California Court of Appeals, Second District, Eighth Division
WALMART STORES, INC., et al., Plaintiffs and Respondents.
v.
UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL UNION et al., Defendants and Appellants,
APPEAL
from a judgment of the Superior Court of Los Angeles County
No. BC508587. Ernest M. Hiroshige, Judge.
Weinberg, Roger & Rosenfeld, David A. Rosenfeld, Emily P.
Rich, Jannah Manansala, Michael D. Burstein, David Delgado;
and George Wiszynski for Defendants and Appellants.
Steptoe & Johnson, Jason Levin, Dylan Ruga, Steven D.
Wheeless, Kirsten Hicks Spira and Douglas D. Janicik, for
Plaintiffs and Respondents.
BIGELOW, P.J.
In
September 2014, the trial court issued a permanent injunction
barring defendants United Food and Commercial Workers
International Union (UFCW) and Organization United for
Respect at Walmart (OUR Walmart; collectively the union) from
conducting demonstrations inside stores owned by Wal-Mart
Stores, Inc., and affiliated companies (collectively
Walmart). On appeal, the union contends the trial court had
no jurisdiction to enter the injunction because the matter
was preempted by the National Labor Relations Act (29 U.S.C.
§ 151, et seq.; NLRA). We conclude the NLRA does not
preempt Walmart's trespass action.
FACTUAL
AND PROCEDURAL BACKGROUND
In
2011, the union began organizing and conducting
demonstrations at Walmart stores across the United States,
including in California. The demonstrations were part of a
union campaign designed to induce Walmart to provide its
employees better working conditions and pay. The campaign
also sought to pressure Walmart to reinstate employees the
union alleged Walmart had discharged or disciplined for
exercising their rights under the NLRA. The union publicly
indicated it was not seeking to act as the representative or
bargaining agent for Walmart employees.[1] During the
demonstrations in California, large numbers of people
typically assembled outside a store. Groups of demonstrators
also entered stores. As many as 30 or 40 demonstrators might
enter a store at one time; on at least one occasion, 100
demonstrators silently entered a store in San Lorenzo to
memorialize a deceased employee. Inside the stores,
demonstrator activities included loud chanting, singing,
marching, carrying posters or placards, taking photographs,
recording video footage, and distributing written materials
or business cards. On some occasions, demonstrators asked to
speak with a manager or presented written demands to a
supervisory employee. In other cases, the activity was
described as a "flash mob, " meaning a group of
people entered the store and, at a pre-arranged time, they
engaged in coordinated activity such as singing and dancing.
Walmart witnesses described one incident in which
demonstrators entered a store and released helium balloons
bearing campaign-related messages.[2] According to
Walmart's witnesses, demonstrators did not immediately
comply when store managers asked them to leave.
In
March 2013, Walmart filed an unfair labor practice charge
with the National Labor Relations Board (NLRB). In the
charge, Walmart alleged defendants violated Section 8,
subdivision (b)(1)(A) of the NLRA (Section 8(b)(1)(A); 29
U.S.C. § 158, subd. (b)(1)(A)) by "planning,
orchestrating, and conducting a series of unauthorized and
blatantly trespassory in-store mass demonstrations, invasive
‘flash mobs, ' and other confrontational group
activities at numerous facilities nationwide... by which the
UFCW restrained and coerced employees in the exercise of
their Section 7 rights (which includes the right to refrain
from supporting the UFCW) by attempting to impose its will on
local facility management in front of facility employees
through the sheer force of a mass of moving bodies despite
requests and direction by local management to leave."
The unfair labor practice charge alleged UFCW coerced
employees when it blocked ingress and egress from Walmart
facilities, filmed employees reacting to the in-store
demonstrations, threatened violence, and attempted to make
"improper payments to employees to yield to the
UFCW's wishes." The charge challenged union conduct
across the United States. It also complained of union conduct
outside Walmart stores, including picketing and
demonstrations near store entrances and in store parking
lots.
