Roundy's Inc. v. Nat'l Labor Relations Bd.

Decision Date28 September 2011
Docket NumberNos. 10–3921,11–1292.,s. 10–3921
Citation674 F.3d 638,192 L.R.R.M. (BNA) 3079
PartiesROUNDY'S INC., Petitioner/Cross–Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent/Cross–Petitioner,andMilwaukee Building and Construction Trades Council, AFL–CIO, Intervening Respondent.
CourtU.S. Court of Appeals — Seventh Circuit


Scott A. Gore (argued), Attorney, Lawrence J. Weiner, Laner, Muchin, Dombrow, Becker, Levin & Tominberg, Ltd., Chicago, IL, for Petitioner/Cross-Respondent.

Linda Dreeben, Gregory P. Lauro (argued), Attorneys, National Labor Relations Board Office of the General Counsel, Washington, DC, for Respondent/Cross-Petitioner.

Yingtao Ho (argued), Attorney, Previant, Goldberg, Uelmen, Gratz, Miller & Brueggeman, Milwaukee, WI, for Intervening Respondent.

Before BAUER, WOOD, and TINDER, Circuit Judges.

TINDER, Circuit Judge.

Roundy's Inc. operates grocery stores throughout southeastern Wisconsin under the name Pick ‘N Save. Milwaukee Building and Construction Trades Council, AFL–CIO (the Union), a central body of construction industry local unions in the Milwaukee area, met with Roundy's to discuss its concerns that Roundy's was using nonunion contractors who didn't pay employees the prevailing area standard wages in the construction and remodeling of its stores. Unsatisfied with Roundy's response (Roundy's took the position that the selection of contractors was up to its landlords, but the administrative law judge (ALJ) found that Roundy's had some control over the selection process), the Union protested and urged a consumer boycott of Roundy's stores. Union representatives stood outside Roundy's stores in the common areas to distribute handbills accusing Roundy's of saving money by using cheap labor to build and remodel its stores and not passing those savings on to its customers, asking customers not to patronize Pick ‘N Save, informing customers that they would achieve savings by shopping at competitor stores, pointing out price differences in Roundy's products with competitors, and even handing out coupons for competitors' products. Needless to say, the handbills were extremely unflattering to Roundy's, some even pictured a rat to represent the company. In response, Roundy's ejected the handbillers from the property.

The General Counsel for the National Labor Relations Board (Board) issued a complaint against Roundy's alleging that it violated Section 8(a)(1) of the National Labor Relations Act (Act), 29 U.S.C. § 158(a)(1), for its discriminatory practice of prohibiting the Union from handbilling while permitting nonunion solicitations and distributions on the property. After an evidentiary hearing before an ALJ on the discrimination theory, the Board remanded for the ALJ to consider whether Roundy's, as a lessee with nonexclusive easements in the common areas where the Union was handbilling, held a sufficient property interest under Wisconsin law to oust nonemployee handbillers. Upon rehearing, the ALJ found that as a nonexclusive easement holder at 23 of the stores at issue, Roundy's did not have a state property right to exclude the handbillers, and thus, Roundy's violated the Act by preventing the Union from engaging in protected Section 7 activities, 29 U.S.C. § 157, at those locations. The Board affirmed, adopting the ALJ findings and conclusions in this respect. We agree with the Board's interpretation of Wisconsin law and find that the Board's application of this law to Section 8(a)(1) of the Act had a reasonable basis in law. Thus, we deny Roundy's petition for review and grant the Board's cross-petition for enforcement of its order.

I. Facts

From April to June 2005, Union representatives distributed informational handbills in front of 26 Roundy's stores around the Milwaukee metropolitan area. Some of the stores are free standing and others are in shopping malls. For reasons explained below, this appeal only concerns 23 of those stores where Roundy's had entered into leases for the stores and held nonexclusive easements over the common areas, including the private sidewalks in front of the stores and parking lots, where the handbilling took place. The handbilling was peaceful; the Union representatives didn't picket and the ALJ found no evidence that they obstructed or interfered with customers' access to or egress from the stores. The Union urged a consumer boycott of Roundy's stores for its alleged use of contractors who did not adhere to area wage standards. As we noted, the handbills were extremely unflattering to Roundy's, and as a result, Roundy's took efforts to expel the protestors, in some instances, calling the police.

