ABA Section of Labor and Employment Law Program ABA Annual Meeting San Francisco CA August 11, 2003

Transcription

1 ABA Section of Labor and Employment Law Program ABA Annual Meeting San Francisco CA August 11, 2003 To Sue or Not to Sue: A Lawyer s Dilemma Will It Be an Unfair Labor Practice The NLRB General Counsel s Approach to Lawsuits as Unfair Labor Practices after BE & K Ellen A. Farrell Deputy Associate General Counsel Office of the General Counsel Division of Advice National Labor Relations Board 1

2 I. BE&K The Decision The National Labor Relations Board has long struggled with whether and how to treat parties who have resorted to lawsuits in order to interfere with rights protected under the NLRA. 1 In Bill Johnson s Restaurants, 2 the Supreme Court brought welcome order to this subject. Reversing a Board decision that condemned an ongoing libel suit as an unfair labor practice, the Court established a number of principles: Filing and prosecuting a meritorious suit can never be an unfair labor practice, no matter what the plaintiff s subjective motivation in bringing suit. To find a plaintiff s action unlawful would impermissibly interfere with the First Amendment guarantee of access to the courts as well as states interest in providing a remedy for conduct touching interests deeply rooted in local feeling and responsibility. 461 U.S. at For the same reasons, the Board may not enjoin an ongoing state suit if it raises genuine issues of material fact or law. If such issues exist, the Board must hold the unfair labor practice case in abeyance until the conclusion of the suit. 461 U.S. at First Amendment concerns and state interests do not come into play, however, if a suit lacks a reasonable basis. The Board may, therefore, condemn a baseless suit as an unfair labor practice if it is filed with the intent to retaliate against the exercise of rights protected by the NLRA. 461 U.S. at While these principles have remained firmly established, in BE & K, 3 the Court rejected additional comments it had made in Bill Johnson s on how the Board might proceed once a suit is concluded. In Bill Johnson s, the Court noted, If judgment goes against the employer in the state court, or if his suit is withdrawn or otherwise shown to be without merit, the employer has had its day in court, the interest of the state in providing a forum for its citizens has been vindicated, and the Board may proceed to adjudicate the unfair labor practice case. 461 U.S. at 747. [I]f it is found the lawsuit was filed with retaliatory intent, the Board may find a violation and order appropriate relief. 461 U.S. at 749. Relying on this guidance, the Board thereafter examined the substance of concluded suits only to determine that they were without merit. It then considered 1 See, e.g., W.T. Carter and Bro., 90 NLRB 2020, (1950) (employer suit to bar employees from holding union meetings on company property was an unfair labor practice); Clyde Taylor, 127 NLRB 103 (1960) (a party s resort to court is not an unfair labor practice, no matter what the motive of party in filing the suit or the effect of the suit, overruling W.T. Carter); Power Systems, Inc., 239 NLRB 445 (1978), enf. denied, 601 F.2d 936 (7 th Cir. 1979) (employer suit filed to discourage employee from filing charges with Board or seeking access to Board is an unfair labor practice). 2 Bill Johnson s Restaurants, Inc. v. NLRB, 461 U.S. 731 (1983). 3 BE & K Construction Co. v. NLRB, U.S., 122 S. Ct (2002) 1

