By: Ashley Laken, Esq.

Seyfarth Synopsis: Millennials are an ever-growing portion of the workforce, and they generally have favorable views toward labor unions.  Employers would be well-advised to be attuned to this reality and they may want to consider developing and implementing strategies aimed at heading off union organizing before it starts.

According to a Pew Research Center analysis earlier this year, Millennials now make up more than 35% of the U.S. labor force, making them the largest generation currently in the workforce.  Their numbers are continuing to grow, and it’s estimated that they will make up 75% of the labor force by 2025.

At the same time, according to an analysis by the Economic Policy Institute, the number of union members in the U.S. grew by 262,000 in 2017, and 76% of that increase was comprised of workers under age 35.  Many believe that one reason younger workers are joining labor unions is because they are concerned about workforce trends that are increasing work insecurity, including the rise of automation and companies’ increased use of independent contractors.

Millennials are also generally known to have favorable views toward labor unions.  A 2017 report published by the Pew Research Center showed that adults younger than age 30 view unions more favorably than corporations.  According to that report, 75% of adults aged 18 to 29 said they have a favorable opinion of unions, while only 55% said they have a favorable view toward corporations.  And in late summer of this year, the National Opinion Research Center at the University of Chicago found that 48% of all nonunionized workers would join a union if given the opportunity to do so.

Millennials have also demonstrated an interest in social activism.  Many younger workers perceive unionization as potentially combating those aspects of jobs that they view as suboptimal, including perceived racial and gender discrimination and a lack of advancement opportunities.  Union organizers are increasingly recognizing that younger workers place a lot of importance on equitable treatment, upward mobility, fair wages, and work/life balance.  Unions are also using new and often informal methods to recruit employees, including social media and text messaging, effectively “speaking the language” of Millennials.

Indeed, the last few years have seen union organizing in industries that traditionally haven’t been unionized, including digital media, nonprofits, and coffee shops.  It almost goes without saying that employees in these industries are often predominantly comprised of Millennials.

And the recent walkout by thousands of non-unionized Google employees at offices around the world was the first protest of its kind by well-compensated tech employees, many of whom are Millennials.  The stated demands of the brief walkout, which were posted on an Instagram page, included an end to forced arbitration in cases of harassment and discrimination, a commitment to “end pay and opportunity inequity,” to “promote the chief diversity officer to answer directly to the CEO,” and to have a “clear, uniform, globally inclusive process for reporting sexual misconduct safely and anonymously.”

Although demands such as these fall outside the scope of what the National Labor Relations Board considers to be mandatory subjects of bargaining between employers and labor unions, they shed light on some of the concerns held by the modern workforce.  On this point, in a recent national survey conducted by MIT, a majority of workers said they don’t have as much of a voice as they believe they should on issues ranging from compensation and benefits to protection against harassment.  These sorts of sentiments can provide fertile feeding ground for union organizers.

Even though many employers recognize some of the negative aspects that can come along with union representation, many employees (including managers and supervisors) might not.  For example, union representation can and often does result in a loss of flexibility in addressing employee issues, and it also results in the insertion of an outside third party between management and employees, which can create a counterproductive “us versus them” attitude.

Employers would therefore be well-advised to train their managers and supervisors on these topics, and also to be on the lookout for union organizing activity among their employees.  Employers should also consider providing positive employee relations training for their managers and supervisors, which could head off union organizing activity before it starts.

 

By: Ashley Laken, Esq. & Brian Stolzenbach, Esq.

Seyfarth Synopsis: Although many employers may think they can let their guard down a little bit when it comes to the NLRB under the Trump Administration, history suggests otherwise. During the last Republican Administration, labor unions often decided to wage their battles outside the NLRB, using tactics like the “corporate campaign.” Although corporate campaigns have been around for a long time and continued even during the Obama Administration, union corporate campaign activity during the Bush Administration suggests that employers would be well advised to implement strategies aimed at reducing their vulnerability to such campaigns and effectively responding to such campaigns in the event they become a target.

When the NLRB shifts from Democrat control to Republican control, as it has under the Trump Administration, many employers rejoice, believing that a Republican-controlled NLRB will take a more employer-friendly approach. This is almost certainly true, but employers should keep in mind that appeals to NLRB intervention are not the only ways for unions to create incredible headaches for employers.

