In a recently issued decision—Bexar II—a divided National Labor Relations Board again reversed employer-friendly standards, this time granting expanded property access to the off-duty employees of a property owner's contractor by making it harder for property owners to oust picketers and protesters.
In Bexar II, the Board's three Democrats ruled that except in a narrow set of circumstances, property owners must allow these off-duty contractor employees access to their property, including publicly accessible areas, to engage in union activity. A contractor's employees can be ousted from the property only if the property owner can show that the conduct "significantly interferes" with the property owner's use of the property or can demonstrate some other legitimate business justification such as the need to maintain production and discipline. This ruling essentially grants the same access rights to a contractor's employees as to a property owner's own employees.
How Did We Get Here?
The Board's decision in Bexar II is only the latest in a string of reversals of employer-friendly standards created by the previous Board.
Bexar II returns the Board to the standard it announced in New York New York Hotel & Casino. In 2019, a Republican majority of the Board decided Bexar I, which overruled New York New York Hotel & Casino in favor of a standard more favorable to property owners. In Bexar I, the Board found New York New York gave too little weight to property owners' constitutionally protected rights and too much weight to the Section 7 rights of a contractor's employees. In striking a new balance, the Board noted that the access rights of onsite contractor employees were "derivative" of the contractor's rights to conduct business on the property in the first instance. This meant, according to the Bexar I Board, that "[o]ff-duty employees of a contractor are trespassers" such that property owners should be free to exclude them—even from public areas—so long as the property owner could show that the employees "have one or more reasonable non-trespassory alternative means to communicate their message."
The Board's decision in Bexar I did not go unchallenged. The union appealed to the D.C. Circuit which determined that the Board had arbitrarily applied its new standard by not allowing the parties an opportunity to development arguments addressing the existence of other reasonable non-trespassory alternative means of reaching the target audience. The D.C. Circuit remanded the case to the Board to "decide whether to proceed with a version of the test it announced and sought to apply [in Bexar I]... or to develop a new test altogether." By the time the Board accepted remand, however, the composition of the Board had changed from a majority of Republicans to a majority of Democrats, and the new three-member majority seized the opportunity to return to the pro-union standard in New York New York.
What Does This Mean for Property Owners?
As a result of the expanded access rights granted to a contractor's off-duty employees, property owners who contract for services should expect to see a rise in organizing activity (e.g., protests, pickets, hand-billing, etc.) on their properties.
Property owners who wish to respond to union activity should consult with their labor counsel before taking action. This is a complex and nuanced area of law containing traps for the unwary. To provide one example, the Board in Bexar II attempted to allay the concerns of property owners by noting that "[n]othing prevents the property owner from negotiating contract terms sufficient to protect its interest in relation to the contractor employees so that it can quickly and effectively intervene if necessary." The Board then noted that "[p]roperty owners are often able to direct the contractor's managers and supervisors to take action to protect their operational and property interest, such as when they observe misconduct or to direct the removal of unruly employees from the premises."
But as we described in a previous blog post, the Board is also seeking to relax its joint employer standards in an effort to make it easier to hold third parties (like property owners) liable in labor disputes. Should a property owner exercise its rights to "quickly and effectively intervene," as the Bexar II decision suggests they might do, then property owners may find themselves sharing liability for the contractor's unfair labor practices -- or even sharing its collective bargaining obligations.
This is an evolving area of law, and DWT will continue to monitor developments. Please reach out to the authors if you have questions about how the Board's decision may impact your organization.