The
record does not indicate what action, if any, the NLRB took
on Walmart's unfair labor practice charge. However, in
June 2013, Walmart's counsel represented in an Arkansas
court that Walmart had withdrawn the charges with respect to
the in-store demonstrations.[3]
In May
2013, Walmart filed a complaint in the Los Angeles superior
court for trespass, seeking injunctive and declaratory relief
against the union.[4] The complaint alleged the union
trespassed inside Walmart stores to engage in
"unauthorized activities." These included:
"blocking ingress and egress at store entrances;
patrolling through the sales floor and soliciting customers
and working associates; parading and initiating
confrontational demonstrations; shouting through bullhorns
and carrying banners and signs; flash mobs; handbilling
flyers and business cards to customers and working
associates; setting free tens of balloons inside the store;
leaving perishable goods in carts and walking away without
paying; blocking customer traffic inside the store; and
tracking down and confronting store managers on the sales
floor to make various demands, and refusing to leave until
the manager responds to them." The complaint alleged
these activities diverted management from their jobs, and
"interfered" with Walmart employees and customers.
The complaint described several demonstrations that occurred
in Walmart's California stores in 2012 and 2013. Walmart
had identified and detailed some of these incidents in the
unfair labor practice charge.
The
union argued the action was preempted because the NLRA
arguably prohibited the union conduct Walmart was seeking to
enjoin. The union did not argue its conduct was arguably
protected under the NLRA. The trial court rejected the
preemption argument in advance of preliminary injunction
proceedings. In November 2013, following a seven-day
evidentiary hearing, the court found the public had a limited
invitation to Walmart's California stores to shop, that
the invitation did not transform the stores into a public
forum, and the union had unlawfully trespassed inside
Walmart's stores across California. The court further
concluded the union and its supporters committed and
threatened to commit "unlawful acts, " including
"blocking ingress and egress and aisle ways and
customers' mobility inside the store, littering balloons
and flyers throughout stores, and blowing air horns,
screaming and conducting flash mobs.... As part of
Defendants' use of flash mobs inside Walmart's
stores, Defendants have gathered and organized demonstrators
who have shown up unannounced and entered Walmart's
stores to demonstrate by marching around the store,
performing loud songs and yelling chants or slogans and
exiting the store." The court found the union's
conduct substantially or irreparably harmed Walmart and the
store had no adequate remedy at law.
The
trial court issued a preliminary injunction prohibiting the
union, and persons acting in concert with the union
(excluding Walmart employees), from entering Walmart's
stores to engage in "unlawful activities, such as
picketing, patrolling, marching, parading, ‘flash mobs,
' demonstrations, handbilling, solicitation, manager
confrontations, or customer disruptions...." The
injunction does not prohibit union representatives from
accompanying a Walmart employee in discussions with a manager
to discuss labor conditions.[5]
In
September 2014, the parties stipulated to the issuance of a
permanent injunction with terms identical to those of the
preliminary injunction, to expedite appellate review.
Pursuant to the parties' stipulation, the trial court
entered judgment in favor of Walmart on all causes of action
in the complaint. This appeal timely followed. The sole issue
on appeal is whether the NLRA preempts Walmart's trespass
action.
DISCUSSION
I.
General Principles of NLRA Preemption
Section
7 of the NLRA "establishes the right of workers to
organize and engage in collective action concerning
conditions of employment. (29 U.S.C. § 157.)"
(Inter-Modal Rail Employees Assn v. Burlington Northern &
Santa Fe Ry. Co. (1999) 73 Cal.App.4th 918, 924.)
Section 8 of the NLRA prohibits both employers and labor
organizations from interfering with these "Section
7" rights, including the right of employees to refrain
from participating in collective action. (29 U.S.C.
§§ 157, 158.) Walmart's unfair labor practice
charge invoked Section 8(b)(1)(A), which provides it is an
unfair labor practice for a labor organization or its agents
"to restrain or coerce employees in the exercise of the
rights guaranteed in section 157 of this title...."