Background on Corporate Campaigns

A corporate campaign is an attack by a union on a company or an industry with the goal of putting so much pressure on the target that it will give in to the union’s demands. Such attacks are multi-pronged and often long-running. Indeed, unions have devoted millions of dollars and multiple years to individual corporate campaigns, and such campaigns have become more sophisticated and coordinated over the years. The typical union philosophy in launching such a campaign is to cost an employer so much time and money and cause it so much disruption that it ultimately gives in to what the union wants.

A corporate campaign’s most common objective is to facilitate union organizing, often by coercing an employer into accepting a card-check agreement along with neutrality commitments (in other words, to agree to recognize the union without a formal election and to stay silent on its views regarding the unionization of its workforce). Corporate campaigns are widely known as a means of organizing workers by disorganizing companies.

In launching a corporate campaign, a union identifies and then exploits a company’s perceived vulnerabilities. Common tactics unions employ in corporate campaigns include:

  • Filing a stream of unfair labor practice charges against the company
  • Encouraging investigations of potential OSHA, wage and hour, environmental, and/or antitrust violations by the company (see our recent management alert regarding antitrust enforcement against employers here)
  • Causing union-paid organizers to get jobs within the company (known as “salting”)
  • Placing print, digital, radio, and/or TV ads attacking the company, establishing anti-company websites, and distributing anti-company materials (including emails and social media messages) to customers, shareholders, and employees
  • Introducing shareholder resolutions aimed at reducing management’s independence
  • Challenging the zoning or permitting of new company facilities
  • Alleging or implying sexual misconduct by company executives or claiming that the company does not pay its employees fairly (the #metoo and #timesup movements are likely to add more fuel to any such fire)
  • Recruiting celebrities, politicians, clergy, and other community leaders to put pressure on the company

A variety of unions have launched a multitude of corporate campaigns over the years, and they often team up with each other and pool their resources against a single company. Collectively, unions employ hundreds of professional corporate campaigners, with job titles such as “online advocacy organizer” and “strategic communications specialist.” The typical position postings for such jobs list responsibilities that include developing campaign strategies and messages, conducting online research, and executing effective media plans. Given the growing presence of Millennials in the workforce, a group that (broadly speaking) considers itself both technologically savvy and socially conscious, unions are likely to have no shortage of candidates for such positions.       

What Employers Can Do

Companies of all sizes, in all locations, and in all industries are potentially vulnerable to corporate campaigns. Of course, the larger the company, the more attractive that company may be as a target, as more employees equals more potential revenue from union dues. In reality, however, almost no relatively large company is safe from such an attack.

Given the power of the internet and the ubiquity of social media platforms such as Facebook, Snapchat, Twitter, and Instagram, the speed with which unions can launch and carry out sophisticated and well-coordinated corporate campaigns is nothing short of astounding. Employers would be well-advised to proactively develop strategies aimed at reducing their vulnerability to such campaigns and quickly and effectively responding to such campaigns. Such strategies could include:

  • Conducting OSHA, wage and hour, and antitrust compliance audits
  • Engaging in positive employee relations training and messaging
  • Conducting up-to-date anti-harassment training
  • Evaluating pay equity within the company
  • Creating an effective internal and external communication system in relation to potential and actual union activity
  • Assembling a dedicated team of inside or outside counsel to respond to filings at the NLRB, such as unfair labor practice charges and representation petitions

Seyfarth lawyers have extensive experience devising and implementing strategies designed to avoid and effectively respond to corporate campaigns. Please don’t hesitate to contact your favorite Seyfarth attorney for more information.

  By: Michael Rybicki, Esq.

Seyfarth Synopsis: On Friday, December 1, 2017, newly appointed NLRB General Counsel Peter Robb issued a memo setting forth a wide range of issues that must be submitted to Advice before Complaints will be authorized. Generally these issues involve areas of the law where the “Obama Board” issued decisions departing from previously established precedent. The memo strongly suggests that instead of declining to exercise prosecutorial discretion not to issue Complaints where the General Counsel disagrees with the legal principles announced in these decisions, he intends to given the newly constituted Board the opportunity to assess these legal principles as the opportunity arises. Our blog is exploring a different aspect of the memo each day during the first three weeks of December. Today’s blog looks at controversial changes with respect to work stoppages. Click here, here, & here to find prior posts.

