Supreme Court to Review Union Corporate Campaign Tactic: Are Neutrality Agreements Lawful?

Every so often I highlight especially well written and timely articles from some of the blogs that I follow. Today, Seyfarth Shaw, LLP discusses union corporate campaigns and how the US Supreme Court will decide whether neutrality agreements during organizing campaigns are lawful. To read the original post, click here.


By Seyfarth Shaw LLP on June 24th, 2013

As I’ve commented on before in this blog, the hurdles unions face in organizing employees are demonstrated by decades of steadily-declining private sector unionization rates.  Traditional union organizing campaigns – where organizers try to convince employees to sign enough authorization cards to obtain an National Labor Relations Board (NLRB) secret ballot election – are hard work, contentious and expensive.  And this is particularly so because Section 8(c) of the National Labor Relations Act (NLRA) guarantees an employer the right to express its views to employees about the benefits of remaining union free and the potential costs and risks of unionization.  After all, it’s called a “campaign” for a reason, and most campaigns – whether political, military, or union organizing – are contested.

To overcome the difficulty with this “bottom up” or grass roots type of organizing, unions have developed and are increasingly using a “top down” or boardroom approach to organizing – a corporate campaign – to increase their odds of success.  Whether it is a combination of consumer boycotts, appeals to government regulators or politicians, attacks on a company’s directors, shareholder initiatives, or other means, a corporate campaign is designed to inflict pain, financially and politically, until the employer’s board of directors and top management decides it is preferable not to oppose a union’s organizing efforts.  (It’s not surprising how declining sales, a lower share price, or adverse publicity will get a company’s attention.)

The ultimate goal of a corporate campaign, however, is usually to get the employer to remain neutral – in other words, to get the employer to agree not to contest the union’s efforts to organize employees, or to exercise its free speech rights under NLRA Section 8(c) – as a tradeoff for the union stopping the corporate campaign.  With a neutrality agreement, unions are typically given access to the workplace and employee contact details, and the employer often agrees to recognize and bargain with the union once it has been able to convince a majority of the employees to sign authorization cards (called card check recognition) – without any secret ballot NLRB election.  With the pressure of a persistent “in your face” union organizer or coworker asking the employee to sign a card, no countervailing information about the potential downsides of organizing, and no ability for the employee to eventually vote “no” in an NLRB secret ballot election, neutrality agreements are a far easier way for a union to organize.

That tactic is now before the United States Supreme Court.  Today the Court granted certiorari in Mulhall v. UNITE HERE Local 355, 667 F.3d 1211 (11th Cir. 2012), which found that neutrality agreements violate the Labor Management Relations Act (LMRA) because they provide a union with something of value.  In Mulhall, the employer agreed to remain neutral while the union attempted to organize the workforce, and provided the union with both access to non-public work areas on its property and its employees’ contact details.  In exchange, the union agreed to support a local ballot initiative the employer wanted to have passed, and agreed not to strike once it was recognized as the employees’ bargaining representative.  Under Section 302 of the LMRA, an employer may not “pay, lend or deliver any money or other thing of value to any labor organization… which seeks to represent… any of the employees of the employer.”  29 U.S.C. 186.   In deciding that this arrangement unlawfully provided something of value to the union,  Mulhall conflicts with earlier cases decided by the 3rd and 4th Circuit Courts of Appeals.  By granting certiorari, the Supreme Court will resolve this conflict and settle the issue.

If the Supreme Court finds that these types of neutrality agreements are unlawful, unions will have lost a key object of their corporate campaigns strategies.  While it is unlikely that a decision that neutrality agreements are unlawful would signal the end of corporate campaigns, unions will have a more difficult time convincing employers to remain neutral.  And if so, the decline in unionization rates likely will continue.

Matt Austin is a Columbus, Ohio employment lawyer who owns Austin Legal, LLC, a boutique law firm with offices in central and northeast Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. Matt can be reached by email at or by phone at 614.285.5342.