As I have blogged about before, one of the most powerful weapons contractors and owners have in combating illegal secondary activity by unions is Section 303 of the Labor Management Relations Act. Section 303 authorizes a party to bring in action in federal court for monetary damages against a labor union who has caused harm because of illegal labor practices.
Late last year the Second Circuit Court of Appeals, which covers appeals from federal courts in New York, Connecticut, and Vermont, affirmed a $650,000 jury award in favor of a commercial sign subcontractor and against Sheet Metal Workers Local 137. In that case, plaintiff was a commercial sign manufacturer and installer who entered into a contract with a prime contractor to Wells Fargo bank for the installation of new signs at locations throughout the New York Metropolitan area. Accordingly to the complaint, plaintiff was not a signatory to Local 137 collective bargaining agreement. Soon thereafter, Local 137 began threatening Wells Fargo because it was permitting the non-union sign company to work on the bank’s projects. Local 137 engaged in classic illegal secondary activity, such as, displaying inflatable rats at Well Fargo locations, picketing Wells Fargo locations, disrupting deliveries to Wells Fargo, and causing Wells Fargo bad publicity. Accordingly to the complaint, Local 137’s action eventually led to Wells Fargo insisting that the plaintiff be replaced with a sign company that was signed with Local 137 and plaintiff was replaced on the Wells Fargo projects.
Plaintiff sued Local 137 under Section 303 claiming that it was terminated by Wells Fargo because of Local 137’s secondary activity that violated Section 8(b) of the NLRA. Section 8(b) prohibits a union from threatening, coercing, or restraining a business in order to cause that business from doing business with another business. The jury agreed with the plaintiff and awarded plaintiff $650,000 in damages.
Interestingly, based on the allegation in the complaint, Local 137 actions may not have garnered much attention from the NLRB on an unfair labor practice charge. Especially in recent years, the NLRB has taken a restrictive view on what constitutes illegal secondary activity under Section 8(b). Conversely, judges and juries have taken a more expansive view of what constitutes an illegal secondary activity and have not hesitated in awarding significant judgments against unions that violate Section 8(b).