3 2 whether the suit was filed with a retaliatory motive. 4 Under this approach the Board could find a plaintiff committed an unfair labor practice in bringing a suit that was reasonably based in fact and law but was ultimately dismissed, if the Board also found that the suit was brought with a retaliatory motive. In BE & K, however, the Supreme Court rejected the implication of Bill Johnson s that First Amendment concerns ended with the determination that a suit was not meritorious. 5 Because condemnation of a reasonably based unmeritorious suit could affect genuine petitioning protected by the First Amendment, the Court examined whether the Board s additional element of retaliatory motive was a sufficient limitation so as to permit the Board to find such a suit unlawful. The Court concluded that the Board s test for retaliatory motive was overbroad because in application it would still permit the Board to condemn as unlawful suits that involved genuine petitioning. Specifically, the Court rejected the Board s reliance on evidence that a suit attacked conduct protected under 7 and evidence that the plaintiff acted with antiunion animus as sufficient indicators of retaliatory motive. 122 S. Ct. at Those elements could exist even if the plaintiff reasonably believed the conduct at issue was unlawful and merely sought a forum to test that question. As long as a plaintiff s purpose is to stop conduct he reasonably believes is illegal, petitioning is genuine, the Court concluded, and cannot be condemned as an unfair labor practice. Id. at 2401 (emphasis in original). The Court declined to decide whether the Board could validly condemn as an unfair labor practice reasonably based unmeritorious suits that fit a more stringent retaliatory motive test, such as suits that would not have been filed but for a motive to impose the costs of the litigation process, regardless of the outcome. Id. at See, e.g., Machinists Lodge 91 (United Technologies), 298 NLRB 325, 326 (1990), enf d. 934 F.2d 1288 (2d Cir.), cert. denied 502 U.S (1992); Operating Engineers Local 520 (Alberici Construction), 309 NLRB 1199, 1200 (1992), enf. den. on other grds. 15 F.3d 677 (7th Cir. 1994); BE & K Construction Co., 329 NLRB 717, 721 (1999), enf d. 246 F.3d 619 (6 th Cir. 2001), revd. and remanded, 122 S. Ct See 123 S. Ct. at The Court offered three reasons for this conclusion: First, it rejected success as the measure of genuineness, asserting that a substantial proportion of reasonably based non-meritorious suits involved genuine grievances. Id. at Second, it noted that permitting the prosecution of reasonably based but unsuccessful suits advances First Amendment interests by allowing the public airing of disputed facts, by raising matters of public concern, and by promoting the evolution of the law. Third, it faulted the analogy between false statements and unmeritorious suits: the fact that a plaintiff loses does not necessarily mean the suit is false but only that the plaintiff failed to prove his or her claims; it does not mean that the defendant has proved or could prove the contrary. Id. at This formulation, taken from Justice O Connor plurality opinion, was rejected by Justice Scalia in a concurring opinion joined by Justice Thomas. Justice Scalia reasoned that an executive agency like the Board has no power to condemn any reasonably based suit as unlawful and would limit the NLRA to prohibiting only baseless suits subjectively 2

4 3 II. Post-BE & K Matters before the General Counsel The cases that have come before the General Counsel since BE & K raise questions in at least three areas: (1) How should the Board assess whether a concluded non-meritorious suit was reasonably based? (2) How should the Board define retaliatory motive; is the standard different depending on whether the suit is reasonably based or baseless? (3) How does BE & K affect footnote 5 of Bill Johnson s? In developing positions on these questions, the General Counsel has been mindful that in the statutory scheme, the Board is responsible for construing the Act and only the Board s decisions are subject to further review. Thus, from an institutional standpoint, the General Counsel s policy has been to present issues to the Board for decision to allow the orderly development of the law in this area. A. Reasonable basis after BE & K Immediately following BE & K, the General Counsel considered several cases that were pending before Administrative Law Judges, the Board or courts when BE & K issued. These cases involved unmeritorious lawsuits litigated under the prior theory that the General Counsel could make out a violation by proving only retaliatory motive. BE & K had now made it imperative that the General Counsel determine whether these concluded suits were reasonably based or baseless. 7 In conducting that analysis, the General Counsel has been guided by the Bill Johnson's Court s pronouncements regarding this issue: a suit is not baseless if it presents a genuine issue of material fact that turns on the credibility of witnesses or the proper inferences to be drawn from undisputed facts (Bill Johnson's, 461 U.S. at 745) or if the suit presents a genuine legal issue: that is, a reasonable chance that the plaintiff s legal theory might be adopted (Id. at 747). On a procedural note, the General Counsel set forth his views in position statements recommending action that the ALJ or the Board should take. Even where the General Counsel concluded that a complaint was no longer viable after BE & K, he recommended that the complaint be dismissed rather than request that the case be remanded for dismissal of the charge. He chose this procedure because, in his view, the issues presented should be decided by the Board and subject to court review; since the General Counsel s decision to dismiss a charge is unreviewable, administrative dismissal would short-circuit such review. intended to abuse the legal process. 122 S. Ct. at Justice Breyer, in a concurring opinion joined by Justices Stevens, Souter, and Ginsberg, agreed that the circumstances presented by the O Connor retaliatory motive formulation might make out a violation of the NLRA. And, Justice Breyer suggested, the Board might be justified in finding retaliatory motive in a lawsuit an employer brought as part of a broader course of conduct aimed at harming the unions and interfering with employees exercise of their rights under 7. Id. at See Casehandling Instructions for Cases Concerning Bill Johnson's Restaurants and BE & K Construction Co., Memorandum GC (NLRB Office of the General Counsel, September 20, 2002) at 4, 3

