It’s become increasingly common for businesses to subcontract workers to perform jobs at a location that is shared with the business or other neutral third parties. When picketing at common job sites shared by the employees of the contractor/employer and the neutral third party, the right of subcontracted employees to engage in collective action at a shared job site must be reconciled with the prohibition on secondary picketing against neutral third parties under the National Labor Relations Act (NLRA). In Service Employees International Union Local 87 v. NLRB (Service Employees International), the Ninth Circuit held that the Board erred in concluding that picketing constituted unlawful secondary picketing where the picketing activity at a shared job site clearly identified the primary employer as the target of the picketing and did not direct coercive activity against neutral third parties.

Workers picket at shared job site

In Service Employees International, Harvest Properties, Inc.(Harvest), the property manager of a multi-tenant commercial building (Harvest building) hired Preferred Building Services (Preferred) to provide janitorial services for the building and its tenants. Preferred subcontracted the work to Ortiz Janitorial Services (Ortiz), a sole proprietorship. The janitorial employees considered Preferred the primary employer, and in the case filed with the National Labor Relations Board (Board), the administrative law judge (ALJ) found that Preferred and Ortiz were joint employers.

Under the facts of the case, the janitorial employees sought union assistance to protest low wages and poor working conditions and picketed the entrance of the Harvest building, which was the location of Harvest and its tenants, and the job site where the employees’ primary employer, Preferred, performed work. The picketing employees’ signs and leaflets specifically identified Preferred as the employer and that the dispute was with Preferred. As a result of the picketing activities, ensuing tenant complaints, and Harvest discussions with Preferred about the terms and conditions of the employees’ employment, Preferred terminated the cleaning contract with Harvest and Ortiz. Ortiz, in turn, fired four of the janitorial employees who participated in the picketing.

The Union filed an unfair labor practice charge against Preferred and Ortiz alleging the unlawful discharge of employees in retaliation for picketing and engaging in union activity. As an affirmative defense, Preferred and Ortiz asserted that the picketing was unlawful secondary picketing. Based on all evidence, the ALJ found the picketing was lawful and issued an order in favor of the janitorial employees and the Union.

The Board determines that union activity constitutes unlawful secondary picketing

The Board dismissed the complaint and held that janitorial employees had lost the protection of the NLRA due to unlawful secondary picketing because: 1) the picketing failed to comply with fourth criterion established in Sailors Union of the Pacific (Moore Dry Dock Co.) which requires the picketing activity to clearly disclose that the dispute was with the primary employer, and 2) even if the picketing complied with the four Moore Dry Dock Co., criteria, independent evidence established an impermissible secondary objective.

The Board’s conclusion that the picketing failed to satisfy the Moore Dry Dock Co., test was based on a single sentence in the leaflets distributed during the first picket that stated in relevant part: “We are calling on KGO Radio to take corporate responsibility in ensuring their janitors receive higher wages…”. Based on this sentence, the Board concluded that the use of the word “their” misled the public into believing that KGO was the employer that could improve the employees’ conditions of employment.

Even if the fourth criterion was met, however, the Board further concluded that employees’ picketing had a prohibited secondary object to force Harvest to cease doing business with Preferred.

Evidence fails to support Board conclusion of unlawful secondary picketing

Evidence established that the picketers clearly identified the primary employer as the object of the labor dispute

A three-judge panel of the Ninth Circuit reviewed the evidence related to picketing activity and reached the opposite conclusion. Describing the Board decision as “predicated… on the thinnest of reeds,” the Court held that Board erred in concluding that the picketing was unlawful secondary picketing because it ignored substantial other evidence which demonstrated that the employees and Union plainly identified Preferred as the primary employer. The substantial other evidence included:

1) Carrying signs at the site that identified the object of the dispute as Preferred;

2) Carrying signs that never mentioned other third parties;

3) Distributing leaflets during the first picket that clearly described the relationship between Preferred, the workers and TKO Radio; and

4) Distributing leaflets during the second picket that repeated that the dispute was with Preferred.

According to the Court, these facts distinguished the picketing in Service Employees International from other cases that held the picketing failed to clearly identify the primary employer. To satisfy the fourth criteria of Moore Dry Dock Co., picketing activity must clearly identify the primary employer. Further, a failure to establish the fourth criterion requires a complete failure to identify the primary employer as the object of the dispute.

In Service Employees International, the picketing activity clearly identified Preferred as the object of the labor dispute and the single word “their” in one sentence did not obfuscate the conclusion imparted by the substantial other evidence taken as a whole that the dispute was with Preferred. Additionally, reference to neutral parties in picketing materials is permissible so long as it remains clear that the dispute is with the primary employer. Therefore, the fourth and only disputed criterion of the Moore Dry Docket Co. test was satisfied, and a rebuttable presumption arose that the picketing was lawful, primary picketing.

Presumption of lawful picketing was not rebutted by evidence

The court further concluded that substantial evidence did not rebut the presumption of lawful picketing and establish a secondary object of forcing Harvest to cease doing business with Preferred. While the union may have picketed the shared job site, no statements indicated that Harvest was the target of the picketing. Conversations that informed Harvest of the nature of the dispute also did not convert the picketing to unlawful secondary picketing. Similarly, while conversations may have influenced Harvest, there was no evidence of direct action or coercive activity directed at Harvest or the Harvest building tenants. While the picketing disrupted the business relationship between Harvest and Preferred, “some disruption of  business relationships is the necessary consequence of the purest form of primary activity.” Lawful picketing does not prohibit unions from engaging in peaceful picketing with the objective of forcing the primary employer to meet the union’s demands, even when such conduct “may seriously affect neutral third parties.” (Emphasis added.)

What this means to you

Neutral employers on shared job sites with picketing activity should carefully monitor statements and actions directed at the neutral employer during picketing activities. The Ninth Circuit decision clarifies that 1) so long as the primary employer remains the object of the labor dispute, and 2) coercive activity is not directed at the neutral third party, the picketing activity remains lawful primary picketing. Picketing activity crosses the line into unlawful secondary picketing once statements or actions are levied directly against the neutral third parties.

A growing effort exists to address a perceived increase in disparity of bargaining power between gig workers in decentralized employment relationships and their primary employers. Indeed, provisions in the PRO Act legislation repeal the NLRA’s ban on secondary picketing and related activity in an effort to provide workers in the new economy with greater ability to bargain over the terms and conditions of employment. We will continue to monitor these developments and provide employers with strategies and responses to picketing activities and labor disputes that affect their workplace.

If you have questions about labor disputes, picketing or other labor law issues, contact Terry Potter or your Husch Blackwell attorney.


Tracey Oakes O’Brien, Legal Content and Knowledge Manager, is a co-author of this content.