As set
forth in San Diego Unions v. Garmon (1959) 359 U.S.
236 (Garmon), the NLRB has exclusive jurisdiction
over disputes involving unfair labor practices, and
"state jurisdiction must yield" when state action
would regulate conduct governed by the NLRA. (Id. at
pp. 244-245.) While the "‘Garmon
guidelines [are not to be applied] in a literal, mechanical
fashion, ' [citation], if the conduct at issue is
arguably prohibited or protected otherwise applicable state
law and procedures are ordinarily pre-empted. [Citation.]
When, however, the conduct at issue is only a peripheral
concern of the Act or touches on interests so deeply rooted
in local feeling and responsibility that, in the absence of
compelling congressional direction, it could not be inferred
that Congress intended to deprive the State of the power to
act, we refuse to invalidate state regulation or sanction of
the conduct." (Operating Engineers v. Jones
(1983) 460 U.S. 669, 676 (Jones); Service by
Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th
1807, 1813-1814.) The exception for conduct that touches on
interests deeply rooted in local feeling has since been
referred to as the "local interest" exception.
Whether
the NLRA preempts a cause of action is an issue of law we
review de novo. (Hillhaven Oakland Nursing Etc. Center v.
Health Care Workers Union (1996) 41 Cal.App.4th 846, 853
(Hillhaven).) A court first determines whether the
"conduct that the State seeks... to make the basis of
liability is actually or arguably protected or prohibited by
the NLRA." (Jones, supra, 460 U.S. at
p. 676.) If, despite being arguably protected or prohibited
by the NLRA, the conduct at issue involves a deeply-rooted
local interest, the question of whether the state action is
allowed "involves a sensitive balancing of any harm to
the regulatory scheme established by Congress, either in
terms of negating the Board's exclusive jurisdiction or
in terms of conflicting substantive rules, and the importance
of the asserted cause of action to the state as a protection
to its citizens." (Ibid.)
II. The
Trespass Action Is Not Preempted Because the "Local
Interest" Exception Applies
The
union does not contend the challenged conduct is arguably
protected under the NLRA.[6] Instead, the union asserts the NLRA
"arguably prohibits" the union's challenged
conduct, triggering preemption. Although Walmart appears to
assert some portions of the union's conduct fall outside
of Garmon preemption rules, it too argues at least
some of the union's conduct is arguably prohibited under
the NLRA. But that the NLRA arguably prohibits the challenged
conduct does not end our analysis.[7]
Under
Garmon guidelines, state action concerning arguably
prohibited conduct is "ordinarily pre-empted."
(Jones, supra, 460 U.S. at p. 676.) In other words,
there is a presumption of preemption. (Belknap, Inc. v.
Hale (1983) 463 U.S. 491, 498.) Yet, as noted above,
when the "conduct at issue is only a peripheral concern
of the Act, " or "touches [on] interests so deeply
rooted in local feeling and responsibility" that we
cannot infer that Congress intended to deprive the state of
the ability to regulate or sanction the conduct, the
presumption of preemption is overcome. (Jones,
supra, 460 U.S. at p. 676.) We conclude the
local interest exception applies in this case.
A.
Sears Governs This Case
To
evaluate this issue, we turn to Sears, Roebuck & Co. v.
Carpenters (1978) 436 U.S. 180 (Sears), in
which the high court established an analytical framework to
determine Garmon preemption issues, including the
application of the local interest exception, in the context
of a California trespass case. In Sears, the union
sought to induce the retailer Sears to use union labor for
carpentry work at one of its department stores in Chula
Vista. The union established picket lines on Sears's
privately-owned walkways next to the store and in the
adjacent parking area. The picketing was "peaceful and
orderly." (Id. at p. 182.) Sears filed a
complaint in superior court seeking injunctive relief for
trespass. The trial court issued a preliminary injunction.
(Id. at p. 183.)
