NLRB Establishes New Rule Allowing Third-Party Employees to Distribute Pro-Union Literature on Owner's Property

On March 25, 2011, the National Labor Relations Board (Board) determined that the New York New York Hotel & Casino in Las Vegas (NYNY) violated the National Labor Relations Act (Act) by prohibiting off-duty employees of a third-party from distributing handbills as part of union organizing activities. In reaching its decision, the Board established a new access standard to determine whether off-duty, third-party employees may exercise their organizing rights under the Act in non-work areas of the owner's property.

The dispute, which dates back to 1997, originated after employees of Ark Las Vegas Restaurants Corporation (Ark), who contracted with NYNY to operate on-site restaurants and a food court, began distributing handbills to Ark and NYNY customers as part of a union organizing campaign. The Ark employees distributed handbills outside of NYNY's main entrance and in front of restaurants on NYNY's property. NYNY requested the Ark employees to leave the property and called police after their requests were ignored. The Ark employees received citations and were escorted off NYNY's property by the police.

In 2001, the Board held that NYNY violated the Act by prohibiting handbilling in non-work areas. However, the U.S. Court of Appeals for the District of Columbia Circuit remanded the decision to determine if the Act provides Ark employees with the same right as NYNY employees to handbill on NYNY's property.

On remand, the Board relied on the Act's language, including the statutory definition of an "employee," which states the term "shall not be limited to the employees of a particular employer," to determine that Ark's employees are "statutorily protected employees" under the Act. In doing so, the Board noted that the prohibition against employers interfering with employees' rights under the Act also extends to "actions by employers affecting employees of other employers."

The Board further stated the Supreme Court's precedent under Lechmere, Inc. v. NLRB, limiting the access of non-employee union organizers to an employer's property, did not control the instant dispute because the Ark employees were regularly employed on NYNY's property. Consequently, the Board created a new access standard to "accommodat[e]" a third-party employee's rights under the Act and the property rights and managerial interests of a property owner.

Under the new standard, a property owner may lawfully exclude off-duty, third-party employees who are regularly employed on the owner's property and performing work integral to the property owner's business from engaging in organizational handbilling directed at customers in non-work, public areas where such activity "significantly interferes" with the owner's use of the property. The Board also recognized that the property owner may exclude such activity because of "another legitimate business reason, including but not limited to, the need to maintain production and discipline."

Ultimately, a Board majority comprised of Chairwoman Liebman and Members Becker and Pearce concluded that NYNY violated the Act because the handbilling activity by Ark employees "did not interfere with operations or discipline at NYNY's complex" and did not "adversely affect the ability of customers to enter, leave or fully use the facility or the ability of Ark or NYNY employees to perform their work."

As it currently stands, the Board's decision and new access standard reduces the owner's property interests and eliminates any consideration as to whether off-duty, third-party employees have reasonable alternative means to communicate with their intended audience. Employers who use or have on-site a third-party's employees are encouraged to contact counsel in the event of union-related solicitations/distribution of literature by such individuals.