Waiting for Roundy s: Employers and Organized Labor Await New Guidance Concerning the Conflict Between Property Rights and Protected Activity

Transcription

1 Waiting for Roundy s: Employers and Organized Labor Await New Guidance Concerning the Conflict Between Property Rights and Protected Activity By Jeffrey S. Bosley 1 Imagine this scenario: You own a retail business. It s Monday morning; you drive into work and park your car. Standing outside the front door on your private property are several construction trade union representatives distributing flyers. The union representatives are not seeking to organize your employees. Instead, they are asking your customers not to patronize your business because a non-union sub-contractor remodeled your storefront. The flyers read, Why spend your money here when this business uses cheap low-paid labor for their construction? There is a picture of a giant, filthy rat on the union s handbills wearing a banner across its chest bearing your company s name. What should you do? Ask them to leave? Call the police? Have the union representative cited for trespass? After all, the union representatives are strangers to you and your employees, are handbilling on your property, and the union s flyers could cause you to lose customers and business. Having the union representatives arrested, or at least escorted off you property seems like the logical choice, right? Not so fast. Remember last March when you allowed your niece and her troop to sell Girl Scout cookies in front of your store? And when you permitted the SPCA to hold a dog adoption event in your parking lot? And don t forget the time you allowed the local environmental group to collect signatures in support of a citywide ban on the use of plastic bags. Those well-intentioned charitable and political solicitations may now prevent you from excluding the union representatives that are distributing damaging flyers on your property and result in you defending charges of interference with protected activity before the National Labor Relations Board ( NLRB or Board ). A significant case pending before the NLRB, Roundy s, Inc., 2 potentially answers many of the above questions. However, it is possible the reach of Roundy s will extend well beyond access to physical property, and even impact use of virtual property, such as employerprovided . This article provides an overview of Roundy s, some historical perspective on 1 Prepared for purposes of discussion at the American Bar Association s 5 th Annual Labor and Employment Law Conference, November 2-5, Mr. Bosley is a partner in the Labor and Employment Department of Winston & Strawn LLP. He may be reached at (415) or jbosley@winston.com. The author appreciates the contributions of associates April Weaver and Nisha Patel to this paper. Any opinions expressed in this paper are solely those of the author. 2 Roundy s and Milwaukee Building and Construction Trades Council NLRB Case No. 30-CA

2 how the Supreme Court and the Board have addressed the conflict between property rights and expressive activity in prior cases, and a brief discussion of several key legal issues before the Board in Roundy s. A. The Roundy s Case In 2006, an Administrative Law Judge ( ALJ ) found that a grocery store chain, Roundy s, violated Section 8(a)(1) of the National Labor Relations Act ( Act ) by prohibiting peaceful area standards handbilling by a construction trades council ( Council ) on its property. 3 The Council, which did not represent (nor seek to represent) Roundy s employees, engaged in a coordinated handbilling campaign at 26 of Roundy s stores after Roundy s hired non-union contractors to perform store re-models and new store construction. 4 The Council s handbills urged Roundy s customers to boycott Roundy s and even suggested that consumers could achieve savings of their own by shopping at competitor stores, pointing out price differences favoring products sold by competitors. 5 Roundy s responded to the handbilling in some locations by calling the police, or in other locations by instructing the handbillers to leave the property. 6 Roundy s had previously permitted charitable solicitation and distribution of literature on its property both inside and outside its stores for at least the prior three years, including the Salvation Army, Girl Scouts, Veterans of Foreign Wars, the Red Cross, and Second Harvest. 7 Roundy s also regularly allowed various other civic and political solicitations inside and outside several of its stores, and allowed the public to advertise events and items for sale on a community oriented bulletin boards inside many of its stores. 8 In finding that Roundy s violated the Act, the ALJ relied on the Board s 1999 Sandusky Mall decision. 9 In Sandusky Mall, a divided Board held that a shopping mall owner violated Section 8(a)(1) of the Act by prohibiting peaceful handbilling by union representatives and having handbillers arrested and charged with criminal trespass. 10 The handbilling in 3 Roundy s Inc. and Milwaukee Building and Construction Trades Council, AFL-CIO, 356 NLRB No. 27, at 6. 4 Id. at 3; Id. at 4; Only one handbill mentioned in small print that the Union claimed that the Council had a dispute with Merit Painting. 6 Two handbillers were issued citations. Id. 7 Id. 8 Id NLRB 618 (1999), enf. denied in relevant part 242 F.3d 682 (6 th Cir. 2001). 10 Id. 2

