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407 US 539 Central Hardware Company v. National Labor Relations Board

407 U.S. 539

92 S.Ct. 2238

33 L.Ed.2d 122

CENTRAL HARDWARE COMPANY, Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD et al.

No. 70—223.

Argued April 18, 1972.

Decided June 22, 1972.

Syllabus

Petitioner had a rule against solicitational activities in
its stores and parking lots. The parking lots are appurtenant to
petitioner's free-standing stores and do not serve other retail
establishments. Union organizers used petitioner's parking lots to
solicit petitioner's employees to join the union, and petitioner
ordered the organizers off its property. The union filed unfair
labor practice charges against petitioner. The National Labor
Relations Board (NLRB) held that enforcement of petitioner's
no-solicitation rule, which it found was overly broad, violated §
8(a)(1) of the National Labor Relations Act, which proscribes
interference with employees' § 7 organizational rights. The NLRB
concluded that the character and use of the lots distinguished the
case from N.L.R.B. v. Babcock & Wilcox Co., 351 U.S. 105, 76 S.Ct.
679, 100 L.Ed. 975, which required a 'yielding' of the employer's
property rights in the context of an organizational campaign only
'when the inaccessibility of employees makes ineffective the
reasonable attempts by nonemployees to communicate with them
through the usual channels . . .. Id., at 112, 76 S.Ct., at 684.
Instead, the NLRB held applicable Amalgamated Food Employees v.
Logan Valley Plaza, 391 U.S. 308, 88 S.Ct. 1601, 20 L.Ed.2d 603,
where peaceful picketing by union agents on a parking lot within a
shopping center was held, under the circumstances existing, to be
within the protection of the First Amendment. The Court of
Appeals, agreeing, ordered enforcement of the NLRB's order. Held:
Logan Valley, decided on constitutional grounds, is not applicable
to this § 7 case, which the Court of Appeals should now reconsider
in the light of Babcock. Pp. 542—548.

439 F.2d 1321, vacated and remanded.

Ronald L. Aylward, Keith E. Mattern, St. Louis, Mo., for
petitioner.

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Page 540

Norton J. Come, Washington, D.C., for respondent, N.L.R.B.

Bernard Dunau, Washington, D.C., for respondent Retail
Clerk's Union 725, Retail Clerks International, AFL—CIO.

djQ Mr. Justice POWELL delivered the opinion of the Court.

Petitioner, Central Hardware Co. (Central), owns and operates
two retail hardware stores in Indianapolis, Indiana. Each store is
housed in a large building, containing 70,000 square feet of floor
space, and housing no other retail establishments. The stores are
surrounded on three sides by ample parking facilities,
accommodating approximately 350 automobiles. The parking lots are
owned by Central, and are maintained solely for the use of
Central's customers and employees. While there are other retail
establishments in the vicinity of Central's stores, these
establishments are not a part of a shopping center complex, and
they maintain their own separate parking lots.

Approximately a week before Central opened its stores, the
Retail Clerks Union, Local 725, Retail Clerks International
Association, AFL—CIO (the Union), began an organization campaign
at both stores. The campaign consisted primarily of solicitation
by nonemployee Union

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Page 541

organizers on Central's parking lots. The nonemployee organizers
confronted Central's employees in the parking lots and sought to
persuade them to sign cards authorizing the Union to represent
them in an appropriate bargaining unit. As a part of the
organization campaign, an 'undercover agent for the Union' was
infiltrated into the employ of Central, receiving full-time salary
from both the Union and the company. This agent solicited
employees to join the Union, and obtained a list of the employees
of the two stores which was about 80% complete.

Central had a no-solicitation rule which it enforced against
all solicitational activities in its stores and on its parking
lots. A number of employees complained to Central's local
management that they were being harassed by the organizers, and
these complaints were forwarded to Central's corporate
headquarters in St. Louis, Missouri. The St. Louis officials
directed the Indianapolis management to enforce the nonemployee
no-solicitation rule and keep all Union organizers off the company
premises, including the parking lots. Although most of the
nonemployee Union organizers had either left Indianapolis or
ceased work on the Central organization campaign, the Indianapolis
management had occasion to assert the nonemployee no-solicitation
rule on several occasions.

One arrest was made when a field organizer for the Union was
confronted by the manager of one of the stores on its parking lot,
and refused to leave after being requested to do so. The field
organizer asserted that he was a 'customer' and insisted upon
entering the store. The police were called, and when the organizer
persisted in his refusal to leave, he was arrested.