In Quietflex Manufacturing, 344 NLRB 1055 (2005), Member Liebman dissented from a decision that an employer did not violate the Act by discharging 83 employees for refusing to vacate its parking lot where those employees had engaged in a peaceful 12-hour work stoppage to protest their terms and conditions of employment. The majority had held that under relevant precedent, while an on-the-job work stoppage can be a form of economic pressure protected under Section 7 of the National Labor Relations Act, not every such work stoppage is protected and that “[a]t some point an employer is entitled to exert its private property rights and demand its premises back,” citing Cambro Mfg. Co., 312 NLRB 634, 635 (1993). Applying a 10-factor test,[1] the majority determined that in balancing employee interests against the employer’s property interests, the employer’s interests prevailed. In her dissent, Member Liebman asserted that the balance struck by the majority seemed unreasonable and implicitly argued that heavier weight should have been given to those factors that tended to favor protection.

Member Liebman’s views were essentially adopted by the Obama Board in a series of cases, Los Angeles Airport Hilton Hotel & Towers, 360 NLRB 1080 (2014), enf’d Fortuna Enterprises, LP v. NLRB, 789 F.3d 154 (D.C. Cir., 2015); Nellis Cab Company, 362 NLRB No. 185 (2015); and Wal-Mart Stores, Inc., 364 NLRB No. 118 (2016). In each of these cases the majority purported to apply the Quietflex multi-factor balancing test and found that the activity at issue was protected. While Member Johnson concurred with the result in Los Angeles Airport Hilton, he disagreed with respect to several aspects of the majority’s analysis of the Quietflex factors, particularly with respect to the failure of the majority to give what he considered to be proper weight to the employer’s open door policy as an alternative means for employees to present their grievances.

In dissenting in part in Wal-Mart, Member Miscimarra found that the activity in question constituted a modern day sit-down strike and on-premises protest by employees inside a retail store before and during the store’s grand reopening that was clearly unprotected under the “disruptive or interference standard” applicable in a retail setting, citing Restaurant Horikawa, 260 NLRB 197 (1982). He further noted that even assuming that the Quietflex factors were applicable, he disagreed with the majority’s analysis under the Quietflex standards. The essence of his disagreement, set forth in a lengthy and detailed dissent, was that the majority had either misapplied the standards or misconstrued or given inappropriately heavier weight to those factors that tended to favor protection.

For example, with respect to the third Quietflex factor, whether the work stoppage interfered with production or deprived the employer access to its property, contrary to the majority’s conclusion that this factor favored protection, Member Miscimara believed this factor “weighs against protection and does so heavily.” (Slip op. at p. 15.) In his opinion, the record clearly established that “the employees’ actions caused substantial disruption and interference, including an adverse impact on customers.” (Id.)

In our view, Member Miscimara’s views with respect to the applicability and construing of the Quietflex standard and the weight to be given the various factors is better reasoned from both a legal and practical perspective. General Counsel Robb’s memo suggests that he may agree, possibly giving employers – and particularly retail employers – something to look forward to in 2018.

[1] The 10 factors applied in Quietflex were: (1) the reason the employees have stopped working; (2) whether the work stoppage was peaceful; (3) whether the work stoppage interfered with production, or deprived the employer access to its property; (4) whether employees had adequate opportunity to present grievances to management; (5) whether employees were given any warning that they must leave the premises or face discharge; (6) the duration of the work stoppage; (7) whether employees were represented or had an established grievance procedure; (8) whether employees remained on the premises beyond their shift; (9) whether employees attempted to seize the employer’s property; and (10) the reason for which employees were ultimately discharged [disciplined].

  By: Brian Stolzenbach, Esq.

Seyfarth Synopsis: On Friday, December 1, 2017, newly appointed NLRB General Counsel Peter Robb issued a memo containing a broad overview of his initial agenda as General Counsel. It previews many anticipated developments during the Trump Administration, which our blog will be exploring over the next three weeks.

In keeping with the tradition of prior General Counsels (see here (GC 16-01), here (GC 14-01), and here (GC 11-11) for prior memos from President Obama’s appointees), Mr. Robb provided the NLRB’s Regional Offices with a list of issues that must be submitted to his Division of Advice for consideration before proceeding to issue a complaint in an unfair labor practice case. Although the Regional Offices are instructed to issue complaints in accordance with extant law (i.e., the law created by the NLRB during the Obama Administration), Mr. Robb suggests that he “might want to provide the Board with an alternative analysis.” As usual when the General Counsel’s office flips from Democrat to Republican or vice versa, the memo basically provides a list of important case law developments from the prior administration that are likely to be overturned. Here, Mr. Robb identifies nearly 30 such cases covering 15 important subjects for employers.