3 Sandusky Mall targeted a mall tenant accused of using a nonunion contractor, who did not pay prevailing area wages and benefits, to remodel its store. 11 The handbills asked the public not to patronize the tenant because its employment of nonunion contractor undermined area standards. 12 The mall owner had previously allowed charitable, civic and other organizations to solicit on its premises, in accordance with its policy to permit solicitation where it benefited the business interest or good will of the mall or its tenants and did not create controversy or political divisiveness. 13 The Board majority, relying on the discrimination exception in Babcock & Wilcox Company, 14 found that the handbilling was protected by the Act, notwithstanding that it was undertaken on private property, and that the mall owner s prohibition of the handbilling constituted impermissible discrimination because it had permitted other solicitation on its property. 15 The ALJ in Roundy s held he was bound to follow Sandusky Mall as extant law. 16 The ALJ further opined, though, that the Board s composition has changed significantly since Sandusky Mall was decided by closely divided members [in 1999]. And, during that time, more circuit courts have weighed in with their own definitions of what kind of comparability is necessary to establish discrimination in the context of union activity. It is thus likely that the present Board would want to take a fresh look at the issue. 17 The parties filed exceptions to the ALJ s decision. Although it was uncontested during the hearing, on September 11, 2006, the National Labor Relations Board ( NLRB ) remanded the case to the ALJ to provide Roundy s an opportunity to establish that it had a sufficient property interest which entitled it to exclude the union agents. 18 On March 28, 2007, the ALJ issued a supplemental decision, holding that Roundy s did not establish an exclusionary property interest in 23 of the 26 stores. 19 For two of the stores, the ALJ found sufficient property interest to exclude the handbillers. 20 Nevertheless, the ALJ reaffirmed his earlier finding that 11 Id. at Id. 13 Id. at NLRB v. Babcock & Wilcox, Co., 351 U.S. 105, 112 (1956) NLRB at 618, CA-17185, JD-12-06, at Id. 18 Roundy s Inc., 356 NLRB No. 27, at 1 (November 12, 2010). 19 Id. at 1, Id. No exceptions had been filed to the ALJ s dismissal of allegations relating to the remaining store. 3

4 Roundy s violated Section 8(a)(1) of the Act by unlawfully discriminating against the Council at these two stores under the standard set forth in Sandusky Mall. 21 On November 12, 2010, the NLRB issued a Supplemental Decision and Order. The Board agreed with the ALJ s findings that Roundy s failed to establish an exclusionary property interest at 23 of the stores, and, accordingly, that Roundy s had violated Section 8(a)(1) of the Act by prohibiting Council representatives from handbilling in front of those stores. 22 The Board severed the allegations concerning the remaining two store locations and retained them for further consideration. 23 On the same day, November 12, 2010, the Board invited the parties and interested amici to file briefs on the following questions: In cases alleging unlawful employer discrimination in nonemployee access, should the Board continue to apply the standard articulated by the Board majority in Sandusky Mall, above? If not, what standard should the Board adopt to define discrimination in this context? What bearing, if any, does Register Guard, 351 NLRB 1110 (2007), enf. denied in part 571 F.3d 53 (D.C. Cir. 2009), have on the Board s standard for finding unlawful discrimination in nonemployee access cases? Over 21 amici submitted briefs in the case, which was fully briefed as of January 25, While many expected a decision before Chairman Liebman s term expired in August 2011, no decision was published as of September 20, B. Why Roundy s Matters to Employers and Labor Organizations 1. The Obama Board has Effected Significant Changes in Board Law, and Roundy s Provides the Board Another Opportunity to Revisit this Important Issue. 21 Id. 22 Id. at Id. at 1. 4

