• Supreme Court Declines To Hear Union Appeal of Ruling That Neutrality Pact May Be Unlawful
  • December 30, 2013 | Author: David P. Phippen
  • Law Firm: Constangy, Brooks & Smith, LLP - Fairfax Office
  • On December 10, the Supreme Court dismissed as "improvidently granted" a writ of certiorari in UNITE HERE Local 355 v. Mulhall, declining to address the substantive issues of the appeal. As we reported earlier, the U.S. Court of Appeals for the Eleventh Circuit ruled last year that a union and a Florida casino company might have violated Section 302 of the Labor-Management Relations Act by entering into a "neutrality" agreement. The agreement gave the union special access to casino property and employees to organize them without employer opposition and to gain representation based on a card check. In exchange, the union promised to (1) support pro-casino legislation and (2) not picket or engage in economic action against the employer. The employees' complaint in Mulhall alleged that the neutrality agreement violated the LMRA as a "thing of value" given by the employer to the union in violation of Section 302. The Eleventh Circuit held that the neutrality agreement was a "thing of value." It held that the agreement violated Section 302 if the employer intended the agreement to corrupt the union, and it ordered that the case be sent back to the U.S. District Court in Florida for a determination of the precise intent of the neutrality pact. (Typically, "intent" is not relevant to a Section 302 inquiry -- provision of a thing of value from an employer to a union is usually considered unlawful regardless of intent.)

    The union petitioned for review by the Supreme Court, which initially granted certiorari, took briefs, and heard oral argument before deciding that certiorari should not have been granted. The effect is to leave in place the Eleventh Circuit decision. Justices Stephen Breyer, Elena Kagan, and Sonia Sotomayor dissented, arguing that further briefing was needed and that if the issue was moot, if the remaining plaintiff in the case lacked standing, or if Section 302 did not provide a private right of action (allowing individuals to sue for violations)*, then the Eleventh Circuit decision should be vacated.

            *Ordinarily, Section 302 is considered a criminal statute enforced as a matter of prosecutorial discretion by U.S. Attorneys' offices, and not a statute that gives individual litigants the right to sue for violations.

    The case is significant because unions frequently seek neutrality "deals" with pressure through "top-down" corporate campaigns. The U.S. Courts of Appeal for the Third and Fourth circuits have held that neutrality agreements do not violate Section 302. Without guidance from the Supreme Court in Mulhall, employers and unions will have to wait for other courts to consider the issue, which ultimately may reach the Supreme Court again to resolve the circuit split.