Unions May Direct Banners Stating "Labor Dispute" At Customers Of Neutral Businesses

The extent to which neutral third parties may be embroiled in disputes between unions and other employers is a recurring issue that tests the boundaries of the First Amendment and the National Labor Relations Act. While unions have a constitutional right to communicate their views and enlist the support of the public, the First Amendment does not protect, and federal labor law prohibits, conduct that coerces neutrals to cease doing business with a union’s adversary. As union tactics evolve, courts are challenged to distinguish between what is permissible and what is not. In a recent 2-1 decision exploring these issues, a panel of the Ninth Circuit Court of Appeals upheld a union’s use of banners directed at customers of neutral businesses—a position contrary to that of a regional director of the National Labor Relations Board. Overstreet v. United Brotherhood of Carpenters and Joiners of America, 2005 U.S. App. LEXIS 10596 (June 8, 2005).

For several years, the United Brotherhood of Carpenters and Joiners of America, Local Union Number 1506, (union) had a labor dispute with three contracting companies (companies). The union objected to the companies’ employment of non-union employees and their alleged failure to meet local labor standards, especially wage standards, on construction projects in the Phoenix, Los Angeles, and San Diego metropolitan areas.

The union attempted to induce the companies to change their labor practices by influencing the contracting practices of businesses (retailers) that engage the companies to build retail stores and other construction projects. The union sent the retailers letters promising an "aggressive public information campaign" against the companies, including "highly visible banner displays" at the retailers’ places of business. After the retailers did not respond, the union protested at the sites of eighteen Retailers. The union set up large banners that read "SHAME ON [NAME OF RETAILER]" in big red letters, with the words "LABOR DISPUTE" in somewhat smaller black letters on either side of the text. These banners were placed on public sidewalks, facing away from the retailers and visible to passing motorists and other members of the public. Individual union members also carried other banners, displaying them anywhere from 20 to several hundred feet from the retailers’ entrances. In addition, individual members distributed handbills to passing pedestrians, explaining the nature of the "labor dispute."

One of the companies as well as two of the retailers filed charges with the National Labor Relations Board (board) against the union alleging that the bannering activities "threatened, coerced, or restrained" customers to "cease doing business" with the retailers, and the retailers with the companies, in violation of § 8(b)(4)(ii)(B) of the National Labor Relations Act (Act). The board issued a complaint against the union under § 10(b) of the Act and the regional director filed a petition in the U.S. District Court for the Southern District of California seeking injunctive relief under § 10(l) to bar the union’s bannering activities pending the board’s final resolution of the complaint. After the district court denied the petition, the regional director appealed the district court’s ruling to the Ninth Circuit.

The Ninth Circuit affirmed denial of the injunction, holding: (1) because the banners did not obstruct retailers' entrances and union members did not patrol the area or initiate interaction with the public, the union's conduct did not constitute traditionally proscribed ambulatory secondary picketing, and (2) the phrase "Labor Dispute" on the banners was not fraudulent, because the dispute, although primarily between the union and the companies, also involved retailers who did business with the companies.

• At least in the Ninth Circuit, the only union activity that appears to be clearly proscribed is ambulatory picketing of secondary businesses.
• A union may use banners to communicate to customers of neutral businesses, in strong terms, at and en route to the neutral businesses’ place of business, that it disapproves of patronizing companies adverse to the union.
• At least in the Ninth Circuit, a union may use the phrase "labor dispute" when appealing to the customers of businesses whose own labor relations are not the object of the union’s activity, so long as it does not interfere with access to their place of business.

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