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Cert granted on what sort of employer organizing assistance is a “thing of value” for LMRA purposes

By Pamela Wolf, J.D.

The question of exactly what is a “thing of value” for purposes of the Labor Management Relations Act’s ant-bribery provisions in Sec. 302 will be under the Supreme Court’s microscope given its grant of certiorari on Monday, June 24, in UNITE HERE, Local 355 v. Mulhall (Dkt No 12-99). Contrary to Third and Fourth Circuit Court of Appeals rulings, the Eleventh Circuit held below that organizing assistance offered by a casino employer to a union can be a “thing of value” under Sec. 302, which bars an employer from giving or a union from receiving any “thing of value” for organizing purposes, subject to limited exceptions.

Organizing assistance. The casino and the union entered into an agreement in which the casino promised to: (1) provide union representatives with access to nonpublic work premises to organize employees during nonworking hours; (2) provide the union with a list of employees, their job classifications, departments, and addresses; and (3) remain neutral when faced with a union organizing campaign. In return, the union promised to lend financial support to a ballot initiative regarding casino gaming. Additionally, if recognized as the exclusive bargaining agent for the casino’s employees, the union promised to refrain from picketing, boycotting, striking, or undertaking other economic activity against it.

The employee who brought the issue before the Eleventh Circuit had opposed unionization and sued to enjoin enforcement of the agreement, claiming that it violated Sec. 302. In a prior appeal addressing standing, the Eleventh Circuit had ruled that he “adequately alleged that the organizing assistance promised by [the casino] in the [agreement] is valuable, and indeed essential, to [the union’s] effort to gain recognition.”

In its review of case law discussing Sec. 302’s “thing of value,” the appeals court followed the Second Circuit’s reasoning: “[v]alue is usually set by the desire to have the ‘thing’ and depends upon the individual and the circumstances.” The Second Circuit recommended that common sense should inform determinations of whether an improper benefit has been conferred.

The Eleventh Circuit further noted that Sec. 302 also prohibits payment of a “thing of value,” and that intangible services, privileges, or concessions can be paid or operate as payment. Further, whether something qualifies as a payment depends not on whether it is tangible or has monetary value, but on whether its performance fulfills an obligation. “If employers offer organizing assistance with the intention of improperly influencing a union, then the policy concerns in Sec. 302 — curbing bribery and extortion — are implicated,” the appeals court added. “Innocuous ground rules” can become illegal payments if used as consideration in a plan to corrupt a union or to extort a benefit from an employer.

In his complaint, the employee alleged, “and a jury could find,” that the casino’s assistance had monetary value. As evidence of the value, the employee pointed to the $100,000 that the union spent on the ballot initiative that was consideration for the organizing assistance. In a 2-1 decision, the Eleventh Circuit ruled that the employee’s allegations were sufficient to support a Sec. 302 claim. The case was thus reversed and remanded for the district court to consider the claim and determine why the union and employer agreed to cooperate with one another.

Question to be resolved. In this case, the Supreme Court will resolve the question of whether an employer and union may violate Sec 302 by entering into an agreement under which the employer exercises its freedom of speech, by promising to remain neutral to union organizing; its property rights, by granting a union representative limited access to the employer’s property and employees; and its freedom to contract, by obtaining the union’s promise to forego its rights to picket, boycott, or otherwise put pressure on the employer’s business.

The union contends that the Eleventh Circuit ruling departs from decades of jurisprudence holding that agreements of the sort entered into by the UNITE HERE, Local 355 and the casino in this case are lawful. “Only now, 65 years after the passage of the Taft-Hartley amendments to the National Labor Relations Act … has the propriety of this important part of cooperative labor-management relations been put in doubt,” wrote the union in its petition for certiorari.