Beverly Hills Foodland, Inc. v. United Food and Commercial Workers Union, Local 655

• Decision Date: 27 October 1994
• Docket Number: No. 94-1378,94-1378
• Citation: 39 F.3d 191
• Parties: 147 L.R.R.M. (BNA) 2641, 129 Lab.Cas. P 11,211 BEVERLY HILLS FOODLAND, INC., a Missouri corporation, Plaintiff-Appellant, v. UNITED FOOD AND COMMERCIAL WORKERS UNION, LOCAL 655, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 191

39 F.3d 191

147 L.R.R.M. (BNA) 2641, 129 Lab.Cas. P 11,211

BEVERLY HILLS FOODLAND, INC., a Missouri corporation Plaintiff-Appellant, v. UNITED FOOD AND COMMERCIAL WORKERS UNION, LOCAL 655 Defendant-Appellee.

No. 94-1378.

United States Court of Appeals Eighth Circuit.

Submitted Sept. 16, 1994.

Decided Oct. 27, 1994.

Terry A. Bond, St. Louis, MO, argued, for appellant.

Jerome Diekemper, St. Louis, MO, argued (Greg A. Campbell, on the brief), for appellee.

Before McMILLIAN, and MAGILL, Circuit Judges, and BOGUE, ^* Senior District Judge.

BOGUE, Senior District Judge.

Beverly Hills Foodland, Inc. (Foodland or appellant) appeals the District Court's ¹ decision granting summary judgment in favor of the United Food & Commercial Workers Union, Local 655 (Union) on the appellant's claims of defamation and tortious interference. For the reasons stated herein we affirm the decision below, 840 F.Supp. 697 (E.D.Mo.1993).

I. BACKGROUND

On or about April 23, 1989 appellant opened a retail grocery store, Beverly Hills Foodland Supermarket, in the City of Beverly Hills, St. Louis County, Missouri. Shortly thereafter, Foodland owners were contacted by representatives of the Union regarding unionizing the employees. The overtures were rejected and the Union began to conduct organizational activities on Foodland's premises. Foodland reacted negatively to the Union's activities and at one point called the police to have the Union organizers removed from its parking lot. Foodland's actions resulted in an unfair labor practice complaint being filed by the Union with the National Labor Relations Board. A settlement followed in which Foodland was required to post a notice in its store for sixty days stating that it would not interfere with the Union's organizational activities.

In July 1989, Union business representative Patrick McDonough (McDonough) notified Foodland by letter that the Union was terminating its organizational efforts. Not long after, the Union began a campaign publicly challenging Foodland policies, including its non-union status, wages paid to employees and the prices charged at Foodland. It appears the most contentious aspect of the Union's campaign focused on Foodland's treatment of its black employees. ² Protests took the form of picketing, mass distribution of handbills and billboards calling for a consumer boycott of Foodland. The majority of Beverly Hills residents are black. Foodland closed approximately one year after the Union campaign was initiated.

Foodland initiated this action and in its second amended complaint alleged ten counts of state defamation and tortious interference based on the Union's picketing and boycotting activities. The action was removed to federal court based upon preemption by the National Labor Relations Act, 29 U.S.C. Sec. 151 et. seq. (as amended) (hereinafter NLRA). Appellant's count I was a libel action based on a handbill distributed by the Union entitled "Are the Scales of Justice Balanced?" See, infra, note 4. Eight questions are posed in the handbill, including, "Is Beverly Hills Foodland being discriminatory in their hiring practices in the community?" Count II was a tortious interference with the right to contract claim based on the same handbill described in Count I. Count III alleged slander based on statements made by McDonough to a representative of the Congress on Racial Equality characterizing Foodland owners as "racists." Count IV alleged libel based on picket signs stating Foodland was "unfair to black employees." Count V was a slander action alleging picketers under the Union's control told Foodland customers that store owners were racist.

Foodland's counts VI through X were based on the same factual circumstances as counts I through V, respectively, but added an allegation of actual malice on the part of the Union. The District Court dismissed the first five counts upon the Union's motion for summary judgment because it determined all actions occurred during a "labor dispute" and actual malice was required to be pled, and was not. 840 F.Supp. at 703. Of the second five counts (alleging actual malice), dismissal pursuant to the summary judgment motion was granted as to all but the counts in which store owners were characterized as racists (counts VIII and X). Id. at 704-07. The surviving counts were voluntarily dismissed and this appeal followed. The issues on appeal are whether the Union's conduct occurred during a labor dispute and, if so, whether the Union's conduct could give rise to state claims sounding in defamation or tortious interference.

