Opinion ID: 772828
Heading Depth: 2
Heading Rank: 2

Heading: Bill Johnson's Liability

Text: 37
38 BE&K next contends that even if unions may assert derivative § 7 rights, the Board's decision that the company committed an unfair labor practice by filing suit against the unions in federal court in California is incorrect. According to BE&K, before it may be punished administrativelyfor availing itself of the judicial process, the Board must determine that the company's suit completely lacked a reasonable basis. The explicit language of controlling Supreme Court precedent does not, however, impose such a burden upon the administrative agency. 39 In Bill Johnson's, the Supreme Court recognized that [a] lawsuit no doubt may be used by an employer as a powerful instrument of coercion or retaliation because [r]egardless 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. Bill Johnson's, 461 U.S. at 740-41. Furthermore, the chilling effect of a . . . lawsuit upon an employee's willingness to engage in protected activity is multiplied where the complaint seeks damages in addition to injunctive relief. Id. at 741. Nevertheless, the employer's right of access to the courts remains an aspect of the First Amendment right to petition the Government for redress of grievances. Id. 40 In balancing those countervailing interests, the Court distilled certain principles that are of assistance in addressing BE&K's allegations of error in this case. First, [t]he filing and prosecution of a well-founded lawsuit may not be enjoined as an unfair labor practice, even if it would not have been commenced but for the plaintiff's desire to retaliate against the defendant for exercising rights protected by the Act. Id. at 743. Second, the Board may enjoin the prosecution of an improperly motivated suit lacking a reasonable basis. Id. at 744. Finally, and most important for purposes of this litigation: 41 In instances where the Board must allow the lawsuit to proceed, if the employer's case in the state court ultimately proves meritorious and he has judgment against the employees, the employer should also prevail before the Board, for the filing of a meritorious lawsuit, even for a retaliatory motive, is not an unfair labor practice. If judgment goes against the employer in the state court, however, or if his suit is withdrawn or is otherwise shown to be without merit, the employer has had its day in court, the interest of the State in providing a forum for its citizens has been vindicated, and the Board may then proceed to adjudicate the § 8(a)(1) and § 8(a)(4) unfair labor practice case. The employer's suit having proved unmeritorious, the Board would be warranted in taking that fact into account in determining whether the suit had been filed in retaliation for the exercise of the employees' § 7 rights. If a violation is found, the Board may order the employer to reimburse the employees whom he had wrongfully sued for their attorney's fees and other expenses. 42 Id. at 747. 43 Despite BE&K's attempts to draw fine distinctions from Bill Johnson's, the Board appropriately concluded in this matter that the federal district court in California had already determined that the company's claims against the unions were all either without merit or voluntarily dismissed. Because the Board's general counsel was not, therefore, attempting to enjoin a parallel proceeding, there was no need for the Board to establish that BE&K's allegations were without a reasonable basis in fact or law. Instead, because the judicial branch of government had already determined that BE&K's claims against the unions were unmeritorious or dismissed, evidence of a simple retaliatory motive would suffice to adjudge the company guilty of committing an unfair labor practice. The mere failure ofcompany to prevail on its claims against the union in regular judicial proceedings was sufficient to strip BE&K of some of its First Amendment protection because of the company's prior opportunity to avail itself of a judicial forum for redress of its grievances. See also Johnson & Hardin, 49 F.3d at 243 (if the employer does not prevail - the state court judgment is adverse or the suit is withdrawn or otherwise shown to be without merit - the Board may then decide whether the suit was filed with a retaliatory motive); NLRB v. Vanguard Tours, Inc., 981 F.2d 62, 65 (2d Cir. 1992) (once the employer has lost court action on the merits -- even if he had a reasonable basis in bringing suit -- the Board may consider the filing of the suit to have been an unfair labor practice) 3 . 44 BE&K directs this court to the Supreme Court decision in Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (1993), in support of its contention that the Court's most recent pronouncements indicate that only baseless or sham suits serve to restrict the otherwise unfettered right to seek court resolution of differences. That decision, however, involved only a claim of Noerr-Pennington immunity from antitrust liability. Moreover, in analogizing the situation presented in that case to the principles discussed in Bill Johnson's, the Court referred solely to labor law situations in which attempts were made to enjoin employer-initiated litigation, not situations in which court rulings had already been rendered. Id. at 59. Thus, the principles BE&K seeks to extract from Professional Real Estate Investors are totally inapplicable to the circumstances presently before us in this case. See Petrochem Insulation, 240 F.3d at 31-2. 45 The law as interpreted by the Supreme Court in Bill Johnson's and by this circuit in Johnson & Hardin creates a bifurcated system of analysis in determining the protections to be afforded an employer for filing retaliatory lawsuits against employees and unions. Prior to a court ruling on the merits of the employer's suit, the Board will not find an unfair labor practice unless the underlying lawsuit was without reasonable basis. Following a court determination that the employer's claims are without merit, however, there is no longer a need to prevent interference with the First Amendment right to seek judicial redress. At that point, the Board is justified in examining the motives of the employer to determine whether the company unfairly dragged the workers or their representatives into court to further illegal objectives. 46 In this case, the California district court ruled on the merits that BE&K could not succeed on its claims against the unions. Such a finding of an unmeritorious court action is thus sufficient to justify a subsequent investigation by the Board into the motives of the company in filing its lawsuit.
