Atlanta Federal Jury Rules Union Engaged in Secondary Boycott

Intimidation is ingrained in the way many unions do business.  In the pursuit of their interests, labor organizations are not above threatening employers, nonunion workers and even pedestrians with economic and physical harm.  One of the more deceptively aggressive tactics in their arsenal is the secondary boycott.  Unions in such instances attempt to coerce a neutral (or “third”) party into siding with them in a dispute.  While secondary boycotts are illegal under the National Labor Relations Act (NLRA), that doesn’t mean unions shun them.  Indeed, they will pursue it if for no other reason than the inevitable imprecision in defining it.  A court decision earlier this month at least clarifies certain boundaries.  The victor is a Gwinnett County, Georgia contractor who had been under continuous fire from a regional affiliate of the United Brotherhood of Carpenters and Joiners.   


On February 10, a federal jury in Atlanta ruled in favor of a drywall contractor, Fidelity Interior Construction LLC, and against the Southeastern Carpenters Regional Council in a case (File No. 1:05-CV-2938) growing out of the latter’s “area standards” campaign.  In awarding the Suwanee, Ga.-based Fidelity $1.7 million in damages, the jury concluded the union had conducted an illegal secondary boycott.  Fidelity is not a large firm.  But the jury justified its rather sizable award as adequate compensation for nonstop harassment.  The details reveal much about the lengths to which labor chieftains will go to get business to toe their line. 


Federal law stipulates that while a union has the right to persuade an employer to hire members, it may not forcibly enlist a third party into its cause.  Section 8(b)(4)(ii)(B) of NLRA states a union is not allowed to:


threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is…forcing or requiring any person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person, or forcing or requiring any other employer to recognize or bargain with a labor organization as the representative of his employees unless such labor organization has been certified as the representative of such employees…


Despite this broad ban, unions long have claimed the law inhibits their right to free speech and due process.  They argue that it is a right, within reasonable limits, to get outside parties to cease doing business with an ostensibly offending nonunion employer or contractor.  Civil rights organizations, they note, have engaged in this tactic for decades.  Now it is true that the National Labor Relations Board and the courts have tended to side against the unions.  In Sheet Metal Workers Local 15 [346 NLRB No. 22 (2006)], for example, the NLRB held that a union’s mock funeral procession in front of a Florida hospital was illegal picketing.  But the unions have won their share of cases, too.  In DeBartolo Corp. v. Florida Gulf Coast Trades Council [485 U.S. 568 (1988)] the U.S. Supreme Court, overturning a circuit court (which itself had overturned the NLRB), ruled 8-0 that a union handbill organizing campaign at a shopping mall was protected free speech and did not constitute coercion against mall retailers.      


The Southeastern Carpenters Regional Council (SECRC) believed it was practicing freedom of speech back in late 2003 when it launched a campaign to prevent the hiring of nonunion workers.  The Augusta, Ga.-based council sent out “warning letters” to Atlanta-area building owners, property managers and general contractors indicating it would retaliate against anyone employing workers not meeting “area standards.”  In practical terms, “area standards” meant union-scale wages and benefits.  If an employer didn’t comply, the union emphasized, that business would be subject to picketing, noisemaking, chanting and other forms of worksite pressure.  Once set in motion, the campaign gave every appearance of a secondary boycott.  It certainly looked that way to Ray Gunter. 


Back in the mid-Nineties, Gunter and his wife had started Fidelity Interior Construction out of their basement in order to secure drywall and acoustical ceiling subcontracts, especially for doctors’ offices and medical buildings.  Gunter submitted bids; his wife managed the books.  Their nonunion workers had few, if any, complaints.  The SECRC insisted on targeting the firm anyway.  Starting on January 15, 2004, Mr. Gunter alleged, the council initiated a secondary boycott designed to drive him out of business.  Fidelity was a target, the union later admitted in depositions, because it had grown but not to the point where it had the resources to win a prolonged court case.  The council came to regret that assumption.


On November 16, 2005, after nearly two years of intense pressure, Fidelity sued the SECRC in federal court, arguing that the campaign was illegal, and moreover, pursuant to Section 303 of the Labor-Management Relations Act (i.e., the Taft-Hartley Act), merited a damage award.  Court documents subsequently revealed that the Carpenters council pulled out the stops to get Gunter to surrender, engaging in privacy invasions, shakedowns and identity theft.  Particularly onerous was the union’s “salting.”  Council organizers would send out undercover agent provocateurs to workplaces in order to secretly record “proof” of employer unfair labor practices.  Ironically, the Southeastern Carpenters Regional Council’s internal documents revealed that its own leaders flouted the labor standards they had been championing.  One witness testified that union shop contractors, unlike nonunion contractors, were allowed to enter into agreements with nonunion subcontractors. 


In awarding $1.7 million to the plaintiff, the jury served notice upon the SECRC and other unions contemplating similar campaigns that such behavior is out of bounds.  The Carpenters council didn’t simply exercise its right to protest, the jury concluded; it sought to undermine a business operating fully within the law.  “It is unfortunate that so many innocent third parties were harmed by the union,” said Jim Wimberly, whose Atlanta law firm represented the Gunters.  “It is also ironic that the union condemned in others the very same conduct it condoned among its own contractors.  I believe the jury simply would not accept this nonsense, and that the union will be forced in the future to confine the subject of its activities to those with whom it had a labor dispute rather than innocent third parties.”  Those are convincing words.  But the long history of secondary boycotts suggests such cases are going to crop up in the future.  (The Circle Group Truth, 2/10/09; Associated Builders and Contractors, 6/29/05; Littler, 5/06).