Amicus Curiae Brief — BE&K Constr. Co. v. NLRB

———

| Supreme Cour Us.

(3) ' FILED

No. 01-518 r Feb

ee 19 2p

IN THE |

Supreme Court of the United States CLERK

BE&K CONSTRUCTION CO.,

Petitioner,

vs.

NATIONAL LABOR RELATIONS BOARD,

Respondent.

On Writ of Certiorari

to the United States Court of Appeals

for the Sixth Circuit

BRIEF FOR SOCIETY FOR

HUMAN RESOURCE MANAGEMENT

AND LPA, INC. AS AMICI CURIAE

IN SUPPORT OF PETITIONER

MARK A. CARTER G. ROGER KING

HEENAN, ALTHEN & Counsel of Record

ROLES, LLP J. TODD KENNARD

1380 BB&T Square JEFFREY D. WINCHESTER

300 Summers Street JONES, DAY, REAVIS & POGUE

Charleston, WV 25301 1900 Huntington Center

(304) 342-8960 41 South High Street

Columbus, OH 43215

DANIEL V. YAGER (614) 469-3939

MCGUINESS, NORRIS &

WILLIAMS

1015 15th Street, NW

Suite 1200

Washington, DC 20005

(202) 789-8600

Counsel for Amici Curiae

TABLE OF AUTHORITIES

STATEMENT OF AMICI INTEREST

INTRODUCTION AND SUMMARY

I. THE BOARD AND THE SIXTH CIRCUIT FAILED

TO PROPERLY APPLY AND ANALYZE WELL-

ESTABLISHED PRECEDENT

ol een , pega A. THE DEVELOPMENT OF THE “SHAM”

uate ta oe Aig | ae Se Bee LITIGATION STANDARD PRIOR TO

BILL JOHNSON’S

B. THE SUPREME COURT’S DECISION IN

BILL JOHNSON’S

fi C. APPLICATION OF THE RULE AFTER

BILL JOHNSON’S

. THE FIRST AMENDMENT RIGHT TO PETITION

REQUIRES THE USE OF AN “OBJECTIVELY

BASELESS” STANDARD AS A MINIMUM

THRESHOLD BEFORE A VIOLATION CAN BE

ESTABLISHED UNDER THE NLRA FOR

“SHAM” LITIGATION |

Ill. | THE LOWER COURT’S DECISION IS NOT

ONLY LEGALLY WITHOUT SUPPORT BUT IT

ALSO IS NOT GOOD PUBLIC POLICY AND IS

INCONSISTENT WITH THE CHECK AND

BALANCE SYSTEM PROVIDED

FOR BY THE NATIONAL LABOR RELATIONS

BEST .ccccccccccsssceneteensnehenne 19

A. THE CHECKS AND BALANCES OF THE

NATIONAL LABOR RELATIONS ACT ..... 20

B. OVERVIEW OF UNION CORPORATE

CAMPAIGNS

C. THE NLRB’S BE&K STANDARD

ENCOURAGES THE ILLEGAL AND

UNPROTECTED TACTICS OF A

CORPORATE CAMPAIGN

CONCLUSION

ill

TABLE OF AUTHORITIES

Page

Cases

Allentown Mack Sales & Serv. v. NLRB,

PEED «cccccccecccccccecccccccces l

Associated Gen. Contractors,

245 NLRB 328 (1979) ... 2... 0c cece cece eee ees )

BE & K Const. Co., 329 NLRB No. 68

(amt. SOIDPD) nnn cc ccrccccccccccccceens 12

Bill Johnson's Rests, Inc. v. NLRB,

EE EEE sw cccccscccccccccccccce passim

Bill Johnson's Rests. Inc.,

290 NLRB 29 (1988) ... 0.2... ccc cee eee eee eens 12

Bob Evans Farms v. NLRB, 163 F.3d 1012

U ° 3 Senn l

Cal. Motor Transp. Co. v. Trucking Unlimited,

CEU cc cccccccccccecccccccccs 16,18

Christiansburg Garment Co. v. EEOC,

ME EEF occ scccccccccccccccccccces 17

Clyde Taylor, 127 NLRB 103 (1960) ............+-: 6,7

Crown Cork & Seal Co., 334 NLRB No. 92

CR GEEED cnccccccccccccccccccccccccccces l

De Jonge v. Oregon, 299 U.S. 353 (1937)... .....++>:. 14

Diamond Walnut Growers, Inc. v. NLRB,

53 F.3d 1085 (9th Cir. 1995) ..... 0... ee eee eee 12

E. R.R. Presidents Conference v. Noerr Motor

Freight, Inc., 365 U.S. 127 (1961) .......... 14,15,16

Epilepsy Found. of Northeastern Ohio v. NLRB,

268 F.3d 1095 (D.C. Cir. 2001) .... 2... 6.6 eee eee 13

Fashion-Fair, Inc., 159 NLRB 1435 (1966) ........... 6

Food Lion, Inc. v. United Food & Commercial

Workers, 103 F.3d 1007 (D.C. Cir. 1997) ......... 23

Int'l Org. of Masters, Mates & Pilots,

224 NLRB 1626 (1976) .... 2... eee ee eee ees 7-9

iv

TABLE OF AUTHORITIES

(continued)

Johnson & Hardin Co. v. NLRB, 49 F.3d 237

SE SUED cevndeccapedneduebdacdanesstes 15

Lodges 743 & 1746 Int'l Assoc. of Machinists &

Aerospace Workers, 534 F.2d 422 (2d Cir. 1975) .... 8

McDonald v. Smith, 472 U.S. 479 (1985) .......... 13,14

Manistee Town Ctr. v. City of Glendale,

S21 F.36 IGS OO Cir. BORD) ccc ccccccccccces 15

NLRB v. Boston Med. Ctr. Corp.,

330 NLRB No. 30 (Nov. 26, 1999) ............ 20,21

NLRB vy. Cent. Ill. Pub. Serv. Co.,

326 NLRB No. 80 (Aug. 27, 1998) .............. 22

NLRB v. Ins. Agents’ Int'l Union,

ee ED ence keducedacddsooechaeks 21

NLRB v. Kentucky River Cmty. Care, Inc.,

Sey PEED naducdddcsduneeatddcdsesoues l

NLRB v. Webcor Packaging, Inc., 118 F.3d 1115

DE EE andnchancubnedesnckeeseenenbads l

Petrochem Insulation, Inc. v. NLRB,

BUD FG FO GK. GR. BEBE occ ccccccccesccccc: 12

Power Sys., Inc., 239 NLRB 445 (1978) ............. 8,9

Power Sys., Inc., 601 F.2d 936 (7th Cir. 1979) ......... 9

Prof’l Real Estate Investors v. Columbia

Pictures Indus., Inc., 508 U.S. 49 (1993) 5,14,16,17,18

Television Wis., Inc., 224 NLRB 722 (1976) .......... 7-9

Tex. Foundries, Inc., 101 NLRB 1642 (1952) ......... 6,7

Tradesmen Int'l, Inc. v. NLRB, 332 N.L.R.B. 107

As cninnsisltingdautmas speedtest een aaa 29

Tradesmen Int'l, Inc. v. NLPB, 275 F.3d 1137

OP GTI vic ncnridiaiindia ties cs 29,30

United Aircraft Corp., 192 NLRB 382 (1971) ......... 7

United Mine Workers v. Ill. State Bar Ass'n,

BI I a cnccdeudieditiksccctecs 2,13

United States v. Robel, 389 U.S. 258 (1967) ......... 18

W.T. Carter & Brother, 90 NLRB 2020 (1950) .... 5,6,10

v

TABLE OF AUTHORITIES

(continued)