II. DISCUSSION

We review the District Court's grant of summary judgment de novo, applying the same standards and affirming only when the record shows that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. ³ Fed.R.Civ.P. 56(c); Johnson v. Group Health Plan, Inc., 994 F.2d 543, 545 (8th Cir.1993) (citations omitted). All evidence is viewed in the light most favorable to the nonmoving party, Foodland, and they are given the benefit of all reasonable factual inferences. Johnson, 994 F.2d at 545.

A. EXISTENCE OF A LABOR DISPUTE

If the Union's activities complained of occurred within the context of a "labor dispute", Foodland's state tort claims are preempted by federal labor law. Old Dominion Br. No. 496, Nat'l Ass'n Letter Car. v. Austin, 418 U.S. 264, 271-73, 94 S.Ct. 2770, 2775, 41 L.Ed.2d 745 (1974) (citing, Linn v. United Plant Guard Wkrs., 383 U.S. 53, 86 S.Ct. 657, 662, 15 L.Ed.2d 582 (1966)). Linn and Austin strike a compromise between state laws penalizing defamatory publication and federal labor policy protecting freedom of speech. As such, when the NLRA is implicated, i.e. during labor disputes, state defamation actions are partially preempted, with plaintiffs required to meet an actual malice standard similar to that announced in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964) (recovery permitted only if the defamatory publication was made with knowledge that it was false or with reckless disregard of whether it was false or not). Austin, 418 U.S. at 271-73, 94 S.Ct. at 2775.

"Labor dispute" is defined within the NLRA as "any controversy concerning terms, tenure or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of employment, regardless of whether the disputants stand in proximate relation of employer and employee." 29 U.S.C. Sec. 152(9). Foodland contends the letter from McDonough indicating the Union was ceasing organizational activities effectively ended any labor dispute. We do not agree that the McDonough letter is determinative on this issue. Courts have routinely found that a labor dispute exists in situations which do not involve any organizing activities by a union. "A union picketing or boycotting a business which it has not tried to organize (and in some cases cannot organize) nevertheless involves a labor dispute." Aarco v. Baynes, 391 Mass. 560, 462 N.E.2d 1107, 1110 n. 3 (1984); see also, Railway Labor Executives Ass'n v. Wheeling & Lake Erie Ry., 914 F.2d 53 (4th Cir.1990) (application of identical "labor dispute" definition under Norris-LaGuardia Act to union picketing railroad in attempt to force hiring of displaced non-union and union workers of another railroad).

The definition of labor dispute under the NLRA is very broad and "rarely have courts found concerted union activities to fall outside this broad definition." Hasbrouck v. Sheet Metal Workers Local 232, 586 F.2d 691, 694 n. 3 (9th Cir.1978) (citing Mountain Navigation Co. v. Seafarers', 348 F.Supp. 1298, 1302-03 (D.Wis.1971)). Where the union acts for some arguably job-related reason and not out of pure social or political concerns, a "labor dispute" exists. Hasbrouck, 586 F.2d at 694 n. 3. We are persuaded the Union campaign publicizing Foodland's non-union status, wages and benefits paid to employees and alleged racial disparities in its work-force involved "terms" and "conditions" of employment. As such, a labor dispute existed which partially preempted Foodland's state defamation and tortious interference claims. The District Court did not err in granting summary judgment as to appellant's counts not alleging actual malice as required under federal labor law.

B. FOODLAND'S STATE LIBEL AND SLANDER CLAIMS

Even in the context of a labor dispute, malicious defamation enjoys no constitutional protection. Linn v. United Plant Guard Workers, 383 U.S. 53, 63, 86 S.Ct. 657, 663, 15 L.Ed.2d 582 (1965). State libel and slander actions may be maintained within the context of a labor dispute but only if the defamatory publication is shown by clear and convincing evidence to have been made "with knowledge that it was false or with reckless disregard of whether it was false or not." Old Dominion Br. No. 496, Nat'l Ass'n Letter Car. v. Austin, 418 U.S. 264, 281, 94 S.Ct. 2770, 2779-80, 41 L.Ed.2d 745 (1974).

Two statements attributed to the Union are before this court on appeal. The first is question one in a handbill distributed by the Union inviting readers to ask themselves whether Foodland was discriminatory in its hiring practices. ⁴ The second is an allegation, deemed to be true for purposes of summary judgment, that picketers under the Union's control carried signs stating Foodland was "unfair to black employees."

As to the first statement, the District Court concluded summary judgment was proper because it is not a false "statement of fact", rather it invites readers to make his or her own inquiry and assess the facts for him or herself. 840 F.Supp. at 705. We agree. The presence of a false statement of fact is a sine qua non for the maintenance of state defamation action in the labor field. Austin, supra, 418 U.S. at 283-85, 94 S.Ct. at 2781. This inquiry must be made prior to applying...