United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 17, 2002 Decided December 24, 2002
No. 01-1351
New York New York, LLC, d/b/a
New York New York Hotel and Casino,
Petitioner
v.
National Labor Relations Board,
Respondent
Local Joint Executive Board of Las Vegas,
Culinary Workers Union, Local 226 and
Bartenders Union, Local 165,
Intervenor
Consolidated with
No. 01-1352
On Petitions for Review and Cross-Applications
for Enforcement of Orders of the
National Labor Relations Board
---------
Gary C. Moss argued the cause for petitioner. With him
on the briefs was Celeste M. Wasielewski.
Steven B. Goldstein, Attorney, National Labor Relations
Board, argued the cause for respondent. With him on the
brief were Arthur F. Rosenfeld, General Counsel, John H.
Ferguson, Associate General Counsel, Aileen A. Armstrong,
Deputy Associate General Counsel, and Margaret A. Gaines,
Supervisory Attorney.
Michael T. Anderson and Richard G. McCracken were on
the brief for intervenor.
Before: Edwards, Randolph, and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Randolph.
Randolph, Circuit Judge: The issue in these consolidated
petitions for review of orders of the National Labor Relations
Board is whether employees of contractors working on a
casino's property have labor organizing rights equivalent to
those possessed by the casino's employees. The Board seeks
enforcement of its orders, and the union--Local Joint Execu-
tive Board of Las Vegas, Culinary Workers Union, Local 226
and Bartenders Union, Local 165--has intervened in support
of the Board. Our decision in ITT Industries, Inc. v. NLRB,
251 F.3d 995 (D.C. Cir. 2001), controls the outcome.
New York New York Hotel and Casino is located on the
Strip in Las Vegas, Nevada. NYNY has leased space in its
hotel and casino complex to independent restaurant manage-
ment companies to run food service facilities. One of the
companies, Ark Las Vegas Restaurant Corporation, operates
two restaurants and several fast food outlets in a food court
on NYNY's premises.
NYNY permits Ark employees, when they are off-duty, to
visit and patronize the casino and restaurants, and to enter
the complex through NYNY's public entrances, but they may
not wear their uniforms, and the bars are off limits at all
times. NYNY presented evidence that it had a policy against
solicitation of any sort on its premises.
Although NYNY has a collective bargaining agreement
with the union, the agreement does not include Ark or its
employees. In February 1997, the union launched a cam-
paign to organize the Ark employees working on NYNY's
property. The following events were part of that campaign.
On July 9, 1997, three off-duty Ark employees stood on
NYNY property outside the main entrance, distributing union
handbills to customers entering and exiting the casino and
hotel. The handbills stated that Ark paid its employees less
than comparable unionized workers and urged the customers
to tell Ark to sign a union contract. Shortly after the
handbilling began, a NYNY security supervisor, joined by a
member of NYNY's management, told the Ark employees
that they were trespassing and that they were not allowed to
distribute literature on NYNY's property. After the Ark
employees protested that they had a right to be on the
property and refused to leave, NYNY's security guards sum-
moned local law enforcement officers, who issued trespass
citations to the handbillers. The union then filed an unfair
labor practice charge with the Board, alleging that NYNY
had violated s 8(a)(1) of the National Labor Relations Act, in
response to which the Board's regional director issued a
complaint.
On April 7, 1998, four off-duty Ark employees entered
NYNY and distributed handbills to customers inside the
complex. Two of the handbillers stood outside America, one
of the Ark-operated restaurants; the other two stood in front
of Gonzales y Gonzales, another of Ark's restaurants. After
they refused a request to stop handbilling, NYNY summoned
the authorities, who issued trespass citations to three of the
employees. Another incident occurred two days later, on
April 9, 1998, when two off-duty Ark employees (one of whom
had received a trespass citation for the handbilling on April 7)
stood outside NYNY's main entrance again, distributing
handbills to passing customers. After a sequence of events
similar to those of July 9, 1997, these Ark employees also
received trespass citations. (All of the trespass citations
issued to the Ark employees in 1998 were dropped.) On
April 20, 1998, the union filed unfair labor practice charges,
alleging that NYNY had violated s 8(a)(1) of the Act; the
regional director issued another complaint.