In addition, Mr. Robb immediately rescinds seven prior memos issued by President Obama’s appointees and revokes five initiatives set forth in other memos issued by the General Counsel’s Division of Advice during the Obama Administration.

As the numbers above suggest, a full explanation of Mr. Robb’s five-page memo is far more than a single blog can handle. Seyfarth Shaw labor lawyers will be posting an item on this blog each weekday for the next three weeks, exploring a different aspect of the memo each day.

P.S. If you just can’t wait and need a full and complete analysis of the memo more quickly, don’t hesitate to drop your friendly neighborhood Seyfarth labor lawyer a note. Any of us would be glad to oblige.

 

Striking  By: Brian Stolzenbach, Esq.

Seyfarth Synopsis: Employers should not presume that they are permitted to stop paying for employees’ medical benefits once they go out on strike. In a 2-1 decision, the NLRB recently held that — at least in some circumstances — medical benefits may be “accrued” simply by virtue of being employed.  If so, then an employer may not stop those benefits during strike.

Nearly 70 years ago, the NLRB confirmed that an employer has no obligation to finance a strike against itself by paying wages to employees during a strike. See General Elec., 80 NLRB 510 (1948).  No one ever said that strikes are supposed to be painless for strikers or that they entitled to be paid not to work.  Decades after the General Electric decision, it has become very common for employers to provide their employees with medical insurance, in addition to wages, as a form of compensation.  Many (perhaps most) employers assume that the old axiom extends to this form of compensation, as well:  they believe they can never be required to continue paying for their employees’ medical insurance during a strike.  Alas, in Hawaiian Telcom, Inc., 365 NLRB No. 36 (Feb. 23, 2017), the NLRB held otherwise.  Over an impassioned dissent by Acting NLRB Chairman Phil Miscimarra, the two Democrat Members of the Board concluded that this is actually a question of contract interpretation.  Reviewing the collective bargaining agreement that had expired prior to the strike, the NLRB observed that the contract provided medical insurance for all employees covered by the agreement — with no exceptions, save for termination of employment.  Strikers, of course, have not terminated their employment, so the NLRB decided that medical benefits could not be stopped during the strike, even though the collective bargaining agreement had expired.

What does this mean for employers? At the very least, it means that they should be very familiar with the precise terms of the collective bargaining agreement and other documents (benefit plan documents, SPDs, etc.) that govern their medical benefits for organized employees.  They should consider how these documents may be interpreted and whether they may be in need of revision.  Of course, this is a complex area of overlapping labor relations and employee benefits law, and an employer may not lawfully be able to make the changes it desires, for various reasons.  Nevertheless, it is better to understand the potential obstacles and to make a considered decision about dealing with them well before a work stoppage looms on the horizon, rather than scrambling to deal with the issue during a strike or (worse) finding out five years after cutting off benefits during a strike that the decision to do so was unlawful, as the employer did in Hawaiian Telcom.

By: Bryan Bienias, Esq.

Seyfarth Synopsis: The Office of the General Counsel for the NLRB has asked the Board to adopt a sweeping new test that will significantly broaden the protections granted to employees who engage in frequent, short-term strikes during the same labor dispute. 

In a purported effort to update existing law to meet the realities of modern labor disputes, the Office of the General Counsel for the National Labor Relations Board last week announced that it will ask the Board to adopt a new test for determining whether intermittent and partial strikes are protected under the National Labor Relations Act. The GC distributed to all regional directors and officers a 15-page model brief to be inserted into filings before the Board and ALJs laying out its new test and also urges the Board to distinguish between “partial” and “intermittent” strikes (as the terms have be used interchangeably over the years).

Under the new test, the Act would explicitly protect employees who engage in multiple short-term strikes, particularly those addressing the same labor dispute, where: “(1) they involve a complete cessation of work, and are not so brief and frequent that they are tantamount to work slowdowns; (2) they are not designed to impose permanent conditions of work, but rather are designed to exert economic pressure; and (3) the employer is made aware of the employees’ purpose in striking.” Under current Board law, workers who strike multiple times, especially in the same labor dispute, can lose the Act’s protections and face discipline or termination.

Citing the need for certainty in the face of the increasing use of intermittent strikes by non-union workforces, as well as employers’ increasing use of temporary employees, the GC’s proposed test significantly broadens the protections granted to employees who engage in intermittent and partial strikes, while providing little guidance for employers as to how existing methods for addressing strike activity could reasonably combat the disruptions and uncertainty caused by frequent, short-term strikes.

