Source: https://openjurist.org/461/us/731
Timestamp: 2019-04-18 14:22:43+00:00

Document:
After one Helton, a waitress at petitioner's restaurant, filed unfair labor practice charges with the National Labor Relations Board (NLRB) alleging that she had been fired because of her efforts to organize a union, Helton and others, including other waitresses, picketed the restaurant and distributed leaflets. Petitioner and three of its co-owners then filed a suit for damages and injunctive relief against Helton and the other demonstrators in an Arizona state court, alleging that the defendants had harassed customers, blocked access to the restaurant, created a threat to public safety, and libeled plaintiffs by false statements in the leaflets. On the following day, Helton filed a second charge with the NLRB, alleging, inter alia, that petitioner had filed the civil suit in retaliation for the defendants' protected, concerted activities and the filing of charges against petitioner with the NLRB. After a consolidated hearing on the unfair labor practice complaints, an Administrative Law Judge (ALJ) concluded that, "on the basis of the record and from [his] observation of the witnesses," the evidence failed to support the allegations of the complaint in the state-court action, and that such action thus lacked a "reasonable basis" and its prosecution was retaliatory, in violation of §§ 8(a)(1) and (4) of the National Labor Relations Act (Act). On petitioner's appeal, the NLRB adopted, with minor exceptions, the ALJ's findings and recommendations, and ordered petitioner to withdraw its state-court complaint. The Court of Appeals enforced the NLRB's order.
On September 20, after an investigation, the Board's General Counsel issued a complaint. On the same day, Helton, joined by three co-waitresses and a few others, picketed the restaurant. The picketers carried signs asking customers to boycott the restaurant because its management was unfair to the waitresses. Petitioner's manager confronted the picketers and threatened to "get even" with them "if it's the last thing I do." Petitioner's president telephoned the husband of one of the picketing waitresses and impliedly threatened that the couple would "get hurt" and lose their new home if the wife continued to participate in the protest. The picketing continued on September 21 and 22. In addition, the picketers distributed a leaflet that accused management of making "[u]nwarranted sexual advances" and maintaining a "filthy restroom for women employees." The leaflet also stated that a complaint against the restaurant had been filed by the Board and that Helton had been fired after suggesting that a union be organized.
In December 1978, an Administrative Law Judge (ALJ) held a four-day consolidated hearing on the two unfair-labor-practice complaints.2 On September 27, 1979, the ALJ rendered a decision concluding that petitioner had committed a total of seven unfair labor practices during the course of the labor dispute. 249 N.L.R.B. 155, 168-169 (1980). With regard to the matter presently before us, the ALJ agreed with the General Counsel that the prosecution of the civil suit violated §§ 8(a)(1) and (4). The ALJ applied the rationale of Power Systems, Inc., 239 N.L.R.B. 445, 449-450 (1978), enforcement denied, 601 F.2d 936 (CA7 1979), in which the Board held that it is an unfair labor practice for an employer to institute a civil lawsuit for the purpose of penalizing or discouraging its employees from filing charges with the Board or seeking access to the Board's processes.
The Court of Appeals enforced the Board's order in its entirety, 660 F.2d 1335 (CA9 1981), holding that substantial evidence supported both the Board's findings that the employer's "lawsuit lacked a reasonable basis in fact, and that it was filed to penalize Helton [and] the picketers for engaging in protected activity." Id., at 1342. Petitioner sought certiorari, urging that it could not properly be enjoined from maintaining its state-court action.4 We granted the writ, --- U.S. ----, 103 S.Ct. 253, 74 L.Ed.2d 198 (1982), and we now vacate and remand for further proceedings.