Shortly after Central received complaints from its employees
as to harassment by the organizers, Central filed unfair labor
practice charges against the Union. The

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Page 542

Union subsequently filed unfair labor practice charges against
Central. After an investigation, the General Counsel of the
National Labor Relations Board (the Board) dismissed Central's
charges against the Union, and issued a complaint against Central
on the Union's charges.

The Board held that Central's nonemployee no-solicitation
rule was overly broad, and that its enforcement violated § 8(a)(1)
of the National Labor Relations Act. The Board reasoned that the
character and use of Central's parking lots distinguished the case
from N.L.R.B. v. Babcock & Wilcox Co., 351 U.S. 105, 76 S.Ct. 679,
100 L.Ed. 975 (1956), and brought it within the principle of
Amalgamated Food Employees Union Local 590 v. Logan Valley Plaza,
Inc., 391 U.S. 308, 88 S.Ct. 1601, 20 L.Ed.2d 603 (1968). 181
N.L.R.B. 491 (1970). A divided Court of Appeals for the Eighth
Circuit agreed, and ordered enforcement of the Board's order
enjoining Central from enforcing any rule prohibiting nonemployee
Union organizers from using its parking lots to solicit employees
on behalf of the Union. 439 F.2d 1321 (1971). We granted
certiorari to consider whether the principle of Logan Valley is
applicable to this case. 404 U.S. 1014, 92 S.Ct. 669, 30 L.Ed.2d
661 (1972). We conclude that it is not.

I

Section 7 of the National Labor Relations Act, as amended, 61
Stat. 140, 29 U.S.C. § 157, guarantees to employees the right to
'selforganization, to form, join, or assist labor organizations.'
This guarantee includes both the right of union officials to
discuss organization with employees, and the right of employees to
discuss organization among themselves.1 Section 8(a)(1) of the
Act, 29 U.S.C. § 158(a)(1), makes it an unfair labor practice for
an employer 'to interfere with, restrain, or coerce employees in
the exercise of the rights guaran-

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Page 543

teed' in § 7. But organization rights are not viable in a vacuum;
their effectiveness depends in some measure on the ability of
employees to learn the advantages and disadvantages of
organization from others. Early in the history of the
administration of the Act the Board recognized the importance of
freedom of communication to the free exercise of organization
rights. See Peyton Packing Co., 49 N.L.R.B. 828 (1943), enforced,
142 F.2d 1009 (C.A.5), cert. denied, 323 U.S. 730, 65 S.Ct. 66, 89
L.Ed. 585 (1944).

In seeking to provide information essential to the free
exercise of organization rights, union organizers have often
engaged in conduct inconsistent with traditional notions of
private property rights. The Board and the courts have the duty to
resolve conflicts between organization rights and property rights,
and to seek a proper accommodation between the two. This Court
addressed the conflict which often arises between organization
rights and property rights in N.L.R.B. v. Babcock & Wilcox Co.,
351 U.S. 105, 76 S.Ct. 679, 100 L.Ed. 975 (1956). The Babcock &
Wilcox Co. operated a manufacturing plant on a 100-acre tract
about one mile from a community of 21,000 people. The plant
buildings were enclosed within a fence, employee access being
through several gates. Approximately 90% of the employees drove to
work in private cars, and the company maintained a parking lot for
the employees. Only employees and deliverymen normally used the
parking lot. The company had a rule forbidding the distribution of
literature on company property. The Board found that the company's
parking lot and the walkway leading from it to the plant entrance
were the only 'safe and practicable' places in the vicinity of the
plant for distribution of union literature, and held the company
guilty of an unfair labor practice for enforcing the
no-distribution rule and thereby denying union organizers limited
access to company property. The Board ordered the com-

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Page 544

pany to rescind its no-distribution rule insofar as it related to
nonemployee union representatives seeking to distribute union
literature on the parking lot and walkway area.2

The Court of Appeals for the Fifth Circuit refused
enforcement of the Board's order on the ground that the Act did
not authorize the Board to impose a servitude on an employer's
property where no employee was involved.3 This Court affirmed on
the ground that the availability of alternative channels of
communication made the intrusion on the employer's property rights
ordered by the Board unwarranted. The Court in Babcock stated the
guiding principle for adjusting conflicts between § 7 rights and
property rights:

'Organization rights are granted to workers by the same
authority, the National Government, that preserves property
rights. Accommodation between the two must be obtained with
as little destruction of one as is consistent with the
maintenance of the other. The employer may not affirmatively
interfere with organization; the union may not always insist
that the employer aid organization. But when the
inaccessibility of employees makes ineffective the reasonable
attempts by nonemployees to communicate with them through the
usual channels, the right to exclude from property has been
required to yield to the extent needed to permit
communication of information on the right to organize.' 351
U.S., at 112, 76 S.Ct., at 684.

