Labor & Employment Law I OCTOBER 15, 2019

RATS! The Continuing Adventures of Scabby the Rat

For thirty years, a large inflatable rat, called Scabby, has been a fixture at labor disputes, typically on projects where there is construction involved. Sometimes Scabby appears at other sites, like the business of a customer, to increase pressure on the employer with whom the union has a dispute.

This has often created legal disputes. The legal issues involved usually turn on whether the activity is “picketing” and whether it is unlawful secondary activity. Here are some recent developments.

In an Advice Memorandum dated December 20, 2018, the Associate General Counsel of the National Labor Relations Board, Jayme Sophir, offered an opinion. The labor dispute involved a company called Summit Design+Build and the International Brotherhood of Electrical Workers.

An NLRB Regional Office submitted the case for advice as to whether the Union violated Section 8(b)(4)(i) and/or (ii)(B) of the National Labor Relations Act by erecting a large, stationary banner proclaiming a labor dispute with the general contractor, as well as a large, inflatable rat clutching a construction worker by the neck, near the entrance to a construction site. The General Counsel concluded that the Region should 1) issue a Section 8(b)(4)(i)(ii)(B) complaint, absent settlement, and 2) urge the NLRB to reconsider its decisions in Carpenters Local 1506 (Eliason & Knuth of Arizona), 355 NLRB 797 (2010) and Sheet Metal Workers Local 15 (Brandon Medical Center) (“Brandon II”), 356 NLRB 1290 (2011), and Carpenters Southwest Regional Councils Locals 184 & 1498 (New Star), and find that the Union’s activity was tantamount to unlawful secondary picketing and signal picketing that unlawfully induced or encouraged neutral employees to cease working, or at least constituted unlawfully coercive non-picketing conduct. 

The Advice Memorandum explained that the Board and courts have historically defined picketing in a very broad and flexible manner. Patrolling and the carrying of picket signs have never been prerequisites to establish picketing. The Board and courts have found a variety of conduct to be picketing or tantamount to picketing, including: planting signs in a snowbank and then watching the signs from a parked car; posting stationary agents with signs near an employer’s entrance; disorderly conduct in front of a neutral’s business, including attaching a banner to the neutral’s building; and the massed gathering of strikers and community members without picket signs or placards in a neutral hotel’s parking lot where strikebreakers were staying.

The Memorandum went on to note other conduct that the Board has found was not picketing but nevertheless coercive within the meaning of Section 8(b)(4)(ii)(B), includes broadcasting a message at extremely high volume through loudspeakers facing a neutral condominium building, throwing bags full of trash into a building’s lobby, and 20-70 union members marching in an elliptical pattern without signs while some distributed handbills.  In Service Employees Local 399, 136 NLRB 431 (1962) the Board noted that the union’s conduct had “overstepped the bounds of propriety and went beyond persuasion so that it became coercive to a very substantial degree.”

In 2011, the Board extended the holding of Eliason & Knuth to hold that a union’s use of a large, inflatable rat was neither picketing, nor otherwise coercive. In Brandon II, the union had set up a large, inflatable rat on a truck approximately 100 feet from the neutral hospital’s front door.  The same three-member Board majority that issued the decision in Eliason & Knuth held in Brandon II that the union’s large inflatable rat did not constitute picketing where the rat was located at a significant distance from the hospital entrance, and where its attendants did not physically or verbally accost hospital patrons. The Board found that there was insufficient confrontation to render the conduct unlawful. Notably, the Board majority acknowledged that “the size of a symbolic display combined with its location and threatening or frightening features could render it coercive within the meaning of Section 8(b)(4)(ii)(B).”

