Employer Reminder: Section 303 Court Actions May be a Means to Circumvent NLRB

Given the ongoing climate at the National Labor Relations Board, many employers continue to feel they are facing "unfriendly fire." As such, employers would be well served to consider, when appropriate, some longstanding alternative routes for pursuit of legitimate violations of the National Labor Relations Act. Specifically, Section 303 of the Labor Management Relations Act (LMRA) affords employers, under certain circumstances, the ability to seek relief in court. The Northern District of Georgia’s holding in Circle Group, L.L.C. v. Southeastern Carpenters Regional Council offers some incentive for employers to explore venturing down a litigation road often less traveled.

Section 303 of the LMRA authorizes an employer to pursue a private damages action where the employer has been injured by a union's unfair labor practice. Specifically, Section 303(a) makes it unlawful for a labor organization to engage in conduct defined as an unfair labor practice under Section 8(b)(4) of the NLRA. As a remedy for this conduct, Section 303(b) provides that: "[w]hoever shall be injured in his business or property by reason of any violation of subsection (a) of this section may sue therefor in any district court of the United States . . . and shall recover the damages by him sustained and the cost of the suit." In Circle Group, the company availed itself of its court access rights under Section 303 to sue the union.  

The core allegations related to the union's conduct during its purported "area standards" campaign in Atlanta against the employer – a Georgia company engaged in interior construction, including drywall and acoustic ceilings. The employer's alleged position was that the union engaged in repeated acts of unlawful bannering/picketing in violation of Section 8(b)(4) of the NLRA.

The significance of Circle Group, however, lies beyond the dispute surrounding the underlying handbilling and bannering/picketing issue. These types of cases, as construction industry companies are well aware, are plentiful before the Board. However, this case warrants attention due to: (1) the company's decision to litigate this as a Section 303 claim; and (2) the reviewing court's unwillingness to readily dismiss and/or dispose of the employer's claims on the union's motion for summary judgment. The court allowed the employer to proceed on its claims that: (1) "at least one of the objectives of the Defendant Union's picketing was to induce or encourage employees of third parties to refuse to work;" and (2) the Union threatened, coerced or restrained various employers, entities, individuals, or executives engaged in interstate commerce or an industry affecting interstate commerce "with an object of: (a) forcing or requiring The Circle Group to join Defendant Union . . . ."

The court also reminded the parties that the use of bannering and handbilling as a means of "truthfully advising the public" of a labor dispute also requires that banners and handbills convey truthful information. In addition, the court made clear that a union cannot avoid liability for illegally threatening a secondary employer by conveying the threat with innocuous words, implications and body language. Liability results from the unlawful threat, not from the particular words or gestures used to convey it. Nor can a union avoid liability because the same statement could be reasonably interpreted as both a threat of a legal primary picket and a threat of an illegal secondary picket.

In light of this case, employers should remember the potential opportunity presented by Section 303 actions. On one hand, employers may benefit from having the issues presented to a jury. On the other hand, pursuing such actions via a Section 303 claim does take away the benefit of injunctive relief. Such a route is not appropriate under all circumstances, but the case does support the conclusion that such an action may be the best opportunity to avoid an anticipated negative result at the Board level. Finally, employers should consider that the mere threat of a damages action could cause a union engaging in unprotected activity to withdraw from such behavior. 

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.