5 4 1. Suits determined to be reasonably based Illustrative of how the General Counsel has applied this test are several post-be & K cases discussed in the General Counsel s Report on Recent Casehandling Developments, May 2, 2003, Clearly, Bill Johnson's would teach that when a suit survives a motion for summary judgment, it presents triable factual issues and cannot be deemed baseless. See Bill Johnson's, 461 U.S. at 749. Thus, in one case, the General Counsel argued that a contractor was reasonably based in its suit against a union and a municipality alleging conspiracy under color of state law to deny the contractor due process. The suit arose out of the union s challenge to the contractor s bid on a city project, alleging the contractor was not a responsible bidder. When the city investigated and found that the Employer had a history of prevailing wage law violations, it disqualified the Employer from the job. Where the district court denied the union s motion to dismiss and motion for summary judgment, the General Counsel argued that the suit was reasonably based even though the district court ultimately dismissed after a bench trial. The General Counsel similarly argued in another case (Dilling Mechanical Contractors, Case 25-CA-25094) that a suit was reasonably based even though it was ultimately dismissed on a motion for summary judgment. That case involved an employer s suit attacking a union organizer s removal of several bags of trash from a dumpster located on the Employer's property adjacent to a public sidewalk. The lawsuit alleged that the action constituted burglary, conversion of property, receipt of stolen property, criminal trespass, and racketeering. The lower court granted the Employer's motion for summary judgment and ruled that the organizer and the Union had committed criminal acts by taking the garbage without the Employer's consent. On appeal, however, the state appellate court reversed and granted summary judgment for the defendants, holding that the trash constituted abandoned property and, thus, its removal was lawful. In a supplemental brief to the ALJ, the General Counsel argued that, although the state appellate court ordered summary judgment against the Employer on all claims, the legal questions posed were not "plainly foreclosed as a matter of law" or "frivolous." See Bill Johnson's, 461 U.S. at The district court had granted the Employer s motion for summary judgment and even the Union conceded that the case involved several substantial questions of first impression. In the absence of controlling legal authority, the Employer reasonably maintained that it had a privacy interest in the trash and that the trash was not "abandoned" property under state law Suits determined to be baseless In other cases, the General Counsel s reexamination of pending cases resulted in a conclusion that the suits were baseless within the meaning of Bill Johnson's. One case, 8 In a Supplemental Decision, the ALJ reaffirmed his original decision that the suit was an unfair labor practice. JD (February 28, 2003). The General Counsel has excepted, taking issue with the ALJ s interpretation of BE & K. 4