5 As the ALJ correctly observed in the Roundy s decision, the composition of the Board has substantially changed (and continues to change) since the 1999 Sandusky Mall decision. Since 2009, the Obama Board has reversed several significant Bush Board decisions, including decisions concerning voluntary recognition of a union, 24 and the successor employer bar. 25 New rules were established concerning posting of remedial notices, 26 and notices of employer rights under the Act. 27 The Board is also currently considering drastically reducing the time it takes to hold a union election through additional rule-making. 28 On March 25, 2011, after briefing concerning Roundy s was closed, the Board also established a new standard concerning access by off-duty employees to handbill on premises of a property owner who is not their employer. 29 In New York New York, the Board addressed whether New York New York Hotel & Casino ( NYNY ) violated Section 8(a)(1) of the Act when it prohibited employees of a contractor, Ark Las Vegas Restaurant Corporation ( Ark ) from handbilling on its property in an effort to organize the Ark employees. 30 While the Board had answered this question in the affirmative in 2001, the United States Court of Appeals for the District of Columbia Circuit denied enforcement and remanded the case to the Board. On remand, the Board stated: Today, we adopt an access standard that reflects the specific status of such workers as statutorily protected employees exercising their own rights under the National Labor Relations Act, but not employees of the property owner. We reject both the view that these workers enjoy precisely the same access rights as the employees of the property owner (under the Supreme Court s Republic Aviation decision) and the view that the property owner may deny access to these workers except in the limited circumstances when even nonemployee union organizers must be permitted on the property (under the Supreme Court s Lechmere and Babcock & Wilcox decisions). Instead we strike an accommodation between the contractor employees rights under federal labor law and the property 24 Lamons Gasket Company, 357 NLRB No. 72 (2011). 25 UGL-UNICCO Service Co., 357 NLRB No. 76 (2011). 26 J. Piccini Flooring, 356 NLRB No. 9 (2010) CFR New York New York Hotel & Casino, 356 NLRB No. 119 (2011). 30 Id. at 14. 5

6 owner s state-law property rights and legitimate managerial interests. 31 Under the new standard, the Board stated that under some circumstances an employer covered by the Act (such as NYNY) could be held to violate the Act by restricting the activities of its contractor s employees, even those employees are not employed directly by the covered employer, and even though the employees may technically be considered trespassers under state law. 32 The Board found that that employees at issue were not strangers or outsiders to NYNY, as were the non-employee organizers in Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992). 33 Rather, the Board held they were statutorily protected employees exercising their own right to engage in organizing activities at the location at which they regularly worked. 34 Exclusion of such activity was warranted only where the employer could demonstrate that [the employees ] activity significantly interferes with his use of the property or where exclusion is justified by another legitimate business reason, including but not limited to, the need to maintain production and discipline. 35 The Board held that NYNY had not made such a showing, and that it had violated Section 8(a)(1) of the Act by excluding the Ark employees who had handbilled on its property. 36 Dissenting, Member Hayes argued the new standard pays only lip service to the owner s property interests and gives no consideration to the critical factor of reasonable nontrespassory alternative means of communication. 37 Unlike NYNY, Roundy s involves non-organizing activities of non-employees (rather than off-duty employees). However, NYNY and other decisions of the current Board suggest a shift in the balance between access and property rights. 2. The Times They Are a-changin : Decreases in Strikes and Continued Increase of Corporate Campaigns. The landscape of organizing and union activity has changed over the course of history. Strikes, historically a union s primary economic weapon, have consistently and dramatically declined in number and duration over the past decade. Fewer major work stoppages 31 Id. at Id. at Id. at Id. at Id. at Id. at Id. at 15. 6

7 were reported in 2009 than any year ever. From , there were on average approximately 17 major work stoppages per year. This compares to 34 per year from , 69 from , and 269 from In lieu of the strike, unions have utilized other organizing tools and economic weapons against employers namely corporate campaigns. A corporate campaign is an attack by a union on the ability of a company or industry to conduct its routine business. The objective of the campaign is to generate so much pressure on the target that it will accede in to union demands. 38 If the ALJ s rationale in Roundy s is adopted, such pressure may include increased peaceful handbilling on the private property of customers or other related parties, providing an enhanced economic weapon to unions at the expense of the private property rights of a person other than the employee s employer. Owners will then be presented with a difficult choice: prohibit any and all solicitation by non-employees for non-organizing purposes, or face increased boycott activity. 3. Other Alternatives to Infringement Upon Private Property Rights Have Proliferated in the Past Decade. The potential alternatives for communication with employees, employers and the public have grown exponentially since These largely free, readily accessible alternatives weigh in favor of less infringement on private property, not greater infringement. According to a recent Nielsen survey, Americans spent 53.5 billion minutes on Facebook in May Individual employees, unions, and even the NLRB, have taken to Facebook, LinkedIn and Twitter to share information. In fact, many of these sites, and even smart phones and ipads, did not exist when the Board decided Sandusky Mall in Contrast these new media outlets to the media outlets of the era of Babcock and Wilcox in the 1950s. In 1955, only half of American homes had a single black and white TV. 40 How many screens do you have in your life today, including smart phones, netbooks, tablets and computer screens? Social networking sites don t close at 5:00 p.m. or on the weekends. They are constantly available. The wide variety of sites that provide avenues for communication of a union s message, obviate, rather than embrace the need for infringement on private property rights. 38 Jarol B. Manheim, 39 Facebook Gets More Popular by the Minute, Benny Evangelista, San Francisco Chronicle, Tuesday, September 13, 2011, p. D

