Supreme Court Docket Reports - 2001 Term, Number 6 / January 4, 2002

Co-authored by Ms Miriam R. Nemetz & Mr Andrew H. Schapiro

The Supreme Court granted certiorari in three cases of potential interest to the business community.

1. National Labor Relations Act - Liability for Retaliatory Lawsuits. The Supreme Court granted certiorari today in BE&K Construction Company v. National Labor Relations Board, No. 01-518, to decide whether, under the National Labor Relations Act ("NLRA"), an employer may be held liable for filing, with a retaliatory motive, a lawsuit against employees or unions that, although ultimately unsuccessful, was not necessarily objectively baseless.

In 1987, BE&K Construction Company ("BE&K") sued several non-employee unions, alleging various forms of interference with a large construction project in California. Over the next several years, all of BE&K's claims were either dismissed or voluntarily withdrawn. The National Labor Relations Board ("NLRB") then found that BE&K was liable for prosecuting an unsuccessful lawsuit for retaliatory reasons. BE&K Construction Co., 1999 WL 883851 [.pdf] (N.L.R.B. Sept. 30, 1999). The NLRB required BE&K to pay the attorney's fees that the unions had incurred in defending the original lawsuit as a sanction for its violation of the NLRA. Id.

On appeal, the Sixth Circuit upheld the Board's determination. BE&K Construction Co. v. NLRB, 246 F.3d 619 [.pdf] (6th Cir. 2001). The court of appeals invoked the standard of liability announced by the Supreme Court in Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731 (1983). The Sixth Circuit interpreted Bill Johnson's as holding that, once an employer's claims have been dismissed or voluntarily withdrawn, the NLRB need only find that the lawsuit was filed with a retaliatory motive in order to establish liability under the NLRA. See id. at 628-29. The court rejected BE&K's argument that, under Professional Real Estate Inventors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (1993), liability for retaliatory lawsuits is restricted to cases in which an employer's claims are "objectively baseless." Id. at 629. The court of appeals held that the "objectively baseless" standard applies to claims of retaliation under the antitrust laws, but not to those under the NLRA. See id.

The Sixth Circuit's decision is at odds with NLRB v. Vanguard Tours, Inc., 981 F.2d 62 (2d Cir. 1992), in which the Second Circuit appeared to adopt the Professional Real Estate Inventors standard in an NLRB retaliatory-lawsuit case...