonable rate-cutting has been held to be actionable.5
5 Knickerbocker Ice Co. v. Gardiner Dairy Co., 107 Md. 556, 16 L. R. A. (N. S.) 746, 69 Atl. 405.
1 Max v. Kahn, - N. J. - , 102 Atl. 737.
2 Max v. Kahn, - N. J. - , 102 Atl. 737.
1 England. Mogul S. S. Co. v. McGregor , App. Cas. 25 [affirming, L. R. 23 Q. B. 508].
Louisiana. Lewis v. Huie-Hodge Lumber Co., 121 La. 658, 46 So. 685; Gilly v. Hirsh, 122 La. 966, 20 L. R. A. (N.S.) 972, 48 So. 422.
Minnesota. Victor Talking Machine Co. v. Lucker, 128 Minn. 171, 150 N. W. 790.
Pennsylvania. Cote v. Murphy, 159
Pa. St. 420, 39 Am. St. Rep. 686, 23 L. R. A. 135, 28 Atl. 190.
2"If one wantonly or maliciously, whether for his own benefit or not, in-duce a person to violate his contract with a third person to the injury of that third person, it is actionable." From syllabus of West Virginia Transportation Co. v. Oil Co., 50 W. Va. 611, 88 Am. St. Rep. 895, 56 L. R. A. 804, 40 S. E. 591.
3 West Virginia Transportation Co. v. Oil' Co., 50 W. Va. 611, 88 Am. St. Rep. 895, 56 L. R. A. 804, 40 S. E 591.
4 "We are brought to the question of the legality of the strike in the case at bar, namely, a strike of bricklayers and masons to get the work of pointing, or to put it more accurately, a combination by the defendants, who are bricklayers and masons, to refuse to lay bricks and stone where the pointing of them is given to others. The defendants, in effect, say, we want the work of pointing the bricks and stone laid by us, and you must give us all or none of the work.
"The case is a case of competition between the defendant unions and the individual plaintiff for the work of pointing. The work of pointing for which these two sets of workmen are competing is work which the contractors are obliged to have. One peculiarity of the case therefore is that the fight here is necessarily a triangular one. It necessarily involves the two sets of competing workmen and the contractor, and is not confined to the two parties to the contract, as is the case where workmen strike to get better wages from their employer or other conditions which are better for them. In this respect the case is like Mogul S. S. Co. v. McGregor, L. R. 23, Q. B. Div. 598; on appeal , A. C. 25.
"The right which the defendant unions claim to exercise in carrying their point in the course of this competition is a trade advantage, namely, that they have labor which the contractors want, or, if you please, can not get elsewhere; and they insist upon using this trade advantage to get additional work, namely, the work of pointing the bricks and stone which they lay. It is somewhat like the advantage which the owner of back land has when he has bought the front lot. He is not bound to sell them separately. To bo 3uro the right of an individual owner to sell both or none is not decisive of the right of a labor union to combine to refuse to lay bricks or stone unless they are given the job of pointing the bricks laid by them. There arc things which an individual can do which a combination of individuals can not do. But, having regard to the right on which the defendants' organization as a labor union rests, the correlative duty owed by to others, and the limitation of the defendants' rights coming from the in* creased power of organization, we are of opinion that it was within the rights of these unions to compete for the work of doing the pointing and, in the exercise of their right of competition, to refuse to lay bricks and set stones unless they were given the work of pointing them when laid. See, in this connection, Plant v. Woods, 176 Mass. 492, 502, 51 L. R. A. 339, 79 Am. St Rep. 330, 67 N. E. 1011; Berry v. Donovan, 188 Mass. 353, 357, 108 Am. St. Rep. 499, 74 N. E. 603.
"The result to which that conclusion brings us in the case at bar ought not to be passed by without consideration.
"The result is harsh on the contractors, who prefer to give the work to the pointers because (1) the pointers do it by contract (in which case the contractors escape the liability incident to the relation of employer and employe); because (2) the contractors think that the pointers do the work better, and if not well done the buildings may be permanently injured by acid; and finally (3) because they get from the pointers better work with less liability at a smaller cost. Again, so far as the pointers (who can not lay brick or stone) are concerned. the result is disastrous. But all that the labor unions have done is to say, you must employ us for all the work or none of it. They have not said that if you employ the pointers you must pay us a fine, as they did in Carew v. Rutherford, 106 Mass. 1, 8 Am. Rep. 287. They have not undertaken to forbid the contractors employing pointers, as they did in Plant v. Woods, 176 Mass. 492, 51 L. R. A. 339, 71) Am. St. Rep. 330, 57 N. E. 1011. So far as the Jahor unions are concerned, the contractors can employ pointers if they choose; but, if the contractors choose to give the work of pointing the bricks and stones to others, the unions take the stand that the contractors will have to get some one else to lay them. The effect of this in the case at bar appears to be that the contractors arc forced against their will to give the work of pointing to the masons and bricklayers. But the fact that the contractors are forced to do what they do not want to do is not decisive of the legality of the labor unions' acts. That is true wherever a strike is successful. The contractors doubtless would have liked it better if there had been no competition between the bricklayers and masons, on the one hand, and the individual pointers on the other hand. But there is competition. There being competition, they prefer to give all the work to the unions rather than get non-union men to lay bricks and stone to be pointed by the plaintiffs.