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Ltd. v. Unite Here Local 1

United States Court of Appeals, Seventh Circuit

July 29, 2014

520 SOUTH MICHIGAN AVENUE ASSOCIATES, LIMITED, d/b/a the Congress Plaza Hotel & Convention Center, and Congress Plaza Hotel LLC, Plaintiff-Appellant,
UNITE HERE LOCAL 1, Defendant-Appellee

Argued April 17, 2014

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:10-cv-01422 -- John J. Tharp, Jr., Judge.

For 520 South Michigan Avenue Associates, Limited, doing business as: The Congress Plaza Hotel & Convention Center, and Congress Plaza Hotel LLC, Plaintiff - Appellant: Peter Andjelkovich, Attorney, Bradley J. Wartman, Attorney, Peter Andjelkovich & Associates, Chicago, IL.

For Unite Here Local 1, Defendant - Appellee: N. Elizabeth Reynolds, Attorney, Allison, Slutsky & Kennedy, Chicago, IL.

Before MANION, SYKES, and TINDER, Circuit Judges.


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Tinder, Circuit Judge.

The Congress Plaza Hotel appeals the dismissal of its lawsuit, on summary judgment, alleging that the Unite Here Local 1 Union has engaged in unfair labor practices during its historically long-running strike against the Hotel.[1] The strike began back in 2003, but apparently escalated in 2008, when the Union pursued a new and more aggressive strategy. It began engaging in secondary activity--i.e., targeting organizations that had made arrangements to reserve large blocks of rooms or space at the Hotel, in the hopes that they would cancel their plans and thus pressure the Hotel to end the strike. The Union would send delegations, consisting of striking Hotel workers and Union staff in groups of between two and ten people, to the stores and offices of these potential Hotel patrons. Delegates were instructed to impress upon the decision-makers of these organizations, both orally and through written materials, the Union's position in the strike and its disapproval of the target organization's plans to use the Hotel. The conduct of these delegates is the focal point of this case.

The Hotel claims that the Union delegations crossed the line into unlawful secondary labor activity, in violation of 29 U.S.C. § 187(a) and 29 U.S.C. § 158(b)(4)(ii)(B). It claims that, instead of utilizing persuasion, the Union coerced the Hotel's customers into cancelling their agreements to book rooms at the Congress. Although the strike eventually ended on May 29, 2013, the Hotel seeks damages for past activity under Section 187(b). At the close of discovery, the district court granted the Union summary judgment, on the ground that the Union's conduct was not coercive, and that barring it as a matter of federal labor law would raise important free speech concerns. We now reverse the district court's decision in part, and remand for a trial regarding whether certain of the defendant's actions were coercive, whether any such coercive conduct damaged the Hotel, and if so, to what extent.

I. Background

Because this case comes to us on summary judgment, we will recite the facts the Hotel has put into the record, resolving every reasonable factual dispute between the parties in its favor. See Griffin v. City of Milwaukee, 74 F.3d 824, 826-27 (7th Cir. 1996). We do not vouch for their ultimate truth or accuracy.

A. The Alleged Secondary Activity

The Hotel has accused the Union of unfair labor practices with regards to the following potential customers. We begin with the allegations we consider most likely to be actionable:

1. American Tango Institute (ATI)

ATI contracted with the Hotel in 2010 to host its tango festival that August. According to ATI president Netza Roldan, the organization is a " very small, nonprofit organization" that uses the tango festival

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as its " annual fundraiser event." Union officials responded to ATI's plans by sending Roldan a letter on May 7 requesting that he cancel ATI's plans with the Hotel. It also began contacting him by fax, mail, and telephone. According to Roldan's testimony, the Union left telephone messages and sent emails every ten minutes for one hour on the morning of May 11, 2010, and also made three or four calls to his personal phone. Roldan soon learned that the Union had called and emailed ATI's artistic director, Jorge Torres, to inform him of the Union's opposition to ATI's booking, even though Torres played no part in that decision. Roldan sent contemporaneous emails to the Hotel complaining about the Union's repeated contacts.

Although Roldan initially called Union officials and told them he did not want to communicate with them any further, the delegations persisted in setting up a meeting at ATI's headquarters in Chicago. The delegation, consisting of between seven and nine people, had notified Roldan in advance that it was coming. Roldan testified that at this meeting Union delegates threatened to visit ATI affiliates " and go to their houses or companies" in order to add pressure. They also allegedly threatened to picket the tango festival itself. Roldan earlier noted that Union boycott coordinator Jessica Lawlor had registered to attend the festival on the ATI web site, and he had no reason to think she intended to be a good-faith participant. Roldan further testified that this first meeting was sufficiently heated that he told his assistant to be prepared to call the police. The Union members then left and the police were not called.[2]

After this first meeting, Union delegates entered ATI's office, which was located on the third floor of an office building that was secured by electronic lock, and left literature behind on two occasions. On a third occasion they left literature in the lobby of the building. Roldan testified that no Union representative was given permission to enter the building to drop literature. Union members also apparently posted a letter on Roldan's office door demanding that ATI cancel its reservations with the Hotel.