6 5 (Allied Mechanical Services, Inc., Case GR-7-CA-41687) involved an employer s suit against a Sheet Metal workers local and a Plumbers local that represented different groups of its employees. The relationship between the Employer and the Plumbers local was acrimonious: the parties had never reached agreement on a contract; the relationship was marked by several strikes, unfair labor practice charges, and Board decisions against the Employer. The Sheet Metal Local, which had an agreement with the Employer, began denying the Employer's requests for use of job targeting funds. The Employer filed suit in federal district court against both Unions based on the denial of the job targeting funds. The lawsuit alleged that the Plumbers Local, in violation of 8(b)(4), coerced, threatened, or otherwise restrained the Sheet Metal Local, and the Employer sheet metal employees to force the Sheet Metal Local to deny the job targeting funds to the Employer and prevent the Employer from doing business with potential customers. The suit also alleged that the Sheet Metal Local breached its collective bargaining agreement with the Employer by denying the funds, even though an arbitrator had earlier dismissed a grievance on that ground, concluding that job targeting was not part of the contract. The district court granted the Unions' motions to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6). It rejected the secondary boycott claims because the conduct relied on was all primary and it rejected the contractual claim because the prior arbitral award to the contrary was binding. A federal appellate court affirmed. In a supplemental brief to the ALJ on remand, the General Counsel argued that the suit was baseless because it failed to plead material elements of the causes of action: As to the secondary boycott claims, they concerned primary, not secondary, conduct and the complaint failed to allege conduct that constituted inducement within the meaning of Section 8(b)(4)(i), or threats, restraint or coercion within the meaning of Section 8(b)(4)(ii). As to the contract breach claim, the arbitrator's contrary decision was binding and precluded the Employer s action. In a second case, Hannah& Sons Construction Co., Inc., Case 4-CA-28916, the General Counsel dealt with a lawsuit that was indisputably preempted by the Act. It was unnecessary to decide in that case what effect to give to Bill Johnson's footnote 5 after BE & K, 9 because a reasonable litigant would have known that he had no chance of prevailing on the merits at the time he filed the suit and the suit could be analyzed as baseless. The suit was brought by a construction employer who had been awarded a subcontract on a project that required, pursuant to the general contractor s agreement with the Union, that all subcontractors to be signatories to a collective bargaining agreement with the Union. The subcontractor sought to become a signatory but failed to give the Union specific information the Union requested to substantiate the Employer s claims that it had a long and successful history as a union Employer. As a result, the Union declined to enter into a labor contract with the Employer and the Employer lost the subcontract. The Employer filed suit against the Union in state court alleging that the Union s refusal to enter into a collective bargaining agreement gave rise to four claims of interference with contractual relations and a common law antitrust violation. The state court dismissed the entire case on the pleadings. It found that the interference with contractual relations counts were preempted and should be dismissed with prejudice and 9 See discussion below at Section C, pp

7 6 that the antitrust claim raised a federal issue more appropriately brought in federal court and should be dismissed in state court without prejudice. The Employer proceeded no further with any claims. The General Counsel argued in the unfair labor practice case that the interference with contract claims were preempted because a claim of refusal to enter into a collective bargaining relationship is premised on the arguably protected 7 right of employees to receive services from unions to negotiate new agreements, or a refusal to bargain when under a legal obligation to do so, arguably prohibited by In light of the indisputable NLRA preemption, there were no material factual issues or unsettled legal principles upon which a reasonably based lawsuit could be brought. See BE & K, 122 S. Ct. at 2396; Bill Johnson s, 461 U.S. at The General Counsel also argued that the Employer s state antitrust conspiracy claim was baseless. In Connell Construction Co., Inc. v. Plumbers and Steamfitters Local Union No. 100, 421 U.S. 616, (1975), the Supreme Court held that the Act preempted state anti-trust laws attempting to regulate union organizing. In any event, state anti-trust law provided no private remedy for damages, the only relief sought by the plaintiff. Given these legal principles and the absence of any contrary argument from the Employer, the anti-trust claim presented no factual or legal questions that would have supported a reasonably based lawsuit. Finally, dealing with a charge filed after BE & K issued, the General Counsel found baseless an employer s suit against a employee whom the employer reinstated pursuant to a Board order and lawfully terminated approximately three weeks after the reinstatement. After the circuit court enforced the Board s backpay award, the Employer filed a bankruptcy petition in order, it admitted, to avoid paying the backpay judgment. On threat of suit from the bankruptcy trustee, it paid the Board s judgment and, the same day, filed suit against the employee for fraudulent misrepresentation regarding his ability to perform the job to which he was reinstated and sought compensatory and punitive damages for the wages paid to him after his reinstatement and for production loss allegedly caused by his insubordinate performance during that time. State law permits recovery of such damages only under a breach of contract theory and a claim for fraud in the inducement of a contract cannot be based solely, as was alleged here, on failure to perform under the contract. Not only does state law not provide a cause of action under the facts alleged by the employer, the relief sought was not available on the facts it pled. Recovery of wages paid for completed employment is available only where the parties have expressly agreed to such relief in the employment contract, a circumstance not present here; punitive damages are unavailable unless the action seeks to vindicate a public right, a claim the Employer did not advance; consequential damages are unavailable unless they were foreseeable and within the contemplation of the parties when the contract was made. Based on this legal analysis, the General Counsel 10 A lawsuit is preempted when activities are "arguably subject" to Section 7 or Section 8 of the Act. See San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, (1959). 6

