Preferred Building Services, Inc. and Service Employees International Union Local 87, 20-CA-149353

CourtNational Labor Relations Board
Writing for the CourtJohn F. Ring, Chairman
PartiesPreferred Building Services, Inc. and Rafael Ortiz d/b/a Ortiz Janitorial Services, Joint Employers v. Service Employees International Union Local 87.
Docket Number20-CA-149353
Decision Date28 August 2018

Preferred Building Services, Inc. and Rafael Ortiz d/b/a Ortiz Janitorial Services, Joint Employers and Service Employees International Union Local 87.

No. 20-CA-149353

United States of America, National Labor Relations Board

August 28, 2018

Carmen Leon, Esq., for the General Counsel.

Norma G.Pizano, for the Regional Director.

Tyler M. Paetkau, Esq., for Preferred Building Services, Inc.

Eric P. Angstadt. Esq., for Ortiz Janitorial Services.

Chairman Ring and Members Kaplan and Emanuel


John F. Ring, Chairman

On September 9, 2016, Administrative Law Judge Mary Miller Cracraft issued the attached decision. Respondents Preferred Building Services, Inc. (Preferred) and Rafael Ortiz d/b/a Ortiz Janitorial Services (OJS) filed exceptions and a supporting brief, the General Counsel filed an answering brief, and the Respondents filed a reply brief. The General Counsel also filed exceptions and a supporting brief, the Respondents filed an answering brief, and the General Counsel filed a reply brief.

The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, and conclusions[1]only to the extent consistent with this Decision and Order.[2]

This case arises in the context of picketing activity by employees of OJS, who perform janitorial services pursuant to subcontracts between OJS and Preferred. The judge found that Preferred jointly employs these employees. She further found that the Respondents committed several of the unfair labor practices alleged in the complaint, all of which occurred in reaction to the employees' picketing activity, including cancelling contracts and discharging, threatening, interrogating, and surveilling the employees. In doing so, the judge rejected the Respondents' affirmative defense that the employees lost the protection of the National Labor Relations Act (the Act) because they engaged in picketing with a secondary object prohibited by Section 8(b)(4)(ii)(B).[3] For the reasons discussed below, we find merit in the Respondents' defense, and thus the Respondents' reaction to the employees' unprotected picketing did not violate the Act. Accordingly, we dismiss the complaint in its entirety.


As more fully recounted in the judge's decision, Preferred contracts with building management companies in the San Francisco Bay Area to provide janitorial services. Preferred fulfills the contracts by either providing its own labor or subcontracting the work to one of 22 subcontractors. Lauren Squeri is an account manager at Preferred.

During the fall of 2014, [4] Preferred contracted with building management company Harvest Properties to service a building located at 55 Hawthorne Street. Preferred, in turn, subcontracted its work cleaning the offices of building tenants at 55 Hawthorne Street, including KGO Radio and Cumulus Media, to OJS, one of Pre-ferred's regular subcontractors.

OJS, which is owned by Rafael Ortiz, employed Balbina Mendoza, Joel Banegas, Yunuen Useda, and Claudia Tapia, among others, as janitors at 55 Hawthorne Street and other locations. At various times that fall, these four employees complained about their working conditions to Olga Miranda, president of the Service Employees International Union Local 87 (Union), and to Karl Kramer and David Frias, directors of the San Francisco Living Wage Coalition (SFLWC).

To publicize their complaints, Mendoza, Banegas, Useda, and Kramer picketed in front of 55 Hawthorne Street on October 29.[5] The picketers marched in front of the lobby chanting slogans like, “up with the union, down with exploitation.” They carried signs, some of which displayed the Union's name and some of which variously stated, “PREFERRED BUILDING SERVICES UNFAIR!” and “WE PREFER NO MORE SEXUAL HARASSMENT.”[6] The picketers also distributed leaflets, which stated in relevant part:

Who Needs a Minimum Wage Increase?

We do.

