The Extra Territorial Impact of the

National Labor Relations Act

by Gerard Morales

(Excerpt from article that appeared in the September 30, 1997, issue of

World Trade Executive Inc. - Latin American Law and Business Report)

To obtain assistance in its dispute with non-union shipping companies that handled cargo for U.S. companies exporting to Japan, the International Longshoremen’s Association (ILA) met with two Japanese unions and expressed its concerns that Japanese importers were purchasing products from U.S. exporters that used non-union shipping companies. In response, the Japanese unions threatened to boycott products loaded by the non-union shipping companies in the United States. In an effort to avoid the boycott, the U.S. exporters redirected their shipments to ports that used union labor to load ships.

The non-union shipping companies filed unfair labor practice charges with the National Labor Relations Board (NLRB) against the ILA, alleging that the ILA’s conduct in seeking and obtaining the assistance of the Japanese unions, which in turn had put pressure on neutral third parties (U.S. exporters), constituted secondary boycott in violation of Section 8(b)(4) of the National Labor Relations Act (NLRA). 29 U.S.C. §158.

The NLRB held that the conduct of the ILA was "a classic secondary boycott" prohibited by the NLRA. Coastal Stevedoring, 313 NLRB 412 (1993). Even though no direct unlawful conduct by the ILA could be found, the alleged unlawful acts committed by the Japanese unions were the result of the ILA’s attempt to cause secondary pressure to be placed on neutral persons to force those persons to cease doing business with U.S. non-union shipping companies, with whom the ILA had a primary labor dispute in the United States. "Everything that happened in this case was initiated by the respondent, ILA, and had the sole purpose of assisting the respondent, ILA, in its primary labor dispute with non-union companies in Florida." The NLRB summarized the rationale for its holding as follows: "In an increasingly global economy, the opportunities abound for U.S. unions to initiate harmful secondary activities by unions representing employees of the foreign trade partner. Permitting U.S. unions to escape responsibility purely on geographical grounds for the economic harm they unleash, subverts the purpose of the Act [NLRA]."

On appeal, the U.S. Court of Appeals for the District of Columbia Circuit disagreed with the NLRB. In the Court’s view, since the ILA exercised no control over the Japanese unions, which were "completely different entities" from the ILA, it could not be shown that the Japanese unions were ILA’s agents. Accordingly, the ILA could not be held responsible for their conduct. Longshoreman, ILA vs. NLRB, 56 F.3rd 205 (D.C. Cir. 1995), cert denied 116 S.Ct. 1040 (1996).

On remand, the NLRB determined last June, in a 2-1 decision, that the Appeals Court decision precluded it from finding that the Japanese unions were in any way the agents of the ILA, or were engaged in a joint venture with the ILA. Accordingly, the ILA could not be held responsible for the Japanese union’s conduct, and no unfair labor practice had occurred. Coastal Stevedoring II, 323 NLRB No. 178 (June 1997).

The chairman of the NLRB, William Gould, dissented. In his view, the NLRA could reach the ILA’s conduct in this case. "Sometimes our law has an extraterritorial impact which limits both employer and union conduct." In Mr. Gould’s view, the majority’s decision is contrary to the policies and purposes of the NLRA. He noted that "in future circumstances, a union could evade an unfair labor practice finding by merely publicizing its labor dispute, thereby suggesting that foreign unions lend their support, and thereafter disclaiming responsibility for any assistance offered by the foreign unions."

For additional information, please contact Jerry Morales via telephone at 800.322.0430 or 602.382.6362, via fax at 602.382.6070, via e-mail/Internet at moralej@swlaw.com, or via Lexis Counsel Connect at jmorales@counsel.com.