Federal Judge Upholds $1.7M Award against Carpenters Affiliate in Georgia

Carpenters logoThe Southeastern Carpenters Regional Council employed a goon squad and pricey legal help in hopes of driving an Atlanta-area building contractor out of business. Unfortunately for the council, a federal judge employed common sense. On August 11, U.S. District Judge Richard W. Story upheld a February jury award of $1.7 million against the Augusta, Ga.-based council. In so doing, he effectively affirmed a longstanding federal ban on secondary boycotts, the practice by which a union attempts to coerce a neutral or “third” party into siding with them in a labor dispute. Though this tactic is illegal, many unions continue to use it. The recent decision may make it a less attractive option. 

Union Corruption Update in February reported on this case, an outgrowth of an “area standards” campaign initiated in 2003 by the Regional Council. The council had sent out “warning letters” to Atlanta-area building owners, property managers and contractors indicating its intention to retaliate against any party not meeting the standards. On a practical level, this meant not paying union-scale wages and benefits. Businesses not complying would risk picketing, noisemaking, chanting and other forms of harassment. One of the contractors caught in the union’s crosshairs was Fidelity Interior Construction, which had done extensive drywall and acoustical ceiling work in the Atlanta area. The firm’s owners, Mr. and Mrs. Ray Gunter, alleged that beginning in January 2004 they were subject to a union-initiated high-intensity campaign of privacy invasions, shakedowns, identity theft and “salting,” the latter being undercover visits to create the illusion of unfair labor practices.

In November 2005, the Gunters, their Gwinnett County-based business by now suffering, filed suit against the union in federal court. They argued that the Regional Council’s actions violated Section 8(b)(4)(ii)(B) of the National Labor Relations Act, which bans secondary boycotts. They also sought compensation for damages as stipulated by Section 303 of the Taft-Hartley Act. On February 10 of this year, the Gunters received good news from the jury: The Carpenters were out of bounds and would have to pay $1.7 million in damages. The union responded with a motion to overturn the decision or, failing that, to obtain a retrial. The council claimed the jury was improperly instructed, and had awarded damages that were excessive and based on conjecture.

U.S. District Judge Richard Story rejected these arguments. The Gunters, he concluded, offered substantial evidence that the secondary boycott cost them business. Not only did the couple quantify their claims, they also demonstrated that the union interfered with ongoing and prospective work. Judge Story concluded:

The Court concludes that the instructions given properly informed the jury regarding the law of secondary boycotts and more specifically the difference between legal primary activity and illegal secondary activity. The evidence showed that the totality of the Council’s actions, not just one isolated incident, resulted in the substantial loss of business and profits to Plaintiff. The jury’s verdict is consistent with that evidence and the applicable law.

The National Labor Relations Act establishes lines separating “primary” from “secondary” targets in a union-sponsored boycott. While on occasion those lines have been blurred, this case wasn’t one of them. For too long, many union leaders have pretended these delineations don’t exist, arguing they have a right to persuade outside parties to cease doing business with an ostensibly anti-union employer or contractor. Under this rationale, they’ve done real harm to people who in no way have committed unfair labor practices. The recent ruling out of Atlanta federal court should make such labor officials think twice.