The Board's General Counsel argued in each case that
under s 7 of the Act, 29 U.S.C. s 157, the Ark employees had
a right to handbill at NYNY in non-work areas during
nonwork times and that NYNY therefore violated s 8(a)(1) of
the Act, 29 U.S.C. s 158(a)(1), when it prevented them from
engaging in protected activity. NYNY countered that be-
cause the employees worked for Ark, not NYNY, they had no
s 7 rights against NYNY and that NYNY validly applied its
restriction on activities on its premises.
In separate proceedings Administrative Law Judges found
in favor of the Ark employees, holding that when employees
of a contractor work regularly and exclusively on the owner's
property, their s 7 rights are equivalent to those of the
employer's own employees. New York New York Hotel LLC
d/b/a New York New York Hotel & Casino, 28-CA-14519,
1998 WL 1985077 (June 29, 1998); New York New York Hotel
LLC d/b/a New York New York Hotel & Casino, 28-CA-
15148, 1999 WL 33452907 (Apr. 9, 1999). The Board affirmed
in both cases, agreeing that the s 7 rights of the Ark
employees were equivalent to those of NYNY's employees,
and that in both cases the Ark employees were engaging in
organization activities in non-work areas of NYNY's property.
New York New York Hotel LLC d/b/a New York New York
Hotel & Casino, 334 N.L.R.B. No. 87 (July 25, 2001); New
York New York Hotel LLC d/b/a New York New York Hotel
& Casino, 334 N.L.R.B. No. 89 (July 25, 2001).
Section 7 of the National Labor Relations Act guarantees
employees "the right to self-organize, to form, to join, or
assist labor organizations." 29 U.S.C. s 157. Section 8(a)(1)
enforces s 7, making it an "unfair labor practice" for an
employer "to interfere with, restrain, or coerce employees in
the exercise of the rights guaranteed in" s 7. 29 U.S.C.
s 158(a)(1). In recognition of the property rights of employ-
ers and the s 7 rights of employees to organize, the Supreme
Court has drawn a distinction between employees and nonem-
ployees. In Republic Aviation Corp. v. NLRB, 324 U.S. 793
(1945), the Court sustained the Board's rulings that off-duty
employees have s 7 rights to engage in organizing activities
on their employer's premises in non-work areas--rights the
employer may not infringe absent a showing that the ban is
necessary to maintain workplace order and discipline. Id. at
803. On the other hand, the Court held in NLRB v. Babcock
& Wilcox Co., 351 U.S. 105, 112 (1956), that "an employer
may validly post his property against nonemployee distribu-
tion of union literature" to employees, at least if the nonem-
ployee union organizers may reach the employees through
other means. Id. at 112. Highlighting the difference be-
tween the rights of employees and nonemployees, the Court
explained in a later case that a "wholly different balance [is]
struck when the organizational activity [is] carried on by
employees already rightfully on the employer's property,
since the employer's management interests rather than his
property interests [are] there involved." Hudgens v. NLRB,
424 U.S. 507, 521-22 n.10 (1976).
This court's opinion in ITT Industries, Inc. v. NLRB, 251
F.3d 995, 1000-03 (D.C. Cir. 2001), thoroughly analyzed these
Supreme Court decisions and others. There, we explained
that although there were suggestions in Supreme Court
opinions that the controlling distinction for s 7 purposes was
between invitees and trespassers, see Eastex, Inc. v. NLRB,
437 U.S. 556, 571 (1978); Hudgens, 424 U.S. at 521-22, the
Court's most recent pronouncement in Lechmere, Inc. v.
NLRB, 502 U.S. 527 (1992), reaffirmed the principle an-
nounced in Babcock & Wilcox that the National Labor Rela-
tions Act confers rights upon employees, not nonemployees,
and that employers may restrict nonemployees' organizing
activities on employer property. See ITT, 251 F.3d at 1002-
03; see also United Food & Commercial Workers v. NLRB,
74 F.3d 292, 295 (D.C. Cir. 1996).
The Supreme Court has never addressed the s 7 rights of
employees of a contractor working on property under another
employer's control, and the Board's New York New York
decisions shed little light on the important issues this factual
pattern raises. The Board provided no rationale to explain
why, in areas within the NYNY complex but outside of Ark's
leasehold, Ark's employees should enjoy the same s 7 rights
as NYNY's employees. Instead, the Board relied upon two of
its previous decisions, Southern Services, 300 N.L.R.B. 1154
(1990), and MBI Acquisition Corp. d/b/a Gayfers Dep't Store,
324 N.L.R.B. 1246 (1997). New York New York, 334
N.L.R.B. No. 87 at 1; New York New York, 334 N.L.R.B. No.
