Bass Berry & Sims Labor Talk

U.S. Supreme Court to Address Neutrality Agreement

Posted in Union Organizing and Collective Bargaining

On June 24, the U.S. Supreme Court agreed to consider whether a neutrality agreement between Hollywood Greyhound Track Inc. d/b/a Mardi Gras Gaming (“Mardi Gras”) and UNITE HERE Local 355 (“UNITE HERE”) violated Section 302 of the Labor Management Relations Act (“LMRA”).

A “neutrality agreement” is an agreement between an employer and a union by which the employer agrees not to campaign against a union’s attempt to organize its workforce. In the neutrality agreement at issue in Mulhall v. UNITE HERE Local 355, Mardi Gras agreed to give UNITE HERE access to nonpublic work areas to organize employees during work hours, provide the union with the names and home addresses of employees, and remain neutral during UNITE HERE’s attempts to organize. In exchange, UNITE HERE agreed to “lend financial support to a ballot initiative regarding casino gaming” and “refrain from picketing, boycotting, striking, or undertaking other economic activity against Mardi Gras,” should the majority of Mardi Gras’ employees recognize UNITE HERE as their exclusive bargaining representative.

Section 302 prohibits an employer from paying, lending, or delivering, or agreeing to pay, lend, or deliver, “any money or thing of value” to “any labor organization, or any officer or employee thereof, which represents, seeks to represent, or would admit to membership, any of the employees of such employer” subject to certain exceptions. Mardi Gras employee, Martin Muhall, filed an action in U.S. District Court for the Southern District of Florida seeking to enjoin enforcement of the neutrality agreement on the basis that it violated Section 302 of the LMRA. Upon review of the district court’s dismissal of the case for failure to state a claim, the Eleventh Circuit found that an employer’s organizing assistance could be a “thing of value” under Section 302.

Willful violations of Section 302 can result in a fine of up to $15,000 and/or imprisonment for up to five years, both.

We expect a decision in this case in mid-2014.