47 In arguing that the Board erred in finding that BE&K filed its suit againstthe unions with a retaliatory motive, the company contends that the Board inferred the requisite retaliation merely from the fact that BE&K failed on the merits of its underlying cause of action. While the Board did, in fact, mention the lack of merit of BE&K's lawsuit as one consideration in its determination of retaliatory motive, that factor was far from the only evidence in support of the Board's finding. Indeed, if it were, the Board would run the serious risk of conflating the two elements of the Bill Johnson's unfair labor practice analysis and thus infringe upon the protections afforded by the petition clause of the First Amendment. Instead, the record now before us contains substantial evidence, albeit circumstantial, from which the Board could reasonably infer a retaliatory motive in BE&K's decision to file suit against the defendant unions in California district court.See Geske & Sons, 103 F.3d at 1375 ([m]otive or intent almost always must be inferred from circumstantial evidence). 48 First, the United States Supreme Court itself, in Bill Johnson's, admitted that the mere finding that an employer's suit against employees (or unions) is unmeritorious warrants the Board taking that fact into account in determining whether the suit had been filed in retaliation for the exercise of the employees' § 7 rights. Bill Johnson's, 461 U.S. at 747. Such a judicial finding was indeed made in this instance. 49 Second, after much of BE&K's original suit had been dismissed by a summary judgment ruling in favor of the defendant unions, the company filed amended complaints that not only re-alleged many of the same claims upon which the district court had already ruled, but also sought treble damages from the defendants for alleged antitrust violations in banding together for protected § 7 activities. As determined by the Ninth Circuit in Diamond Walnut Growers, Inc. v. NLRB, 53 F.3d 1085, 1089 (9th Cir. 1995), the simple request for such punitive damages is another factor to be considered in evaluating an employer's motive in prosecuting its lawsuit. 50 Finally, an additional inference of retaliatory motive may be made from the fact that BE&K sought recompense from two union organizations for a previous lawsuit filed by other union officials, even though the two union locals admittedly were not parties to the precedent legal action (the Piledrivers suit). Even after labor attorneys called this information to BE&K's attention, moreover, the company refused to dismiss the two locals, despite BE&K's failure to uncover, after extensive discovery, any evidence of participation by those parties in the prior litigation. In response, BE&K argues that the continued prosecution of the civil action against the two locals resulted only from the business's belief that all the local unions, even those that were not parties, were jointly responsible for a jointly devised and executed series of sham proceedings. The very disingenuousness portrayed by such an argument lends additional support to the conclusion that BE&K harbored a deep, anti-union bias that led it to retaliate against the organized labor movement for engaging in governmental petitioning and judicial proceedings protected by the federal constitution and by federal labor legislation. 51 The plain language of the National Labor Relations Act directs that [t]he findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive. 29 U.S.C. § 160(e). Because substantial evidence in the record convincingly indicates that BE&K did indeed possess an improper, illegal, retaliatorymotivation in prosecuting its suit against the union defendants, this court is duty-bound to accept that determination.