Over the last few years, Seattle contractors and owners involved in highly visible construction sites, have had the pleasure of enduring banners by labor unions proclaiming them "unfair" or worse.  Most of these four-foot by sixteen-foot banners identify only the owners and therefore suggest to the public that the "labor dispute" is with the owners' labor policies rather than those of the open-shop contractor or subcontractor with whom the union has an actual dispute.  In response, neutral owners have sought relief under the National Labor Relations Act on the premise that such bannering is unlawful "secondary" activity like picketing, and therefore can only be carried out by unions when the target companies are present at the jobsites and in full compliance with dual gate procedures. Unions have countered that bannering is akin to "speech" and is therefore not subject to the National Labor Relations Act's secondary boycott provisions.  Many key bannering cases, including several filed by this law firm, have been pending for years awaiting the full complement of Board members to address this important issue.

On September 2, 2010, Board Chair Wilma Liebman joined new Board members Craig Becker and Mark Pierce to finally issue a controversial 3-2 decision that banners are not inherently coercive and are therefore not subject to the secondary boycott provisions of federal labor law.  In the consolidated cases known as United Brotherhood of Carpenters Local No. 1506 (Elias on & Knuth of Arizona, Inc.), 355 NLRB No. 159 (2010), the Board majority determined that neither the language of the National Labor Relations Act nor its legislative history suggested Congress intended to apply secondary boycott provisions to the "peaceful stationary display of a banner."  Employer member Schaumberg, who is soon to leave the Board, filed a spirited dissent claiming the decision would leave the door open to all sorts of union secondary activity.  The consolidated cases involved the following stipulated facts.

The Carpenters Union had a primary labor dispute with several construction employers, including Ellison & Knuth of Arizona, allegedly based on the employer's failure to pay area standard wages and benefits.  As part of its actions, Carpenters Union members held large banners stating "Shame on [NAME OF SECONDARY EMPLOYER]" in large letters and, in smaller letters, "Labor Dispute" on either side of this statement.  Thus, the banner appeared to identify the neutral building owner as the target of the labor activity rather than the targeted contractor.  The banners could be viewed by passing motorists and employees coming to the jobsite but were some distance from the jobsite entrances.  Although accompanied by leafletting, they were not accompanied by traditional picketing and, at most, only four Union representatives were present at any time to hold the banners.  As a result, there was no chanting, blockage, or other mass display of "confrontational activity."

Normally, union attempts to enmesh a neutral owner or contractor in a labor dispute with a primary or target company, violate the secondary boycott previsions of the National Labor Relations Act since this activity is considered coercive conduct aimed at unlawfully forcing the neutral owner to stop doing business with the target company.  The question before the Board is whether bannering activity is "conduct" similar to picketing or whether it is pure "speech." 

The Board determined that bannering is speech subject to the "core protections of the First Amendment":

Under our jurisprudence, categorizing peaceful, expressive activity at a purely secondary site as picketing renders it unlawful without any showing of actual threats, coercion, or restraint, unless it falls within the narrow exception for consumer picketing.

The Board went on to hold that bannering differs from picketing which is inherently coercive since the latter involves not only a display, but also the movement of picketers in front of a jobsite entrance creating a real or psychological barrier for workers entering the jobsite.  The Board determined that stationary bannering does not create such a barrier, especially when, as here, the bannering is far enough from the entrances "so that anyone wishing to enter or exit the sites could do so without confronting the banner holders in any way."  According to the majority, such a holding is necessary in order to avoid constitutional questions under the First Amendment right of free speech.

It should be noted that the Board failed to address the "labor dispute" language of the banners which wrongfully suggest that the neutral building owners are the source of the labor dispute.  Administrative law judges addressing bannering cases in the past have been sharply divided over whether the owners' sole act of retaining the services of a target or primary contractor truly places the neutral owners within the ambit of a "labor dispute."  However, the Board ignored this issue.

In a strong dissent, the Board members Schaumberg and Hayes pointed out that bannering has the same coercive impact as traditional picketing.  Banners are, after all, large stationary picket signs.  The dissenters also pointed out the secondary boycott provisions have applied to picketing activity even when the picketers are not patrolling. Neutral owners and targeted employers should therefore brace for an increase in bannering activity.  In addition, banners should be monitored to ensure there is no patrolling, yelling, mass demonstrations or blockage.  Finally, employers should determine whether the banners are accompanied by picketing since this could allow affected employers to argue that the bannering has lost its "pure speech" character and is subject to the same secondary boycott proscription as picketing.