White v. Lee, 227 F.3d 1214 (9th Cir. 2000) ........-. 12

Statutes

18 U.S.C. §§ 1961-68... 66. eee eee eee ee eee eee 27

Legislative History

S. Rep. No. 74-573 (1935) ....----eeeeeee eee rerees 20

78 Cong. Rec. 4229, 4230 (1934) ....----eeeeereees 21

Miscellaneous

204 Daily Reporter (BNA) A-11 (Oct. 22, 1999) ....--- 3

A Petition Clause Analysis of Suits Against The —

Government: Implications For Rule 11 Sanctions,

106 Harv. L. Rev. 1111 (Mar. 1993) ......---+++: 18

J. Crump, The Pressure Is On: Organizing Without

the NLRB, 18 Lab. Res. Rev. 33 (1992) ......----- 25

T. DiLorenzo, The Corporate Campaign .

Against Food Lion: A Study of Media Manipulation,

17 J. Lab. Res. 359 (Summer 1996) .......------> 28

C. Gangemi, Jr. and J. Torres, |

The Corporate Campaign at Caterpillar,

17 J. Lab. Res. 377 (Summer 1996) .......----+++> 28

F. Harper & F. James, The Law of Torts (1956) ...----- 8

V. Hyman, Steel Mill Clean, EPA Probe Says,

Money, (Apr. 26, 1995) .....---0e+e seer er ereee 28

D. La Botz, The Troublemaker’s Handbook

(A Labor Notes Book 1991) .....----++ee5+5+> 24

vi

TABLE OF AUTHORITIES

(continued)

J. Manheim, The Death of A Thousand Cuts:

Corporate Campaigns and The Attack on the

Corporation (2001) ..............ccccceeee. 22,27

JL. & Pub.Pol. 771 (Summer 1999) ........... 27,28

William Prosser, Law of Torts (4th ed. ED bitcessuwe 8

SEIU, Contract Campaign Manual (1 ee 25

Bargaining Campaigns, Daily Labor R

(Nov. 16, 1992) ¥ ncumnetiion

STATEMENT OF AMICI INTEREST'

The Society for Human Resource Management (“SHRM”)

is the largest human resource management association in the

world. SHRM provides education and information services,

conferences and seminars, government and media

representation, online services and publications to more than

165,000 professional and student members throughout the

world. LPA, Inc., The Labor Policy Association, is a public

policy advocacy organization representing senior human

resource executives of over 200 leading employers doing

business in the United States. Collectively, LPA members

employ over 19 million people worldwide and over 12 percent

of the U.S. private sector workforce. LPA’s members are

employers subject to the National Labor Relations Act

(“NLRA”). Certain members of LPA have been victims of

corporate campaign tactics, similar to those involved in this

case. Because of their interest in the development of the

nation’s labor laws, LPA and SHRM have participated as

amicus curiae on many important labor law issues before this

Court, the United States Courts of Appeals and the National

Labor Relations Board (“NLRB” or “Board”).’ The instant

matter is of interest to SHRM and LPA because both believe

that the Board’s and the Sixth Circuit’s decision is in error

because (i) it is an incorrect interpretation and application of

the case law; (ii) it is a violation of the First Amendment by

placing a serious impediment upon the rights of employers and

' Counsel for all parties have consented to the filing of this brief, and their

consents have been filed with the Clerk of this Court. No counsel for

either party had any role in authoring this brief, and no other person other

than the named Amici and their counsel has made any monetary

contribution to the preparation and submission of this brief.

? See, e.g., NLRB v. Kentucky River Community Care, Inc., 532 U.S. 706

(2001); Allentown Mack Sales & Serv. v. NLRB, 522 U.S. 359 (1998);

NLRB v. Webcor Packaging, Inc., 118 F.3d 1115 (6th Cir. 1997), cert

denied, 522 U.S. 1108 (1998); Bob Evans Farms v. NLRB, 163 F.3d 1012

(7th Cir. 1998); Crown Cork & Seal Co., 334 NLRB No. 92 (July 20,

2001).

2

unions who may be involved in labor disputes to seek judicial

redress; and (iii) it creates a significant practical barrier for

parties to pursue legitimate litigation options because of the

substantial likelihood of being found in violation of the

NLRA, and correspondingly being exposed to the imposition

of the extraordinary remedy of being required to pay the other

party’s attorneys fees and costs.

INTRODUCTION AND SUMMARY

The instant matter involves the basic right of access to

judicial adjudication and redress of legal rights as guaranteed

by the First Amendment. Indeed, this fundamental right to

petition to the courts is “intimately connected, both in origin

and in purpose, with other First Amendment rights of free

speech and free press.” United Mine Workers v. Ill. State Bar

Ass'n, 389 U.S. 217, 222 (1967). This matter addresses the

rights of parties that become involved in a labor dispute to

initiate litigation against the other party without being found

to have violated the NLRA and thereby be subjected to a

remedy of paying the attorneys fees and costs of the defendant

litigant. The facts of the instant matter involve an extensive

“corporate campaign” against BE&K Construction Co. by

various labor unions to force the employer to change its

decision to construct a power plant with both union and non-

union workers. The unions in question filed various

administrative and judicial actions against BE&K in an

attempt to force it to agree to their demands. The unions also

initiated various administrative and regulatory filings,

picketing and handbilling activity and lobbying initiatives with

various state and local governmental entities. Acts of violence

were also committed against BE&K and its joint venture

partner for proceeding with the project without a commitment

to exclusively utilize labor union workers. In response to

these actions, BE&K filed various lawsuits and an NLRB

charge against the unions that were involved. The Company’s

litigation responses were either dismissed by the courts or

voluntarily withdrawn; its NLRB charge was found to have

3

merit. Based BE&K’s unsuccessful litigation initiatives,

the ‘chntont ther unions filed § 8(aX1) unfair labor practice

charges with the NLRB and alleged that such litigation by

BE&K was an unlawful retaliatory response against the unions

with an objective to interfere with the subject unions’ rights

under the NLRA. The NLRB found merit in the charge and

the Sixth Circuit enforced the Board’s Order. The Board, as

a remedy in this matter, ordered BE&K to pay—contrary to

the American Rule that each party in a lawsuit pay its own

legal fees and costs—the unions’ attorneys fees and costs in

defending against the employer-initiated litigation.

This matter, in addition to involving the important First

Amendment right of access to the courts, also involves

important public policy questions, particularly given the

increased use of “corporate campaign” initiatives by labor

organizations against employers.* Such “campaigns” can

. The NLRB has not yet issued an Order stating the amount of fees and

costs that BE&K is required to pay to the charging party unions.

ives of the unions in question, however, have stated that the

amount that BE&K will have to reimburse them for their litigation costs

and fees will total “hundreds of thousands” and potentially “millions of

dollars. Interest also could be assessed on any such fees. See 204 Daily

Reporter (BNA) A-11, A-12 (Oct. 22, 1999).