The question whether the Board may issue a cease-and-desist order to halt an allegedly retaliatory lawsuit filed by an employer in a state court has had a checkered history before the Board.5 At first, in W.T. Carter & Bro., 90 N.L.R.B. 2020, 2023-2024 (1950), where an employer sued and obtained a state-court injunction barring its employees from holding union meetings on company property, a divided Board held that the prosecution of the suit constituted an unfair labor practice. The Board analogized from the common law of malicious prosecution and rejected the employer's contention that its "resort to court proceedings was a lawful exercise of a basic right." The dissent objected that the Board should recognize the employer's right to present its case to a judicial forum, even if its motive in doing so was to interfere with its employees' rights. Id., at 2029 (Herzog, Chairman, dissenting). Ten years later, in Clyde Taylor Co., 127 N.L.R.B. 103, 109 (1960), where the employer obtained an injunction banning peaceful union picketing in protest of unlawful discharges, the Board overruled W.T. Carter and adopted the view of the earlier dissent.
During the next eighteen years after Clyde Taylor, the Board's decisions do not appear to us to have been entirely consistent.6 Then, in Power Systems, supra, at 450, the Board concluded: "Since we have found that Respondent had no reasonable basis for its lawsuit, . . . the lawsuit had as its purpose the unlawful objective of penalizing [the employee] for filing a charge with the Board." The suit therefore was enjoined as an unfair labor practice. The gravamen of the offense was thus held to be the unlawful objective, which could be inferred by lack of a reasonable basis for the employer's suit.
Although the Board in Power Systems purported to distinguish Clyde Taylor and its progeny on the basis that the lawsuit in each of those cases "was not a tactic calculated to restrain employees in the exercise of their rights under the Act," id., at 449, the distinction was illusory. In Clyde Taylor itself the Board found no unfair labor practice despite the ALJ's specific finding that the employer's lawsuit "was for the purpose of preventing his employees from exercising the rights guaranteed to them under the Act, rather than for the purpose of advancing any legitimate interest of his own." 127 N.L.R.B., at 121. Since 1978, the Board has consistently adhered to the Power Systems rule that an employer or union who sues an employee for a retaliatory motive is guilty of a violation of the Act.7 Under this line of cases, as the Board's brief and its counsel's remarks at oral argument in the present case confirm,8 the Board does not regard lack of merit in the employer's suit as an independent element of the § 8(a)(1) and § 8(a)(4) unfair labor practice. Rather, it asserts that the only essential element of a violation is retaliatory motive.
At first blush, the Board's position seems to have substance. Sections 8(a)(1) and (4) of the Act are broad, remedial provisions that guarantee that employees will be able to enjoy their rights secured by § 7 of the Act—including the right to unionize, the right to engage in concerted activity for mutual aid and protection, and the right to utilize the Board's processes without fear of restraint, coercion, discrimination, or interference from their employer. The Court has liberally construed these laws as prohibiting a wide variety of employer conduct that is intended to restrain, or that has the likely effect of restraining, employees in the exercise of protected activities.9 A lawsuit no doubt may be used by an employer as a powerful instrument of coercion or retaliation. As the Board has observed, by suing an employee who files charges with the Board or engages in other protected activities, an employer can place its employees on notice that anyone who engages in such conduct is subjecting himself to the possibility of a burdensome lawsuit. Regardless of how unmeritorious the employer's suit is, the employee will most likely have to retain counsel and incur substantial legal expenses to defend against it. Power Systems, supra, at 449. Furthermore, as the Court of Appeals in the present case noted, the chilling effect of a state lawsuit upon an employee's willingness to engage in protected activity is multiplied where the complaint seeks damages in addition to injunctive relief. 660 F.2d, at 1343, n. 3. Where, as here, such a suit is filed against hourly-wage waitresses or other individuals who lack the backing of a union, the need to allow the Board to intervene and provide a remedy is at its greatest.
In the present case, the only disputed issues in the state lawsuit appear to be factual in nature. There will be cases, however, in which the state plaintiff's case turns on issues of state law or upon a mixed question of fact and law. Just as the Board must refrain from deciding genuinely disputed material factual issues with respect to a state suit, it likewise must not deprive a litigant of his right to have genuine state-law legal questions decided by the state judiciary.13 While the Board need not stay its hand if the plaintiff's position is plainly foreclosed as a matter of law or is otherwise frivolous, the Board should allow such issues to be decided by the state tribunals if there is any realistic chance that the plaintiff's legal theory might be adopted.