8 7 authorized complaint alleging that the suit rested on plainly foreclosed legal theories 11 and was baseless. B. Retaliatory motive after BE & K 1. Reasonably based suits BE & K made clear that if a suit is reasonably based, the Board s prior standard for retaliatory motive will not suffice to permit the Board to find a violation. Thus, in the remanded cases, discussed above, in which the General Counsel concluded that the suits were reasonably based, the General Counsel was also required to re-analyze the retaliatory motive issue. His approach on this issue is to apply the test suggested by the O Connor opinion in BE & K: whether there is evidence that the suit would not have been filed but for a motive to impose the costs of the litigation process, regardless of the outcome, in retaliation for NLRA protected activity. 122 S. Ct. at In the first reasonably based case discussed above, p. 4, in which the suit survived motions to dismiss and for summary judgement, the fact that the suit attacked conduct ultimately determined to be protected under 7 was insufficient under BE & K to support a finding of violation because the plaintiff s purpose was to stop conduct he reasonably believed was unprotected. The General Counsel therefore urged dismissal of that case. In Dilling, the trash from the dumpster case, discussed above p. 4, the ALJ had originally concluded, prior to BE & K, that the suit was brought with a retaliatory motive. Two statements in particular were relied on to establish the Employer s retaliatory motive. The Employer told an employee that it had filed a lawsuit that would keep the Union from operating and the Employer s counsel told Union organizers that the suit would result in a $3 million judgement for the Employer. On remand, the General Counsel argued that such evidence was insufficient to establish retaliatory motive for a reasonably based suit. Although the statements clearly established the Employer s ill will to the Union and animus to the Union agent s protected activity, that is insufficient under BE & K to remove the case from genuine petitioning (see 122 S. Ct. at 2400); they do not demonstrate that the Employer was pursuing the case without regard to the outcome. Indeed, the statement that the Employer expected to win a $3 million judgment against the Union indicated the Employer was committed to winning his case. Consistent with Justice O Connor s plurality opinion and Justice Breyer s concurrence, however, the General Counsel has not read BE & K to preclude finding that a reasonably based suit is an unfair labor practice. Thus, he considered whether the lawsuit discussed above p. 6, against the employee who had been reinstated pursuant to a Board order and then discharged for cause, was unlawful even if reasonably based. He concluded that the employer filed the suit without regard to the ultimate outcome and to impose the costs of litigation on the employee in retaliation for the employee s protected charge filing. He relied on the timing of the suit immediately after it agreed to pay the backpay it owed 11 Bill Johnson's 461 U.S. at 746, n.11. 7