* Section III of this Brief discusses corporate campaigns in detail. Briefly

employers and have one or more of the following objectives: (i) pressure

an employer to recognize a union as the exclusive representative of its

employees without the benefit of a secret ballot vote conducted by the

NLRB—in many instances the union is, at best, a “minority” union and

does not enjoy majority support of the employees in the unit in question,

(ii) pressure an employer to agree to union demands in conlzsct

negotiations when the union is unable to obtain such objectives at

bargaining table; (iii) pressure third parties not to do business with the

target employer (e.g., boycott and similar tactics); (iv) pressure -

employer not to do business in a particular industry on a non-union basis;

(v) pressure an employer not to do business in a particular geographic area

on a non-union basis (the instant situation); or (vi) pressure an employer

4

inflict considerable economic damage on employers, cause the

target business to suffer loss of reputation and standing, and if

the Board’s and lower court’s decision herein is not reversed,

cause employers who respond to a “corporate campaign” with

ae ae to face the substantial likelihood of being

in violation of the NLRA with a corresponding remedy

of balng extened to gag the etttimaye fens and cust tanienad

by the union in such litigation. It is critical that this Court

apply the fundamental principles contained in the NLRA to

this matter to maintain the delicate, but essential, balance of

rights of employers and labor organizations in resolving labor

disputes. Such balance, as this Court is well aware, is an

essential element of Federal labor law policy and is critical to

prevent unnecessary industrial strife. Equally, it is important

to maintain such balance to provide appropriate regulatory and

statutory incentives for parties to peacefully resolve labor

disputes. If union corporate campaigns are permitted to

proceed without the ability of target employers to respond with

appropriate litigation initiatives, the delicate “check and

balance” system of Federal labor policy will be substantially

disrupted and additional industrial conflict will be encouraged.

SHRM and LPA respectfully request this Court to clarify

its decision in Bill Johnson’s Restaurants, Inc. v. NLRB, 461

U.S. 731 (1983), and to provide clear guidelines in this area.

Specifically, Amici submit that given the substantial precedent

in other areas of the law providing protection to parties

pursuant to the First Amendment to petition the courts for

redress of their grievances, that a test be established that would

require the Board to find litigation by parties involved in a

labor dispute in violation of the NLRA only if (i) said

proceedings were without any legal bases, that is, frivolous, or

to pay a certain level of wages and benefits to its employees. In all of the

above examples, except perhaps (i), the union(s) in question have no intent

a ne ee ee ae

employer.

5

“objectively baseless” as articulated by this Court in Prof’

Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc.,

508 U.S. 49, 55 (1993) and (ii) said proceedings were brought

for the improper motive of interfering with specific rights

provided for under the NLRA.

ARGUMENT

I. THE BOARD AND THE SIXTH CIRCUIT FAILED

TO PROPERLY APPLY AND ANALYZE WELL-

ESTABLISHED PRECEDENT

A. THE DEVELOPMENT OF THE “SHAM”

LITIGATION STANDARD PRIOR TO BILL

JOHNSON’S

Precedent related to the question before this Court can be

traced back to W.T. Carter & Brother, 90 NLRB 2020 (1950).

In that case, the employer had obtained an injunction in state

court preventing union meetings, and had union organizers

arrested for violating the injunction. /d. at 2021-22. In a two-

to-one decision, the Board recognized the “basic right” of

access to the court system, but noted that the right is limited by

legal doctrines prohibiting malicious use of judicial

proceedings for ulterior, retaliatory motives. /d. at 2023-24.

Because, the Board held, the employer’s motive in seeking the

injunction was retaliatory in nature, it violated § 8(a)(1) of the

NLRA, regardless of the fact that the employer had prevailed

in obtaining the injunction. /d. at 2022-24.

In his dissent, Chairman Herzog agreed with the Board’s

finding that the employer’s decision to seek the injunction was

motivated by a desire to interfere with its employee’s right to

organize, but argued that “the traditional right of all to

bring . . . contentions to the attention of a judicial forum”

should not be deemed an unfair labor practice, regardless of

the employer’s motive in initiating the litigation. /d. at 2029.

The Board soon demonstrated dissatisfaction with the

Carter & Brother decision. For example, in Texas Foundries,

6

Inc., 101 NLRB 1642 (1952), enforcement denied, 211 F.2d

791 (Sth Cir. 1954), the Board agreed with the trial examiner’s

holding that a lawsuit brought by an employer to halt picketing

was not an unfair labor practice. Keys to the examiner’s

holding were his findings that the suit was based upon

probable cause and that the employer was not motivated by an

impermissible purpose. /d. at 1689 (holding that “I am not

convinced that there exists in this case . . . a sufficient basis for

finding that the state court process was invoked maliciously,

abusively, and in bad faith not to protect legitimate interests

under state law ... .”). Thus, only two years after holding that

the party’s motive for bringing a court action determined

whether or not the action was an unfair labor practice, the

Board changed course, and opined that the only suits that are

= and brought for improper reasons violate the

In 1960, the Board made it clear that it was charting a

course in diametric opposition to the holding in Carter &

Brother. In Clyde Taylor, 127 NLRB 103 (1960), the

employer had (i) threatened to file a libel lawsuit against five

former employees who had filed unfair labor practice charges

after they were terminated for union organizing activities and

(ii) obtained an injunction in state court against fellow

workers’ peaceful picketing in protest of the terminations.

Although the Board opined that the threat of a lawsuit violates

the NLRA, it held that the actual filing of a suit could not be

an unfair labor practice, regardless of the merits of the suit or

the motive in filing it. Jd. at 109-10.

The Clyde Taylor holding that the right to seek judicial

redress could not qualify as an unfair labor practice, regardless

of the merits or motive of the litigation at issue, enjoyed

consistent application by the Board for years afterwards. For

example, in Fashion-Fair, Inc., 159 NLRB 1435, 1449 (1966),

the Board held that an employer’s lawsuit brought in state

court to enjoin employees from picketing could not support an

unfair labor practice charge, even though the lawsuit had no

7 -

basis in state law and even though the Board found the suit to

have been motivated by the employer’s “desire to harass the

picketers in the exercise of their protected concerted

activities.” See also United Aircraft Corp., 192 NLRB 382,

384 (1971) (noting that “since the [Clyde] Taylor case, the

Board has consistently held that the filing of a civil suit cannot

be found to be an unfair labor practice”) (listing cases).

The Board’s bright-line rule set forth in Clyde Taylor was

modified a decade and a half later in the case of Television

Wisconsin, Inc., 224 NLRB 722 (1976). In that case, the union

had filed suit against ten former members who resigned their

membership prior to a strike, worked during the strike, and

circulated decertification petitions. /d. at 779. The suit was

based in part upon the union’s claim that the defendants had

violated the union security clause in the collective bargaining

agreement. See id.

The Board upheld the Administrative Law Judge’s

(“ALJ”) ruling that the union’s lawsuit was an unfair labor

practice. /d. at 722. But in doing so, the Board differed with

the ALJ, and stated that the lawsuit was not an unfair labor

practice “because of the Union’s subjective intent,” but rather

it amounted to an unfair labor practice “because of the

unlawful objective sought by the Union,” namely, the

enforcement of an illegal union security clause. /d. at 722 n.2.

Only nine days after issuing its opinion in Television

Wisconsin, the Board again illustrated that it had modified the

Clyde Taylor test and adopted the two-pronged test followed

by the Board in Texas Foundries. In International

Organization of Masters, Mates & Pilots (“IOMMP”), 224

NLRB 1626 (1976), the union brought an unsuccessful in rem

action against a ship, seeking lost wages for union members

who the IOMMP alleged had been unjustly discharged. /d. at

1629-30. In upholding the ALJ’s finding that the suit was an

unfair labor practice, the Board held that (i) the suit “may not

have been [brought] in complete good faith” and (ii) the union

had pursued the lawsuit as part of a “larger objective,” namely,

og aac agree to an IOMMP contract. /d. at

Taken together, Television Wisconsin and IOMMP stand

for the proposition that, in order for an unsuccessful lawsuit to

qualify as an unfair labor practice, it must be demonstrated

both that the suit lacked a good-faith basis in law and that it

was brought for an improper ulterior motive, namely, to

violate the defendant’s NLRA rights.°

The Board continued to apply such two-pronged test in

Power Systems, Inc., 239 NLRB 445 (1978), enforcement

denied, 601 F.2d 936 (7th Cir. 1979). In that case, the

employer sued a former employee for, inter alia, the

employer’s costs and fees expended in defending itself against

the employee’s unfair labor practice charges and OSHA

complaints. The employer also sought to enjoin the employee

from filing any additional administrative or judicial

proceedings against it.’ Jd. at 445-47. The employer

a - ly voluntarily dismissed its request for injunctive

relief. Id.