8 C. Key Questions at Issue in Roundy s 1. The proper scope of the discrimination exception. In 1956, the Supreme Court announced, unequivocally, that an employer may validly post his property against nonemployee distribution of union literature if reasonable efforts by the union through other available channels of communication will enable it to reach the employees with its message and if the employer s notice or order does not discriminate against the union by allowing other distribution. 41 In issuing its holding, the Court reasoned, Accommodation between [a union s derivative Section 7 rights and the employer s property rights] must be obtained with as little destruction of one as is consistent with the maintenance of the other. The employer may not affirmatively interfere with organization; the union may not always insist that the employer aid in organization. 42 In the years that have followed, the Board has discussed two exceptions to the general rule that an employer cannot be compelled to permit union agents to distribute literature on its property: the inaccessibility exception where an employer violates the Act by denying a union access to its property where the union can establish it has no other reasonable means of communicating its organizational message; and the discrimination exception where an employer violates the Act by prohibiting nonemployee distribution of union literature on its property if it allows other organizations to engage in distribution or solicitation. Neither Babcock & Wilcox, nor any subsequent Supreme Court decision has squarely addressed the scope of a discrimination exception. In Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992), however, the Supreme Court underscored the restrictive nature of the exception to the general rule that a property owner cannot be compelled to allow distribution of union literature by nonemployee organizers on his or her private property. 43 The Court held the exception is a narrow one and does not apply wherever nontrespassory access to employees may be cumbersome or less-than-ideally effective. 44 Rather, the exception only applies where the location of a plant and the living quarters of the employees place the employees beyond the 41 NLRB v. Babcock & Wilcox Co., 351 U.S. 105, 112 (1956). 42 Id U.S. at Id. at

9 reach of reasonable union efforts to communication with them. 45 The Supreme Court explained that the burden imposed on the union is a heavy one is evidenced by the fact that the balance struck by the Board and the courts under the Babcock accommodation principle has rarely been in favor of trespassory organizational activity. 46 The Sandusky Mall standard, especially in light of ever-increasing means of alternative communications available, decreases the heavy burden required in Babcock & Wilcox and Lechmere, at the expense of the rights of property owners to allow solicitations consistent with their business purposes, while excluding other messages. 2. One Size Does Not Fit All: The Consequences Of a Broad Discrimination Standard. The Board s decision in Salmon Run Shopping Center, and the Second Circuit decision denying enforcement of that decision, highlight the conflicting interests at issue in Roundy s and the flaws of a one-size fits all, zero-sum approach to access rights. In 2006, the Board found in Salmon Run Shopping Center that the operator of a large retail shopping mall violated the Act by denying a union s request for access to the mall to distribute literature. 47 Pursuant to the mall s community access program it welcomed civic, charitable and other organizations to solicit the common areas of the mall when the solicitation would benefit both the organization and the mall s tenants. 48 The mall s primary considerations in granting requests for solicitation were whether the requested activity will increase foot traffic in the mall or enhance the mall s public image in the community. 49 For example, there was ample evidence that the mall allowed organizations such as the Little League, Boy Scouts and Children s Miracle Network to solicit on the property. 50 The mall also previously allowed the United Food and Commercial Workers to participate in a health fair and a local firefighters union to solicit for charitable purposes. 51 In accord with its community access program, the mall had previously rejected applications for solicitation by the Howard Dean campaign group to hold a forum, the 45 Id. (citing Babcock, 351 U.S. at 113). 46 Id. at 535. One Court of appeals has suggested that the discrimination exception should not even apply in the case of non-employee, non-organizing activity. Be-Lo Stores v. NLRB, 126 F.3d 268, 284 (4 th Cir. 1997). 47 Salmon Run Shopping Center, LLC, 348 NLRB 658 (2006). 48 Id. at Id. at Id. at Id. at