We work for Preferred Building Services which cleans the offices of KGO radio. We get paid the San Francisco minimum wage of $10.74 per hour. We endure abusive and unsafe working conditions and sexual harassment. The work involves heavy lifting and the risk of serious injury. A foreman arbitrarily cut hours from eight hours per day to six hours and said that any additional hours would need to include sexual favors. The company does not provide paid sick days that are required by San Francisco law or pay medical bills for injuries on the job as required by workers compensation
We are calling on KGO radio to take corporate responsibility in ensuring that their janitors receive higher wages, dignity on the job, respect, their rights to sick pay and workers compensation, and full legal protections against sexual harassment and retaliation for asserting their rights
Vote yes on Prop J on Nov. 4 to raise the city minimum wage
Join us for a picket line outside the offices of KGO radio

Neither OJS nor Harvest Properties was mentioned by name on the signs or leaflets. However, the leaflet's reference to a “foreman” appears from the record to be a reference to Ortiz.

Though not recounted by the judge, the uncontradicted record evidence establishes that, a few days after the picketing concluded, Miranda met with Banegas, Men-doza, and Useda to discuss the “reactions and responses” of the tenants at 55 Hawthorne Street. The picketers reported that the tenants were “upset by what they had learned.”[7]

On November 19, employees Mendoza, Banegas, Useda, and Tapia, in addition to SFLWC Directors Kramer and Frias and Union President Miranda, picketed in front of 55 Hawthorne Street. While marching in front of the building, the picketers carried signs, distributed leaflets, and chanted slogans similar to those used on October 29.[8]

Though not recounted by the judge, the uncontradicted record evidence establishes that, at some point that day, Miranda, Kramer, Mendoza, Useda, and Tapia had a meeting with Harvest Property Manager Benjamin Max-on.[9] According to Maxon, Miranda and Kramer told him “they were going to keep showing up until we made changes, more specifically to the wage.” They also complained about poor working conditions. Further, Miranda testified that she told Maxon “we were picketing outside and it just seemed inappropriate that [Ortiz] was still here, knowing what they knew since October.” During this conversation, Maxon announced that Harvest intended to substitute a unionized contractor for Preferred. In his testimony, Maxon characterized the reaction of those who attended the meeting as “happy.”

That day, SFLWC Director Frias also filmed a video entitled: “It's Time for a Living Wage.” At one point, the video displayed a handful of picketers in the building lobby along with a caption stating: “Inside the lobby of 55 Hawthorne Bldg to speak to the building manager on behalf of the janitors who work there.” The video later showed employee Useda announcing to the picketers outside that “it seems to me that the negotiations . . . were successful and we gained a victory . . . the person that we wanted to leave it seems has been let go. What I like most is that Lauren [Squeri] from Preferred was present and saw that we're not playing . . . I'm very pleased to see . . . the support that the union has brought out . . . .” At another point in the video, employee Mendoza stated, “[W]e are here to get results from what[']s been happening to us with our supervisor . . . . [W]e spoke with the building manager and he suspended our employer and promised there will be changes and respect for us.” The video aired on local television and was posted on SFLWC's YouTube page.

Concerned about the picketers' allegations, Maxon provided Preferred a copy of the leaflet and requested that it conduct an investigation.[10] He also told Preferred that, until the investigation was completed, Ortiz was not to enter the premises. Instead of conducting an investigation, however, Preferred gave Maxon notice of its intent to cancel the cleaning contract with Harvest, effective the following month. Preferred also notified OJS that it intended to cancel their corresponding subcontract. Ortiz discharged Mendoza and Banegas when they reported for work that evening. The contract between Preferred and Harvest, and the subcontract between Preferred and OJS, ended in mid-December, sometime before December 18. Useda and Tapia, among other employees, were discharged as a result. Harvest replaced Preferred with a unionized contractor.[11]


The Respondents argued at the hearing that the employees engaged in secondary picketing prohibited by Section 8(b)(4)(ii)(B), which caused them to lose the protection of the Act. Citing National Packing Co. v. NLRB, 352 F.2d 482 (10th Cir. 1965), the Respondents further argued that the unprotected nature of the employees' picketing was a complete defense to the unfair labor practice allegations in the complaint.

During the hearing, the judge limited the Respondents' right to question the General Counsel's witnesses regarding this affirmative defense, explaining that the Respondents could recall the witnesses during their case-in-chief and/or make proffers. Before the Respondents presented their case-in-chief, however, the judge issued a written order rejecting the affirmative defense and precluding further evidence in support.[12] She determined that she was not bound by the Tenth Circuit's holding in National Packing.

Despite having rejected the Respondents' affirmative defense during the hearing, the judge acknowledged in her decision that “[c]ertainly there are circumstances in which an employer may lawfully discharge an employee for participating in an unlawful strike.” On the merits,...

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