The Board, relying upon, inter alia, Television Wisconsin

and JOMMP, noted that under well-established precedent a

* Of Lodges 743 & 1746 Int'l Assoc. of Machinists & Aerospace Workers

$34 F.2d 422, 463-65 & n.85 (2d 4 1975) (holding that ee

lawsuit could not qualify as “malicious prosecution” because the employer

had prevailed, therefore the Board could find the lawsuit to be an unfair

labor practice only if it was shown that the “court’s processes” had been

used for “collateral purposes not related to the suit in question.”) (citing W.

Prosser, Law of Torts § 121 at 857 (4th ed. 1971) and F. Harper & F.

James, The Law of Torts § 4.9 at 330-33 (1956)).

. The employer’s desire for an injunction was likely motivated by the fact

that, in addition to the two administrative charges the employee had filed

against it, the employee had filed no less than 45 charges against multiple

eo, and employers in years prior. See Power Sys., Inc., 239

9

lawsuit (whether filed by a union, employee, or employer)

amounts to an unfair labor practice only where it is shown that

the suit has “no reasonable basis” in the law and was brought

“to penalize the other party for exercising protected rights.”

Id. at 449-50 & n.18. Because the Board found the employer’s

suit against the employee to have “no reasonable basis” and to

have been brought for the purpose of harassing the employee,

the Board held that the suit was an unfair labor practice. /d.

On appeal, the Seventh Circuit denied enforcement on the

ground that the record contained insufficient support for the

Board’s ruling that the employer had lacked a reasonable basis

for filing suit or that the employer had an improper motive for

such suit. Power Sys, Inc., 601 F.2d at 939-40. Thus, the state

of the law at the time Bill Johnson's came before this Court

was that federal and state court litigation could amount to an

unfair labor practice only if it had no reasonable basis in law

and was brought for impermissible ulterior reasons. See id.;

see also, e.g., Associated Gen. Contractors, 245 NLRB 328,

331 (1979) (holding that, where employer’s lawsuit against the

union had been dismissed, such suit was not an unfair labor

practice because it was “filed in good faith to enforce

colorable contract rights” and because the evidence “fail[ed]

to reveal that [the employer’s] object in filing the suit was to

engage in reprisal . . . .”).

B. THE SUPREME COURT’S DECISION IN BILL

JOHNSON’S

The facts and procedural posture underlying the Bill

Johnson’s decision are as follows: management employees

had, on a number of occasions, threatened picketing

employees, promising “to get even with them” and threatening

that employees would “get hurt” if they continue to picket.

Bill Johnson's, 461 U.S. at 733-34. The employer then filed

a lawsuit in state court seeking to enjoin the employees from

picketing, claiming that the employees had libeled it by

distributing leaflets allegedly containing “false and outrageous

10

Statements . . . with the malicious intent to injure” the

employer, and bringing state law claims of interference with

the employers business. /d. at 734. The employees filed an

unfair labor charge the following day, claiming that the

employer’s civil suit had been brought in retaliation for the

employees’ union activities and because they had previously

filed charges under the NLRA. /d. at 734-35. The ALJ found

that the charges had merit.’

On appeal, the Board upheld the ALJ’s ruling and adopted

it “with minor exceptions.” /d. at 737. The Ninth Circuit then

enforced the Board’s Order, holding that “substantial evidence

supported both the Board’s findings that the employer’s

‘lawsuit lacked a reasonable basis in fact and that it was filed

to penalize [the employees] for engaging in protected

activity.’” Jd.

In its opinion, the Court addressed the narrow question of

the standard the Board should apply when a party seeks to

enjoin another party from pursuing a lawsuit. Jd. The Court

addressed only the employer’s libel suit. The Court first

traced the evolution of the law in this area back to Carter &

Brother, and concluded that “[s]ince 1978, the Board has

consistently adhered to the Power Systems rule that an

employer or union who sues an employee for a retaliatory

motive is guilty of a violation of the Act.” Jd. at 739. The

Court then noted that “[t]here are weighty countervailing

considerations . . . that militate against” allowing the Board to

enjoin a lawsuit solely on the basis of the motive behind the

suit. The Court noted two main concerns: the “First

” Prior to the hearing, the state court had rejected the employer’s request

for a preliminary injunction. Moreover, while the ALJ was considering the

employees’ unfair labor practice charges, the state court granted the

employees’ motion for summary judgment and dismissed the business

interference claims, but left the employer’s libel claim for trial. Bill

Johnson's, 461 U.S. at 735 & n.2. The state court also si

dismissed the employees’ cross claim for abuse of process. Id.

NS ee

11

Amendment rights to petition the government for redress of

grievances” and “the States’ compelling interest in the

maintenance of domestic peace.” Jd. at 741. Because of these

two compelling interests, the Court concluded that the Board

may enjoin a lawsuit only upon a determination that (i) the suit

lacks a reasonable basis and (ii) the suit was brought for an

improper motive. /d. at 743.

The Court in Bill Johnson’s, after oe that the

loyers litigation was baseless and brought for an improper

motive, agreed with the Board that as a remedy the employer

could be assessed the union’s attorneys fees and costs in

defending against such litigation.

The Court in Bill Johnson's did not, however, have before

it a situation where — as contrasted to the instant matter —

the litigation in question had been completed. The Court in

dicta, did briefly discuss situations where the non-NLRA

litigation had been completed. Contrary to the Board and the

Sixth Circuit, the Court, however, did not state that a plaintiff

in non-NLRA federal and state court litigation presumptively

has engaged in illegal conduct pursuant to the first prong or

step of any applicable test because the litigation in question

was not successful in all respects. Stated alternatively, the Bill

Johnson's court did not hold that an unsuccessful lawsuit by

definition is “objectively baseless” litigation. Further, the

Court in Bill Johnson’s did not conclude that, if a finding that

unsuccessful litigation had been pursued, the only inquiry left

for the Board to determine was whether the party bringing the

litigation at issue did so with an improper ulterior motive.

Accordingly, while Bill Johnson's is precedent that is

important to review in analyzing the instant matter, it 1s not

dispositive of the issue herein.

C. APPLICATION OF THE RULE AFTER BILL

JOHNSON’S

Albeit incorrectly, after Bill Johnson's, most Board and

certain court opinions interpreted the Supreme Court’s dicta in

12

Bill Johnson's as requiring the Board to equate a loss in state

court with lack of a reasonable basis for bringing the suit,

thereby limiting the Board’s inquiry to seeking proof of

improper intent, which, circularly, could be adduced, at least

in part, by the failure of the party initiating the action to

prevail.’ See, e.g., Bill Johnson's Rests., Inc., 290 NLRB 29,

29-32 (1988) (on remand); Diamond Walnut Growers, Inc. v.

NLRB, 53 F.3d 1085, 1087-88 (9th Cir. 1995). Other

decisions have, however, correctly determined that this

interpretation of Bill Johnson’s is problematic, and flies in the

face of the well-established law governing the right of access

to courts and the doctrines governing frivolous lawsuits,

malicious prosecution, and abuse of process. See, e.g.,

Petrochem Insulation, Inc. v. NLRB, 240 F.3d 26, 30-35 (D.C.

