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"Shame on Union" - U.S. Court of Appeals Upholds $1.7 Million Verdict Against Union

On March 29, 2012, the Atlanta office of Wimberly & Lawson, P.C. (which is affiliated with Wimberly Lawson Wright Daves & Jones, PLLC), obtained a favorable ruling from the U.S. Court of Appeals for the Eleventh Circuit regarding labor unions' ability to engage in "area standards" campaigns that give rise to secondary boycotts of companies and firms that do not utilize organized labor to perform work. Such area standards campaigns often involve individuals erecting large "Shame On ______" banners near companies that did not utilize organized labor to provide services on a project.

In Fidelity Interior Construction, Inc. v. The Southeastern Carpenters Regional Council, the Eleventh Circuit upheld a trial court's jury verdict of $1.7 million for a small Atlanta drywall contractor that had been subject to what the defendant Carpenters' union labeled an "area standards" campaign. The union contended that its extensive publicity campaign was only designed to publicize the alleged low wages paid by the "open shop" contractor, Fidelity Interior Construction. The union's campaign consisted of picketing, bannering, and hand billing activities, often at office buildings where Fidelity was, had or might be working.

The court rejected that union's argument that its tactics were merely "free speech" under the First Amendment, because the union campaign was designed to coerce innocent third parties to stop doing business with Fidelity. The court found that the federal secondary boycott law, designed to protect innocent third parties against coercive activities of unions, was violated by such tactics. The evidence at trial showed that Fidelity lost business as a result of the union's coercive tactics. The wording on the union's picket signs and banners confused bystanders as to which business the picketing was actually directed, which was a violation of secondary boycott laws.

Although the Eleventh Circuit's ruling is not binding within the Sixth Circuit (which encompasses Tennessee, Kentucky, Ohio and Michigan), certainly, the Eleventh Circuit's ruling will get the attention of unions operating within the Sixth Circuit, and likely cause them to reassess some of their tactics, which are often on display around various companies that operate in these states.

Clients of our firm who have been subject to union tactics similar to those in the Fidelity Interior Construction case may wish discuss the ramifications of that case with their Wimberly Lawson attorney.

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