Shame On Banners Likely To Continue

By now, most Phoenix-region employers have grown familiar with the Carpenter’s Union’s “Shame On” banners dotting the Phoenix landscape, and have asked the question whether the banners violate labor laws.  In a much anticipated decision, the Ninth Circuit Court of Appeals ruled last week that union “bannering” is not the same as picketing and, therefore, that the Carpenter’s Union should not be enjoined from continued bannering of secondary businesses.  “While the Ninth Circuit decision is disconcerting to employers,” notes Ogletree Deakins’ attorney Christopher Mason, “it still leaves open the possibility that secondary bannering may be enjoined in appropriate circumstances.” 
 
Factual background

The term “bannering,” a locution apparently unique to labor law, reflects the practice by certain unions of displaying large banners in front of local businesses in ongoing labor disputes to discourage customers from patronizing those businesses.  These banners, often four-foot by fifteen-foot in size, generally read “SHAME ON [Company Name]” in large red letters, with the words “LABOR DISPUTE” in somewhat smaller black letters on either side of that text, but can include other terms and phrases. 
 
The Carpenter’s Union generally places the banners in front of establishments run by secondary businesses.  Put differently, the businesses named and targeted by the banners are not directly involved in a primary labor dispute with the Carpenter’s Union.  The dispute is generally with another business that happens to deal with the business targeted by the banners.  The goal is to discourage customers from conducting business with the secondary business which, in turn, may stop conducting business with the primary business.  Through this indirect pressure, the Carpenter’s Union hopes to secure concessions with the primary business.
 
Legal background

While commonplace in recent years in the Phoenix market, bannering of secondary employers is not clearly lawful.  The National Labor Relations Act prohibits unions from threatening, coercing, or restraining individuals from engaging in business, where the object of the union’s activities is to force or require the person to cease doing business with other entities.  Although the Act exempts picketing of primary employers from this prohibition, unions may not picket secondary employers, except in specific circumstances. 
 
The U.S. Supreme Court has previously held that picketing of secondary employers is inherently threatening and coercive and, thus, violates the Act and may be enjoined.  On the other hand, the high court also has ruled that the distribution of handbills, often referred to as “handbilling,” in front of establishments run by secondary employers is not, in itself, inherently threatening and coercive and is generally permissible, particularly in light of First Amendment free speech guarantees. 
 
The difficulty with secondary bannering is that it appears to include elements of both picketing and handbilling, which raises the question of whether bannering is sufficiently threatening, coercive, or restraining to violate the Act.  The trial courts and administrative law judges that have ruled on the issue have reached different conclusions.  Notably, the National Labor Relations Board (NLRB) has not yet ruled on this issue.
 
Legal analysis

In its 2 to 1 split decision, the Ninth Circuit held that bannering is more like protected handbilling than picketing.  The federal appellate court with jurisdiction over Arizona recognized the implications of prohibiting bannering and found that a prohibition on bannering raised serious First Amendment concerns.  To avoid those concerns, the Ninth Circuit distinguished bannering from picketing and found that bannering was not coercive because it did not create a barrier to entrances often common to picketing.  As the court recognized “[c]lassically, picketers walk in a line and, in so doing, create a symbolic barrier. . . . In contrast, bannering involves no walking, in line or otherwise, of union members.”  The Ninth Circuit also noted that the manner in which the Carpenter’s Union conducted its bannering was neither threatening nor coercive and, thus, that it could not be preliminarily enjoined.  Overstreet v. United Brotherhood of Carpenters and Joiners of America, Local Union No. 1506, No. 03-56135, Ninth Circuit Court of Appeals (June 8, 2005). 
 
Practical impact

According to Mason, who is based in Ogletree Deakins’ Phoenix office, “The Ninth Circuit’s holding in this case leaves open the possibility that secondary bannering may be enjoined in appropriate circumstances.  The decision, for instance, addressed only whether the NLRB Regional Director had ‘established a fair chance’ of proving that the bannering violated the Act, to assess whether the trial judge should have issued a preliminary injunction.  The Ninth Circuit did not conclusively rule that it would permit bannering of secondary businesses in all cases, particularly given that the NLRB has yet to weigh in on the issue.”
 
Mason added: “The Ninth Circuit’s reasoning also supports the notion that it did not reach a ‘one-size-fits-all’ ruling.  The decision turned largely on the fact that the bannering was passive, truthful, and unobtrusive.  The banners were generally placed on public sidewalks, scores or hundreds of feet away from building entrances, and targeted customers, not employees, of the secondary employers.  Those holding the banners did not block entrances, confront customers, chant, or shout.  They remained generally stationary and quiet while bannering.  Where the facts differ, and as the conduct grows more obtrusive, the courts may be more inclined to enjoin secondary bannering.”
 
Additional information

Should you have any questions about this ruling and its ramifications, please contact the Ogletree Deakins attorney with whom you normally work, Christopher Mason at 602-778-3700, or the Client Services Department at 800-603-1252 or via e-mail at clientservices@ogletreedeakins.com.

Note: This article was published in the June 15, 2005 issue of the Arizona eAuthority.