Cir. 2001) (noting that the Bill Johnson’s dicta creates an

anomaly in the jurisprudence governing frivolous lawsuits and

musing that “[pjerhaps the Supreme Court will one day create

a uniform standard for sham litigation governing both the

NLRA and non-NLRA cases... .”); White v. Lee, 227 F.3d

1214, 1234-37 (9th Cir. 2000) (discussing the Ninth Circuit’s

application of the dicta of Bill Johnson’s and noting that it

amounts to an “apparently contradictory position” with the

Court’s other rulings regarding the right to seek judicial

redress of controversies).

A review of the Board precedent in this area as outlined

above, and the corresponding circuit court precedent, does not

support, as a matter of law, the Board’s and lower court’s

conclusion that BE&K initiated litigation against the unions in

question that was “objectively baseless.” Indeed, just the

opposite conclusion caf be drawn as there is substantial

* The Board also held that BE&K’s voluntary dismissal of certain causes

of action could be regarded as the equivalent to a showing that its litigation

lacked merit. BE&K Const. Co., 329 NLRB No. 68 (1999). Such a

finding, Amici submit, is also clear legal error.

13

precedent to support the legal bases for BE&K’s litigation

initiatives.’

Finally, by granting certiorari in this case, the Court not

only has the opportunity to reverse the decision below, but

also to clarify its dicta in Bill Johnson’s, and to establish a

uniform standard governing the pursuit of frivolous or “sham”

litigation that is true to the Court’s jurisprudence in other

areas.

Il. THE FIRST AMENDMENT RIGHT TO PETITION

REQUIRES THE USE OF AN “OBJECTIVELY

BASELESS” STANDARD AS A MINIMUM

THRESHOLD BEFORE A VIOLATION CAN BE

ESTABLISHED UNDER THE NLRA FOR “SHAM”

LITIGATION

In the instant matter, the lower court’s standard for

evaluating “meritless” litigation violates fundamental

principles related to citizens’ right to petition the government.

That right is “among the most precious of the liberties

safeguarded by the Bill of Rights.” United Mine Workers, 389

U.S. at 222 (1967).

The right to petition is “implicit in the very idea of

government, republican in form.” McDonald v. Smith, 472

U.S. 479, 482 (1985) (quotation and bracket omitted). Indeed,

“(t]he Petition Clause . . . was inspired by the same ideals of

liberty and democracy that gave us the freedoms to speak,

publish, and assemble.” /d. at 485. “[T]he values in the right

* Under any scenario, BE&K should not be found guilty of an unfair labor

practice in this matter, since it is clear from reviewing the Boar¢’s decision

that new “law” has been developed by the Board in this case. Accordingly,

if the decision below is not reversed, the Board’s new approach to this area

of the law should only be applied prospectively. See Epilepsy Found. of

Northeast Ohio v. NLRB, 268 F.3d 1095, 1102-03 (D.C. Cir. 2001)

(holding that the Board’s new position on the application of Weingarten

rights to non-union employees should be applied only prospectively).

14

of petition as an important aspect of self-government are

beyond question.” /d. at 482.

Consistent with the central role that the right to petition

plays in a representative democracy, the right should not be

abridged through governmental action “except in the most

extreme circumstances ‘without violating those fundamental

principles of liberty and justice which lie at the base of all civil

and political institutions.” McDonald, 472 U.S. at 486

(Brennan, J. concurring) (quoting De Jonge v. Oregon, 299

U.S. 353, 364 (1937)). A long line of right to petition

jurisprudence supports this premise.

In Eastern Railroad Presidents Conference v. Noerr Motor

Freight, Inc., the Court rejected an interpretation of the

Sherman Act that would have allowed liability based on

petitioning the government. See 365 U.S. 127, 137-39 (1961).

As the Court explained, “we cannot, of course, lightly impute

to Congress an intent to invade” the freedoms protected by the

Bill of Rights, including the right of petition. See id. at 138.

The only exception to immunity for petitioning that the

Court has identified is outlined in its decision in Noerr-

Pennington. Such exception is for “mere sham” activities.

See id. at 144. In particular, the Court found that the

application of the statute—and thus the removal of First

Amendment immunity—“would be justified” when petitioning

“ostensibly directed toward influencing governmental action,

is a mere sham to cover . . . an attempt to interfere directly

with the business relationships of a competitor.” Jd. at 144

(emphasis added).

While the Noerr-Pennington doctrine initially arose in an

antitrust context, its rationale applies in many other contexts,

as this Court has previously noted. See Prof] Real Estate

Investors v. Columbia Pictures Indus., Inc., 508 U.S. at 58-59

(stating that [w]hether applying Noerr as an antitrust doctrine

or invoking it in other contexts . . .” and equating “sham”

litigation in the antitrust context and “baseless” litigation in

eS

15

the labor context) (emphasis added); see also, e.g., Manistee

Town Ctr. v. City of Glendale, 227 F.3d 1090, 1092 (9th Cir.

2000) (concluding that “(t]he immunity is no longer limited to

the antitrust context”). These, and other cases have

recognized, there is no logical reason to limit the Noerr-

Pennington doctrine to antitrust cases. Indeed, there is no

reason that a claim under the NLRA should be allowed .o

abridge or chill the First Amendment right to petition to a

greater extent than in the antitrust context.

The Bill Johnson's case , - = ‘oe

Noerr-Pennin principle and rei same

heundmaas ecba ef anean to trate deve afem Goo Cute

construction of the Act. See 461 U.S. at 741-43. The only

issue that the Court considered in Bill Johnson's was “whether

the Board may issue a cease-and-desist order to halt the

prosecution of a state court civil suit brought by an employer

to retaliate against employees for exercising federally-

protected labor rights, without also finding that the suit lacks

a reasonable basis in fact or law.” See id. at 733. The Court

concluded that “the Board may not halt the prosecution of a

state-court lawsuit, regardless of the plaintiff's motive, unless

the suit lacks a reasonable basis in fact or law.” Id. at 748

(emphasis added). The Court was not asked to consider what

standard should be applied after the conclusion of the litigation

to determine whether the employer’s lawsuit was a “sham”

and could therefore subject the employer to liability consistent

with the First Amendment’s right to petition.

The Court identified two different interests that courts have

to consider in determining whether filing a lawsuit could

violate § 8(a)(1) of the NLRA. The first was the right to

petition, and the second involved interests arising from the

“States’ compelling interest in the maintenance of domestic

peace.” See 461 U.S. at 741-44; see also Johnson & Hardin

Co, 49 F.3d at 242 (stating that the Court in Bill Johnson s

“referred explicitly to the First Amendment right to petition

the government for redress of grievances and the States

16

compelling interest in maintaining domestic peace by

providing a forum to its citizens for the redress of wrongs”)

(citing Bill Johnson's, 461 U.S. at 741-42).

In Professional Real Estate Investors, the Court clarified

the standard for ensuring First Amendment rights in this

context. The Court explained that “[o]ur decisions therefore

establish that the legality of objectively reasonable petitioning

‘directed toward obtaining governmental action’ is ‘not at all

affected by any anti-competitive purpose [the actor] may have

had.”” Prof’l Real Estate Investors, 508 U.S. at 59 (quoting

Noerr, 365 U.S. at 140). As the Court explained:

Since California Motor Transport, we have consistently

assumed that the sham exception contains an indispensable

objective component .... Whether applying Noerr as an

antitrust doctrine or invoking it in other contexts, we have

repeatedly reaffirmed that evidence of anti-competitive

intent or purpose alone cannot transform otherwise

legitimate activity into a sham. Indeed, by analogy to

Noerr’s sham exception, we held that even an “improperly

motivated” lawsuit may not be enjoined under the National

Labor Relations Act as an unfair labor practice unless such

litigation is “baseless.”