Specifically, the Associate General Counsel said that the Region should argue that the Board’s decisions in Eliason & Knuth and Brandon II, restricting the definition of picketing to circumstances where union agents carry picket signs while patrolling, were wrongly decided, inappropriately departed from the Board’s previously broad and flexible definition of picketing, and should be overruled. According to the Associate General Counsel, the dissenters in those cases were right because the placement of union agents with large banners or inflatables at the entrances to neutral businesses sought to dissuade the public from entering through coercive conduct, rather than through a persuasive message, and therefore should have been considered tantamount to picketing under well-established law.

In a later case, the employer, Lippert Components, Inc., filed Case 25-CC-228342 alleging that the International Union of Operating Engineers, Local Union No. 150 posted a large, inflatable rat and two stationary banners near the public entrance of a trade show, inducing or encouraging persons engaged in commerce to refuse to handle or work on goods or perform services and  threatened, coerced, or restrained Lippert and other persons engaged in commerce in violation of Section 8(b)(4)(i) and (ii)(B) of the National Labor Relations Act (Act).

The Administrative Law Judge, though, followed Eliason & Knuth. In Eliason & Knuth, the union placed banners, approximately three to four feet high and 15 to 20 feet long, on the public sidewalk outside the secondary employer’s facility approximately 15 to 1,050 feet from the entrances.  One banner read “SHAME ON [secondary employer]” and “Labor Dispute” while the other read “DON’T EAT ‘RA’ SUSHI.” Several union representatives stood beside each of the stationary banners and offered flyers to passersby. The Board found that the use of stationary banners did not by itself establish signal picketing. The Board further concluded that this nonpicketing conduct was not a violation of § 8(b)(4) because the conduct did not engender the same coercive effects of picketing nor did it disrupt the secondary’s operations. Finally, the Board affirmed the notion that banners are speech and, “neither the character nor the size of the banners stripped them of their status as speech or expression.”

The ALJ also looked to Brandon II. In Brandon II, a medical facility hired two construction contractors to build an addition to the hospital; however, the two contractors were engaged in a labor dispute with the union regarding use of nonunion labor and insufficient wages. In addition to stationing a union member holding out a leaflet between two outstretched arms aimed at the incoming and outgoing traffic at the hospital’s entrance, the union placed an inflated rat balloon on a flatbed trailer parked outside the hospital, approximately 100 feet from the front door.  The inflatable rat was approximately 16 feet tall and 12 feet wide with an attached sign reading “WTS.”  (WTS stood for “Workers Temporary Staffing,” one of the primary contractors). The Board affirmed past doctrine and “found no evidence here to support a finding that the display of the inflatable rat. . .constituted nonpicketing conduct that was unlawfully coercive.”

In Brandon II, the Board held that an inflatable rat as used in that demonstration did not constitute picketing because it “lacked the essential ‘element of confrontation that has long been central to our conception of picketing for the purposes of the Act’s prohibitions.’” The rat in Brandon II was approximately 16 feet tall and 12 feet wide, erected on a trailer bed, and was stationary while being displayed; whereas here, the rat in the instant case was 12 feet tall and stationed on the curb. While the leaflet displayed along with the inflatable rat in Brandon II was considerably smaller than the banners in this case, the similarities between the use of the inflatable rat in that display and the display at issue here leads the ALJ to find that the precedent set in Brandon II was controlling. Accordingly, the ALJ found that Local 150’s display of the inflatable rat with the banners was not proscribed picketing.

The ALJ noted that if federal court precedent was controlling, the bulk of the recent precedent would be in Local 150’s favor, citing, among other cases, Construction and General Laborers’ Union No. 330 v. Town of Grand Chute, 915 F.3d 1120, 1123 (7th Cir. 2019) (“. . .there is no doubt that a union’s use of Scabby to protest employer practices is a form of expression protected by the First Amendment.”).

Local 150’s banners conveyed information to the public regarding events which had transpired, including the fact that OSHA found safety violations against a company called MacAllister. There was no evidence that this claim was false. The banners, unlike those in Eliason & Knuth, did not instruct the public to stop patronizing a business but rather informed the public of an event which occurred and of a business relationship between employers involved. One of the banners in Eliason & Knuth gave specific instructions not to patronize the secondary but was still found to be protected. Therefore, the ALJ found that the banners in this case were also protected under the First Amendment.

