Business Law Articles
Provided By: Wendy E. Lane
Until July 2010, two California laws — Code of Civil Procedure Section 527.3 (also known as the Moscone Act) and Labor Code Section 1138.1 — made it all but impossible for businesses to prevent labor dispute demonstrations on private sidewalks directly in front of their businesses. That was until a three-judge panel from the Third District Court of Appeals found both of those statutes unconstitutional, deeming union members who picketed outside of a grocery store as trespassers. The court granted the grocery store the ability to seek an injunction against the protestors in the labor dispute to the same extent that it would be permitted to enjoin trespassers who were not engaged in activity or speech related to a labor dispute.
In Ralphs Grocery Co. v. United Food and Commercial Workers Union Local 8, union agents peacefully picketed five days a week, eight hours per day on the privately-owned front sidewalk apron of a Ralphs-owned store, which apron separated the store from the parking lot. The union representatives walked back and forth in front of the store’s doors, carrying picket signs and handing out flyers encouraging people not to shop at the store because its employees were not represented by a union.
As alleged in court documents, Ralphs’ customers complained about the picketers, and one customer said that she called the police after a picketer yelled at her and told her not to shop there. Picketers ignored Ralphs’ repeated requests that the protesters relocate off company-owned property to a distance of at least twenty feet from the store’s front doors.
After nine months of continuous protests, Ralphs filed a complaint for trespass against the union in Sacramento County Superior Court. Ralphs further sought injunctive relief to prevent the union from using the store’s front sidewalk as a forum for expressing its views. The union opposed the requests for relief under the Moscone Act and Section 1138.1 of the Labor Code. The Moscone Act denies courts the jurisdiction to issue any restraining order or injunction barring specified conduct (such as peaceful picketing) relating to a “labor dispute,” and Section 1138.1 restricts a court from issuing a preliminary or permanent injunction in a case involving a labor dispute except in the most limited circumstances.
Specifically, Section 1138.1, which was enacted in 1999, precludes the issuance of injunctive relief in a labor dispute unless the court can make findings of fact, after a hearing with live witnesses, that the party seeking injunctive relief has received threats of unlawful acts and that such acts will be committed unless restrained and that the threatened act will cause substantial and irreparable injury to the party seeking the relief. Section 1138.1 further requires a showing that the injury inflicted on a party seeking injunctive relief would, if the requested relief were denied, be greater than the injury inflicted on the defendants by the granting of the relief, and that the party seeking the relief has no adequate remedy at law. Finally, pursuant to Section 1138.1, a party cannot obtain an injunction in a labor dispute unless it can show that the “public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection.”
The trial court in Ralphs held that the Moscone Act, enacted in 1975, violated the First and Fourteenth Amendments of the U.S. Constitution, which grant and protect the fundamental personal right to free speech. However, the court still denied the application for an injunction, holding that Ralphs failed to meet its burden of establishing any of the aforementioned prerequisites for obtaining injunctive relief as set forth in Section 1138.1.
The Third District Court of Appeals agreed with the trial court’s determination that the Moscone Act was unconstitutional because it amounted to “governmental discrimination based on the content of speech,” which “favors speech related to labor disputes over speech related to other matters based on the content of the speech” and “declares that labor protests on private property are legal, even though a similar protest concerning a different issue would constitute trespassing.”
Unlike the trial court, the appellate court further concluded that Section 1138.1 “suffers from the same constitutional defect as the Moscone Act,” and therefore violates the constitutional right to free speech, because it “adds requirements for obtaining an injunction against labor protesters that do not exist when the protest, or other form of speech, is not labor related,” forcing the private property owner “to provide a forum for speech with which the owner disagrees and it bases that compulsion on the content of the speech.” Acknowledging the U.S. Supreme Court’s holding that “the choice to speak includes within it the choice of what not to say,” the appellate court found that Section 1138.1, in barring businesses from having any remedy to stop labor protestors from continuously trespassing on private premises, violated employers’ rights to choose what not to say.
Rather than seeing Section 1138.1 invalidated, the union argued that the appellate court should apply Section 1138.1 to essentially preclude courts from issuing injunctive relief in all speech-related cases, whether they were related to labor disputes or not. The appellate court firmly rejected that argument, stating that the legislature’s clear intent to promote speech related to labor disputes further reflects an unstated goal of promoting all forms of speech regarding all topics in a private forum.
After invalidating the Moscone Act and Section 1138.1, the appellate court concluded that Ralphs was entitled to injunctive relief, holding that a private property owner need not establish an unlawful act beyond continuing trespass in order to satisfy the “unlawful act” element of injunctive relief. The appellate court further held that there is irreparable harm when “a trespasser engages in activities to discourage the public from patronizing a business” because “there is no way of knowing who would have patronized the business but for the trespasser’s activities.” The Court of Appeals remanded the matter to the trial court with directions to grant the preliminary injunction sought by Ralphs.
While retailers welcome the Ralphs decision as a major win, many questions remain unanswered. Will the union appeal to the California Supreme Court? Given the fact that the case involves speech rights under the federal constitution, could the case ultimately end up before the U.S. Supreme Court? Will courts in other states look to the Ralphs decision?
And assuming the decision is upheld, how will it be applied to future cases? For example, while the Ralphs court found an injunction proper based on the union’s many months of “continuous trespass” in that case, how often and frequently must demonstrators be present at a business before their conduct rises to the level of a “continuous trespass” that warrants injunctive relief?
Furthermore, the Ralphs decision does not alter the California Supreme Court’s 1979 holding in Robins v. Pruneyard Shopping Center that persons protesting labor disputes can still reasonably exercise their right to free speech and petition in public forums. It is likely, therefore, that more courts will grapple with questions regarding what activities by business owners might turn an otherwise private forum into a public forum and where labor demonstrations will be more liberally allowed.
Obviously, it will take time for all of these questions to be answered. In the meanwhile, California retailers, many of whom have been forced or nearly forced out of business in a struggling economy, will surely welcome relief from demonstrations that could further reduce their sales.
Reprinted with the permission of Daily Journal Corp. (2010).
Wendy E. Lane is an attorney in Century City, California.