508 U.S. at 58-59 (internal citations omitted). Thus, since

Professional Real Estate Investors, it has been this Court’s

guidance to the circuits—with no distinction between

“injunction” cases and those resolved on the “merits”—that

the First Amendment protects a plaintiff from liability unless

the lawsuit is “objectively baseless.”

The Court in Professional Real Estate Investors also

issued an admonition to the lower courts. Such admonition

foreshadowed the circumstances present here:

[W]hen the antitrust defendant has lost the underlying

litigation, a court must “resist the understandable

temptation to engage in post hoc reasoning by concluding”

_—

17

that an ultimately unsuccessful “action must have been

unreasonable or without foundation.” The court must

remember that “[e]ven when the law or the facts appear

questionable or unfavorable at the outset, a party may have

an entirely reasonable ground for bringing suit.”

508 U.S. at 61, n.5 (quoting Christiansburg Garment Co. v.

EEOC, 434 U.S. 412, 421-22 (1978)); see also Prof'l Real

Estate Investors, 508 U.S. at 60 (concluding that antitrust and

labor issues could override right to petition only when a

lawsuit is “objectively baseless” such that “no reasonable

litigant could realistically expect success on the merits”).

Taken together, these cases mandate that “unmeritorious” or

“sham” should not be construed so narrowly as to mean that

any time an employer does not prevail as a plaintiff it can be

held liable under the NLRA because there is a right to petition

interest that must be considered, even after the close of

unsuccessful litigation.

As explained above, Bill Johnson’s did not address the

First Amendment implications of liability for an unsuccessful

plaintiff once the litigation has run its course, much less the

case of a plaintiff who filed its action in good faith but simply

lost on the merits, no matter how “close” the result. Thus, the

language on which the lower court relied in this case is dicta.

Further, the lower court’s decision does not address the First

Amendment issue in the post-litigation situation, other than to,

in effect, assume that there is no such interest once litigation

has been completed. That is contrary to this Court’s guidance

in Bill Johnson's, as made clear in Professional Real Estate

Investors.

Finally, the court of appeals’ standard does not consider

the possibility of any less restrictive means of controlling |

frivolous lawsuits. If a plaintiff brings a baseless lawsuit, an

aggrieved party has several remedies that do not directly

impinge on First Amendment rights, including claims for

abuse of process and sanctions under Rule 11. See generally

18

United States v. Robel, 389 U.S. 258, 268 (1967) (stating that

a statute that “imposes a substantial burden on protected First

Amendment activities” must meet its goals “by means which

have a ‘less drastic’ impact on the continued vitality of First

Amendment freedoms”); A Petition Clause Analysis of Suits

Against The Government: Implications For Rule 11

Sanctions, 106 Harv. L. Rev. 1111, 1122 (Mar. 1993) (“when

courts apply Rule 11 sanctions to complaints, courts punish

citizens’ presentation of judicial petitions.”)

The practical effect of the Board’s and lower court’s

standard would be to hold that any time an employer’s lawsuit

against labor organizations is unsuccessful—including

voluntarily dismissed—there is a substantial likelihood that the

Board will find a violation of the NLRA irrespective of the

employer’s good faith in filing suit and irrespective of the

“merit” of the action. That rule completely disregards the

Court’s prior rulings that the First Amendment and the right to

petition protect all but “sham” litigation, as set forth in

Professional Real Estate Investors and California Motor

Transport. Indeed, under the court of appeals’ rule, the only

way to avoid an unfair labor practice finding is to either not

initiate litigation in the first instance, no matter how valid the

claim appears to be at the outset, or pursue litigation in a very

aggressive posture and obtain a “victory” in all areas.

Certainly, voluntary dismissal, or perhaps even settlement

would, pursuant to the Board’s BE&K standard, not be safe

harbors for an employer litigant. Under this approach the

General Counsel of the Board would not need to introduce any

evidence that the lawsuit was subjectively or objectively

baseless or that the employer acted for retaliatory reasons in

filing the action.

Instead, those elements are essentially presumed, in what

is apparently an irrebuttable presumption test. Such

“irrebuttable” presumption test amounts to an emasculation of

the First Amendment right to petition for redress for parties

that are involved in a labor dispute.

——_ —.--

19

Faced with the choice of having to prevail or risking the

possibility of losing, being found, ipso facto, of having

committed an unfair labor practice and being forced to pay the

union’s attorneys fees, no doubt many, if not most, employers

will be forced to forego exercising their right to petition. If

BE&K’s action was unlawful, even though it was filed and

maintained with experienced counsel and in defense of plainly

improper non-employee conduct, then every time an employer

files a lawsuit against a labor organization, the employer is

facing a potential unfair labor practice, even for non-“sham”

litigation. The court of appeals’ decision will chill businesses’

right of access to the courts because of the extreme—if not

unavoidable—trisk of being conclusively presumed to have

committed unfair labor practices.

BE&K, and other employers faced with like

circumstances, have the right to expect the same First

Amendment protection to petition the courts for redress as

litigants do in other areas of the law without the imposition of

findings of unlawful activity and potential harsh remedies.

Such parties should also have the same right to rely upon

precedent in evaluating litigation options as parties do in other

areas of the law. Indeed, after reviewing the substantial

precedent in support of the Petitioner’s position in the instant

matter, Amici respectfully submit that the instant matter is not

even a “close” case and that the Board, not BE&K, has come

perilously close to being the party that should be required to

reimburse attorneys fees and costs.

Il. THE LOWER COURT’S DECISION IS NOT

ONLY LEGALLY WITHOUT SUPPORT BUT IT

ALSO IS NOT GOOD PUBLIC POLICY AND IS

INCONSISTENT WITH THE CHECK AND

BALANCE SYSTEM PROVIDED FOR BY THE

NATIONAL LABOR RELATIONS ACT

The decision of the NLRB in the instant matter has

sanctioned an employer for responding to arguably

20

unprotected tactics and legally questionable actions developed

by unions as part of the “corporate campaign.” Because the

NLRB has failed to confront this relatively new tactic of

“economic warfare”"® being utilized by organized labor, it is

necessary to outline the process to provide context for this

Court in addressing the substantive legal issues presented by

the Petitioner which are outlined in Sections I and II, infra.

Specifically, the decision below is not consistent with the

letter or spirit of the NLRA because it punishes employers

who resist illegal and unprotected corporate campaign tactics

by seeking recourse to the civil courts.

A. THE CHECKS AND BALANCES OF THE

NATIONAL LABOR RELATIONS ACT

The NLRA is founded upon a model which anticipates the

potential for adversarial relationships. The Act anticipates that

the relationships between labor unions and employers can

become contentious, but seeks to resolve those disputes

through non-confrontational means. In short, “[t]he primary

purpose of the Act is to minimize industrial conflict by

channeling it into an adversarial arms-length bargaining

system.” S. Rep. No.74-573 (1935).

Accordingly, Congress, in constructing the Act, fully

anticipated that the nation’s unions and management would

occasionally resort to “economic warfare,” but sought to

mitigate the ferocity of the conflict through the statute. The

underlying legislation to the Act was drafted to address “sharp

oy of economic warfare.” 78 Cong. Rec. 4229, 4230

Indeed, this Court has acknowledged that the effective

operation of the NLRA will include the sporadic resort to

economic weapons and economic warfare by the parties.

'° NLRB v. Boston Med. Ctr. Corp., 330 NLRB No. 30 (Nov. 26, 1999)

(Member Brame, dissenting).

