In a decision affirming the National Labor Relations Board, the U.S. Court of Appeals for the District of Columbia Circuit has ruled that employees of a contractor working for a contract restaurant operator located in another employer’s hotel/casino, have a right to pass out handbills inside the hotel/casino at the entrance to the restaurant.  NewYork-New York, LLC d/b/a New York-New York Hotel and Casino v. NLRB, Case No. 11-1098 (April 17, 2012).

The case involved a restaurant operated by a contractor and located inside the hotel/casino.  The restaurant contractor’s employees desired to pass out handbills to other restaurant employees and customers of the restaurant at its entrance, publicizing their efforts to organize a union at the restaurant. The hotel/casino barred them from doing so.  The restaurant entrance was located inside the hotel/casino, and the hotel/casino argued that it had the right to bar non-employees from entering its property to engage in union handbilling.

In its decision below, 356 NLRB No. 119 (March 25, 2011), the Board had said it was addressing only the “narrow” situation where “a property owner seeks to exclude, from nonworking areas open to the public, the off-duty employees of a contractor who are regularly employed on the property in work integral to the owner’s business, who seek to engage in organizational handbilling directed at potential customers of the employer and the property owner.” (Emphasis added.)

The Board held that a property owner may prohibit off-duty employees of a subcontractor from engaging in handbilling to customers only where (i) it can demonstrate that activity of the subcontractor’s employees “significantly interferes” with the owner’s use of the property; or (ii) there is another legitimate business reason to justify the exclusion.  “The need to maintain production and discipline” (as defined by the Board’s case law) are “legitimate business reasons.”  Here, because the hotel/casino could demonstrate neither, its barring of access to the contractor’s employees was deemed a violation of the National Labor Relations Act.

In affirming the Board’s decision, the court held that “the governing statute and Supreme Court precedent grant the Board discretion over how to treat employees of onsite contractors for these purposes.”  Slip op. at 6.  The court also rejected the hotel/casino’s argument that its actions were justified because the targets of the handbilling were not just fellow employees but customers of the restaurant, and that the area adjacent to the restaurant entrance was a “working area” where handbilling could be banned.  Slip op. at 7-8.  As to both matters, the court held the Board was acting well within its authority.

The Board’s decision, which we originally reported on here, is of a piece with other recent Board decisions broadening the rights of employees to engage in protected concerted activity, with or without a union.