About two weeks after the first meeting, Roldan arranged a second face-to-face discussion with a Union delegation, but he remained firm that he did not want to change ATI's room reservations. He testified that the delegation threatened to " have people in [the festival] and talking to our guests" about the strike. Even after this second meeting, the Union continued to contact ATI. Roldan testified that he felt " harassed" and " pressed" to cancel the arrangements with the Hotel, and that he was concerned that the Union would picket the festival and harass its participants, along with ATI's members, clients, sponsors and employees, such as Jorge Torres.

Roldan and ATI's board thereafter decided to cancel the contract with the Hotel, even though the organization did not have an alternate site ready. ATI eventually moved the festival to a smaller venue in a different part of the city on short notice. Roldan testified that ATI " had to change the whole concept of the event" due to the change. The new venue was not a hotel, which meant that participants had to lodge away from the festival. This inconvenience allegedly harmed the event's attendance. As a result, ATI lost approximately $20,000 and had to revise its marketing materials to reflect the change in hotels. Roldan estimated that ATI also lost about $40,000 in expected revenue due to a decrease

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in participation. The organization also reportedly suffered a 60% drop in membership following the incident.

2. International Housewares Association (IHA)

IHA contracted with the Hotel for four years' worth of room blocks, from 2008 to 2011, for its annual trade show. In early 2009, Union representative Jessica Lawlor phoned IHA vice president Mia Rampersad to tell her that the IHA should not book rooms at the Hotel. Rampersad testified that Union delegations entered IHA's offices in Illinois and threatened to picket the IHA trade show, although the word " picket" may not have been used. Union phone bankers also began calling affiliated retailers and prospective attendees of the trade show, asking them to put pressure on IHA to cancel its plans with the Hotel.

Lawlor testified that, during one visit to IHA offices, one Union delegate walked past IHA security to tell IHA president Phil Brandl " shame on you" while he was in a meeting. IHA officials advised its security not to let in the Union delegations. Rampersad and IHA vice president of finance Dean Kurtis both testified that they were concerned that the Union might attempt to picket the trade show or even board IHA busses used to take attendees to the event. However, they could not recall any Union member making a specific threat to target the busses or the trade show.

In February of 2009, a Union delegation, numbering three or four members, went to IHA's offices without an appointment. The delegates were asked to leave when they reached the reception area, but refused to do so. Kurtis then called the police. Although the delegation eventually left, a smaller delegation of " one or two" Union representatives returned later that day. IHA's president, Phil Brandl, decided to meet them in the basement cafeteria of the building.

IHA soon became aware of reports that the Union was contacting and visiting IHA's board members, retailers, and exhibitors' offices in Chicago; exhibitors complained that they were being harassed. Rampersad testified that she likewise felt harassed into cancelling IHA's plans with the Hotel, rather than persuaded to adopt the Union's position. On February 10 she sent an email to other decision-makers at IHA stating that the Union's conduct was " bordering on harassment." According to Rampersad, the Union soon opened up two additional fronts in its battle to have IHA cancel its patronage of the Hotel.

a) Rick Bayless, Celebrity Chef

As part of its efforts, the Union contacted Rick Bayless, a famous chef and owner of two Chicago restaurants, the Frontera Grill and Topolobampo. Bayless was scheduled to conduct a cooking demonstration at the IHA trade show. Rampersad was informed that the Union was leafleting in front of one of Bayless's restaurants. The manager of the Frontera Grill, Jennifer Fite, testified that she saw two people handing out fliers inside the restaurant. Lawlor testified that the Union delegated at the restaurants three times, attempting to meet with Bayless directly, before sending a fourth delegation to distribute the fliers.

The fliers contained four bullet points of information quoting apparent citations from government health inspections of the two restaurants. The quotes were accurate and were found in publicly available reports, but the fliers did not note that the restaurants passed the inspections despite the quoted observations. The fliers also did not reference the labor dispute, except by including the address of a Union-sponsored

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web site,

b) IHA Affiliates and RSNA

The Union also allegedly visited several IHA affiliates, including Walgreens, Macy's, and Ace Hardware stores, all located in Chicago. IHA also learned that the Union visited the headquarters of the Radiological Society of North America (RSNA), an unrelated group that was also a prospective customer of the Hotel. One Union delegate, Jennifer Blatz, testified that a delegation boarded RSNA busses to distribute leaflets about the strike. She also testified that a delegation entered a Macy's store attempting to see the General Manager; she conceded that management " may" have threatened to have the delegation arrested for trespassing. Rampersad was informed by an RSNA official that six Union officials entered its offices and walked into department meetings shouting an RSNA's official's name. Rampersad testified that she was aware of the Union's activities at an Ace Hardware and RSNA by the time IHA decided to switch hotels, but she and Kurtis conceded that they were not aware of activities at Macy's, Walgreens, or other affiliates at that time.

