When we think of the tools available to unions in waging campaigns against employers, we typically think of behavior such as picketing, handbilling, and strikes. While these traditional tactics certainly are still used, sometimes quite effectively, unions are discovering new ways to pursue their goals. A recent case from the United States Court of Appeals for the Sixth Circuit (which covers Kentucky, Michigan, Ohio, and Tennessee) illustrates a novel tactic used by a union, and how the employer in that case sought to counter it.
Roberto Baltierra was a member of a construction crew employed by Pulte Homes. In September 2009, Pulte discharged Mr. Baltierra, for the stated reasons of misconduct and poor performance. A union, the Laborers’ International Union of North America (“LIUNA” or “the Union”), contended that Pulte actually discharged Mr. Baltierra because he wore a LIUNA t-shirt to work. (In one of the more interesting aspects of this case, LIUNA did not represent Mr. Baltierra or his co-workers.) LIUNA filed an unfair labor practice charge with the National Labor Relations Board.
Rather than limit its dispute with Pulte to the filing of an unfair labor practice charge, LIUNA also mounted a national corporate campaign against the company. LIUNA requested its members to call Pulte, and it hired an auto-dialing service to call Pulte. The Union also encouraged its members to send e-mails to specific Pulte executives. Most of the calls and emails concerned Pulte’s alleged unfair labor practices, but some contained threats and obscenities.
According to Pulte, it was the volume of calls, not their content, that injured the company. Pulte alleged that the calls clogged access to its voicemail system and prevented customers from reaching its sales office and representatives. Pulte further alleged that the emails overloaded its computer system, which limits the number of emails in an inbox, meaning that Pulte employees could not access business-related emails or send emails to customers and vendors.
Four days after LIUNA started its telephone and email campaign, Pulte’s general counsel contacted the Union and requested that the Union stop the campaign because it prevented Pulte’s employees from doing their jobs. When the calls and emails continued, Pulte filed suit in federal district court against LIUNA and two of its officers, alleging several state law torts and violations of the federal Computer Fraud and Abuse Act (“CFAA”). Simultaneously, Pulte moved to preliminarily enjoin LIUNA’s telephone and email campaign.
The district court denied Pulte’s motion for a preliminary injunction, holding that it lacked jurisdiction to enter a preliminary injunction under the Norris-LaGuardia Act. Pulte appealed that ruling. Meanwhile, LIUNA moved to dismiss Pulte’s lawsuit on the grounds that Pulte failed to state a claim under the CFAA and that its claims were preempted by federal labor law. The district court did not address the preemption issue, but found that Pulte failed to state a claim under the CFAA. The court then declined to exercise jurisdiction over Pulte’s state law claims and dismissed Pulte’s lawsuit in its entirety. Pulte appealed this ruling as well, and the Sixth Circuit consolidated the two appeals. In August of this year, the Sixth Circuit rendered its decision in the case styled Pulte Homes, Inc. v. Laborers’ International Union of North America, et al., 648 F.3d 295 (6th Cir. 2011).
The Sixth Circuit first addressed the preemption issue, finding that Pulte’s claims were not preempted by federal labor law. The Court next moved to the question of whether Pulte had stated a claim for relief under the CFAA. Among other things, the CFAA prohibits knowingly transmitting information that damages a computer. To state such a “transmission” claim under the CFAA, a plaintiff must allege that the defendant “knowingly cause[d] the transmission of a program, information, code, or command, and as a result of such conduct, intentionally cause[d] damage without authorization, to a protected computer.” 18 U.S.C. §1030(a)(5)(A). The district court had found that Pulte failed to allege that LIUNA had intentionally caused damage to its computers. The Sixth Circuit reversed this finding, holding that a transmission that diminishes a plaintiff’s ability to use data or a computer system causes “damage” within the meaning of the CFAA. According to the Sixth Circuit, Pulte’s claims that its employees were prevented from receiving at least some calls and accessing or sending at least some emails alleges the necessary damage.
The Court also found that Pulte sufficiently alleged that LIUNA had intended to cause such damage, relying on allegations that the Union instructed its members to send thousands of emails to three specific Pulte executives; many of these emails came from the Union’s server; the Union encouraged its members to “fight back” after Pulte terminated several employees; the Union used an auto-dialing service to generate a high volume of calls; and some of the messages included threats and obscenities. According to the Court, at a minimum it is plausible LIUNA understood that sending transmissions of that volume would slow down Pulte’s computer operations, and the “fight back” rhetoric suggests that a slow-down was at least one of the Union’s objectives. Because the Sixth Circuit found that Pulte’s lawsuit had stated a claim for relief under the CFAA, it reinstated that claim and further reversed the dismissal of Pulte’s state law claims, sending those claims back to the district court for it to determine whether it should exercise supplemental jurisdiction over those claims. Remedies potentially available under the CFAA include economic damages, such as lost profits attributable to the CFAA violation.
The Court ruled against Pulte in two respects, however. First, in addition to its “transmission” claim under the CFAA, Pulte also alleged in its Complaint that the Union violated the CFAA by “intentionally access[ing] a protected computer without authorization.” The Sixth Circuit upheld the district court’s dismissal of this claim, finding that Pulte failed to allege any access of its computers “without authorization.” According to the Court, the Union used unprotected public communications systems, which defeated Pulte’s allegation that the Union accessed its computers without authorization. Pulte allowed all members of the public to contact its offices, including its executives. Because Pulte’s telephone and email systems were open to the public, the Union was authorized to use them.
Second, the Court agreed with the district court that it lacked jurisdiction to enter a preliminary injunction against LIUNA’s telephone and email campaign. The Court found that, because Pulte’s lawsuit involved or grew out of a labor dispute, the Norris- LaGuardia Act applied. Among other things, that Act prohibits a court from granting an injunction to any complainant “who has failed to make every reasonable effort to settle [a labor] dispute . . . by negotiation.” 29 U.S.C. § 108. According to the Court, Pulte’s alleged settlement efforts, which at most consisted of a cease and desist letter sent to the Union on a Sunday, followed by the filing of the lawsuit less than 48 hours later, fail the “every reasonable effort” test and thus prevent the application of injunctive remedies.
While the Sixth Circuit’s opinion serves as something of a cautionary tale to unions attempting to wage corporate campaigns through the use of telephone calls and the internet, employers should not take too much comfort in this opinion. The opinion could be viewed as advising unions what steps to take to avoid a finding of a CFAA violation when conducting such corporate campaigns – specifically, unions should espouse an intent other than disruption of the employer’s computer systems, regardless of what their actual intent is, and perhaps they should scale back the volume of the campaign so that it is a serious annoyance, but it will not actually result in any voice mails or emails not being received. For example, one can foresee emails and phone calls being placed to executives every hour on the hour – an annoyance, to be sure, but not likely to seriously disrupt any computer systems. In any event, one lesson for employers faced with an aggressive union campaign waged via telephone and email is to act quickly in attempting to “negotiate” with the unions. Although such negotiations may be unlikely to result in a settlement, they are necessary if the employer wishes to pursue injunctive relief.