Union’s hardball tactics in hotel dispute crossed the line into secondary boycott

A union’s strategy of targeting organizations that had made arrangements to reserve large blocks of rooms or spaces with a hotel in the hopes that they would cancel their plans may have crossed the line into unlawful secondary boycott activity, ruled the Seventh Circuit. While a number of the incidents complained of by the hotel were insufficient to support allegations that the union coerced neutral targets or that it used coercion with the intent of forcing the neutral entities not to do business with the hotel, the appeals court found that in three instances, the union engaged in conduct that crossed the line from intent to persuade, to simply interfering with the businesses of the neutrals (520 South Michigan Avenue Associates, Ltd dba The Congress Plaza Hotel & Convention Center v UNITE Here Local 1, July 29, 2014, Tinder, J). Hotel strike. UNITE was engaged in a long-running strike with the Congress Hotel dating back to 2003. In 2008, the union escalated the strike by pursuing a more aggressive strategy. Specifically, the union began targeting organizations that had made arrangements to reserve large blocks of rooms or space at the hotel in the hopes that they would cancel their plans. The union would send delegations to the offices of potential hotel patrons and express the union’s disapproval of their plans to use the hotel. According to the hotel, instead of just using persuasion, the union coerced hotel customers into cancelling their agreements. Claiming that this conduct crossed the line into unlawful secondary labor activity, the hotel filed suit, seeking damages. The district court granted the union’s motion for summary judgment, reasoning its conduct was not coercive and that barring it would raise important free speech concerns. The hotel appealed. Finding that certain of the union’s actions were coercive, the Seventh Circuit reversed. Secondary targets. The hotel alleged that the union engaged in unfair labor practices by targeting secondary targets with the object of forcing them to cease doing business with the hotel. The central question, therefore, was whether the union’s conduct in this case was coercive, as in the sense of a boycott or picket, or persuasive, as in the case of handbilling outside of an establishment. Courts have observed that a defining characteristic of picketing is that it creates a physical barrier between a business and potential customers, thereby “keeping employees away from work or keeping customers away from the employer’s business.” By contrast, peaceable activity that does not create a barrier between customers and the business is typically permitted. The conduct alleged in this case was not satisfactorily described as either picketing or handbilling. On the one hand, the delegates often took written materials with them, including handbills and leaflets. Then again, some of the conduct the described by the hotel was similar to picketing. Moreover, the Seventh Circuit observed, many of the union’s activities were disturbingly similar to trespass and harassment. Trespass and harassment. The court first examined whether trespassing and harassment could count as coercive behavior under federal labor law. A union is permitted some initial entry onto private property so it may convey its views to the decision-makers of a secondary organization. But, even in the context of primary picketing, at some point the trespass becomes unprotected. The Supreme Court has made clear that federal labor law “does not require that [an] employer permit the use of its facilities for organization when other means are readily available.” The same is true of harassment, which relies on the interfering manner of communication, not its content, to accomplish its aims. Here, the union was alleged to have continued contacting targets even after they had made clear that they were not willing to receive delegations. Some of these contacts were physical invasions of private property. Moreover, allegedly frequent and repetitive phone calls and the threats to disrupt events also supported an inference that the union did not intend to persuade but to force neutrals to take sides in its dispute with the hotel. Harassment, if severe enough, could rise to the level of coercive behavior under Sec. 8(b) of the NLRA. As a consequence, the Seventh Circuit concluded that a union may be liable under Sec. 8(b)(4)(ii)(B) for unlawfully coercing a secondary to cease doing business with the struck employer if the union’s conduct amounts to harassment or involves repeated trespass, or both. While trespass and harassment of a secondary organization do not create a symbolic barrier between a business and its customers in the way a picket line does, such conduct may nevertheless significantly disrupt a business and pose a substantial threat to an organization’s finances. Another important point is that the conduct alleged by the hotel was generally targeted at employees, not customers passing by, as in handbilling. Here, the appeals court determined that the union’s decision to repeatedly target secondary employees indicated an intention not to persuade, but simply to interfere. Because the conduct here was concededly directed at secondary actors, it may potentially fall under the ambit of Sec. 8(b) if it is substantially similar to picketing and sufficiently coercive. Free speech concerns. The Supreme Court has cautioned the courts to be careful not to label expressive union conduct as coercive if such an interpretation could interfere or limit free speech. In this instance, it was undisputed that the union delegations all attempted to communicate a message on a topic of public concern. According to the hotel, some of the union’s conduct went too far, and rendered its activities unprotected and illegal. Agreeing, the Seventh Circuit concluded that prohibiting some of the union’s conduct under the federal labor laws would pose no greater obstacle to free speech than that posed by ordinary trespass and harassment laws. Even aside from the ban on secondary picketing, the appeal court found that some of the union’s alleged conduct, such as trespass and harassment, was not protected speech. The union’s harassing conduct could also not reasonably be deemed protected under the First Amendment. Important First Amendment interests were not threatened in this case because the hotel’s complaint was narrowly tailored to address the union’s conduct without reference to the content of its message. Another reason why some of the union’s alleged harassment merited less First Amendment protection was because the union transmitted its messages to an unwilling, captive audience. Finally, the Seventh Circuit concluded that Servette gave the union ample breathing room to express its views by permitting delegates to approach and talk to decision-makers of neutral businesses, even if they are initially uninvited. But once that decision-maker says that she is not interested, and that the union delegates are no longer welcome, the union’s free speech interests start to wane, and the property and privacy rights of the neutral target become dispositive. Thus, if the hotel could provide evidence permitting a reasonable inference that the union essentially committed trespass or harassed secondary organizations, or threatened to do the same, and thereby coerced them to cease their business with the hotel, summary judgment for the union was inappropriate in this case. Crossing the line. With respect to a number of incidents complained of by the hotel, the appeals court concluded that there was no evidence in the record that the union did anything other than attempt to peacefully persuade the neutrals. However, the court reversed summary judgment with respect to the union’s behavior toward three neutrals. In those instances, the hotel demonstrated that the union coerced the neutrals into abandoning their business with it by trespassing in offices and businesses, threatening to disrupt the neutrals’ businesses, and stalking a neutral. Such conduct crossed the line between communication intended to persuade, and was simply intended to interfere with the inner workings of three neutral entities. Accordingly, the Seventh Circuit reversed the district court’s decision in part, remanding for a trial on whether the union’s actions were coercive and, if so, whether and to what extent the hotel was damaged by this coercive conduct.
By Ronald Miller, J.D.