The National Labor Relations Board announced on September 4 that it will hold oral arguments in a long-pending Las Vegas restaurant organizing case that will impact employers far beyond the glitz and glitter of the Las Vegas Strip.
The National Labor Relations Board announced on September 4 that it will hold oral arguments in a long-pending Las Vegas restaurant organizing case that will impact employers far beyond the glitz and glitter of the Las Vegas Strip. At issue are the rights of contractor employees to conduct organizing activities on the property of the employer who is contracting for their services.
Ark Las Vegas Restaurant Corporation operates several restaurants on the property of the New York New York Hotel and Casino on the Las Vegas Strip. New York New York has a contract with the union, but Ark’s employees are non-union. On three separate occasions over a nine month period, small groups of off-duty Ark employees stationed themselves on New York New York property and distributed handbills to casino customers informing the public that Ark did not have a contract with the union. Twice the Ark employees handbilled just outside the main entrance to the casino. On one occasion, they handbilled on a walkway inside the casino in front of an Ark restaurant. On all three occasions New York New York security officers told the Ark employees they were trespassing and must leave. The Ark employees refused each time, so New York New York called local law enforcement, who cited the Ark employees for trespassing. The union filed unfair labor practice charges claiming that New York New York violated the Section 7 rights of the Ark employees by having them cited for trespass.
The Board sided with the union in two companion cases. New York New York, 334 NLRB 762 (2001), and 334 NLRB 772 (2001). Relying on its own precedent, the Board reasoned that because the Ark employees worked “regularly and exclusively” on New York New York’s property, they could not be trespassers there – even when off-duty. Thus they could solicit and distribute literature provided they did so in non-working areas of New York New York’s property, and provided their conduct did not threaten New York New York’s productivity and discipline. The Board ordered New York New York to cease and desist from prohibiting the Ark employees from soliciting and handbilling at the casino entrance and in front of the Ark restaurant.
The union’s victory, however, was short-lived. The U.S. Court of Appeals for the D.C. Circuit refused to enforce the Board’s orders. New York New York v. NLRB, 313 F.3d 585 (D.C. Cir. 2002). The court chided the Board for failing to explain why the Ark employees should have the same rights as New York New York employees on the latter’s property. The court cited the U.S. Supreme Court’s decision in Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992), which held that the scope of an individual’s Section 7 rights turns on his status as either an employee or a nonemployee. The court pointed out that the Ark employees were not New York New York’s employees. Given the Lechmere holding, the court could not accept the Board’s conclusion that New York New York had to treat the Ark employees like its own employees when they were handbilling on New York New York property.
The court remanded the case to the Board to resolve a number of unanswered questions:
1) Does the fact that the Ark employees work on New York New York’s property, without more, give them certain Section 7 rights throughout all of the non-working areas of New York New York’s property?
2) Or are the Ark employee invitees of some sort but with rights inferior to those of New York New York employees?
3) Or should the Ark employees be considered the same as nonemployees when they distribute literature on New York New York’s property outside Ark’s leasehold?
4) Does it matter that the Ark employees in this case returned to New York New York after their shifts ended and thus could be considered guests of the casino?
5) What is the significance, if any, of the fact that the Ark employees handbilled guests and customers – not other Ark employees?
The Board has scheduled oral argument for November 9 and invited briefs from the public so that the parties and amici can address the appellate court’s questions.
Employers’ Bottom Line:
This case has far-reaching implications for employers. Health care institutions, manufacturing plants, educational institutions, hotels, and employers in a variety of other industries utilize contractors on their property in long-term arrangements. Those contractor employees spend most, if not all, of their work time on the contracting employer’s property. The Board’s decision will clarify the status of those contractor employees, which will in turn define what their Section 7 rights are on the property of the contracting employer.
In the meantime, every employer should have policies in place to promote efficient operations and protect property rights. An employer should understand the physical boundaries of its property, and post its property against trespassing. Also, a valid no-solicitation/no-distribution policy can minimize the adverse effect of organizing activity on the employer’s normal operations.
If you have any questions regarding this decision or other labor related issues, please contact the Ford & Harrison attorney with whom you usually work or the author of this Alert, Brian Kurtz, bkurtz@fordharrison.com or 312-960-6137.