NLRB Grants Off-Duty Contract Workers Easier Property Access to Engage in Union Organizing Activity

Continuing the wave of decisions overturning Trump-era precedent, last Friday, a divided Board issued a 3-2 decision limiting the power of property owners to restrict off-duty access of workers employed by onsite contractors. The decision reinstated the Obama Board’s prior standard, giving off-duty contractor employees a more expansive right of access to the contractor’s customer’s premises for the purposes of engaging in activities protected under Section 7 of the National Labor Relations Act (“NLRA”), such as union organizing. Bexar County Performing Arts Center Foundation d/b/a Tobin Center, 372 NLRB 28 (Bexar County II) (Dec. 16, 2022).

This case involves a group of third-party, contractor musicians who, in 2019, were prohibited by Tobin Center (property owner) from distributing leaflets on publicly accessible areas of the Tobin Center’s property. The matter first appeared before the Trump-era Board, which ruled that a property owner generally could prohibit off-duty employees of an on-site contractor from accessing private property to engage in activity protected under the NLRA. Bexar County (Bexar County I), 368 NLRB No. 46 (2019). The Bexar County I Board introduced a two-step standard to be applied in such cases. Under the first step, only contractor employees who worked both “regularly” and “exclusively” on the property were deemed to have a sufficient connection to the property to be afforded greater Section 7 access rights than nonemployees. Under the second step, even if contractor employees worked both regularly and exclusively on the property, the property owner was free to exclude them if it could show that the contractor employees had “one or more reasonable nontrespassory alternative means to communicate their message.”

On reconsideration, the Bexar County II Board majority (Chairman McFerran, and Members Wilcox, and Prouty) has returned to the standard articulated in New York New York Hotel & Casino, 356 NLRB 907 (2011), reasoning that the Bexar County I standard undermined off-duty, contractor employees’ right to engage in protected concerted activity under Section 7 of the NLRA without rational justification. The Board rationalized that the New York New York standard better accommodates contractor-employees’ rights under federal labor law with the property owner’s legitimate interests, and avoids creating incentives for employers to structure work relationships to avoid direct hiring in order to deny workers the opportunity to exercise their statutory rights.

Consequences of the Ruling

The Bexar County II ruling precludes property owners from prohibiting access to off-duty employees who regularly work on the property for an on-site contractor and who seek to engage in organizing activity on the worksite, unless the activity “significantly interferes” with the use of the property or another legitimate business reason for exclusion exists. Legitimate reasons for exclusion include, but are not limited to, the need to maintain production and discipline.

The Board’s majority ruled that the decision in Bexar County II was a predictable change in the law and therefore it will be applied retroactively to all currently pending matters before the Board and prospectively to future cases.

The Dissent

Dissenting Members Kaplan and Ring stood by the Bexar County I (2019) decision as the more suitable means of reaching an appropriate accommodation between the competing Section 7 rights of off-duty contractor employees and the property owner’s rights at stake. The dissent argued that the majority’s position contravenes the Supreme Court’s guiding principles in Lechmere Inc. v. NLRB, 502 U.S. 527 (1992), as to a property owner’s treatment of off-duty employees of an on-site contractor. Noting that “property owners ‘enjoy certain fundamental property rights derived from the common law and protected by the Fifth and Fourteenth Amendments to the United States Constitution,” the dissent highlighted three principles articulated in Lechmere to properly balance inherent property rights against Section 7 rights. First, when Section 7 rights conflict with a property owner’s property rights, an accommodation between the two must be obtained with as little destruction possible of one to maintain the other. Second, in determining an accommodation, a distinction of substance between the union activities of employees versus those of nonemployees must be drawn. Third, nonemployees are not entitled to access private property to engage in Section 7 activity unless they have no reasonable alternative means of communicating their message. Thus, the dissent reasoned, “where nonemployees are concerned, no invasion of private property rights is required in order to accommodate Section 7 rights except in limited circumstances.” According to the dissent, the majority ruling ignores the Supreme Court’s holding in Lechmere that the Act draws a clear distinction between the access rights of employees and those of nonemployees and requires property owners to yield to nonemployees’ Section 7 rights only in limited circumstances.

As a result of the Bexar County II ruling, property owners can expect a rise in organizing activity on their premises by non-employees.

Please do not hesitate to contact any of our attorneys if you have any questions regarding this new ruling.