When unions picket a construction site to warn about a non-union contractor’s destruction of area wage and labor standards, the First Amendment does not give them unlimited protection for their actions.   Philadelphia Magazine’s Property blog has a story about an ongoing labor dispute between Philadelphia trade unions and an apartment developer that brings to the fore the intersection between free speech and unfair labor practices.

According to the story, IBEW Local 98 is protesting outside an apartment complex in Germantown.  (This particular protest is part of an ongoing feud between the developers and organized labor.)  The Union has posted signs urging people not to rent an apartment in the complex and, according to the story, the Union recently upped the ante by videotaping would be residents entering and exiting the complex.  (There is no mention of what exactly the Union intends to do with the videos.)

Local 98 claims that their protest is a legitimate exercise of their constitutionally protected right to free speech (or as we say in Philly, your right to “hoot ‘n halla’”).  This is generally correct.  The First Amendment does give a labor union – or anyone else – the right to protest a condition that they find objectionable.  So long as the protests remain – for the most part – peaceful and there is no destruction of property or blocking of entrances, there is little an owner can do to stop the protest, save for regulating the location of the protest through a two gate system.  However, because the National Labor Relations Act also regulates a labor union’s activities the matter is not simply one of free speech.

The NLRA is a body of federal law that regulates the relationship between management and labor, whether union or not.  Section 8 of the NLRA deals with labor unions and prohibits a labor union from engaging in a “secondary boycott.”  A secondary boycott is an attempt by a labor union to pressure a neutral employer from doing business with a firm that is the subject of a labor dispute.  Under the NLRA, secondary boycotts are unlawful.

Secondary boycotts have particular significance in the construction industry because the owner of a construction site that is the subject of a union protest is usually a neutral employer, who is not in charge of directly hiring members of a trade union, rather it is the contractors the owner employs that have that power.

In the matter involving the apartment developer, while Local 98 has the right to protest those contractors employed by the developer, protesting the apartment developer could be an illegal secondary boycott.  Local 98’s protest is aimed at persuading people from renting from the developer rather than publicizing a labor dispute with an electrical contractor because, as far as we know, the apartment developer is not an electrical contractor and, therefore, not capable of directly employing Local 98 members.

A few years ago, the National Labor Relations Board, the administrative agency charged with resolving disputes under the NLRA, awarded trade unions a major victory in outlining how far they could go in protesting a neutral employer before their actions become an illegal secondary boycott. In a series of cases decided in 2010, the Board ruled that displaying stationary banners declaring “shame” on a neutral employer for contracting with a merit shop contractor was not a secondary boycott and was protected speech. In 2011, in a separate case, the Board ruled that the same rationale applied to the ubiquitous inflatable rats used by unions to protest merit shop contractors.

But those decisions are not the end of the story.  Under Section 303 of the Labor Management Relations Act anyone injured by an unfair labor practice can sue in federal court to recover damages.  Federal Courts tend to take a different view of secondary boycotts and are not bound by the Board’s decisions.

For example, in U.S. Info. Sys., Inc. v. Int’l Bhd. of Elec. Workers Local Union No. 164, AFL-CIO, 500 F. App’x 198, 200 (3d Cir. 2012), the Third Circuit upheld a summary judgment award in favor of a subcontractor and against Local 98’s counterpart in New Jersey, Local 164, under Section 303.  In that case, Local 164 protested a construction site where a subcontractor, who did not employ Local 164 members, was working.  As a result of the protests, the subcontractor was terminated and replaced with a subcontractor, who did employ Local 164 members.  The terminated subcontractor then brought a claim for damages against Local 164 under Section 303.  The District Court found in favor of the subcontractor finding that the intent of Local 164’s protest was to force the neutral employer to award the contract to an employer who employed Local 164’s members and awarded it $180,000 in damages.  The Union appealled and the Third Circuit affirmed.

If the apartment developer can show that people were actually persuaded from not renting from it, then it could sue Local 98 for damages.  Thus, the irony is that if the Local 98’s protest is successful and people chose not to rent from the developer, they could be liable for damages.