Over the years the NLRB has, in essence, put a “choke-hold” on employers’ efforts to bring claims against labor organizations in the courts, especially if the grounds for the litigation are novel in nature. The Supreme Court restricted the NLRB’s efforts in this area in 2002 with its decision of BE&K Construction Company v. NLRB, 536 US 516. The Supreme Court, as well as most of the other courts who have reviewed such litigation, are much more protective of first amendment concerns relating to petitioning the government for redress of grievances. In particular, the Court has made it clear that whether or not litigation should be construed as retaliatory under the NLRA does not turn on whether the litigation is successful, clarifying that even unsuccessful, but reasonably based suits, advance some first amendment rights, such as public airing of disputed facts. 536 US at 532.
Most recently, the Sixth Circuit Court of Appeals in NLRB v. Allied Mechanical Services, Inc. found that once again the Board failed to restrain itself in addressing unsuccessful litigation by an employer against a labor organization. The employer, Allied Mechanical Services, Inc., had filed suit in District Court regarding a number of alleged breaches of labor law, including violations of the secondary boycott provisions of the NLRA. Ultimately the District Court sustained a motion to dismiss the matter, which was upheld by the Sixth Circuit. The NLRB then jumped on the bandwagon, as both an ALJ and the full Board, notwithstanding BE&K Construction Company, found that the lawsuit was retaliatory in nature. Allied Mechanical Services then appealed the matter before the Sixth Circuit.
The Sixth Circuit reversed the NLRB and, in particular, found that it was a matter of concern in which deference to the NLRB’s decision making process, as is normally the case in such appeals, would not be appropriate, as it was not a subject matter where the NLRB had particular expertise. The Court then reviewed the matter in accordance with BE&K Construction Company. The Court found that Allied Mechanical Services had reason to believe that it could have succeeded on the merits of the case, at least with respect to the local unions, in that its position was not entirely unreasonable from a legal standpoint, citing the Supreme Court’s recognition that an unsuccessful law suit may yet have an objective basis. In particular, the Court found that the evidence in the record was not substantial enough to establish that Allied Mechanical Services’ motive was specifically to punish the unions through litigation costs. Rather, the record indicates that any retaliatory motive, if any, related to, “ill will that is not uncommon in litigation,” and that further, “the evidence cited by the Board may have proved that there was such ill will between Allied and Local 357 as to rise to the level of hatred, but none of the evidence offers support for the proposition that Allied’s reasonably based suit was filed without regard for the merits and was instead only intended to cost the unions money.”
While the Board has a habit of ignoring the Courts of Appeal on issues of this nature until an overwhelming majority of the courts fail to support their position, this is a great start to the process, and one that, hopefully, will continue so that employers need not fear claims of retaliatory action in such circumstances.