Employment Law Alert: National Labor Relations Board Permits Unions to Display Large Stationary Banners in Front of Businesses Where They Have No Primary Labor Dispute

Reproduced with permission from Clark Hill PLC

by Kurt M. Graham

The newly comprised National Labor Relations Board (“NLRB” or “Board”), which now consists of a majority of pro-union appointees, has wasted no time expanding the rights of organized labor. In Carpenters & Joiners of America (Elaison & Knuth of Ariz. Inc.), 355 NLRB No. 159 (2010), the NLRB found that a union’s practice of displaying large stationary banners in front of a secondary employer’s business is not coercive and thus does not violate the secondary boycott provisions of the National Labor Relations Act (“NLRA”).

Under the NLRA, a union having a dispute with an employer over the terms and conditions of employment being offered to its employees (the primary employer) must confine its picketing activity to that particular employer. It may not extend the labor dispute to other employers (secondary employers) in the hope that pressuring those employers to cease dealing with the primary employer will help it gain the upper hand in its primary labor dispute. Section 8(b)(4)(ii)(B) of the NLRA makes it unlawful for a union to force or require “any person to cease using, selling, handling, transporting, or otherwise dealing in the products of another other . . . person . . .”

In 2003, the Carpenters & Joiners of America Union was involved in primary labor disputes with four construction employers – Eliason & Knuth of Arizona Inc., Delta/United Specialities, Enterprise Interiors, Inc., and Hardrock Concrete Placement – that the union contended did not pay their employees wages and benefits that equaled area standards. In furtherance of the dispute with these four primary employers, the union engaged in peaceful protest activity at the Thunderbird Medical Center in Phoenix, the Northwest Medical Center in Tucson, and the RA Tempe Restaurant in Tempe during which union members held a large banner on a public sidewalk 15 feet to 1,050 feet from the company’s facility. The banners stated “SHAME ON [the name of the employer]” in large letters, flanked on either side with the words “Labor Dispute” in smaller letters. As they were displaying the banners, union members offered fliers that explained the nature of the labor dispute to interested members of the public. The fliers explained that the union’s complaint was with the construction companies but asserted that the employer was contributing to the undermining of area labor standards by using the services of those construction companies.

In late 2003, Eliason & Knuth, Northwest Hospital, and RA Tempe filed unfair labor practice charges with the NLRB contending that the union violated the NLRA by displaying the banners at secondary employer sites with the intention of forcing the neutral employers to cease doing business with the primary employers.

In a case of first impression, the NLRB found that the Carpenters & Joiners of America Union did not violate Section 8(b)(4)(ii)(B) because the provision does not prohibit the “peaceful stationary display of a banner.” According to the majority, the conduct that makes picketing coercive is the combination of carrying picket signs and the persistent walking of picketers back and forth in front of an entrance to a worksite so that a physical or symbolic confrontation with workers entering the worksite exists. The majority further stated: “Banners are not picket signs. Furthermore, the union representatives held the banners stationary, without any form of patrolling . . . the banners were located at a sufficient distance from the entrances so that anyone wishing to enter or exit the sites could do so without confronting the banner holders in any way.”

According to the two dissenting Board members, the Board has long held that the use of picket signs and patrolling are not prerequisites for finding a union’s conduct to be the equivalent of traditional picketing. The coercion element exists when a union posts its agents outside a business to advance the union’s cause. Thus, simply posting union agents at the site of a neutral employer is a coercive act because it creates a confrontation between the union members and those who are trying to enter the neutral employer’s premises.

The end result of this decision is that unions, particularly those in the construction industry, will increasingly utilize stationary banners as a means of lawfully expressing their displeasure over another employer’s wages and benefits. The scope of employers who may be impacted by this decision could be significant since many different industries utilize construction contractors to perform work on their premises. Employers must be cautious when they encounter any stationary banners outside of their workplace since any attempt to prohibit such activity may result in an unfair labor practice charge for interfering with employees’ rights to engage in protected, concerted activity under Section 7 of the NLRA. Employers are encouraged to consult with legal counsel to evaluate their options prior to taking any action.

If you have any questions about this decision please consult your Clark Hill Labor and Employment attorney.