By February 18, IHA decided to cancel its pending block reservations with the Hotel. That still left 100 rooms already reserved by individuals in advance of the 2009 trade show. Jessica Lawlor advised Rampersad by phone that the Union's activities " would not stop" until IHA completely disassociated itself from the Hotel.

3. Reed Exhibitions/Chicago Comic and Entertainment Expo

Reed Exhibitions reserved a block of rooms with the Hotel for the April 2010 Chicago Comic and Entertainment Expo. Ron Zobel and Lance Fensterman were responsible for obtaining lodging for the event. Fensterman testified that the Hotel's low rate was a central motivating factor in the decision to book there, because many of the Expo's attendees would be paying out of pocket, rather than having their expenses covered by an employer. Two months after making the reservation, the Expo's organizers were told that affiliated retailers were being picketed at their places of business--i.e., comic book stores.

In late 2009, the Union sent delegations to nine comic book stores, according to the testimony of Union organizer Jessica Lawlor. The Union apparently was following Fensterman's own visits to the stores and confronting him at each stop. Fensterman testified that he specifically remembered the Union's activities at two comic book stores: Challengers Comics and Graham Crackers Comics, both in Chicago. At one store Fensterman noticed as many as ten Union members, four or five of whom were carrying two-foot by one-foot signs. Fensterman testified that the Union members were polite and non-disruptive, and the comic book stores were open to the public. But he also characterized their visits as " incredibly uncomfortable," and sent an email to Zobel in December of 2009, stating, " I want to drop this contract [with the Hotel]. I had strikers at all of my retail visits in Chicago this week." The delegations made clear that they would continue following Fensterman until he canceled the Hotel reservation. Fensterman testified that the delegations to the comic book stores " sen[d] a message that doing business with [Reed Exhibitions] can be damaging to your business."

Zobel wrote to the Hotel management in February of 2010 to explain the decision to cancel the block reservation, noting that the Expo's attendees and exhibitors were subject to " physical[] target[ing] and picket[ing]." The letter cited the strike as one of two reasons that Reed Exhibitions terminated

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the contract (the other being a lack of expected guest room usage).

4. NeoCon/Merchandise Mart Properties (MMP)

MMP reserved room blocks with the Hotel for its 2009 and 2010 NeoCon trade show. Chris Kennedy is the president of MMP and was allegedly considering a run for the United States Senate at the time. Union delegations visited NeoCon exhibitors with leaflets urging them to call Kennedy through the main number at MMP, even though, aside from being president, he had no role in contracting with the Hotel. Union delegations met once with Kari O'Shea, who was in charge of the Hotel reservation, without an appointment and visited numerous exhibitors. They may also have inadvertently visited the homes (rather than the business addresses) of certain targets. Kennedy at one point allegedly engaged in a screaming match with a Union official over the phone. Eventually MMP canceled its reservation.

5. America's Next Top Model (ANTM)

Ansia Production contracted with the Hotel for meeting space to conduct a casting call in September 2008 for its reality show, America's Next Top Model. The Union soon sent out emails to sympathetic recipients asking them to call and email one of the show's corporate sponsors. At one point a Union organizer sent an email to supporters observing that one of their targets had a full voicemail, but he nevertheless urged that the email's recipients continue to call the number. According to Lawlor's testimony, the Union's policy was for members to call a target only once. Two days before the scheduled casting call, ANTM canceled its arrangement with the Hotel.

6. WordCamp Chicago

In February of 2010, WordCamp Chicago, a non-profit, scheduled its bloggers conference at the Hotel for that June. Within a week the room block reservation was canceled, allegedly because its lead organizer, Lisa Sabin-Wilson, was " email-bombed" by Union activists. However, during her testimony Ms. Sabin-Wilson was able to discuss only one or two emails from the Union, along with numerous Twitter messages and social media postings. She also alleged that the Union had obtained WordCamp's registrant and sponsor lists and had begun emailing individuals and threatening protests and bad publicity if the event were held as scheduled. Ms. Sabin-Wilson stated in her cancellation email to the Hotel that the conference location would have to change so that " our attendees and sponsors stop being harassed." She ...

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