The principle of Babcock is limited to this accommodation
between organization rights and property rights. This principle
requires a 'yielding' of property rights only in the context of an
organization cam-

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Page 545

paign. Moreover, the allowed intrusion on property rights is
limited to that necessary to facilitate the exercise of employees'
§ 7 rights. After the requisite need for access to the employer's
property has been shown, the access is limited to (i) union
organizers; (ii) prescribed nonworking areas of the employer's
premises; and (iii) the duration of organization activity. In
short, the principle of accommodation announced in Babcock is
limited to labor organization campaigns, and the 'yielding' of
property rights it may require is both temporary and minimal.

II

The principle applied in Amalgamated Food Employees Union
Local 590 v. Logan Valley Plaza, Inc., 391 U.S. 308, 88 S.Ct.
1601, 20 L.Ed.2d 603 (1968), is quite different. While it is true
that Logan Valley involved labor picketing, the decision rests on
constitutional grounds; it is not a § 7 case.

Logan Valley had its genesis in Marsh v. Alabama, 326 U.S.
501, 66 S.Ct. 276, 90 L.Ed. 265 (1946). Marsh involved a 'company
town,' an economic anachronism rarely encountered today. The town
was wholly owned by the Gulf Shipbuilding Corp., yet it had all of
the characteristics of any other American town. Gulf Shipbuilding
held title to all the land in the town, including that covered by
streets and sidewalks. Gulf Shipbuilding also provided municipal
services, such as sewerage service and police protection, to the
residents of the town. A Jehovah's Witness undertook to distribute
religious literature on a sidewalk near the post office in the
'business block' of the town, and was arrested on a trespassing
charge. She was subsequently convicted of the crime of
trespassing, and the Alabama courts upheld the conviction on
appeal. This Court reversed, holding that Alabama could not permit
a corporation to assume the functions of a municipal government
and at the same

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time deny First Amendment rights through the application of the
State's criminal trespass law.

In Logan Valley, over a strong dissent by Mr. Justice Black,
the author of Marsh, the Court applied the reasoning of Marsh to a
modern economic phenomenon, the shopping center complex. The Logan
Valley Mall was a complex of retail establishments, which the
Court regarded under the factual circumstances as the functional
equivalent of the 'community business block' of the company town
in Marsh. The corporate owner of Logan Valley Mall obtained a
state court injunction against peaceful picketing on the shopping
center property, and the Pennsylvania Supreme Court affirmed the
issuance of the injunction on the ground that the picketing
constituted a trespass on private property. This Court reversed,
holding that Pennsylvania could not 'delegate the power, through
the use of its trespass laws, wholly to exclude those members of
the public wishing to exercise their First Amendment rights on the
premises in a manner and for a purpose generally consonant with
the use to which the property is actually put.' 391 U.S., at 319
320, 88 S.Ct., at 1609.

III

The Board and the Court of Appeals held that Logan Valley
rather than Babcock controlled this case. The Board asserts that
the distinguishing feature between these two cases is that in
Logan Valley the owner had 'diluted his property interest by
opening his property to the general public for his own economic
advantage.'4 The emphasis, both in the argument on behalf of the
Board and in the opinion below, is on the opening of the property
'to the general public.'5

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Page 547

This analysis misconceives the rational of Logan Valley.6
Logan Valley involved a large commercial shopping center which the
Court found had displaced, in certain relevant respects, the
functions of the normal municipal 'business block.' First and
Fourteenth Amendment free-speech rights were deemed infringed
under the facts of that case when the property owner invoked the
trespass laws of the State against the pickets.

Before an owner of private property can be subjected to the
commands of the First and Fourteenth Amendments the privately
owned property must assume to some significant degree the
functional attributes of public property devoted to public use.
The First and Fourteenth Amendments are limitations on state
action, not on action by the owner of private property used only
for private purposes. The only fact relied upon for the argument
that Central's parking lots have acquired the characteristics of a
public municipal facility is that they are 'open to the public.'
Such an argument could be made with respect to almost every retail
and service establishment in the country, regardless of size or
location. To accept it would cut Logan Valley entirely away from
its roots in Marsh. It would also constitute an unwarranted
infringement of long-settled rights of private property protected
by the Fifth and Fourteenth Amendments. We hold that the Board and
the Court of Appeals erred in applying Logan Valley to this case.

