BE&K Construction Co. v. National Labor Relations Board

2002-06-24

Headline: Labor-law ruling limits NLRB power to punish employers for unsuccessful but reasonably based lawsuits alleged to be retaliatory, protecting access to courts while narrowing the Board’s authority over employer litigation.

Holding: The Court held that the National Labor Relations Board may not declare an employer's reasonably based but unsuccessful lawsuit unlawful merely because it was allegedly filed with a retaliatory motive, and reversed the court of appeals.

Real World Impact:

Limits NLRB power to punish employers for losing but reasonably based lawsuits.
Protects employers’ right to bring court suits without fear of agency penalty for mere loss.
Leaves open punishment for sham suits or suits meant solely to impose litigation costs.

Topics: labor law, right to petition, employer lawsuits, agency power

Summary

Background

An industrial general contractor obtained a contract to modernize a California steel mill and sued several unions it said were trying to delay the project because the contractor’s workers were nonunion. The contractor’s federal claims were dismissed or withdrawn, the court imposed Rule 11 sanctions, and the contractor lost its remaining claims. The unions then brought charges before the National Labor Relations Board, and a Board panel found the contractor had filed an unlawful, retaliatory suit. The Board ordered the company to stop such litigation, post notices to employees, and pay the unions’ legal fees. A court of appeals enforced that order.

Reasoning

The central question was whether the Board could declare an employer’s completed lawsuit unlawful simply because the suit lost and was alleged to be retaliatory, even if the suit was reasonably based. The Court stressed the First Amendment right to petition and analogies to antitrust law’s “sham” doctrine. It concluded the NLRA should not be read to allow the Board to punish all reasonably based but unsuccessful suits brought with an accused retaliatory motive. The Court reversed the court of appeals and said the Board’s broad standard was invalid. It left open whether truly sham suits or suits filed solely to impose litigation costs could later be treated differently.

Real world impact

Employers gain greater protection when they bring reasonably based lawsuits against unions: the Board cannot declare such suits unlawful just because they lose and are alleged retaliatory. The decision narrows the Board’s authority, preserves access to courts, and still allows future cases to test limits for sham or cost-imposing suits.

Dissents or concurrances

Justices wrote separate concurrences: one urged applying the antitrust “sham” test to labor cases, while another agreed with the result but emphasized differences between labor and antitrust law.