— SS

21

It must be realized that collective bargaining, under a

system where the Government does not attempt to control

the results of negotiations, cannot be equated with an

academic collective search for the truth—or even with

what might be thought to be the ideal of one. The parties

—even granting the modification of views that may come

from a realization of economic interdependence—still

proceed from contrary and to an extent antagonistic

viewpoints and concepts of self-interest... . The presence

of economic weapons in reserve, and their actual exercise

on occasion by the parties, is part ard parcel of the system

that the Wagner and Taft-Hartley Acts have recognized.

NLRB v. Ins. Agents’ Int’l Union, 361 U.S. 477, 488-489

(1960).

Members of the NLRB have recognized that the traditional

tools of labor and management are anticipated in the process

of the NLRA. For example, strikes and lockouts have been

found to be legitimate checks and balances in the operation of

the statute. “[W]hen efforts to bargain break down, as they

inevitably will in some cases, the Act contemplates that the

parties will resort to “economic warfare,” including strikes and

lockouts to resolve their differences. ... Striking employees

withhold their labor for the purpose of pressuring an employer

to accede to their demands. . . .” NLRB v. Boston Med. Ctr.

Corp., 330 NLRB No. 30 (Nov. 26, 1999) (Member Brame,

dissenting) (footnote omitted), see also, NLRB v. Cent. Il.

Pub. Serv. Co., 326 NLRB 928 (1998) (conversely, an

employer is free to operate its business, with or without

replacement employees, and in certain circumstances may

lockout striking employees).

Organized labor has expanded the arsenal of weapons it

engages in economic warfare, and the weapon at issue here—

the corporate campaign—is one which the NLRA does not

prescribe a check or counter-balance. The absence of a

remedy under the NLRA for illegal and unprotected corporate

22

campaign activity naturally leads employers to the civil courts.

However, under the current rule as interpreted by the NLRB

below, employers are confronted with severe sanctions if they

seek recourse in the civil courts, necessarily tilting the desired

“level playing field” in labor relations considerably in favor of

organized labor.

B.OVERVIEW OF UNION CORPORATE

CAMPAIGNS

A corporate campaign is a coordinated attack by a union

using a variety of economic, legal, political, and psychological

weapons against a corporation that has opposed unionization,

refused to agree to the union’s bargaining demands, or in some

other way refused to yield on some issue of great importance

to the labor organization waging the campaign. The attack is

waged in numerous forums. including regulatory agencies and

the courts. The attack is intended to tarnish the image, and

undermine the reputation, of the targeted company through

constant and unyielding pressure and to cause so much

disruption that management is forced to surrender to the

“union’s demands.'' But most of all, it is warfare which unions

have chosen to undertake outside the confines of the

representational procedures of the Act.

Courts are beginning to acknowledge the destructive

nature of these attacks. The Court of Appeals for the District

of Columbia Circuit defined corporate campaigns as:

a wide and indefinite range of legal and potentially illegal

tactics used by unions to exert pressure on an employer.

These tactics may include, but are not limited to, litigation,

political appeals, requests that regulatory agencies

. investigate and pursue employer violations of state or

federal law, and negative publicity campaigns aimed at

'' See generally, J. Manheim, The Death of A Thousand Cuts: Corporate

Campaigns and The Attack on the Corporation, p. xiii (2001).

23

reducing the employer’s goodwill with employees,

investors, or the general public.

Food Lion, Inc. v. United Food & Commercial Workers, 103

F.3d 1007, 1014 n.9 (D.C. Cir. 1997). However, long before

this, unions themselves have described the strategy more

succinctly:

[Corporate campaigns . . . swarm[] the target employer

from every angle, great and small, so that corporate

officers are always aware of the effects of their decreases

on the rank and file. It’s the death of a thousand cuts

rather than a single blow.

Union Officials Stress International Scope of Organizing,

Bargaining Campaigns, Daily Lab. Rep. (BNA) [at A-5

Nov. 16, 1992) (quotation and citation omitted).

The AFL-CIO Industrial Union Department (“IUD”)

defines a corporate campaign as one which:

Applies pressure to many points of [corporate]

vulnerability to convince the company to deal fairly and

equitably [from the union’s point of view] with the union.

It means vulnerabilities in all of the company’s

political and economic relationship—with other unions,

shareholders, customers, creditors, and government

agencies—to achieve union goals.

Developing New Tactics: Winning with Corporate Campaigns,

Industrial Union Department, AFL-CIO at 1 (1985). And,

according to Ray Rogers, who claims to have initiated

corporate campaign strategies:

“(W]e develop a campaign strategy that has a beginning

point A and an end point Z. Point Z is total defeat or

annihilation of your adversary.”

Quoted in, D. La Botz, The Troublemaker’s Handbook at 128,

(A Labor Notes Book 1991). According to The

Troublemaker’s Handbook, such campaigns “are effective

24

when they inflict costly consequences on the target company

or its allies.” Jd. at 127.

Manuals, such as Developing New Tactics: Winning with

Corporate Campaigns and The Troublemaker’s Handbook,

have been published by several union-affiliated organizations,

individual unions, and the AFL-CIO to guide local unions in

waging corporate campaigns. These manuals explain the

rationale behind corporate campaigns and provide tactical

suggestions and organizational templates. It is clear from the

manuals that unions view federal and state law as a means to

harass employers:

Both public institutions and private companies are subject

to all sorts of laws and regulations, from the Securities and

Exchange Commission to the Occupational Safety and

Health Act, from the Civil Rights Act to the local fire

codes. Every law or regulation is a potential net in which

management can be snared and entangled.

A Troublemaker’s Handbook, supra at 127.

Part of ensnaring management is using regulatory agencies

to harass management. The IUD’s manual, Developing New

Tactics: Winning with ee et Campaigns, supra, phrased

it this way:

Businesses are regulated by a virtual alphabe: soup of

federal, state, and local agencies, which monitor nearly

every aspect of corporate behavior. Although these

watchdog agencies employ inspectors to monitor

compliance by companies, most rely on employees and

other individuals to file complaints about violations. Once

the regulators are alerted by a company, they sometimes

assume an adversarial relationship toward the offender.

Id. at 6. The Service Employees International Union’s

(“SEIU”) Manual clearly sums up the purpose for which

unions utilize regulatory agencies in corporate campaigns:

25)

Moreover, even if the violations are completely unrelated

to bargaining issues, your investigations may give

management added incentive to improve its relationship

with you. Management officials may find that . . . the

employer now is facing . . .

— Extra expense to meet regulatory requirement or

qualify for necessary permits and licenses.

— Costly delays in operations while those requirements

are met.

— Fines or other penalties for violating legal obligations.

— Damage to the employer’s public image, which could

jeopardize political or community support, which in

turn could mean less business or public funding.

SEIU Contract Campaign Manual, 3-21 (1988).

As these manuals demonstrate, in a typical —

campaign, unfair labor practice charges are filed wi

Board, oan complaints with the Occupational Safety and

Health Administration (“OSHA”), charges generated with the

Environmental Protection Agency (“EPA”), and protests filed

to petitions for local building permits, sometimes by

cooperating “public interest” groups. Expensive litigation and

bad publicity for corporations frequently result. At the same

time, little thought or attention is given to the representational

wishes of the employer’s employees, i.e., such employees

frequently have not requested and may even oppose the

union’s pressure tactics against their employer.

Thus, in an article entitled The Pressure is On: Organizing

Without the NLRB, by Joe Crump, Secretary-Treasurer of the

United Food and Commercial Workers (“UFCW”), Local 951,

the union author provides an extremely candid and graphic

discussion of the intent of unions during a corporate campaign.

