Last week, the United States Court of Appeals for the Ninth Circuit overturned a decision by the NLRB dismissing a complaint against two joint employers alleging unlawful termination in retaliation for picketing activity. The Court, reversing the Board, found that the employees’ picket was not unlawful secondary activity and therefore did not lose the protection of the Act. Service Employees International Union Local 87 v. NLRB, Case No. 19-70334 (Apr. 28, 2021).

Background

The case involved a ULP charge filed by the union on behalf of terminated employees against their primary employers, a building services company and a janitorial services subcontractor. A property management company hired the building services company to provide janitorial services to one of the buildings it managed. The building services company subcontracted the work to the janitorial services subcontractor who directly employed the employees to perform the janitorial work.

In response to issues concerning wages and other working conditions, the employees, with the assistance of the union, organized two pickets in front of the building for which the employees provided janitorial services. At the conclusion of the pickets, several employees were fired by the janitorial services subcontractor, and the building services company terminated its contract with the property management company and, consequently, with the subcontractor. The union filed a ULP charge against the primary employers, alleging unlawful termination in retaliation for protected activity under the Act. However, the NLRB credited the employers’ affirmative defense and found that the employees lost the protection of the Act by engaging in secondary activity in violation of Section 8(b)(4)(ii)(B) of the Act. The Board held that the employees’ picketing constituted secondary activity intended to pressure a neutral party, the property management company, to “cease doing business” with the primary employers.

Analysis

Under the Act, conduct that coerces, threatens, or restrains a neutral employer with the objective of pressuring the neutral employer to “cease doing business” with the primary employer, or the employer with whom employees have a labor dispute, constitutes unlawful, secondary activity. Conduct is found to have this requisite secondary objective when it seeks to force the neutral employer to terminate its business relationship with the primary employer or to pressure the primary employer into changing its labor policies. The Board found that the General Counsel and the union failed to establish that the picketing clearly disclosed that the dispute was with the primary employers, the building services company and the subcontractor, creating a rebuttable presumption that the picketing was unlawful secondary activity. The Board further held that the picketing had an impermissible secondary objective.

On appeal, the Court concluded that the Board’s finding of unlawful picketing activity was not supported by sufficient evidence but rather was based on the “thinnest of reeds”.  Contrary to the Board, the Court found that the picketing employees clearly indicated that their dispute was with their primary employer, stating that the single sentence in a leaflet isolated by the Board in its analysis did not obfuscate the plain language of the picketers’ signs and materials that called on the building services company by name.

The Court also disagreed with the Board’s finding that there was independent evidence that the employees’ picketing had a secondary purpose, namely to pressure the property management company to “cease doing business with” the primary employer. The Court held that the Board placed too much weight on statements made by employees to the property manager during the picketing, noting that none of the picketing employees’ signs or leaflets mentioned the property management company and there was no evidence in the record showing that the employees requested the property management company to intervene or threatened action against the neutral employer. As such, the Court held that the Board erred in concluding that the employees’ picketing violated Section 8(b)(4)(ii)(B) of the Act.

Takeaway

The Court’s holding suggests that the evidentiary standard for finding an impermissible secondary objective is fairly significant. While the Board’s interpretation of the Act, including the meaning of unlawful secondary activity under Section 8(b)(4)(ii)(B), is owed deference from reviewing courts, the Ninth Circuit’s decision in this case indicates that federal courts can and do intervene where the Board’s decision, in the court’s opinion, is not supported by sufficient evidence. Depending on whether other circuit court of appeals follow the Ninth Circuit’s precedent, this decision may increase the evidentiary burden that entities must carry to show that otherwise concerted activity is secondary in nature, thus losing its protection under the Act.

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Photo of Paul Salvatore Paul Salvatore

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

Paul negotiates major collective bargaining agreements…

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

Paul negotiates major collective bargaining agreements in several industries, including real estate and construction. He represents the NYC real estate industry’s multi-employer organization, the Realty Advisory Board on Labor Relations (RAB), and its principal trade organization, the Real Estate Board of New York (REBNY). In 2022, he helped the RAB reach a new collective bargaining agreement with SEIU Local 32BJ, covering more than 30,000 residential building employees. Paul also represented the Cement League, a multiemployer group of NYC area superstructure contractors, in halting an illegal strike by the Carpenters Union and negotiating a significant new, more competitive, collective bargaining agreement. He previously negotiated, on behalf of The Related Companies with 18 New York City construction unions, a landmark project labor agreement (PLA) for Hudson Yards on Manhattan’s West Side, the largest private real estate development in U.S. history. In 2019, he assisted Related in resolving the very public labor disputes at Hudson Yards in time for its grand opening. He also represented REBNY in negotiating its 2019 landmark “Statement of Principles” with NYC’s construction unions. For his work in this sector, City & State magazine has named him one of the most powerful lawyers in New York.