The
California Supreme Court subsequently concluded the NLRA
preempted state court jurisdiction over the trespass claim.
The court reasoned the picketing was arguably protected as a
concerted activity under Section 7-picketing for
employees' mutual aid or protection-and was also arguably
prohibited under section 8(b)(7)(C) as unlawful recognitional
picketing. (Sears, Roebuck & Co. v. San Diego County
Dist. Council of Carpenters (1976) 17 Cal.3d 893,
898-900.) The court rejected the application of the local
interest exception. It reasoned the United States Supreme
Court had not created a judicial exception to Garmon
to "withdraw from the exclusive jurisdiction of the
Board those peaceful activities... which, although arguably
subject to section 7 or section 8 of the Act, are
nevertheless trespassory in nature." (17 Cal.3d at p.
905.) The court noted cases cited in Garmon
regarding the local interest exception involved mass
picketing and violence. (17 Cal.3d at p. 904.) Following an
earlier California Supreme Court case, the court explained:
"‘[u]nlike the power to prevent violence and
public disorder, the power to prohibit peaceful picketing
that trespasses on the premises of employers involved in
labor disputes would "leave the States free to regulate
conduct so plainly within the aim of federal
regulation...."' [Citation.]" (17 Cal.3d at p.
905.) Preemption was therefore required.
The
United States Supreme Court granted certiorari to consider
"whether, or under what circumstances, a state court has
power to enforce local trespass laws against a union's
peaceful picketing." (Sears, supra, 436 U.S. at
p. 184, fn. omitted.) The court also framed the question as
"whether the arguable illegality of the picketing as a
matter of federal law should oust the state court of
jurisdiction to enjoin its trespassory aspects."
(Id. at p. 190.)
The
Sears court set forth two guides for evaluating
preemption, one for conduct the NLRA arguably prohibits, and
one for conduct the NLRA arguably protects. We are concerned
here with the approach for arguably prohibited conduct. The
court affirmed that although a state suit based on arguably
prohibited conduct is presumed preempted, the presumption is
overcome if the state action "touches ‘interests
so deeply rooted in local feeling and responsibility that, in
the absence of compelling congressional direction, we could
not infer that Congress had deprived the States of the power
to act.' [Citation.]" (Sears, supra, 436
U.S. at pp. 194-195.) The court identified two factors that
had warranted application of the local interest exception in
prior cases: "First, there existed a significant state
interest in protecting the citizen from the challenged
conduct. Second, although the challenged conduct occurred in
the course of a labor dispute and an unfair labor practice
charge could have been filed, the exercise of state
jurisdiction over the tort claim entailed little risk of
interference with the regulatory jurisdiction of the Labor
Board. Although the arguable federal violation and the state
tort arose in the same factual setting, the respective
controversies presented to the state and federal forums would
not have been the same." (Id. at pp. 196-197,
fn. omitted.)
The
court condensed these factors into a single "critical
inquiry": "[W]hether the controversy presented to
the state court is identical to... or different from... that
which could have been, but was not, presented to the Labor
Board. For it is only in the former situation that a state
court's exercise of jurisdiction necessarily involves a
risk of interference with the unfair labor practice
jurisdiction of the Board which the arguably prohibited
branch of the Garmon doctrine was designed to
avoid." (Sears, supra, 436 U.S. at p. 197, fn.
omitted; see Retail Prop. Trust v. United Bhd. of
Carpenters & Joiners of Am. (9th Cir. 2014) 768 F.3d
938, 953 (Retail Prop.) [High Court reduced factors
warranting a departure from general preemption guidelines in
local interest cases to a single test].)
Applying
this test to Sears's challenge to the union's
peaceful trespassory conduct, the Court concluded the
controversy Sears could have presented to the NLRB was not
the same as that presented to the state court. The issue
before the NLRB would have been "whether the picketing
had a recognitional or work-reassignment objective; decision
of that issue would have entailed relatively complex factual
and legal determinations completely unrelated to the simple
question whether a trespass had occurred." (Sears,
supra, 436 U.S. at p. 198, fn. omitted.) The court
characterized the dispute in state court as "limited.
