BE&K Construction Co. v. National Labor Relations Board
The Supreme Court ruled that the National Labor Relations Board cannot declare an employer's lawsuit against a union illegal simply because the suit was unsuccessful and the Board found a retaliatory motive, so long as the suit was reasonably based.
The decision protects employers' First Amendment right to go to court even when they lose, and limits how far a federal labor agency can punish companies for suing unions over conduct the companies believed was unlawful.
How it got here: The Board ruled against the employer and the Sixth Circuit enforced that order; the employer asked the Supreme Court to review whether the Board could punish an unsuccessful but non-baseless suit.
The Case in Depth
What happened
A construction company hired to modernize a California steel mill sued several unions, claiming their lobbying, picketing, grievance filings, and a state lawsuit were an unlawful campaign to delay the nonunion project. The company lost or withdrew every claim. Two unions then complained to the National Labor Relations Board, which found the company's lawsuit itself was an unfair labor practice because it was unsuccessful and motivated by a desire to retaliate against protected union activity.
The question before the Court
Can the government punish an employer for filing a lawsuit against a union that lost but was not baseless, just because a labor board thinks the employer was motivated by retaliation?
The Court's answer
No — the Court ruled that the National Labor Relations Board went too far by declaring an employer's lawsuit illegal based only on it being unsuccessful and retaliatory, without requiring that the suit also be baseless. Drawing on antitrust law's "sham litigation" rule, the Court explained that lawsuits which are reasonably grounded, even if they ultimately lose, still serve real First Amendment purposes, like airing genuine disputes and developing legal arguments.
The Board's definition of "retaliatory motive" was too broad because it could capture employers who genuinely and reasonably believed union conduct was illegal. Since nothing in the relevant NLRA provision required reaching that broad category of suits, the Court read the law narrowly to avoid the constitutional problem and struck down the Board's standard, sending the case back for further proceedings.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Employers who sue unions over picketing, lobbying, or other activity now have more breathing room to bring reasonably grounded lawsuits without risking a federal finding that they committed an unfair labor practice, even if they ultimately lose. Unions retain protection against truly baseless retaliatory suits, but the ruling narrows the situations where losing a lawsuit alone can trigger Board sanctions.
What changes now
The case returns to the Sixth Circuit and, ultimately, the Board for further proceedings consistent with the Court's ruling, meaning the Board's finding against the employer cannot stand under the standard it used. The Court left open whether a narrower Board rule -- targeting suits filed only to impose litigation costs regardless of outcome, or suits that are part of a broader anti-union campaign -- could still be valid, and did not decide the separate question of attorney's fee awards.
What this does not decide
The Court did not decide whether the Board could ever punish a reasonably based but unsuccessful suit filed solely to impose litigation costs on a union regardless of outcome, whether the Board can award attorney's fees generally, or what "retaliation" precisely means under Bill Johnson's. It resolved only that the Board's broad standard here was invalid.
Concurrences and dissents
Concurrence — Justice Scalia
Justice Scalia agreed with the majority in full, but wrote separately to argue that the logical implication of the ruling is that the NLRA should eventually be read, like the Sherman Act, to reach only suits that are both objectively baseless and subjectively abusive. He stressed that the risk to court access is even greater under the NLRA than under antitrust law, because an executive agency (not an Article III court) makes the factual findings about motive, insulated from full judicial review.
Concurrence in part — Justice Breyer
Justice Breyer agreed with the narrow holding but argued the Court wrongly reopened questions he believed Bill Johnson's had already settled as binding holdings, not dicta. He also disputed treating labor law like antitrust law, stressing that regulating employer lawsuits against unions is central to the NLRA's purpose in a way anticompetitive suits are not central to antitrust law, given labor law's history of curbing anti-union litigation abuses.
How the Court got there
The legal reasoning, step by step
- The Court drew on its antitrust precedent, which shields 'genuine' petitioning of the government from liability and only strips protection from 'sham' litigation that is both objectively baseless (no reasonable litigant could expect to win) and subjectively meant to abuse the legal process rather than to win on the merits.
- The Court found that declaring a completed lawsuit unlawful is a real burden on the right to petition courts, separate from any fee award, because the finding of illegality itself carries reputational and legal consequences even before any damages are assessed.
- Because a large share of unsuccessful-but-reasonably-based lawsuits reflect genuine grievances and serve real First Amendment interests -- public airing of disputes, development of legal theories, and a peaceful alternative to self-help -- treating the entire category as unlawful raised a serious constitutional problem.
- The Board's own definition of 'retaliatory motive' did nothing to narrow this problem, since an employer who genuinely and reasonably believed union conduct was illegal could still be found retaliatory under the Board's test, sweeping in petitioning that was fully genuine.
- Following its approach in an earlier labor case (DeBartolo) of reading an ambiguous NLRA provision narrowly to avoid a hard constitutional question, the Court held that nothing in the text of Section 8(a)(1) required reading it to cover reasonably based but unsuccessful suits filed with a retaliatory purpose.
- The Court concluded that because the Board's standard reached this broader, constitutionally protected category of suits, that standard was invalid, without deciding whether a narrower standard aimed at suits filed only to impose litigation costs might be permissible.
Doctrinal impact
Cases affected by this decision
Limits Bill Johnson's Restaurants, Inc. v. NLRB (461 U.S. 731)
Clarifies that its earlier remarks about penalizing completed but unsuccessful lawsuits were non-binding dicta, not a settled rule.
Reaffirms Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc. (508 U.S. 49)
Relies on its two-part sham-litigation test as the model for analyzing when lawsuits lose First Amendment protection.