89 at 1 n.3. While the Board is certainly entitled to invoke its
precedents to justify a given result, the court's responsibility
is to examine those precedents to make sure they supply the
reasoning lacking in the Board's opinion under review. See
ITT, 251 F.3d at 1004. Here, neither Southern nor Gayfers
fills the gap, a point on which we are in agreement with the
Fifth Circuit in NLRB v. Pneu Elec., Inc., 309 F.3d 843, 850-
55 (5th Cir. 2002), handed down after oral argument in this
case. The Board decided Southern before the Supreme
Court issued Lechmere; Gayfers came after the Court's
opinion. Neither Board decision takes account of the princi-
ple reaffirmed in Lechmere that the scope of s 7 rights
depends on one's status as an employee or nonemployee.
In Southern, the Board ruled that an employee of a janito-
rial subcontractor that serviced Coca-Cola's manufacturing
site had the same s 7 rights as Coca-Cola's employees.
Therefore, despite the company's no solicitation rule, the
subcontractor's employee had a s 7 right to distribute leaflets
to fellow janitorial employees in non-work areas of Coca-
Cola's property after reporting to work but while she was off-
duty. The Board interpreted the Supreme Court's opinions
in Republic Aviation and Babcock & Wilcox as resting on a
distinction between situations in which the union organizers
were "properly on company property pursuant to the employ-
ment relationship" (Republic Aviation) and those in which
they were "strangers to the employer's property" and "tres-
pass[ed] to facilitate activity covered by" s 7 (Babcock &
Wilcox). 300 N.L.R.B. at 1155. Because the subcontractor's
employee "did not seek to 'trespass' on Coke's property" and
"was 'already rightfully on [Coke's] property' " when she
distributed union literature, the Board ruled that the case fell
under Republic Aviation and that Coca-Cola thus violated
her s 7 rights by preventing her from engaging in protected
activity on company property. Southern, 300 N.L.R.B. at
1155.
The Eleventh Circuit enforced the Board's order. South-
ern Services, Inc. v. NLRB, 954 F.2d 700, 704 & n.5 (11th Cir.
1992). In ITT Services we took note of the Eleventh Circuit's
decision but viewed it as unpersuasive. Although the opinion
issued a month after Lechmere, it did not mention the Su-
preme Court's decision, and it therefore did "not account for
Lechmere's express reaffirmation of the employee/nonemploy-
ee distinction." ITT Services, 251 F.3d at 1003.
The opinion of the court of appeals in Southern was con-
trary to Lechmere in other respects. The Eleventh Circuit
stated:
Nor does the conduct of distributing union literature
transform the status of a subcontract employee ...
from that of a business invitee to that of a mere
trespasser. Coca-Cola ... urge[s] this theory, but
suggest[s] no principled barrier against the argu-
ment that a similar transformation occurs when the
regular employee of an employer such as Coca-Cola
engages in distribution activity.
Southern, 954 F.2d at 704. At this point the court dropped a
footnote citing Montgomery Ward & Co. v. NLRB, 692 F.2d
1115, 1126 & n.12 (7th Cir. 1982). The quoted passage
appears to bare some confusion about trespass. While the
actions of the subcontractor's employee may not have fit
within the ancient tort of trespass quare clausum fregit, her
violation of the company's no solicitation rule nonetheless
made her a trespasser. As the Restatement puts it, a
"conditional or restricted consent to enter land creates a
privilege to do so only in so far as the condition or restriction
is complied with." Restatement (Second) of Torts s 168
(1965). The union organizers in Lechmere were in a similar
position. They were handing out leaflets in a shopping center
parking lot jointly owned by Lechmere, which had a store in
the center. No one doubted that the organizers were tres-
passers because they violated Lechmere's no solicitation poli-
cy. See 502 U.S. at 530, 540. The Southern court could find
no principled reason why, if the subcontractor's employee
were a trespasser, employees of Coca-Cola would not also be
trespassers when they handed out union literature on compa-
ny property. But that is the very point of Lechmere, as we
explained in ITT Industries: the s 7 rights of employees
entitle them to engage in organization activities on company
premises. See 502 U.S. at 537. Nonemployees do not have
comparable rights. Id. The Seventh Circuit case Southern
cited--Montgomery Ward--is no longer good law. On its
facts it was nearly identical to Lechmere, yet it held that
nonemployees could enter a store and distribute union litera-
ture to employees in violation of the employer's rule against
it-just the opposite of what the Supreme Court later held in
Lechmere. See Montgomery Ward, 692 F.2d at 1126-27.