J. Crump, The Pressure Is On: Organizing Without the NLRB,

18 Lab. Res. Rev. 33 (1992). In his article, Crump describes

26

his local’s “success” against Family Foods, a supermarket

chain, in Kalamazoo, Michigan:

After a three-year struggle, the battle with Family Foods is

over. Do we represent the employee? No. The company

went out of business. The good news is that some of the

stores were purchased by companies already under a Local

951 contract. A couple of stores are empty, but I am sure

that many of the former patrons are now shopping in

unionized stores. Perhaps even more important is the

message that has been sent to nonunion competitors: There

is no “free lunch” in our jurisdiction.

Id. at 35. The local succeeded in putting the company out of

business after engaging in a corporate campaign that targeted

several demographic groups and using a different approach for

each. For example, the UFCW targeted senior citizens by

accusing the company of taking excess pension funds.

In another case, in mid-1993, the United Steelworkers

(“Steelworkers”) announced a corporate campaign against

Bayou Steel in LaPlace, Louisiana, where a strike of several

months had been in progress, but the company continued to

operate. For three difficult years— from August, 1993

through September, 1996—the Steelworkers waged an

exhausting corporate campaign against the steel company."

As part of its corporate campaign, the Steelworkers filed

numerous complaints with the Louisiana Department of

Environmental Quality, causing the Louisiana agency to react

strongly after numerous unsupported allegations of

'? On October 29, 1997, Bayou Steel and the Steelworkers entered into a

confidential settlement agreement ending the company’s Racketeer

Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-68,

(“RICO”) lawsuit based on the Steelworkers’ corporate campaign. See H.

Northrup and C. Steen, Union “Corporate Campaigns” As Blackmail: The

ee are

27

environmental offenses. Its deputy secretary wrote the

chairman of the local union safety committee as follows:

The numerous special inspections in response to your

frequent unsupported allegations have not resulted in any

findings of significant danger to the environment or human

health, nor an emergency, nor the discovery of an

abandoned hazardous waste site, nor any findings of

significant violations of the Environmental Quality Act.

This office can no longer reasonably believe your

unsupported allegations against the above referenced

facility. Submit significant, verifiable evidence to support

your allegations against the above referenced facility, and

this office will investigate in an appropriate manner.

H. Northrup, Corporate Campaigns: The Perversion of the

Regulatory Process, \7 J. Lab. Res. 345, 353-54 (Summer

1996) (hereinafter cited as The Perversion of the Regulatory

Process) (quoting letter from Filmore F. Bordelson, III,

Deputy Secretary, Louisiana, Department of Environmental

Quality, to Maurice Simoneaux, Chairman, Safety and Health,

United Steelworkers, Local 9121, Nov. 17, 1994). The

“significant, verifiable evidence’ was never forthcoming.

Meanwhile, despite the state inspections, the federal EPA

insisted on inspections of its own, thus subjecting this small

company to further harassment. After two inspections and

numerous information requests over a ten-month period, the

EPA confirmed the state agency’s findings that there were no

major environmental violations at Bayou Steel. /d. at 354

(citing, V. Hyman, Steel Mill Clean, EPA Probe Says, Money,

Apr. 26, 1995, at C-1). These are only a few of the many

examples of companies that have been victimized by corporate

campaigns waged against them by unions."

'3 For further discussion of the corporate campaigns waged against various

companies, see generally, J. Manheim, The Death of A Thousand Cuts:

Corporate Campaigns and the Attack on the Corporation, (2001), H.

28

C. THE NLRB’S BE&K STANDARD

ENCOURAGES THE ILLEGAL AND

UNPROTECTED TACTICS OF A CORPORATE

CAMPAIGN

Employers victimized by illegal and unprotected corporate

campaign tactics are unable in a vast majority of situations to

seek relief before the NLRB, and are Subject to sanction by the

NLRB for pursuit of a remedy before the Courts, as evidenced

in the instant matter, thereby destroying the parity sought by

federal labor law between labor and management.

Unions are not protected by the NLRA when they take

actions solely to injure an employer. In Tradesmen Int'l Inc.,

332 NLRB No. 107 (Oct. 31, 2000), a union organizer

participated in a public hearing before the City of Lorain,

Ohio. The organizer testified that Tradesmen should be

subject to a city ordinance which required certain contractors

to post surety bonds when doing business in the city. The

organizer subsequently applied for employment with

Tradesmen, a corporate campaign tactic known as “salting,”

and was not hired. The organizer alleged successfully before

the NLRB that the employer had refused to hire him based

upon his testimony to the city, and that the conduct was

protected activity under the Act as it was engaged in for the

mutual aid and protection of employees.

The D. C. Circuit vacated the decision of the NLRB as the

conduct of the organizer in publicly criticizing the employer

was not for the mutual aid and protection of employees and

therefore was not protected by the Act. The Court focused on

Northrup, The Perversion of the Regulatory Process, supra, (discussing

the International Paper Company); T. DiLorenzo, The Corporate

Campaign Against Food Lion: A Study of Media Manipulation, 17 J. Lab.

Res. 359 (Summer 1996); C. Gangemi, Jr. and J. Torres, The Corporate

Campaign at Caterpillar, \17 J. Lab. Res. 377 (Summer 1996).

29

the desired impact of the organizer’s conduct in resolving the

matter, noting that “[i}Jn the present case, Oakes’s activity was

not an effort to improve any employees’ (union or non-union)

working conditions. So far as the record shows, it was solely

an effort to raise Tradesmen’s costs.” See Tradesmen Int'l v.

NLRB, 275 F.3d 1137, 1143 (D.C. Cir. 2002).

As noted, unions admit that they design corporate

campaign tactics to create unnecessary expenses for

employers. See Contract Campaign Manual, 3-21 supra.

Where this is the sole motivation for the union’s, or its agent’s

conduct, the D. C. Circuit concluded accurately that the union

loses its § 7 NLRA protections:

The Board’s decision suggests a new standard that any

activity that raises a non-union employer’s costs “levels

the playing field” between union and non-union

employers, even if unrelated to working conditions or

union/non-union status, and is therefore protected under

the Act... . But such a standard effectively erases any line

between acceptable and unacceptable activity directed

toward an employer’s economic health. We reject this

sweeping and unprecedented expansion of “concerted

activity for mutual aid or protection.”

Tradesmen Int'l, 275 F.3d at 1143.

The D.C. Circuit in Tradesmen was correct in rejecting the

“unprecedented expansion of concerted activity for mutual aid

or protection” that is implicit in the core definition of

corporate campaigns. The instant matter is yet another

example of the Board’s improper expansion of “mutual aid and

protection” concurrent with harsh remedies. Amici

respectfully request that this Court clearly and decisively

reject such expansion by the Board and re-establish the

balance of rights of employers and labor organizations under

the NLRA.

ia 30

CONCLUSION

For the foregoing reasons, the judgment of the United

States Court of Appeals for the Sixth Circuit should be

reversed.

Respectfully submitted,

MARK A. CARTER G. ROGER KING

HEENAN, ALTHEN & Counsel of Record

ROLES, LLP J. TODD KENNARD

1380 BB&T Square JEFFREY D. WINCHESTER

300 Summers Street JONES, DAY, REAVIS & POGUE

Charleston, WV 25301 1900 Huntington Center

(304) 342-8960 41 South High Street

Columbus, OH 43215

DANIEL V. YAGER (614) 469-3939

MCGUINESS, NORRIS &

WILLIAMS

1015 15th Street, NW

Suite 1200

Washington, DC 20005

(202) 789-8600

Counsel for Amici Curiae