This morning, the Sixth Circuit affirmed in part and reversed in part a decision involving a labor dispute where the union intentionally crashed the employer's telephone and computer system to protest the discharge of an employee. The Court held that the employer stated a valid claim against the Union under the federal Computer Fraud and Abuse Act, 18 U.S.C. § 1030 ("CFAA"), but upheld the denial of a preliminary injunction on the grounds that the employer failed to make all efforts to resolve the labor dispute before filing suit as required by the Norris LaGuardia Act. Pulte Homes, Inc. v. Laborers International Union of North America, No. 09-2245 (6th Cir. 8/2/11).
According to the allegations in the employer's complaint, following the discharge of a construction employee, the Union began a corporate campaign to organize the employer's workforce and protest the discharge of the employee. The employer alleged that the Union utilized legal and illegal tactics to harm the employer's goodwill with its employees, vendors and customers. The Union filed a ULP with the NLRB alleging that the employee had been fired for wearing a LIUNA tshirt to work and the NLRB ultimately filed suit against the employer. However, the issue in this litigation involved the Union's "bombardment" of the employer's sales office and three of its executives with thousands of phone calls and emails. In particular,
[t]o generate a high volume of calls, LIUNA both hired an auto-dialing service and requested its members to call Pulte. It also encouraged its members, through postings on its website, to "fight back" by using LIUNA's server to send e-mails to specific Pulte executives. Most of the calls and e-mails concerned Pulte's purported unfair labor practices, though some communications included threats and obscene language.
The volume of the communications injured the employer's business by clogging the voicemail system, preventing customers from reaching the sales office, and forcing on employee to turn off her business cell phone. The emails overloaded the server and stalled business operations because the staff could not access business-related emails or send emails to customers or vendors. Four days after the Union's harassment began, the employer's attorney contacted the Union and requested it to stop employees from doing their jobs. When the calls and emails continued, the employer filed a lawsuit alleging violations of state law and the CFAA, which criminalizes certain computer fraud crimes and creates a civil cause of action. The trial court refused to issue a preliminary injunction on the grounds that it lacked jurisdiction under the NLGA to get involved in a labor dispute. It ultimately dismissed the lawsuit on the grounds that the employer failed to state a claim under the CFAA.
On appeal, the Sixth Circuit rejected the Union's argument that Garmon preemption deprived it of jurisdiction over the dispute. "An exception to [Garmon's] general rule—the independent-federal-remedy exception—nevertheless allows federal courts to "'decide labor law questions that emerge as collateral issues in suits brought under independent federal remedies.'" The CFAA prohibits conduct that is wholly independent of federal labor laws. "And neither the prospect of LIUNA defending itself here by arguing that its campaign qualifies as protected activity nor the possibility of either party filing prohibited-conduct charges with the NLRB—which LIUNA already has done—removes potential NLRA issues from the collateral-issue category."
The Sixth Circuit also rejected Machinist pre-emption – which precludes both state law and NLRB interference of areas which Congress intended to unregulated because it should be decided by the free economic forces -- because it only applied to state law claims and not federal claims.
As for the CFAA claims, the Court found a transmission claim to be stated in the complaint, but not a claim for unauthorized access (in that sending emails or placing telephones cannot be unauthorized if there was no password, etc. required). On the other hand, "[t]o state a transmission claim, a plaintiff must allege that the defendant "knowingly cause[d] the transmission of a program, information, code, or command, and as a result of such conduct, intentionally cause[d] damage without authorization, to a protected computer." 18 U.S.C. § 1030(a)(5)(A)." The Sixth Circuit found the employer's inability to access emails and voicemails and to turn off a cell phone constituted sufficient "damage" to come within the statute. "Applying these ordinary usages, we conclude that a transmission that weakens a sound computer system—or, similarly, one that diminishes a plaintiff's ability to use data or a system—causes damage." Likewise, it found the Union's conduct to be "intentional" in that it intended the result which was obtained."
Nonetheless, the employer was not entitled to a preliminary injunction under federal labor law. The NLGA requires, among other things, that an employer prove that it made "every reasonable effort to settle [a labor] dispute . . . by negotiation" before filing suit. Sending one cease-and-desist letter to the Union before filing suit did not come close to meeting that standard. The employer's "settlement efforts—devoid of any attempt to confer with LIUNA's attorneys before filing suit—fail the everyreasonable- effort test and thus prevent resort to injunctive remedies." The employer merely
transmitted the cease-and-desist letter on a Sunday, did not specify a time to respond, did not offer LIUNA an opportunity to negotiate, and filed suit less than forty-eight hours after sending the letter without even confirming that LIUNA received the letter. This is not "every reasonable effort" to settle the dispute.
The employer attempted to avoid its obligations under the NLGA on the grounds that it was a non-union employer and LIUNA had never been certified as a representative of its employees. In addition, it pointed to the violent threats and damage sustained by its computer system as creating an exigency. The Court rejected these arguments on the grounds that negotiating with LIUNA under the circumstances would not violate the Wagner Act (since there was no other union to be offended by the employer's negotiations) and the threats were too vague to threaten imminent physical harm.
Thus, the case was remanded back to the trial court to determine the Union's liability and potential damages under the CFAA and pendent state law claims.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