10 Miss New York State Pageant to hold a bake sale, and Sam s Club (a competitor of mall tenants) to set up a table to recruit new applicants. 52 In finding a violation of the Act had occurred, the Board did not examine how the mall s prior enforcement of its community action program intersected with the union s claim of discrimination. Instead, the Board found a violation of the Act because the mall s decision to exclude [the union] was based on the mere fact that the Union is seeking to engage in labor-related speech. 53 The Second Circuit denied enforcement of the Board s order. 54 In denying the Board s order, the Second Circuit explained that the standard for assessing discrimination must take account of the general rule that a private property owner need not provide a forum for expression on its property and may be arbitrary and inconsistent in its selection of speakers. 55 The Court went on to say that [t]o amount to Babcock-type discrimination, the private property owner must treat a nonemployee who seeks to communicate on a subject protected by Section 7 less favorably than another person communicating on the same subject. 56 The disparate treatment much be shown between or among those who have chosen to enter the fray by communicating messages on the subject, whether employers or employees. 57 The Court concluded that [o]nly the rare case satisfies Babcock s inaccessibility exception... and it may be that the same holds true under... the discrimination exception. 58 The Second Circuit s opinion highlights a key question at issue in Roundy s: whether a property owner can adopt a policy that determines access rights based on content. If not, and if more than an isolated charitable solicitation opens private property to messages detrimental to the owner s business, then the owner may simply choose to exclude all solicitation by non-employees for any purpose, regardless of its content or value to the community. 52 Id. at Id. at Salmon Run Shopping Center LLC v. NLRB, 534 F.3d 108, 111 (2nd Cir. 2008); see also Guardian Industries Corp. v. NLRB, 49 F.3d 317 (7th Cir. 1995). 55 Id. at Id. at Id. 58 Id. at

11 3. Whether the Same Discrimination Test Should Be Applied to Virtual and Physical Property. In Register Guard, the Board squarely held, employees have no statutory right to use [an employer s] system for Section 7 purposes. 59 The Board also adopted a narrower and more nuanced discrimination standard than the test set forth in Sandusky Mall. In Register Guard, the employer maintained a policy that communication systems, such as were not to be used for non-job-related solicitations. 60 The employer was aware that employees sometimes sent personal messages and s such as baby announcements, party invitations, and the occasional offer of sports tickets or request for services such as dog walking. 61 The union president, however, was disciplined for using the employer s system to make union related communications. 62 In finding that the employer did not violate Section 8(a)(1) of the Act by maintaining such a communication policy, the Board explained that [a]n employer has a basic property right to regulate and restrict employee use of company property. 63 In determining whether the employer had discriminatorily enforced its policy, the Board stated that unlawful discrimination consists of disparate treatment of activities or communications of a similar character because of their union or other Section 7-protected status. 64 For example, an employer clearly would violate the Act if it permitted employees to use to solicit for one union but not another, or if it permitted solicitation by antiunion employees but not by prounion employees. 65 But an employer may draw a line between charitable solicitations and noncharitable solicitations, between solicitations of a personal nature... and solicitations for the commercial sale of a product. 66 Numerous Roundy s amici suggested to the Board that the discrimination standard adopted in Roundy s should be at least as granular as the test adopted in Register Guard 59 The Guard Publishing Co. d/b/a The Register-Guard and Eugene Newspaper Guild, CWA Local 37194, 351 NLRB No. 70, 183 L.R.R.M. (BNA) 1113, 2007 WL (N.L.R.B. Dec. 16, 2007), enf. denied in part, 571 F.3d 53 (D.C. Cir. 2009), supplemental op. at 357 No. 27 (July 26, 2011). 60 Id. at Id. 62 Id. 63 Id. at 1114 (citing Union Carbide Corp. v. NLRB, 714 F.2d 657 (6th Cir.). 64 Id. at Id. 66 Id. 11

12 standard. Even if a different standard were adopted by the Board, Roundy s is not the proper case to revisit the Register Guard standard. As set forth above, Roundy s not only involves physical property, and not equipment; it also does not involve organizing activity by employees, but rather trespassory access by non-employees. D. Conclusion The Board s decision in Roundy s will be of substantial significance to property owners, property managers and tenants. Regardless of the outcome, the case will provide both needed guidance on this issue and inevitably fuel additional debate on the conflict between private property rights and accommodation of protected activity. 12