Another case recently made it into the federal court system. The Chefs’ Warehouse, Inc. v. Dylan Wiley and Local Union 1430, 2019 WL 4640208 (S.D.N.Y., September 24, 2019)

On November 29, 2018, a Chefs’ Warehouse’s delivery driver was involved in a verbal altercation (the “Incident”) while delivering product to a Chefs’ Warehouse customer (the “First Customer”). Following the altercation, the driver alleged that the First Customer’s employee had directed racially charged derogatory language toward him.

On the same day, Chefs’ Warehouse received a call from the First Customer, informing Chefs’ Warehouse that someone from Local 1430 had threatened to picket and disrupt First Customer’s business with a mob of union members and to install a giant inflatable rat outside of its place of business. As a result, the First Customer terminated its business relationship with Chefs’ Warehouse.

Also, on November 29, 2018, Chefs’ Warehouse received a call from another customer (the “Second Customer”), informing Chefs’ Warehouse that someone from Local 1430 had threatened to place a giant inflatable rat in front of its place of business.  Subsequently, the Second Customer informed Chefs’ Warehouse that it “would terminate its business relationship with Chefs’ Warehouse if the dispute with Local 1430 was not resolved by the close of business on Friday, December 7, 2018.”

One day after the incident, Local 1430 contacted another Chefs’ Warehouse customer (the “Third Customer”) and threatened that a mob would come to the front of the store to protest how Chefs’ Warehouse treats its drivers. Within a week of the Incident, Local 1430 contacted two more Chefs’ Warehouse’s customers (the “Fourth Customer’ and the “Fifth Customer”) and threatened to set up a giant rat if they continue to do business with Chefs’ Warehouse.

Chefs’ Warehouse filed suit on December 3, 2018, asserting breach of contract and unlawful secondary activity claims against Local 1460, and defamation and tortious interference with contractual relations claims against both Defendants. Defendants moved to dismiss the amended complaint.

Chefs’ Warehouse argued that Local 1430’s conduct violated Section 8(b)(4)(ii)(B), which prohibits unions from threatening secondary employees from doing business with the primary employer.

The District Court found Chefs’ Warehouse had properly alleged a claim of unlawful secondary activity by Local 1430 in connection with its conduct with the First Customer. Chefs’ Warehouse alleged that Local 1430 threatened to “picket and disrupt” the First Customer’s business with a “mob” and an “inflatable rat.”

The First Customer allegedly terminated its business relationship with Chefs’ Warehouse as a result of the threat by Local 1430. Thus, Chefs’ Warehouse had plausibly asserted a claim of unlawful secondary activity based on Local 1430’s threat to the First Customer.

Chefs’ Warehouse claimed that Local 1430 threatened to put a giant inflatable rat in front of the Second Customer’s place of business “in order to disrupt a major corporate event that was scheduled to take place.” Similarly, Local 1430 allegedly threatened to erect giant rats at the Fourth and Fifth Customers’ places of business. These claims, however, failed to allege sufficient facts to permit a reasonable inference that Local 1430’s conduct was coercive.

According to the court, installing a giant inflatable rat outside a business entrance is permissible secondary activity; it becomes impermissible only if the rat impedes travel or is erected in the context of “confrontational conduct” with the secondary party. Absent any specific threats to use an inflatable rat to engage in “confrontational conduct,” however, Local 1430’s threat to erect an inflatable rat had to be presumed lawful. Although Chefs’ Warehouse asserted that the threat was intended to “disrupt,” the absence of any stated threats to gather a “mob” or to “picket” made the threats aimed at the Second, Fourth, and Fifth Customers less confrontational than the threat aimed at the First Customer.

Predictably, displays of Scabby the Rat will continue to engender litigation. Want your own Scabby the Rat?  Of course you do.