The Court holds today that the National Labor Relations Board may not enjoin the prosecution of a state court lawsuit unless the suit lacks a "reasonable basis," ante, at 743, and, further, that to find that the suit lacks a reasonable basis on factual grounds the Board must find that there is no "genuine issue of material fact," id., at 2171-2173. For me, those are no delphic pronouncements. They are standards that take their content from the basic structures of federal and state—and of administrative and judicial—authority over labor disputes, and they should not be read in an artificial way that ignores their provenance.
"[is] not to interpret that statute as [we think] best but rather the narrower inquiry into whether the [NLRB]'s construction was 'sufficiently reasonable' to be accepted by a reviewing court. Train v. National Resources Defense Council, 421 U.S. 60, 75 [95 S.Ct. 1470, 1480, 43 L.Ed.2d 731] (1975); Zenith Radio Corp. v. United States, 437 U.S. 443, 450 [98 S.Ct. 2441, 2445, 57 L.Ed.2d 337] (1978). To satisfy this standard it is not necessary for a court to find the agency's construction was the only reasonable one or even the reading the court would have reached if the question initially had arisen in a judicial proceeding." FEC v. Democratic Senatorial Campaign Committee, 454 U.S. 27, 39, 102 S.Ct. 38, 46, 70 L.Ed.2d 23 (1981).
It is in this spirit that the "reasonable basis" and "genuine material dispute" standards must be understood. They are phrases that encapsulate a complex judgment as to what limits a court may infer on the Board's broad authority to set federal labor policy and to vindicate that policy by enjoining prosecution of a state lawsuit.2 More specific meaning can be derived from close attention to the particular constitutional considerations upon which they are based.
Somewhat different concerns affect the standards and procedures by which the Board makes its "reasonable basis" determination. While the Constitution protects a person's right to file and to prosecute a lawsuit in state court, it does not guarantee that state law, rather than federal law, will provide the ground for decision. In fact, with regard to labor disputes, federal preemption of state law is the rule, not the exception. That preemption may be accomplished by congressionally authorized administrative action as well as by legislation. Fidelity Federal Savings & Loan Assn. v. de la Cuesta, --- U.S. ----, ----, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982). Even in areas where state law is not preempted, there may be a federal overlay—as with defamation actions like the one involved in this case, which are limited by a federal requirement that malice be proved. See Linn, 383 U.S., at 61, 86 S.Ct., at 662.
"[W]hen it set down a federal labor policy Congress plainly meant to do more than simply to alter the then-prevailing substantive law. It sought as well to restructure fundamentally the processes for effectuating that policy, deliberately placing the responsibility for applying and developing this comprehensive legal system in the hands of an expert administrative body rather than the federalized judicial system." Motor Coach Employees v. Lockridge, 403 U.S. 274, 289, 91 S.Ct. 1909, 1919, 29 L.Ed.2d 473 (1971).
(4) to discharge or otherwise discriminate against an employee because he has filed charges or given testimony under this subchapter." 29 U.S.C. §§ 158(a)(1) and (4).
Section 7 guarantees employees "the right to self-organization, to form, join, or assist labor organizations, . . . and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection." 29 U.S.C. § 157.
Meanwhile, there had been other developments. On October 27, 1978, the Board's Regional Director petitioned the United States District Court pursuant to § 10(j) of the Act, 29 U.S.C. § 160(j), for an order enjoining petitioner from maintaining its state-court suit pending a final Board decision. On January 22, 1979, the District Court denied the request for an injunction. App. to Brief for Petitioner C1-C7.
Nash-Finch also requires rejection of petitioner's assertion that the Board is precluded from enjoining a state-court suit by virtue of 28 U.S.C. § 2283, which, subject to certain exceptions, prohibits a court of the United States from enjoining proceedings in a state court. In Nash-Finch, the Court held that § 2283 was inapplicable in instances where the Board files an action to restrain unfair labor practices, because the purpose of § 2283 "was to avoid unseemly conflict between the state and the federal courts where the litigants were private persons, not to hamstring the Federal Government and its agencies in the use of federal courts to protect federal rights." 404 U.S., at 146, 92 S.Ct., at 378.

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