The United States Court of Appeals for the Seventh Circuit recently handed down a decision on union handbilling that employers should note (Roundy’s Inc. v. NLRB, Nos. 10-3921 & 11-1292).

The case involved a grocery store chain in Wisconin, Pick ‘N Save.   The chain was using non-union contractors to remodel some of its locations.  This drew the attention of the Milwaukee Building and Construction Trades Council.  After an unsuccessful effort to persuade the company to use organized labor, the Union resorted to handbilling outside of Pick ‘N Save locations.

The handbills:

• accused the store of using cheap labor to build and remodel stores and not passing those savings on to its customers
• asked customers not to patronize Pick ‘N Save
• informed customers that they would achieve savings by shopping at competitor stores
• pointed out price differences in . . . products with competitors

— and, perhaps the most creative tactic —

• handed out coupons for competitors

Finally, because it always must make an appearance in these sorts of situations, the Union handed out some leaflets that “pictured a rat to represent the Company.”  As the Court put it rather mildly, these handbills were “unflattering.”   The Company ejected the handbillers.

Under a Supreme Court decision, Lechmere, a property owner has the right to eject “non-employee” union organizers — basically union representatives who are not already your employees.   But this case turned on Pick ‘N Save’s property interest.   Like many grocery store chains,  Pick ‘N Save did not physically own the buildings they occupied — in fact, in some instances, they were located in shopping malls.   Instead, they only had a non-exlcusive “easement” to use the property and surrounding areas.    Easements are non-possessory right in the property of another — so, here, the Company had a right to use the property of the owner.   So, Pick ‘N Save was not a traditional “Lechmere” property owner.   Thus, they could not eject the handbillers under Lechemere.

While easements are different from owning a property outright, every easement carries with it the right to do what is necessary for the full enjoyment of the easement —  if what somebody else is doing to your easement is “unreasonable interference,” you, as the easement holder, can eject them.

Which brings us to the major issue in this case — was the union handbilling an “unreasonable intereference” with Pick ‘N Save’s easement?  The Seventh Circuit said “NO!”  According to the Court:

The ALJ specifically found that the handbillers were engaged in peaceful conduct protected by Section 7, and there is nothing in the record to show that they were disruptive or that customers were inconvenienced or disconcerted by their presence.

Pick ‘N Save — and other employers — might beg to differ.   Having your customers bombarded with handbills like the ones described above at least seems “disruptive” and possibly “inconveniencing” to customers to use the words of the Court.   Nevertheless, that argument did not prevail.

The bottom line for employers: if your property right is dependent upon an easement, excluding union handbillers is difficult, so long as the handbillers do not “cross the line.”  The “line,” so to speak, is hard to figure out, but nasty handbills and coupons for your competitors do not cross it, at least for the Seventh Circuit.