On Friday, the National Labor Relations Board, in a 3-2 decision in Bexar County Performing Arts Center Foundation II, changed the standard applicable to property owners seeking to restrict off-duty, outside contractor employees from engaging in protected concerted activity on their property.

The Board reversed a 2019 decision to the contrary issued during the Trump Administration by a Republican-majority Board.

Friday’s decision returns to a standard first established by the Board during the Obama Administration, when the Board had a Democratic majority. Under that standard, a property owner may exclude off-duty employees of outside contractors (when the employees regularly work there) from engaging in protected activity, but only (1) if the protected concerted activity would significantly interfere with the owner’s use of the property, or (2) where exclusion is justified by another legitimate business reason. The Board did not provide any detailed explanation as to what “interference” it would consider “significant” or what “business reason” it would consider “legitimate” so as to permit the property owner to exclude off-duty contractor employees.

What happened

In 2017, Ballet San Antonio was performing Tchaikovsky’s Sleeping Beauty using recorded, rather than live, music. Musicians of the San Antonio Symphony, a separate company, protested the use of recorded music on the ground that it deprived them of work. The performance was at a center where the Symphony and the Ballet (as well as the local Opera) regularly performed, but the property was owned by a nonprofit foundation that did not control either the Symphony or the Ballet.

At performances of the ballet, Symphony musicians distributed leaflets to ballet patrons as the patrons were entering the performing arts center. Management of the performing arts center prohibited the distribution on its property and required the musicians to move across the street onto a public sidewalk.

In the 2019 decision that the Board has now reversed, the Board said that the foundation, as property owner, could lawfully bar the musicians from foundation property unless (1) the musicians worked “regularly and exclusively” on the property, and (2) the foundation, as property owner, could not show that the musicians had a “reasonable nontrespassory [sic] alternative” for communicating with the public.

After the Board issued its 2019 decision, the union representing the musicians requested review by the U.S. Court of Appeals for the District of Columbia Circuit. In 2021, the D.C. Circuit sent the case back to the Board for reconsideration. That resulted in Friday’s decision, which reversed the 2019 decision.

Rationale for the Obama-era standard

In returning to the 2011 standard on Friday, the Board majority said, “The Act’s promise to employees that they are entitled to organize, bargain collectively, and engage in other concerted activities for their mutual aid or protection rings hollow if employees – while off the clock – cannot engage in protected conduct at the very place where they and their coworkers work.” The Board reasoned that a return to the 2011 standard properly accommodates contractor employees’ rights under the National Labor Relations Act as well as the legitimate interests of the property owners, and avoids creation of incentives for employers to structure work relationships to avoid direct hiring.

NLRB Chair Lauren McFerran commented in a Board press release,

For contractor employees, the right to exercise their Section 7 rights at their workplace – where they interact with their coworkers and are most impacted by their employer’s decisions – is critical to making the protections of the Act a reality. . . . Today’s decision ensures that contract employees’ rights are protected and respected in a manner appropriate to the nature of their employment.

She was joined in the decision by Democratic Members David Prouty and Gwynne Wilcox.

The dissent

Republican Members John Ring and Marvin Kaplan said that that the Board majority had abandoned any efforts at balance and put the rights of outside contractor employees above those of property owners.

As a side note, Member Ring’s term ended Friday, December 16. Thus far, President Biden has not nominated anyone to fill this “Republican” seat.

Implications for employers

As a first step, property owners who themselves are employers subject to the Board’s jurisdiction may want to assess which outside contractor employees are permitted to be on their property (or in their facilities) and anticipate what protected concerted activities those employees may be inclined to engage in on their premises. This could include activity aimed at the contractor-employer, the property owner, or other third-party entities (such as the Ballet involved in this case).

Once the initial assessment is complete, property owners may want to consider making operational plans for future events that will minimize the impact on visitors – such as customers, suppliers, vendors, or secondary employers who do not directly employ the contractor employees – and on themselves.

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