ACCC rejected $3M settlement offer from CFMEU in secondary boycott case
Competition & Consumer Protection June 1, 2018 11:06 pm By Cat Fredenburgh | Melbourne

The ACCC rejected a $3 million settlement offer in a high-profile case against the Construction, Forestry, Mining, and Energy Union over secondary boycotts, instead taking its chances in a trial that ultimately resulted in a penalty of just $1 million, according to a judgment published Friday.

According to a judgment made public Friday, the CFMEU had offered to pay a $3 million penalty, admit to 12 violations of the law and agree to an injunction against restraining concrete maker Boral from supplying concrete. By taking the case to trial, the ACCC secured a $1 million penalty, established violations at only two of the 12 sites in its case, and failed to win an injunction.

The settlement was ultimately undone by a disagreement over the terms of a suppression order.

The CFMEU’s offer was conditional upon both parties making a request to the court for an order suppressing publication of the judgment that would stay in place until the conclusion of related criminal investigations against individuals involved in the alleged boycotts. In its counter-offer, which the union rejected, the ACCC provided for the CFMEU to go it alone in making the bid for a suppression order and for a limited public disclosure saying the court had made declarations of contraventions and ordered a penalty of $3 million.

Justice Middleton said the ACCC’s counter offer was an appropriate response and that its rejection of the settlement was not unreasonable, noting that although a suppression order was eventually granted, it was limited in scope.

The consumer regulator touted the $1 million penalty in a February press release as a record fine.

“This is the highest penalty ever awarded for a breach of the secondary boycott provisions. It signifies the seriousness with which the Court regarded the conduct,” ACCC Chairman Rod Sims said in February.

The ACCC brought the case in 2014 alleging the CFMEU engaged in secondary boycotts at construction sites in Melbourne.

The Federal Court said the CFMEU violated the Competition and Consumer Act by colluding with a shop steward at construction sites in Hawthorn and Richmond, Victoria to prevented the acquisition of concrete from Boral and its subsidiary Alsafe with the intent of harming Boral’s business.

Justice Middleton ordered the CFMEU to pay a penalty of $500,000 for each of the two violations of the law the ACCC had successfully proved at trial.

The Federal Court’s judgment on liability, which was handed down in November, was subject to non-publication and suppression orders until Friday.

The judge ordered the CFMEU to pay 40 percent of the ACCC’s costs based on the fact that the ACCC was successful in proving the ban against Boral but prove violations at only two of the 12 construction sites.

The ACCC was represented by Philip D Crutchfield QC of Dever’s List with Nicholas P De Young with Owen Dixon Chambers and solicitors from DLA Piper. The CFMEU was represented by Rachel M Doyle SC with List G Barristers with John R Gurr with Foley’s List and solicitors from Slater and Gordon.

The case is Australian Competition and Consumer Commission v The Construction, Forestry, Mining and Energy Union.

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Cat Fredenburgh

Cat Fredenburgh has been covering legal news for 12 years. She was previously Editor-in-Chief at US legal news publication Law360. She is the Co-Founder of Lawyerly.