The GC notes its test “recognizes that there is a point at which intermittent strikes are so frequent and brief that they enable employees to effectively reap the benefits of a strike without assuming the attendant risks,” citing examples of a ten-minute strike every thirty minutes, or an hourly work stoppage once employees reach daily production quotas. Beyond these extreme examples, however, the GC provides little in the way of practical limitations as to how frequently employers may strike during the same labor dispute before losing the Act’s protections.  Is a 45-minute strike every day protected?  A two-day strike every week?  As of now, it’s anybody’s guess.

The GC also claims that employers are “not helpless in the face of such strikes,” having traditional strategies of permanent replacement, lockouts, subcontracting, etc. at their disposal. But the question remains how practical or effective such traditional strategies would be in the face of frequent, short-term strikes multiple times per week or per month.

While we do not know whether the Board will ultimately adopt the GC’s proposed test, employers can expect to see these arguments raised in future NLRB proceedings. In the meantime, employers should consult with counsel regarding lawful strategies for minimizing risk and potential disruptions caused by employees’ and unions’ increasing use of intermittent or partial strikes during labor disputes.

 By:  Susan Jeanblanc Cohen, Esq.

Seyfarth Synopsis: In a split decision, the NLRB ruled that off-duty employees of an acute care hospital had the right to picket the hospital’s main lobby entrance.

After the collective bargaining agreement between acute care hospital Capital Medical Center (“the Hospital”) and UFCW Local 21 (“the Union”) expired on September 30, 2012 and the parties engaged in negotiations for months, the Union and some bargaining unit employees decided to engage in picketing and handbilling at the Hospital.  During this union activity, off-duty employees distributed handbills at the main lobby entrance of the hospital and the physicians’ pavilion entrance. In addition, a group of employees distributed handbills and carried picket signs along the public sidewalk next to the hospital driveway.  The Hospital did not interfere with these activities.  Later in the day, at least two off-duty employees went to the main lobby entrance of the Hospital with their picket signs, and one of the employees also distributed leaflets at the lobby entrance for a short period of time while holding her picket sign.  The Hospital informed the picketing employees that they were welcome to remain at the doorway and hand out leaflets, but that they were not allowed on Hospital property with their picket signs.  The picketers disregarded their employer’s instruction and remained at the lobby entrance with their picket signs.  The Hospital contacted the police, who said he would not force the picketers to leave because they were not being disruptive or blocking doors or ingress and egress.

In Capital Medical Center, 364 NLRB No. 69 (August 12, 2016), a split panel of the NLRB decided that the Hospital violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) by attempting to prevent the off-duty employees from picketing, threatening the employees with discipline and arrest for engaging in picketing, and contacting the police in an effort to have the picketing ended.  The majority did not rule that off-duty employees have an absolute right to picket a hospital’s lobby entrance, but cited the standard enunciated by the Supreme Court in Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945) that employee rights under Section 7 of the NLRA must be balanced against employer property rights and business interests.  Accordingly, picketing could be restricted if an employer shows that the restriction is required to maintain discipline and production.  Recognizing that acute care hospitals involve special considerations, the majority noted that hospitals may prohibit picketing in non-patient care areas if necessary to prevent patient disturbance or disruption of health care operations.  However, the majority decided that the Hospital did not show that the picketing in this case created any such disturbance or disruption or that restricting picketing was required to maintain discipline and production.  The majority felt that the presence of individuals peacefully holding picket signs near the main entrance to the Hospital was not likely to be any more disruptive or disturbing than the handbilling that the Hospital allowed.

The dissent, Member Miscimarra, felt that the majority improperly applied standards governing on-premises solicitation and distribution and applied them to on-premises picketing, noting that picketing is very different than other modes of communication and that the very presence of picketers on hospital property could disturb patients entering and exiting the facility. Member Miscimarra opined that the Hospital should have been allowed to restrict the on-premises picketing in this case.

 Employer Takeaway: Be prepared to allow off-duty employees to come onto employer property and even position themselves at entrances  while holding picket signs. Before restricting off-duty employees from such picketing, make sure there is evidence of real potential patient disturbance or disruption.  Conclusory statements that picketers could deter patients (or customers) from entering or, the acute care context, impact the healing environment will be insufficient.  In the case the a hospital, the NLRB will likely want to see evidence of the following types of behavior for a hospital to be able to lawfully restrict picketing:  patrolling the doorway, marching in formation, chanting and making noise, creating a barrier to entrances/exits, or other behavior that actually disturbed patients or disrupted hospital operations.

