In response to a U.S. Supreme Court order remanding the case for consideration by the Board, a 3-2 Board majority has held that the filing and maintenance of a reasonably based lawsuit does not violate the NLRA, regardless of the motive for bringing it.
In response to a U.S. Supreme Court order remanding the case for consideration by the Board, a 3-2 Board majority has held that the filing and maintenance of a reasonably based lawsuit does not violate the NLRA, regardless of the motive for bringing it. See BE&K Construction Co., Cases 32-CA-9474, 32-CA-9475, and 32-CA-12531-1-8 (Sep. 29, 2007). In this case, BE&K Construction sued a group of unions, claiming, among other things, that the unions violated the antitrust laws by engaging in efforts to delay a construction project that had been awarded to BE&K (which is a union-free employer). The lawsuit was ultimately unsuccessful. After the lawsuit was dismissed, the Board found that BE&K violated Section 8(a)(1) of the Act by filing the lawsuit.
The U.S. Supreme Court invalidated the standard applied by the Board in determining that BE&K violated the Act. In doing so, the Court held that whether reasonably based but unsuccessful lawsuits fall outside the First Amendment’s protection presents a difficult constitutional issue. Rather than resolve this difficult issue, the Court adopted a limiting construction of Section 8(a)(1) so as to avoid the First Amendment issue. Thus, the Court found that there was nothing in the statutory text indicating that Section 8(a)(1) must be read to reach all reasonably based but unsuccessful suits filed with a retaliatory purpose and declined to read Section 8(a)(1) as doing so. The Court then held that the Board’s standard, which covered all such suits, is invalid. The Court remanded the case to the Board for a decision consistent with its reasoning.
On remand the Board held that the filing and maintenance of a reasonably based lawsuit does not violate the Act, regardless of whether the lawsuit is ongoing or is completed, and regardless of the motive for initiating the lawsuit.
The Board held that concerns regarding the potential chilling of the fundamental First Amendment right to petition the government exist whether the Board burdens a lawsuit in its initial phase or after its conclusion. “In sum, we see no logical basis for finding that an ongoing, reasonably-based lawsuit is protected by the First Amendment right to petition, but that the same lawsuit, once completed, loses that protection solely because the plaintiff failed to ultimately prevail. Nothing in the Constitution restricts the right to petition to winning litigants.”
In determining whether a lawsuit is reasonably based, the Board applied the test articulated by the Supreme Court in the antitrust context: a lawsuit lacks a reasonable basis if “no reasonable litigant could realistically expect success on the merits.” Applying this standard to the facts of this case, the Board held that the lawsuit was reasonably based.
Employers’ Bottom Line:
This decision is good news for employers who may seek to exercise their constitutional right to petition the government by filing reasonably based lawsuits in response to certain union activity. Nevertheless, any such lawsuit should be carefully considered in conjunction with experienced labor counsel to ensure that it meets the Board’s new standard. If you have any questions regarding the impact of this decision or any other labor related issue, please contact the Ford & Harrison attorney with whom you usually work.