RA Tempe restaurant in Tempe, Arizona serves sushi and its parent corporation hires a construction contractor to perform work at RA Tempe’s location. The Carpenters’ Union appears on the public sidewalk outside the restaurant. Rather than walking back and forth with picket signs, the union’s employees unfurl a large banner urging customers, “DON’T EAT ‘RA’ SUSHI.” The banner faces away from the business so that the message may be seen only by passing motorists. Also, the banner does not block the sidewalk and the union sends only the number of union employees needed to hold the banner. The union’s employees offer flyers to interested members of the public which explains the labor dispute with the contractor. They do not chant, yell, march, hold picket signs or interfere with members of the public entering and leaving the restaurant. Free speech by a union or unlawful interference with a business relationship?

That was the question the National Labor Relations Board answered on August 27, 2010, See Carpenters Local 1506 (Eliason & Knuth of Arizona, Inc.), 355 NLRB No. 159 (2010). Two medical centers and a restaurant had hired contractors that the union claimed was paying wages lower than the standard wages in the geographical areas. Although unions can protest the payment of wages by non-union contractors, unions may not lawfully threaten, coerce or restrain the contractors’ customers in an effort to cause the neutral medical center and restaurant to cease doing business with the contractors, who have the primary dispute with the union. If picketing could be unlawful, does a union violate federal law by “bannering”?

In a 5-3 decision, the Labor Board found that the bannering was not coercive. The three Democrats ruled in favor of the Union and the two Republicans dissented. The majority ruled that the National Labor Relations Act does not prohibit the peaceful stationary display of a banner. Describing the activity as “nonconfrontational,” the majority of the Labor Board wrote that “[g]overnment regulation of nonviolent speech…implicates the core protections of the First Amendment.” Therefore, the majority dismissed the cases against the Carpenters’ Union. The two Republican members of the Labor Board dissented, finding that the Union wanted to invoke convictions and emotions sympathetic to the Union’s activity as well as fear and retaliation by the Union. The majority disagreed, finding no evidence of a coercive intent and a distinction between protected persuasive and unlawful coercive speech.

According to Alan M. Kaplan, a former Labor Board attorney, this was a case of first impression for the Labor Board. This decision will begin a long line of decisions by the new, Democratic-controlled Labor Board addressing a number of issues, including those issues on which past Labor Boards have already issued decisions. Stay tuned.