The parties stipulated to the relevant lease terms and property interests at each of the store locations. The nonexclusive easements generally permit use of the common areas by Roundy's and its customers, employees, and invitees, as well as the landlord and other tenants of the shopping centers, and their customers, employees, and invitees. For example, a majority of the store leases contain the following provision:

Tenant is hereby granted a nonexclusive easement, right and privilege for itself and its customers, employees and invitees and the customers, employees and invitees of any subtenant, concessionaire or licensee of Tenant to use the [common areas] without charge with Landlord and other tenants and occupants of the Shopping Center and their customers, employees and invitees; provided, however, no use of the [common areas] shall be made which detracts from the first-class nature of the Shopping Center or obstructs access to or parking provided for customers of the Shopping Center.

(emphasis added). A few leases provide that the easement shall be used for all customary and proper purposes. Numerous leases also state that “the landlord may, with the prior consent of tenant, ... promulgate reasonable, nondiscriminatory rules and regulations for the use of the common areas....”

The leases also contain language setting forth either Roundy's or the landlord's maintenance obligations with respect to the common areas. A number of the leases require the landlord to maintain the common areas “in accordance with good shopping practice,” but most also require Roundy's to pay its proportionate share of those expenses. Other leases require Roundy's to pay all costs and expenses for maintaining the common areas; a few leases require Roundy's to operate and maintain the common areas “in accordance with good real estate practice”; and another gives Roundy's the right to take over the landlord's common area responsibilities, but there is no evidence that Roundy's agreed to take on those responsibilities. None of the leases provide Roundy's with explicit authority to eject trespassers or other unwanted parties from the common areas.1

Brian Pikalek, Roundy's loss prevention district manager, supervises security issues for part of Roundy's operations. He testified that it's Roundy's practice to exclude what he described as “undesirable” visitors, such as panhandlers, drunks, skateboarders, handbillers, or vagrants, from the common areas in front of Roundy's leased stores. Such “undesirables” are asked to leave the property; if they do not leave, the police are called to remove them. It has never been Roundy's practice to consult with the landlord either before or after ejecting individuals from the common areas and no evidence was presented that the landlords were aware of Roundy's practice of ejecting third parties from the common areas.

II. Procedural History

The Board's General Counsel issued a complaint against Roundy's alleging that it violated Section 8(a)(1) of the Act by prohibiting the Union representatives from handbilling on property owned or leased by Roundy's while permitting nonunion solicitations and distributions on such property. Before the first administrative hearing, the parties stipulated to the events that occurred at each store. At the initial hearing, neither party presented evidence to show that Roundy's possessed a sufficient property interest to interfere with the Union's handbilling on the subject properties. The ALJ asked the General Counsel whether the parties' joint stipulation meant that handbilling took place on property owned by Roundy's. He answered “yes.” At that time, the General Counsel had not yet received the leases it had subpoenaed from Roundy's and didn't receive the leases until after its case-in-chief.

As discovered later, Roundy's only held nonexclusive easements in the common areas of the 23 stores at issue in this appeal. In his post-hearing brief, the General Counsel argued that Roundy's interference with the Union's handbilling violated the Act notwithstanding its discriminatory intent because Roundy's failed to meet its burden of proving an exclusionary property interest at the locations where handbilling took place. The parties refer to this as the “property right” theory. The ALJ rejected this argument because the General Counsel had not raised the property right theory during the hearing and instead, alleged in the complaint that the Union handbilled “on [Roundy's] property and/or property leased by [Roundy's].” The ALJ explained:

The gravamen of the complaint was that [Roundy's'] prohibition of the handbilling was unlawful because it permitted similar activity by nonunion entities on that same property. This is essentially a disparate treatment theory, and the theory upon which the case was tried. The parties assumed at all stages of this litigation that [Roundy's] had a property interest sufficient to oust the handbillers. Indeed, the General Counsel's basic argument was that [Roundy's], having such property interest, permitted similar conduct by nonunion entities. It is too late now—and a potential due process problem—for the General Counsel to change the theory of the case on brief.

The ALJ issued its decision finding that Roundy's violated Section 8(a)(1) of the Act by...

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