9 8 but four years after the alleged damages occurred, and the evidence that the suit will not yield any financial recovery both because of the legal defects in his case and because the defendant employee is judgment proof he has provided the employer with an affidavit that he is in ill health, supported by Social Security disability payments, has no assets and owes significant debt. 2. Baseless suits BE & K s discussion of retaliatory motive arises in the context of a suit that was undisputedly reasonably based. The Court itself noted that the issue presented was whether the Board may impose liability on an employer for a retaliatory lawsuit that was unsuccessful, even if it was not objectively baseless. 122 S. Ct. at 2398 (emphasis added). The Court rejected the evidentiary factors the Board relied on to find retaliation because they did not screen out sanctioning genuine petitioning. 12 Baseless suits, however, are not objectively genuine and thus, fall outside the First Amendment s protection for genuine petitioning. Accordingly, in evaluating retaliatory motive in baseless suits, the General Counsel continues to rely on factors which the Board and courts have traditionally found establish retaliatory motive in lawsuits. Thus, in Allied Mechanical, the suit attacking the denial of job targeting funds, discussed above at p. 5, the General Counsel concluded that the nature of the suit itself evinced a retaliatory motive: it expressly attacked the Plumbers protected primary activity of soliciting co-workers support in the Union s dispute with the Employer. 13 In any event, we concluded that the extrinsic evidence supported a finding that the suit would not have been brought but for the Employer s motive to interfere with employees protected activity: the lack of any reasonable basis for the lawsuit, 14 the iteration in the complaint of other unrelated protected activity (the Plumber s strike and filing of other unfair labor practice charges), the suit s timing (on the heels of an adverse ALJD in another case and the filing of additional unfair labor practice charges), and the Employer s ongoing history of hostility and, indeed, unlawful response, to protected conduct. 15 Similarly, the General Counsel concluded that there was sufficient evidence of retaliatory motive in Hannah, the suit attacking the Union s refusal to enter into a collective bargaining relationship, discussed above at pp The lawsuit directly attacked S. Ct. at 2401 ( the Board s retaliatory motive limitation...fails to exclude a substantial amount of petitioning that is objectively and subjectively genuine. ) 13 See Geske & Sons, Inc., 317 NLRB 28, 58 (1995), enf d. 103 F.3d 1366 (7 th Cir. 1997). 14 See Bill Johnson's, 461 U.S. at 747 ( [t]he employer s suit having proved unmeritorious, the Board would be warranted in taking that fact into account in determining whether the suit had been filed in retaliation for the exercise of the employees 7 rights. ) 15 See BE & K, 122 S. Ct. at 2403 (Breyer, J, concurring). 8

10 9 protected 7 activity the Union s right to refuse to enter into a voluntary agreement - and lacked any reasonable basis in fact or law. 16 C. Footnote 5 after BE & K In Bill Johnson's, the Court held that the baseless/retaliatory motive analysis set out there governed only suits that federal law would not bar except for [their] allegedly retaliatory motivation. It reaffirmed the Board s power to enjoin suits claimed to be beyond the jurisdiction of the state courts because of federal-law preemption, or a suit that has an objective that is illegal under federal law. 461 U.S. at 737, n.5. BE & K did not address this aspect of Bill Johnson's. Some have argued that, after BE & K, a plaintiff s claim that a suit is not preempted should be analyzed under reasonable basis principles. At least one court has held, however, that BE & K did not disturb the Bill Johnson's principle that preempted suits are a different matter. 17 In order to put this matter before the Board, the General Counsel has adhered to the Bill Johnson's position in post-be & K litigation. 1. Preempted suits The General Counsel considered the preemption prong of footnote 5 in J. A. Croson Co., Case 9-CA-35163, a case involving a nonunion contractor s suit alleging that a union contractor violated Ohio prevailing wage and anti-kickback laws (the state s mini Davis- Bacon Act ) by accepting job targeting funds from the union on a non-davis-bacon Act project. 18 The Ohio Supreme Court found the lawsuit preempted concluding that interpreting the state law to prohibit job targeting was inconsistent with Manno Electric, 321 NLRB 278 (1996), which held job targeting protected. An unfair labor practice complaint attacking the lawsuit as preempted followed; while the case was pending before the Board on a stipulated record, BE & K issued. The Board remanded the case to the Region for further proceedings in light of BE & K. The matter was subsequently submitted to an ALJ on the stipulated record. In a supplemental brief, the General Counsel argued that in Manno Electric, the Board had 16 The ALJ has issued a supplemental decision in Hannah, reaffirming his original finding of a violation on the grounds that the suit was baseless and retaliatory. JD (February 24, 2003). 17 Can-Am Plumbing, Inc., v. NLRB, 321 F.3d 145, 151 (D.C. Cir. Feb. 28, 2003). 18 Under job targeting programs, a union uses a portion of its members dues to create a fund from which it subsidizes a union contractor s expenses on a targeted job in order to allow the union contractor to compete more effectively with nonunion contractors. In Manno Electric, 321 NLRB 278 (1996), the Board concluded that job targeting program are protected under the 7 right to engage in activity for mutual aid and protection. The use of dues collected on Davis-Bacon Act jobs for job targeting is, however, prohibited. See e.g., IBEW Local 48 (Kingston Constructors), 332 N.L.R.B. No. 161 (2000); Can- Am Plumbing, Inc., v. NLRB, 321 F.3d at ,