The other opinion cited by the Board in these cases--
Gayfers--is also lacking. There, the Board considered the
s 7 rights of employees of an electrical subcontractor tempo-
rarily hired by Gayfers to perform remodeling work at its
shopping mall. Addressing the argument raised by Gayfers
that the subcontractor's "employees were not employees of
Gayfers and therefore [were] nonemployees within the mean-
ing of Babcock & Wilcox and Lechmere," the Board once
again equated "nonemployee" with "trespasser," and "em-
ployee" with "invitee," relying upon the Supreme Court's pre-
Lechmere statement that " 'the nonemployees in Babcock &
Wilcox sought to trespass on the employer's property, where-
as the employees in Republic Aviation did not.' " Gayfers,
324 N.L.R.B. at 1249 (quoting Eastex, 437 U.S. at 571). The
Board found that the subcontractor's employees "were not
'strangers' to the Respondent's property, but rightfully on it
pursuant to their employment relationship," and concluded
that, as in Southern, the subcontractor's employees enjoyed
s 7 rights "established by the standard of Republic Aviation
and not ... Babcock & Wilcox and Lechmere." Gayfers, 324
N.L.R.B. at 1250.
The Board's decisions in Southern and Gayfers, and thus
its decisions in these consolidated cases, purport to rest on
the Board's interpretation of Supreme Court opinions. As
such, the Board's judgment is not entitled to judicial defer-
ence. "We are not obligated to defer to an agency's interpre-
tation of Supreme Court precedent under Chevron or any
other principle." Univ. of Great Falls v. NLRB, 278 F.3d
1335, 1341 (D.C. Cir. 2002) (quoting Akins v. Fed. Election
Comm'n, 101 F.3d 731, 740 (D.C. Cir. 1996) (en banc), vacated
on other grounds, 524 U.S. 11 (1998)). As our opinion in ITT
Industries foreshadowed in its discussion of Southern, the
critical question in a case of this sort is whether individuals
working for a contractor on another's premises should be
considered employees or nonemployees of the property own-
er. Our analysis of the Supreme Court's opinions, unlike the
Board's in Southern and Gayfers, yields no definitive answer.
No Supreme Court case decides whether the term "employ-
ee" extends to the relationship between an employer and the
employees of a contractor working on its property. No
Supreme Court case decides whether a contractor's employ-
ees have rights equivalent to the property owner's employ-
ees--that is, Republic Aviation rights to engage in organiza-
tional activities in non-work areas during non-working time so
long as they do not unduly disrupt the business of the
property owner--because their work site, although on the
premises of another employer, is their sole place of employ-
ment.
This leaves a number of questions in this case unanswered.
Without more, does the fact that the Ark employees work on
NYNY's premises give them Republic Aviation rights
throughout all of the non-work areas of the hotel and casino?
Or are the Ark employees invitees of some sort but with
rights inferior to those of NYNY's employees? Or should
they be considered the same as nonemployees when they
distribute literature on NYNY's premises outside of Ark's
leasehold? Does it matter that the Ark employees here had
returned to NYNY after their shifts had ended and thus
might be considered guests, as NYNY argues? Is it of any
consequence that the Ark employees were communicating,
not to other Ark employees, but to guests and customers of
NYNY (and possibly customers of Ark)? Compare United
Food & Commercial Workers, 74 F.3d at 298. (Derivative
access rights, the Supreme Court has held, stem "entirely
from on-site employees' s 7 organizational right to receive
union-related information." ITT Industries, 251 F.3d at 997.)
It is up to the Board to answer these questions and others,
not only by applying whatever principles it can derive from
the Supreme Court's decisions, but also by considering the
policy implications of any accommodation between the s 7
rights of Ark's employees and the rights of NYNY to control
the use of its premises, and to manage its business and
property. The Board did not perform that function in these
cases. We will therefore grant the petitions for judicial
review without reaching the other issues NYNY has present-
ed, deny enforcement of the Board's orders, and remand to
the Board for further proceedings.
So ordered.