By: Brian Stolzenbach, Esq.

In early 1999, the Venetian Casino Resort in Las Vegas asked police officers to remove union protesters from a temporary walkway in front of the Venetian — a walkway the Venetian built on its property in exchange for the public expansion of the Las Vegas Strip to accommodate increased vehicular traffic.

Eventually, the Ninth Circuit determined that the walkway was a public forum, so the Venetian had no property right to exclude them.  In turn, the unions behind the protest filed an unfair labor practice charge challenging, among other things, the Venetian’s request that the police remove the protestors from the walkway (even though the police did not oblige).  The Venetian responded that its request was protected by the Petition Clause of the First Amendment to the U.S. Constitution (which protects “the right of the people . . . to petition the Government for a redress of grievances”) and therefore could not be a violation of the National Labor Relations Act (“Act”).  In 2011, the NLRB ruled that: (1) the request to the police was not protected by the First Amendment because it was not a “direct petition to the government” and (2) the request violated the Act.

On July 10, 2015, the D.C. Circuit reversed the NLRB, holding that the Venetian’s request to the police was a “direct petition to the government,” which is generally entitled to the protections of the Petition Clause of the First Amendment.  That said, the case still is not over because “sham petitions” — i.e., petitions that are “objectively baseless” and “brought with the specific intent to further wrongful conduct through the use of governmental process” — are not protected by the First Amendment.  The court remanded the case to the NLRB to determine whether the Venetian’s (16-year-old!) request to the police was a sham petition, in which case it still will be considered a violation of the Act.

Key point for employers:  Keep in mind that the Venetian did commit unfair labor practices by threatening to have the protestors arrested and by having its security officers place protestors under citizen’s arrest.  Neither of those actions could be protected by the First Amendment.  Many employers are quick to evict union protestors from “their property,” but the labor laws permit this only if the public truly has no right to be on the property.  In some cases, the public’s right in that regard is unknown to the employer, or at least unclear, until after the union challenges the eviction — as the Venetian found out in this case.  Further, while the D.C. Circuit’s opinion suggests that perhaps the safest thing to do is to call the police and let them sort it out, that option is often met with the practical reality that the police will not intervene (as in the Venetian’s situation).  To complicate matters further, when employees are involved in the protest, they may well have the right to be on the property, regardless of the employer’s property rights.  So what is an employer to do when faced with a workplace-related protest on or near its property?  First, know your property rights (as well as they can be known) beforehand.  Second, so long as things are peaceful and safe, take the time to think through your reaction very carefully.  Sometimes (though not always), the most successful reaction — and the one that can save you 16+ years of litigation — may be none at all.

  By: Sarah K. Hamilton, Esq. & Alison Loomis, Esq.

In a recent case of note, the Ninth Circuit held that federal labor laws did not preempt a shopping mall owner’s state law claims for trespass and nuisance against a union that was picketing a store in the mall.  See Retail Property Trust v. United Brotherhood of Carpenters, No. 12-56427 (9th Cir. September 23, 2014). 

The owner of a California shopping mall brought state trespass and nuisance claims against a union that protested in front of an Urban Outfitters store for its hiring of non-union subcontractors.  During the picketing, the union chanted loudly, blew whistles, hit and kicked a construction barricade, and banged picket signs against mall railings.  The mall responded by filing a lawsuit seeking declaratory and injunctive relief in state court.   The union removed the case to federal court on the grounds that the state law claims were preempted by federal law and stated a federal cause of action. 

Citing to a Seventh Circuit decision which held that, generally, claims involving secondary boycotts (i.e.  union action in support of a strike initiated by workers in a separate company) were “completely” preempted by LMRA Section 303, the District Court found that the mall owner’s trespass and nuisance claims were preempted by federal labor laws.   Based on the District Court’s preemption finding, the court dismissed the mall owner’s claims.

The Ninth Circuit reversed the lower court’s dismissal, finding that the alleged property-based torts of trespass and nuisance only incidentally involved union conduct, and therefore, were not preempted by federal labor laws.  For example, the mall owner did not seek to punish or prevent labor conduct; rather, it merely sought to stop conduct which violated its time, place, and manner rules. 