Paul tries arbitrations and litigations, and argues appeals, arising from labor-management relationships. Paul argued and won before the U.S. Supreme Court 14 Penn Plaza LLC v. Pyett. In a 5-4 decision of importance to employers, the Court held a collective bargaining agreement that explicitly requires unionized employees to arbitrate employment discrimination claims is enforceable, modifying 35 years of labor law. In 2016, he argued and won NBC Universal Media, LLC v. NLRB, where the D.C. Circuit — rejecting the National Labor Relations Board’s (NLRB) analysis — found “the reasoning supporting the [NLRB’s] judgment … incomprehensible.” In 2017, Paul argued and won T-Mobile v. NLRB where the Fifth Circuit refused to enforce the NLRB’s ban on certain common sense employee handbook policy provisions, finding the NLRB’s analysis to be unreasonable.

Paul represents universities and colleges in their labor and employment relations, including in the currently active areas of graduate student and adjunct faculty union organizing. He represented Yale, Duke, Chicago, Washington University in St. Louis and other universities in their response to graduate student unionization after the NLRB’s controversial 2016 decision finding graduate teaching/research assistants to be employees under the labor law. He has negotiated innovative non-NLRB election agreements at Cornell and Brown Universities.

An honors graduate of Cornell’s School of Industrial and Labor Relations (ILR) and the Cornell Law School, Paul served eight years on Cornell’s Board of Trustees, including on its Executive Committee. Upon completion of his terms, he was elected Trustee Emeritus and Presidential Councilor. Paul presently serves as a Trustee Member of the Board of Fellows of Weill Cornell Medicine, as well as on the Law School and ILR Deans’ Advisory Councils. In 2002, ILR awarded him the Judge William B. Groat prize, the school’s highest honor.

At Proskauer, Paul was elected to its Executive Committee and served as co-chair of its global Labor & Employment Law Department, named by The American Lawyer and Chambers USA as one of the premier U.S. practices. He is widely recognized as a leading U.S. labor and employment lawyer in such publications as Chambers Global and USA (Band 1), and Legal 500 (“Hall of Fame”). The National Law Journal selected Paul as one of “The Decade’s Most Influential Lawyers” – one of only three in the labor and employment law field. His peers elected him to the College of Labor and Employment Lawyers.

Paul counsels business groups, including the U.S. Chamber of Commerce and its Litigation Center. An active speaker and writer on labor and employment law issues, his publications include “One Dozen Years of Pyett:  A Win for Unionized Workplace Dispute Resolution” in the American Bar Association Labor & Employment Law Journal, Volume 36, Number 2 at 257. He is an Adjunct Professor at the Cornell Law School.

Photo of Steven Porzio Steven Porzio

Steven J. Porzio is a partner in the Labor & Employment Law Department and a member of the Labor-Management Relations Group. Steve assists both unionized and union-free clients with a full range of labor and employee relations matters. He represents employers in contract…

Steven J. Porzio is a partner in the Labor & Employment Law Department and a member of the Labor-Management Relations Group. Steve assists both unionized and union-free clients with a full range of labor and employee relations matters. He represents employers in contract negotiations, arbitrations, and representation and unfair labor practice cases before the National Labor Relations Board.

Steve has experience conducting vulnerability assessments and providing management training in union and litigation avoidance, leave management, wage and hour, and hiring and firing practices. He provides strategic and legal advice in certification and decertification elections, union organizing drives, corporate campaigns, picketing and union contract campaigns. Steve has represented employers in a number of different industries, including higher education, health care, construction and manufacturing in successful efforts against unions in election and corporate campaigns.

In addition to his traditional labor law work, Steve assists companies with handbook and personnel policy drafting and review, daily management of employee disciplines and terminations, and general advice and counsel on compliance with federal and state employment laws.

Steve’s litigation experience includes work on matters before state and federal courts, the Equal Employment Opportunity Commission, the Connecticut Commission on Human Rights and Opportunities, the New York State Division of Human Rights and various other administrative agencies. He has litigated matters involving age, race, national origin, gender and disability discrimination, wage and hour, whistleblower and wrongful termination claims.

While attending the Syracuse University College of Law, Steve served as the editor-in-chief of the Syracuse Science and Technology Law Reporter. He also received the Robert F. Koretz scholarship, awarded in recognition of excellence in the study of labor law.

Photo of Elizabeth Dailey Elizabeth Dailey

Elizabeth Ann Dailey is an associate in the Labor & Employment Law Department. Elizabeth assists clients in a variety of labor and employment matters, including motion practice, administrative proceedings, internal investigations, labor-management relations, and claims of employment discrimination. As part of her labor-management…

Elizabeth Ann Dailey is an associate in the Labor & Employment Law Department. Elizabeth assists clients in a variety of labor and employment matters, including motion practice, administrative proceedings, internal investigations, labor-management relations, and claims of employment discrimination. As part of her labor-management relations practice, Elizabeth has assisted in representation proceedings before the NLRB and has experience responding to unfair labor practice charges, conducting labor-related business risk assessments, and assisting with collective bargaining negotiations.

Elizabeth frequently represents clients across a variety of industries and sectors, including educational institutions, sports entities, news and media organizations, entertainment companies, healthcare institutions, and real estate companies.

Elizabeth earned her J.D. from the University of Pennsylvania Law School, where she completed a certificate program in business management from The Wharton School. While attending Penn Law, Elizabeth interned with the National Labor Relations Board Region 2 where she conducted investigations into unfair labor practices and recommended case dispositions to the Regional Director.