On August 27, 2010, the National Labor Relations Board (the “Board”) issued its long-awaited decision in United Brotherhood of Carpenters and Joiners of America, Local Union No. 1506, 355 NLRB No. 159 (2010) – a case that had been pending before the Board since March 2004 - holding that bannering at a secondary employer’s place of business was not an unfair labor practice.

The Facts

Four non-union employers, Eliason & Knuth, Delta/United Specialties, Enterprise Interiors, Inc., and Hardrock Concrete Placement Co. (collectively the “primaries”), and the Carpenters Union had a dispute in which the Union alleged that they did not pay area standards. In protest, the Carpenters placed 15’ by 4’ banners, i.e., canvas signs, at the location of three neutrals: Thunderbird Medical Center, Northwest Medical Center, and the RA Tempe Restaurant. These neutrals had no direct dispute with the Carpenters but were targeted because they were doing business with the primaries. In one situation, the primary employer was working at the neutral’s location. In the other situations, the primary was working at the neutral’s parent company. In other words, bannering was taking place even though the primary was not on those premises but instead on the parent company’s premises.

The facts were similar at each location. The Union placed and maintained a banner on a public sidewalk outside of the neutral’s location. The banners were large, but did not block the sidewalk and were faced towards passing motorists. The text was simple, containing the phrases “Shame on [neutral]” and “Labor Dispute” in various places on the banner. The banners were held stationary and the members standing with the banner offered handbills to interested persons. There was no chanting, yelling, or marching, and the Union members did not block ingress or egress from the property.

The Decision

Section 8(b)(4)(ii)(B) of the National Labor Relations Act (the “Act”) prohibits a union from threatening, coercing, or restraining neutral employers with the object of forcing the neutral to refuse or cease doing business with the employers with whom the union has a dispute. The General Counsel argued that this bannering violated Section 8(b)(4)(ii)(B) because such activity was akin to picketing (which has repeatedly been found “coercive”) and fraudulently misled the public into believing the Union had a dispute with the neutral. The Board was unconvinced. The Board noted that, while the statute does prohibit conduct that is “threatening, coercing, or restraining,” it does not prohibit all conduct designed to persuade a neutral employer to engage in a boycott. The Board, relying heavily on DeBartolo Corp. v. Florida Gulf Coast Building and Construction Trades Council, 485 U.S. 568 (1988), held that bannering was more akin to peaceful handbilling and strikingly different from unlawful secondary picketing. Picketing, according to the opinion, “generally involves persons carrying picket signs and patrolling back and forth before an entrance to a business or worksite” and “entail[s] an element of confrontation. ”The banners, on the other hand, did not block ingress or egress, did not create any symbolic boundaries, and were not accompanied with conduct otherwise threatening to disrupt the neutral’s business operations. Therefore, the banners were not coercive or threatening and did not violate Section 8(b)(4).

The Board also raised constitutional concerns, framing the question as, “whether [Section 8(b)(4)(ii)(B)] is open to a construction that obviates deciding whether a congressional prohibition on [banners] on the facts of this case would

violate the First Amendment.” The majority was concerned that because banners were a form of speech, reading Section 8(b)(4)(ii)(B) to prohibit such speech would render the provision unconstitutional.

Significantly, the majority did not find that the banners were inherently misleading. The dissent argued that the banners should lose constitutional protection based on the fact that they were designed to fraudulently induce the public into believing the Union had a labor dispute with the neutral. The majority rejected this argument, not finding any misleading statements on the banners, despite the fact that they used the words “labor dispute” and mentioned only the neutrals (as opposed to the primary employers with whom the Union clearly had an actual dispute).

Practical Implications

The Board’s decision opens the door to a variety of creative activities that will embroil neutral employers in union disputes in which they have no interest. The Board was specifically not concerned with the possibility of the union’s message misleading the public into thinking the neutral employer was at fault. Unions will likely employ more aggressive tactics designed to persuade customers of a neutral employer to participate in the boycott in order to place more pressure on the neutral employer to support the union against the primary. For example, in cases decided since, the Board has dismissed unfair labor practice charges where the unions passed out handbills prominently displaying a rat gnawing on an American flag and accusing the neutral employer of “desecrating the American way of life” next to banners displayed much closer to the entrance of the neutral employer. The Board stuck to its view that this activity does not rise to the level of picketing. How much further unions will have to go to cross the line is uncertain. Of course, in later cases, employers will continue to point out similarities between picketing and the union activities and argue that the more aggressive tactics are independently threatening or coercive, but so long as the unions can remain within the realm of “peaceful” protest, these arguments may not gain traction no matter how misleading or fraudulent the union campaigns may be.