In its opinion, the court provides a comprehensive background of preemption, including discussion of the distinction between “complete” versus “defensive” preemption and the three types of defensive preemption: (1) express preemption, (2) field preemption, and (3) conflict preemption.  The Ninth Circuit noted that courts commonly use these terms inconsistently, and at times, incorrectly.  To read the Ninth Circuit’s thorough discussion of preemption analysis, see the court’s decision here.

The Ninth Circuit addressed the Seventh Circuit’s prior finding that state law claims involving secondary boycotts are  “completely” preempted (relied on by the District Court), stating that its sister circuit was “simply wrong.” Instead, the Ninth Circuit focused on the fact that trespass and nuisance are labor-neutral torts, with non-economic interests, and that regulation of this conduct is “deeply rooted in local feeling and responsibility.”  Here, per the Court, the mall owner was not trying to prevent or punish union activity; but rather, to prevent conduct that violates time, place, and manner restrictions. As such, the Ninth Circuit found that the conduct involved was only a peripheral concern of federal labor law.

The creation of a circuit split does nothing to clear the muddy waters of preemption.  That said, this case helps to provide a guide of labor preemption doctrines, as applicable in the Ninth Circuit. 

In addition, the case provides some positive recourse for employers facing a secondary boycott disrupting the workplace. Where an employer has content-neutral time, place, and manner restrictions in place, a civil action may be a possible remedy to explore.

By: Kamran Mirrafati, Esq.

Just in time for football season and tailgate parties, the NLRB Division of Advice recently issued a Memorandum effectively limiting parking lot demonstrations outside an employer’s facility.  [See Wal-Mart Stores, Inc., NLRB Div. of Advice, No. 13-CA-99526, August 14, 2013 (released August 23, 2013).]  Here, the employer’s actions were vindicated, but employers generally are cautioned not to read this Memorandum too broadly.

The NLRB has long held that an employer may lawfully prohibit non-employees (i.e., union organizers and other solicitors) from accessing its property. The NLRB also has held that any such prohibition may not extend to prevent off-duty employees from accessing an employer’s parking lots and other outside non-working areas. But, what if a demonstration on the employer’s premises is led by an off-duty employee and includes both employee and non-employee demonstrators?  

The Division of Advice recently answered this question: an employer may lawfully use police officers to remove non-employee demonstrators and their paraphernalia (i.e., a minivan containing a projection system and stadium style speakers) from its parking lot, so long as it allows any employee demonstrators to remain on the premises. According to the Division of Advice Memorandum, such actions do not interfere with employee rights to engage in concerted activities, even if the employee demonstrators were effectively leading the demonstration and were deprived use of property that was instrumental to their demonstration.   

In the case at hand, an off-duty Wal-Mart employee drove to a Wal-Mart store in a minivan owned by a third-party organization whose goal was to educate employees about labor laws. The van had logos of the third-party organization and other graphic images wrapping around the entire vehicle. The off-duty employee parked the vehicle in the parking lot, two rows from the front entrance of the store, and immediately began to lead a group of about 18 non-employee demonstrators with loud music such as the song “We’re Not Gonna Take It” and a projection of protest video clips onto the store’s façade.  After about 15 minutes of this activity, police officers advised all the non-employee demonstrators to leave the parking lot with the minivan, but permitted any off-duty employee demonstrators to remain on the premises. The off-duty employee who was leading the demonstration was not issued any citation by the officers, nor was he ever issued any discipline for his involvement in the demonstration.

The Advice Memorandum stated that Wal-Mart lawfully used the police to enforce its valid Solicitation and Distribution Policy because it reasonably concluded that the demonstration constituted solicitation by an outside organization in violation of its lawful policy. While the action of the police deprived employees the use of the minivan, it was found that Wal-Mart did not unreasonably conclude that the van was owned and operated by the third party organization because the van displayed the logo of the organization. As a result, the Division of Advice recommended that the charge be dismissed, absent withdrawal by the charging party.

Notwithstanding the positive holding of this Memorandum, employers must be cautious when addressing solicitation, distribution, and/or other protected concerted activity on their property. The decision here turned primarily on the fact that Wal-Mart “reasonably concluded that the demonstration constituted solicitation by an outside organization” because it was only able to recognize two of its employees among a larger group of approximately 20 demonstrators. Therefore, it is also reasonable to conclude that the result may have been far different if there had been a larger contingent of employees in the demonstration.