United States Government
`National Labor Relations Board
`OFFICE OF THE GENERAL COUNSEL
`Advice Memorandum
`
`DATE: July 9, 2010
`TO : J. Michael Lightner, Regional Director
`Region 22
`FROM : Barry J. Kearney, Associate General Counsel
`Division of Advice
`
`SUBJECT: Statue Cruises
`Case 22-CA-29222
`
`133-0600
`220-2500
`512-5009
`
`The Region submitted this case for advice as to
`whether the Employer violated Section 8(a)(1) by
`instituting and maintaining a state court lawsuit against
`the Union for fraud in the inducement and breach of the
`implied covenant of good faith and fair dealing. We
`conclude that the Region should dismiss the instant charge.
`Regardless of whether or not the Employer's lawsuit is
`preempted, the maintenance of the suit is not an unfair
`labor practice as it does not coerce or restrain employees
`in their exercise of Section 7 activity.
`
`FACTS
`In 2007, Local 333, United Marine Division, ILA (the
`Union) and Statue Cruises, LLC (the Employer) negotiated a
`collective bargaining agreement covering all full-time
`deckhands and engineers employed by the Employer on vessels
`in the Port of New York and New York Harbor, effective
`January 1, 2008 to January 31, 2011. The collective
`bargaining agreement includes a provision relating to
`overtime in Section X which states the following: “Work
`performed in excess of forty-eight hours in the work week
`shall be paid for at the overtime rate of time and one-half
`an employee’s straight time rate of pay.”1
`On or about September 25, 2009, employee Howard
`Flecker, III filed a class action lawsuit in New Jersey
`Superior Court alleging that the Employer had violated New
`Jersey’s wage and hour laws by failing to pay overtime for
`work performed in excess of 40 hours in a workweek. The
`Employer denied the allegations in its answer and alleged
`as an affirmative defense that Section 301 of the LMRDA
`preempted the state court wage and hour lawsuit.
`
`1 Section 13(b)(6) of the Fair Labor Standards Act provides
`an exemption from overtime pay for “any employee employed
`as a seaman.”
`
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`Thereafter, by a letter dated October 1, 2009, the
`Employer informed unit employees of the wage and hour
`lawsuit. Although the letter stated that the Employer
`disputed the legal theory underlying the wage and hour
`lawsuit, the Employer wrote that it would henceforth limit
`its potential liability by scheduling employees for no more
`than 40 hours in a workweek. The letter further alleged
`that the Union supported the wage and hour lawsuit.
`Specifically, the letter noted that the named plaintiff
`(Howard Flecker III) is “the brother of an official in
`Local 33.” The letter concluded by stating the following:
`“I leave it to your good judgment whether Local 333’s
`possible involvement in this lawsuit was in your best
`interests.”
`The Union denies that it has had any involvement in
`the wage and hour lawsuit and notes that the named
`plaintiff’s brother is only an administrative assistant to
`the Union’s president.
`On January 12, 2010, the Employer filed a third party
`complaint against the Union in the same state court hearing
`the wage and hour lawsuit. In its third party complaint,
`the Employer alleged that the Union had committed two
`torts: fraud in the inducement and breach of the implied
`covenant of good faith and fair dealing. The Employer
`alleged that the Union committed fraud in the inducement by
`proposing and then agreeing to the collective bargaining
`agreement’s overtime provisions “with knowledge that such a
`term was arguably unenforceable and with the intention of
`inducing [the Employer] to withdraw certain other economic
`proposals.” Secondly, the Employer alleged that the Union
`breached the implied covenant of good faith and fair
`dealing by acting in “bad faith” by orchestrating the
`filing of the class action lawsuit and thus depriving the
`Employer “of the benefits of” the collective bargaining
`agreement. The Union denied the Employer’s allegations in
`its third party answer and alleged as an affirmative
`defense that the third party lawsuit is preempted by the
`NLRA.
`
`The Union filed the instant Section 8(a)(1) charge,
`alleging that the Employer's lawsuit is preempted and,
`consequently, “objectively baseless” and brought with a
`“retaliatory purpose” as defined by the Board in BE&K.2
`
`
`2 BE&K Construction Co., 350 NLRB 450 (2007).
`
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`Case 22-CA-29222
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`ACTION
`We conclude that the Region should dismiss the instant
`charge because the Employer's lawsuit does not interfere
`with protected, concerted activity. Even if the Employer's
`lawsuit is preempted, it does not violate Section 8(a)(1)
`absent interference with Section 7 rights. Here, the
`lawsuit does not restrain or coerce employees’ exercise of
`Section 7 rights. Accordingly, the Region should dismiss
`the charge, absent withdrawal.
`Absent interference with Section 7 rights, the
`analysis under Bill Johnson's and BE&K to determine if a
`state lawsuit is protected under the First Amendment is not
`implicated. The Supreme Court's decisions in those cases
`were premised upon a state lawsuit filed in retaliation for
`the exercise of Section 7 rights; only in those
`circumstances must the Board weigh the litigating party's
`First Amendment right to petition the courts against
`employees' Section 7 rights.3 Thus, absent interference
`with Section 7 rights, there is no need to determine
`whether a lawsuit is preempted and therefore “enjoys no
`special protection.”4
`The lawsuit in the instant case does not implicate
`Section 7 conduct. Under similar circumstances, in Bakery
`Workers Local 6 (Stroehmann Bakeries), the Board held that
`the “maintenance of [a] preempted lawsuit was not an unfair
`labor practice.”5 Specifically, the Board concluded that a
`union’s federal district court suit seeking its
`certification as the bargaining representative and contract
`damages from the employer’s alleged breach of a Stipulated
`Election Agreement did not violate the Act “because
`
`3 See Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S.
`731, 734-737 (1983) (lawsuit based on picketing and
`handbilling filed in retaliation for the filing of unfair
`labor practice charges); BE&K Construction Co. v. NLRB,
`536 U.S. 516, 507-508 (2002) (lawsuit based on union's
`lobbying of local authorities, picketing and handbilling,
`and filing of contractual grievances).
`4 Bill Johnson’s, 461 U.S. at 738, fn.5. The Board has held
`that the Supreme Court's decision in BE&K Construction Co.,
`536 U.S. 516 (2002), “did not affect the footnote 5
`exemption in Bill Johnson's.” Allied Trades Council (Duane
`Reade, Inc.), 342 NLRB 1010, 1013 fn. 4 (2004), quoting
`Can-Am Plumbing v. NLRB, 321 F.3d 145, 151 (D.C. Cir.
`2003).
`5 320 NLRB 133, 137 (1995).
`
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`statutory restraint or coercion [was] lacking.”6 In making
`this determination the Board noted, amongst other factors,
`that the lawsuit was not filed against the employees, and
`the lawsuit sought monetary damages only from the employer
`rather than individual employees.7
`Similar to Stroehmann Bakeries, the third party
`lawsuit in the instant case was filed against the Union
`rather than individual employees. Moreover, the lawsuit
`seeks economic damages from the Union rather than
`individual employees. Even if the third party lawsuit
`succeeds, the employees will be free to pursue their class
`action suit against the Employer for any alleged violations
`of New Jersey’s wage and hour laws.
`In sum, since the Employer’s lawsuit here does not
`target protected activity, there is no Section 8(a)(1)
`violation regardless of whether or not that lawsuit is
`preempted. Accordingly, absent withdrawal, the Region
`should dismiss the instant charge.
`
`B.J.K.
`
`
`6 Id.
`7 Id.
`
`