Supreme Court Hears Arguments in Dispute Over Employer, Union Agreement

Supreme Court Hears Arguments in Dispute Over Employer, Union Agreement

 WASHINGTON, D.C. — (Mealey’s) An agreement between an employer and union regarding access to the premises, employee information, monetary support for a ballot initiative and a promise not to picket did not violate Section 302 of the Labor Management Relations Act (LMRA), an attorney representing Unite Here Local 355 told the U.S. Supreme Court Nov. 13 (Unite Here Local 355 v. Martin Mulhall, et al., No. 12-99, U.S. Sup.; See November 2013, Page 26).

“Many employers and unions find agreements such as this useful to avoid conflict during organizing campaigns. They are efficient. They avoid the hard feelings that come in many contested organizing campaigns and thereby create a good environment for collective bargaining. They serve the core objectives of the Labor Management Relations Act, those being freedom of contracts, organizing employees for collective bargaining and labor peace,” Richard G. McCracken of Davis, Cowell & Bowe in San Francisco argued, representing Unite Here Local 355.

Organizing Agreement

Hollywood Greyhound Track Inc. (doing business as Mardi Gras Gaming) and Unite Here Local 355 entered into an agreement on Aug. 23, 2004. Under the agreement, Mardi Gras promised to provide Unite Here representatives access to nonpublic work premises to organize employees during nonwork hours; provide the union a list of employees, their job classifications, departments and address; and remain neutral to the unionization of employees. In return, Unite Here promised to spend more than $100,000 supporting a ballot initiative regarding casino gaming. Unite Here also promised, if it was recognized as the exclusive bargaining agent for Mardi Gras’ employees, to refrain from picketing, boycotting, striking or undertaking other economic activity against Mardi Gras.

Martin Mulhall, a Mardi Gras employee, opposed unionization. He also sued Unite Here and Mardi Gras in the U.S. District Court for the Southern District of Florida. He sought to enjoin enforcement of the agreement, claiming that it violated Section 302, which makes it unlawful for an employer to give or for a union to receive any “thing of value,” subject to limited exceptions. The District Court dismissed the complaint for failure to state a claim. It found that the assistance promised in the agreement did not constitute a “thing of value” under Section 302. Mulhall appealed.

An11th Circuit U.S. Court of Appeals panel on Jan. 18, 2012, issued a split decision. The majority reversed and remanded. “We hold that organizing assistance can be a thing of value that, if demanded or given as payment, could constitute a violation of § 302. Because the dismissal of Martin Mulhall’s complaint was based on the contrary conclusion, we reverse,” Judge Charles R. Wilson wrote for the majority. Judge Peter T. Fay joined in the opinion.

Dissenting Opinion

U.S. Judge Jane A. Restani of the Court of International Trade, sitting by designation, issued a dissenting opinion pointing to earlier rulings out of the Third and Fourth Circuits (Adcock v. Freightliner LLC, 550 F.3d 369 (4th Cir. 2008) [an enhanced version of this opinion is available to subscribers] and Hotel Emps. & Rest. Emps. Union, Local 57 v. Sage Hospitality Res. LLC, 390 F.3d 206, 218-19 (3d Cir. 2004) [enhanced version]). “I also write because I do not agree that an improper intent on behalf of the union or employer in demanding or offering the types of concessions at issue here transforms an otherwise ‘innocuous’ concession into a bribe or constitutes extortion in violation of § 302 of the Labor Management Relations Act (LMRA). Mulhall has not alleged that Mardi Gras offered these concessions as a bribe. Thus, I put this aside and focus on whether a union that demands these types of concessions with an improper intent commits extortion and thereby runs afoul of § 302,” she noted.

Unite Here petitioned the U.S. Supreme Court. The high court granted the petition on June 24.

United States’ Argument

Deputy Solicitor General Michael R. Dreeben of Washington presented arguments on behalf of the United States in support of the union. “Section 302 cannot be read in isolation from the remainder of the labor laws,” he argued. “The United States does not dispute that if all this Court had to look at was the words ‘thing of value’ in Section 302, the promises that were at issue in this case could be viewed as things of value and, with a little bit of stretching of the language, could be viewed as paid, lent or delivered. . . . What the Court has to do here, as it did in the [Credit Suisse Sec. (USA) LLC v.] Billing [551 U.S. 264 (2007) [enhanced version]] case, is read multiple statutes together in order to harmonize them. And just as in Billing, the Court said, well, the antitrust laws literally do apply here, the securities underwriting activity could violate the antitrust law.”

When questioned by Justice Sonia Sotomayor about arguments that Billing is applicable only to antitrust cases, Dreeben responded that was not true. “Billing is simply an application of this Court’s responsibility to divine Congress’ intent based on language, structure and history and policy of the relevant laws. And here, all of those things when read together indicate that agreements by parties to set the ground rules for an organizing campaign do not constitute prohibited things,” Dreeben said.

Employee’s Arguments

William L. Messenger of the National Right to Work Legal Defense Foundation in Springfield, Va., presented arguments on behalf of Mulhall that the agreement did in fact violate the LMRA. When questioned about whether the expiration of the agreement affects Mulhall’s arguments, Messenger responded that it does not. “I don’t believe that it renders the case moot, for two reasons, the first of which is that Unite has pending a lawsuit to compel arbitration in which it is alleging violations of the agreement that occurred before it expired. And one of the remedies the union is seeking is to have the agreement extended for a longer period of time, which is a remedy it received before. . . . And then the second reason is Unite continues to demand this organizing assistance. 302(b)(1) makes it illegal for a union to demand a thing of value, even if it doesn’t receive it. Unite Here is clearly still demanding that Mardi Gras help it organize its employees, so Mulhall still has standing to seek injunctive relief to stop the union from demanding those things,” Messenger argued.


Robert Norton and Mark E. Levitt of Allen, Norton & Blue in Coral Gables, Fla., represent Hollywood Greyhound Track.

Leon Dayan of Bredhoff & Kaiser in Washington filed an amicus curiae brief on behalf of American Federation of Labor and Congress of Industrial Organizations, Service Employees International Union and National Education Association.

John C. Eastman of Center for Constitutional Jurisprudence in Orange, Calif., filed an amicus brief on behalf of Center for Constitutional Jurisprudence. Matthew W. Finkin of University of Illinois College of Law in Champaign, Ill., filed an amicus brief on behalf of National Academy of Arbitrators.

Karen R. Harned of NFIB Small Business Legal Center in Washington filed an amicus brief on behalf of National Federation of Independent Business Small Business Legal Center and Cato Institute. Arthur B. Smith Jr. of Chicago filed an amicus brief on behalf of The Council on Labor Law Equality. Solicitor General Donald B. Verrilli Jr. filed an amicus brief on behalf of the United States.

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