Hunton Employment & Labor Perspectives

In a recent case called Southwest Regional Council of Carpenters (New Star General Contractors, Inc.), the National Labor Relations Board upheld a fairly common Union street tactic of calling attention to the Union’s dispute with a so-called “primary” employer by displaying a large banner in front of the worksite of a “secondary” employer who happens to be utilizing workers from the “primary” employer. Typically, the dispute between the Union and the “primary” employer is over the “primary” employer’s failure to use Union workers or pay Union-scale wages. By publicly advertising its dispute with banners in front of the “secondary” employer, the Union hopes to “shame” the “secondary” employer. The NLRB held that hanging a banner outside in front of the “secondary” employer’s worksite with this clear purpose of simply shaming the “secondary” employer does not constitute what is known as “signal picketing” (sending a signal or inducement to workers at the “secondary” employer to engage in any kind of work stoppage or slowdown), nor does it constitute any kind of an unlawful threat, restraint or coercion against the “secondary” employer. See generally Southwest Reg’l Council of Carpenters (New Star Gen. Contractors, Inc.), 356 N.L.R.B. No. 88, 2/3/11 (released 2/4/11) (New Star). The NLRB’s decision appears consistent with a series of decisions in the fall of 2010 in which the Board determined that a stationary display set up by a Union in front of the worksite of a “secondary” employer does not constitute unlawful picketing of the “secondary” employer because a stationary or fixed sign does not include “the element of confrontation.” See e.g. Carpenters & Joiners of America (Eliason & Knuth of Arizona, Inc.), 355 N.L.R.B. No. 159 (2010) (Eliason).

In the recent New Star case, the Unions initiated a strike against two general contractors -- the so-called “primary” employers. During the strike, the Unions displayed banners referencing its “labor dispute” with the two general contractors at 19 different construction worksites associated with “secondary” employers, i.e., worksites that were using the general contractors being struck by the Unions. At two non-public job sites, the Unions did not confine their banners to the immediate proximity of the entry gates that were reserved for non-neutral employees. Instead, at one worksite, the banners were displayed 10-15 feet from the gate reserved for neutral employees, and at a second worksite, the banners were 300-350 feet away from the neutral employee gate. At the work sites, the Unions also distributed handbills that explained the connection between the “secondary” employer and the two general contractors (or “primary” employers) with which the Unions had a dispute.

Siding with management, the NLRB’s General Counsel had argued that the banners constituted unlawful common situs picketing and that the term “labor dispute” on the banners impermissibly signaled to employees of the “secondary” employers that they should cease working. Disagreeing with the General Counsel, the NLRB pointed out that:

(i) it has considered ten cases involving bannering at fifty-four locations;

(ii) in each case, the General Counsel argued that the banners were in actuality a “signal” to employees of the “secondary” employer to cease work; and

(iii) yet, there was no evidence in any case that “any employee [of the “secondary” employer], in fact, ceased work.”

The Board ruled that, for conduct to be in violation of the secondary boycott provisions of federal labor law, two key elements must be satisfied:

(1) the Union’s activity induced or encouraged the “secondary” employer’s workers to cease working; and

(2) one of the goals of the Union’s activity was to in fact compel the “secondary” employer to cease doing business with the struck or “primary” employer.

Ultimately, the NLRB found “no evidence” to suggest that the Unions’ banners were a “‘prearranged or generally understood signal’ to any employees to cease work.” The Board also noted that:

(i) the Unions did not discuss their protest with passersby;

(ii) the banners were not timed to coincide with the “secondary” employees’ reporting times;

(iii) handbills explicitly stated that the Unions were not urging anyone to refuse to work or deliver goods; and

(iv) the banners faced well-traveled public roads and could be observed by the public.

Dissenting Board Member Brian E. Hayes, the only Republican NLRB member, observed the lack of a practical difference between picketing and bannering and pointed out that “‘every form of influence and persuasion’ is equally prohibited, regardless of the method used.” Hayes accused the majority of the NLRB of “undoing through administrative adjudication the restrictions imposed by Congress on unions’ ability to involve neutral employers and employees in a labor dispute.” Hayes opined that the display of a banner announcing a “labor dispute” at a neutral gate to a non-public job site “plainly sought to ‘create the impression that this was an unfair job, and that the Union was requesting neutral employees . . . not to enter the site.’”

While the Democratic NLRB majority seems to remain consistent in its stance that bannering is distinguishable from unlawful picketing, it is still unclear how a federal appellate court will view the issue. Unless and until a federal appellate court reverses the NLRB’s determinations on this issue, employers may find themselves stuck enduring this type of activity. In order to ensure that business is not disrupted and that Union activity is contained as much as possible, employers should continue to use the reserved gate system.