11 10 already held that job targeting constituted Section 7 protected conduct. Thus, a lawsuit claiming that state law barred the job targeting program, in effect, sought to have the state declare unlawful conduct that the Board has already decided is protected under the Act. Consistent with the Board s decision in Manno, such a suit is actually preempted by the Act and unlawful under Bill Johnson's footnote 5. Whether BE & K changes this analysis is not clear and the prosecution of this issue will give the Board an opportunity to address its view of BE & K s effect on footnote Suits for an Unlawful Object The General Counsel has continued to apply the principle that suits for an illegal objective are unlawful without regard to the reasonable basis/retaliatory motive of Bill Johnson's and BE & K. A suit will be found to have an illegal objective if, accepting its factual assertions as true, the theory of the suit would achieve a result that would be violative of the NLRA. 19 A recent illustrative case involved a union s suit against nonmember unit employees covered by a collective-bargaining agreement that did not contain a union security clause. The Union informed the non-member employees that if they had been covered by a union-security clause they would be required to become "financial core payers," paying for activities germane to collective-bargaining. The Union then sued a non-member employee in state court under a theory of unjust enrichment alleging that, as a unit member, the employee directly benefited from the Union s activities as collective bargaining representative and would by unjustly enriched if he was not required to pay his "fair share" contribution to the Union. The court granted judgment for the Union and required the employee to pay dues. We concluded that, notwithstanding the favorable judgment, 20 the Union s suit violated Section 8(b)(1)(A) because it had an objective that was illegal under federal law. A union s efforts to compel a non-member employee represented by the union to pay dues or fees in the absence of a union security clause violates the employee s 7 right to refrain from assisting a union. 21 Accordingly, it can be argued that a union s lawsuit to collect such funds has an illegal object and is unlawful under footnote 5 of Bill Johnson s. 19 See Elevator Constructors (Long Elevator), 289 NLRB 1095 (1988), enf d 902 F.2d 1297 (8th Cir. 1990) (union violated 8(b)(4)(ii)(A) by filing grievance predicated on a contract construction that, if accepted, would render the contract provision violative of 8(e). 20 Under a Bill Johnson's-BE & K analysis, a favorable decision from the trial court would likely establish that a suit had a reasonable basis. 21 See Electrical Workers IUE Local 444 (Paramax Systems), 311 NLRB 1031, (1993), cited in Golf Officials (PGA Tour), 317 NLRB 774, 778 (1995) (union suit to recover dues and fees in absence of union security clause has an illegal object because Congress had decided that such dues and fees are not recoverable under the Act). 10

12 11 III. Conclusion After BE & K, the General Counsel has reconsidered how he should analyze charges alleging that a lawsuit violates the NLRA. Clearly, BE & K requires a determination in every case as to whether the suit is reasonably based or baseless. BE & K left open whether a meritless but reasonably based suit can ever be an unfair labor practice. To present the issue to the Board for orderly decision, the General Counsel is prepared to issue complaint on reasonably based meritless lawsuits, as well as on baseless suits, if the evidence demonstrates that the suit was filed with a retaliatory motive. Evidence sufficient to prove retaliatory motive for a reasonably based suit is different than that for a baseless suit. Finally, pending further decision by the Board, the General Counsel has taken the position that BE & K does not affect footnote 5 of Bill Johnson's; preempted suits or those that seek an unlawful object may be attacked as an unfair labor practice without regard to the reasonable basis/retaliatory motive analysis in Bill Johnson's and BE & K. 11