Sears asserted no claim that the picketing itself violated
any state or federal law. It sought simply to remove the
pickets from its property to the public walkways, and the
injunction issued by the state court was strictly confined to
the relief sought. Thus, as a matter of state law, the
location of the picketing was illegal but the picketing
itself was unobjectionable." (Id. at p. 185.)
As a result, "whether the picketing had an objective
proscribed by federal law was irrelevant to the state claim.
Accordingly, permitting the state court to adjudicate
Sears' trespass claim would create no realistic risk of
interference with the Labor Board's primary jurisdiction
to enforce the statutory prohibition against unfair labor
practices." (Id. at p. 198.)[8]
The
"identical controversy" test has since been applied
by numerous courts, including in California. (See Service
by Medallion, Inc. v. Clorox Co., supra, 44 Cal.App.4th
at pp. 1814-1816; Hillhaven, supra, 41 Cal.App.4th
at pp. 856-857; Kelecheva v. Multivision Cable T.V.
Corp. (1993) 18 Cal.App.4th 521, 527-528.) For example,
in Kaplan's Fruit & Produce Co. v. Superior Court,
supra, 26 Cal.3d 60 (Kaplan's), the court
considered whether the Agricultural Labor Relations Act
(ALRA), which is modeled on the NLRA, preempted claims that
union pickets were obstructing ingress and egress to the
plaintiff's wholesale facility. (Id. at p. 65.)
The
Kaplan's court concluded the obstruction of
access was clearly an unprotected activity, rendering the
Sears "arguably prohibited" analysis
relevant. (Kaplan's, supra, 26 Cal.3d at pp.
70-71.) The court reasoned the issue that would be presented
to the NLRB in an obstruction case is "different from,
and far narrower than, the issue which may be presented to
the superior court." (Id. at p. 71.) Picketing
that obstructs access may be an unfair labor practice to the
extent it "restrains or coerces nonstriking employees in
the exercise of their right to refrain from concerted
activities." (Ibid.) But the court found that
while there was some evidence the union's picket line
interfered with Kaplan's nonstrking employees, "that
obstruction is a minor facet of the controversy; the
principal objective of the pickets, and of the alleged
interference to access, was to persuade prospective customers
not to do business with Kaplan's." (Id. at
pp. 71-72, italics and fn. omitted.) The court concluded
blockage of customer access is not in itself an unfair labor
practice under the ALRA. Local court decisions enjoining
obstructions to access thus "do not threaten significant
interference with labor board adjudications."
(Id. at p. 75; see also Bertuccio v. Superior
Court (1981) 118 Cal.App.3d 363, 369-371.)
As in
Sears and Kaplan's, this case presents
a state claim challenging union conduct the NLRA arguably
prohibits, since engaging in indoor demonstrations could
under some circumstances constitute an unfair labor practice.
(See District 65, Retail, Wholesale & Department Store
Union (1966) 157 NLRB 615 (District 65),
enforced NLRB v. District 65, Retail, Wholesale & Dept.
Store Union (2d Cir. 1967) 375 F.2d 745.) Yet,
Sears indicates peaceful trespass may be an issue
deeply rooted in local feeling such that the local interest
exception to preemption may apply.
We
reject the union's contention that the local interest
exception only applies to violent trespass. This contention
is inconsistent with Sears which not only applied
the exception to a state action challenging peaceful
trespassory picketing, but also implicitly rejected the
California Supreme Court's ruling concluding state courts
had no power to prohibit peaceful trespassory picketing
arising out of a labor dispute and limiting the local
interest exception to instances of mass picketing or
violence. (See Retail Prop. supra, 768 F.3d at p.
956 ["Sears... confirmed what the Court said in
Garmon... Trespass is one ‘threat[] to public
order' that is not totally preempted by the NLRA."];
Hillhaven, ...