A Race to Nowhere: Supreme Court Dismisses Neutrality Agreement Case

Last month, the Supreme Court heard oral argument in UNITE HERE Local 355 v. Mulhall, a case claiming that a neutrality agreement violated § 302 of the Labor-Management Relations Act, 29 U.S.C. § 186, the anti-union bribery statute which makes it a crime for an employer to give "money or other thing of value" to a union. Yesterday, in a surprise move, the Court abruptly dismissed the closely watched case in a single line opinion stating that the appeal was "improvidently provided."

"And They're Off!"

The case arose when an employee of Mardi Gras Gaming, a greyhound racetrack operator, challenged the neutrality agreement, which provided Local 355 with:

access to the employer's premise to organize employees during non-work hours a list of employees, their job classifications, departments and addresses a promise to remain neutral to the unionization for employees In turn, the union agreed to support a state ballot initiative promoting casino gambling that would benefit the employer.

On a motion to dismiss, the District Court found that organizing assistance could not be a § 302 violation relying on decisions from the Third and Fourth Circuits. See Adcock v. Freightliner, LLC, 550 F.3d 369, 374 (4th Cir. 2008); Hotel Emps. & Rest. Emps. Union, Local 57 v. Sage Hospitality Res., LLC, 390 F.3d 206, 219 (3rd Cir. 2004).

The Eleventh Circuit, in reviewing the motion to dismiss decision, reversed and remanded:

[i]t is too broad to hold that all neutrality and cooperation agreements are exempt from the prohibitions in § 302. Employers and unions may set ground rules for an organizing campaign, even if the employer and union benefit from the agreement. But, innocuous ground rules can become illegal payments if used as valuable consideration in a scheme to corrupt a union or to extort a benefit from an employer.

Mulhall v. UNITE HERE Local 355, 667 F.3d 1211 (11th Cir. 2012). Thus, given the procedural context where the court had to take the facts as pled and the pleadings stated that the union spent over $100,000 in support of the ballot initiative, the Circuit Court sent the case back for further proceedings on the intent and purpose of the neutrality agreement.

"They're in the Final Turn...?"

Before the case went back to the District Court, Local 355 appealed and the Supreme Court granted review. After full briefing and oral argument last month, Court-watchers were expecting a decision that would address the core question of whether neutrality...