The NLRB handed labor unions a helpful present just in time for the Labor Day weekend. The National Labor Relations Act contains provisions that prohibit certain types of "secondary" activity. For example, a union having a dispute with company "A" cannot picket the business of company "B" in order to force company "B" to stop doing business with company "A".

In a 3-2 ruling released last Friday, the NLRB held that the union practice of displaying large, stationary banners in front of a secondary employer’s business (i.e., company "B") does not violate federal labor law. The Board, in Carpenters & Joiners of Am. (Eliason & Knuth of Ariz. Inc.), 355 N.L.R.B. No. 159, found that such a form of protest is merely persuasive, not coercive, and therefore does not run afoul of secondary boycott provisions contained in the NLRA.

The case arose out of a labor dispute between the United Brotherhood of Carpenters and Joiners of America (the “Union”) and four construction-industry employers (the “primary employers”). As part of that dispute, the Union placed anti-employer banners, which were 3 to 4 feet high and 15 to 20 feet long, in front of three secondary employers’ facilities. Union representatives held these banners stationary at distances of 15 to 1,050 feet from the entrances to the facilities but did not patrol the area, carry picket signs, or block entrances.

The NLRB general counsel and the secondary employers asserted that the banner displays violated federal labor law, which prohibits activities that “threaten, coerce, or restrain” commercial activity, arguing the displays were aimed at forcing the neutral employers to discontinue doing business with the primary employers. The Board disagreed. The majority examined the language of the NLRA and its legislative history and concluded that Congress did not intend the law to prohibit the display of stationary banners. According to the majority, such conduct is not comparable to other activities that have been found to be coercive, such as picketing. Moreover, the majority held that outlawing the banners would unnecessarily raise First Amendment concerns.

In a strongly worded dissent, the minority accused the majority of promulgating a “startling new standard” that goes too far by requiring employers to show that the union’s conduct either causes or could reasonably be expected to cause a disruption to the secondary employer’s operations. They contended the majority decision was not compelled by the language of the NLRA, legislative history, nor any First Amendment concerns, and goes against a strong body of contradictory precedent. At the end of the day, the minority said, the display of large banners is in fact coercive and is no different than other types of prohibited picketing.

By allowing the display of such banners, the NLRB now permits unions to target a broader range of businesses -- ones which have no collective bargaining relationship with the union -- and more freely exert economic pressure on them and the companies with which they do business. This decision is likely to increase union protest power, creating additional opportunities for union secondary activity and the resultant need to plan for such conduct. Finally, it remains to be seen whether the new standard the minority accused the majority of creating will be applied by the NLRB in future cases to further erode statutory protections for secondary employers.