Boral and the Construction and General Division of the Victorian CFMEU have entered into a settlement agreement that will protect the building products company against a continued secondary boycott of its products and see them compensated for damages and legal expenses as a result of the boycott.

Under the agreement, the CFMEU will issue a press release and a public statement on its website making it clear to the market that construction businesses are free to choose their suppliers, including concrete suppliers, without fear of retribution from the union.

They will also pay Boral between $7 million and $9 million in damages and legal expenses that have already been incurred, with the final legal expenses total to be agreed or assessed by the courts.

The CFMEU will not be permitted to interfere with Boral and its affiliate companies in the delivery of concrete or any other Boral products or services for a period of three years.

The news comes in light of the ongoing Royal Commission into Trade Unions Governance and Corruption which has involved investigations into allegations from Boral that they had been the victim of an illegal secondary boycott (“black ban”) by the CFMEU.

Boral chief executive Michael Kane told the Royal Commission that Boral had been frozen out of almost all high-rise work in Melbourne's CBD because the CFMEU had imposed a black ban of its products.

Fairfax reports that the feud was instigated when Boral refused to stop supplying concrete to Grocon back in February 2013, and resulted in a massive slump in market share for Boral and losses of more than $8 million.

Grocon says CFMEU is “ill-informed” about use of substandard building products

In addition to injunctions for a period of three years, the settlement agreement includes a legally binding contractual mechanism that will activate upon any violation of this agreement, with amounts ranging from $50,000 to $200,000 per occurrence.

These amounts will double where there are three or more breaches in any 12 month period. For example, in a year where there were four breaches at the maximum amount, the total amount payable by the union in that year would be $1.6 million.

Kane says the agreement is a huge step in their multi-year effort to "re-establish the rule of law" on Melbourne construction sites.

“We will now be protected against illegal interference in serving our customers,” he claims.

“We have fought long and hard to get to the point where we can start to reclaim our position in the Melbourne CBD and we look forward to working with those customers that have felt unable to do so because of the ban."