The Trial Examiner concluded that no reasonable means of
communication with employees were available to the nonemployee
Union organizers other than solicitation in Central's parking
lots. The Board adopted this conclusion. Central vigorously
contends that this

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Page 548

conclusion is not supported by substantial evidence in the record
as a whole. The Court of Appeals did not consider this contention,
because it viewed Logan Valley as controlling rather than Babcock.
The determination whether on the record as a whole there is
substantial evidence to support agency findings is a matter
entrusted primarily to the courts of appeals. Universal Camera
Corp. v. N.L.R.B., 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456
(1951). Since the Court of Appeals has not yet considered this
question in light of the principles of NLRB v. Babcock & Wilcox
Co., supra, the judgment is vacated, and the case will be remanded
to that court for such consideration.

It is so ordered.

Judgment vacated and case remanded.

djQ Mr. Justice MARSHALL, with whom Mr. Justice DOUGLAS and Mr.
Justice BRENNAN join, dissenting.

I agree with the Court that this case should have been
considered under N.L.R.B. v. Babcock & Wilcox Co., 351 U.S. 105,
76 S.Ct. 679, 100 L.Ed. 975 (1956). That case is, as the opinion
of the Court suggests, narrower than Amalgamated Food Employees
Union v. Logan Valley Plaza, Inc., 391 U.S. 308, 88 S.Ct. 1601, 20
L.Ed.2d 603 (1968). It does not purport to interpret the National
Labor Relations Act (NLRA) so as to give union members the same
comprehensive rights to free expression on the private property of
an employer that the First Amendment gives to all citizens on
private property that is the functional equivalent of a public
business district. But Babcock is, in another sense, even broader
than Logan Valley. It holds that where a union has no other means
at its disposal to communicate with employees other than to use
the employer's property, or where the union is denied the access
to employees that the employer gives anti-union forces, the union
may communicate with employees on the property of the employer.
Congress gave unions this right in Section 7

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Page 549

of the NLRA, 61 Stat. 140, 29 U.S.C. § 157. The First Amendment
gives no such broad right to use private property to ordinary
citizens.

The National Labor Relations Board found that petitioner
permitted anti-union solicitation on its premises at the same time
that it barred union solicitation. 181 N.L.R.B. 491 (1970). It
made no explicit finding as to whether access to the employees was
reasonably available to the union outside of the petitioner's
property, but suggested that it was not. Rather than deciding the
case under Babcock, supra, which would appear to control and to
provide that the union activity in the case is protected by the
NLRA, the Board appears to have decided the case under Logan
Valley, supra. The United States Court of Appeals for the Eighth
Circuit affirmed on the basis of Logan Valley and found it
unnecessary to review the Board's finding of discrimination by the
employer against the union in the use of its property or to remand
the case for a determination of whether it was necessary for the
union to use petitioner's property to communicate with the
employees. 439 F.2d 1321 (1971).

It is obvious, then, that neither the Board nor the Court of
Appeals has fully considered whether the employer's conduct was
proscribed by Babcock even though the indications in the Board's
opinion are that it was. In reaching out to decide this case under
Logan Valley, the agency and the lower court decided a difficult
constitutional issue that might well have been avoided by deciding
the case under the NLRA. This was error. The principle is well
established that decisions on constitutional questions should not
be reached unnecessarily. See, e.g., Dandridge v. Williams, 397
U.S. 471, 476, 90 S.Ct. 1153, 1157, 25 L.Ed.2d 491 (1970);
Rosenberg v. Fleuti, 374 U.S. 449, 83 S.Ct. 1804, 10 L.Ed.2d 1000
(1963).

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Page 550

Since both the agency and the Court of Appeals should have
first decided whether or not Babcock controlled the instant case
before proceeding to decide it under Logan Valley, before this
Court decides whether or not the decision below was correct under
the Constitution, we should remand the case to the Board, rather
than to the Court of Appeals, for a square holding as to the
applicability of Babcock to the facts of this case. Mr. Justice
White has recently re-emphasized the point that when an agency
decides a case under an incorrect legal approach, courts should
not seek to predict whether the agency would have decided the case
the same way under the correct approach, but should instead remand
the case to the agency for further proceedings. FTC v. Sperry &
Hutchinson Co., 405 U.S. 233, 249, 92 S.Ct. 898, 908, 31 L.Ed.2d
170 (1972). See also Burlington Truck Lines v. United States, 371
U.S. 156, 168, 83 S.Ct. 239, 245, 9 L.Ed.2d 207 (1962).

Accordingly, I would remand this case to the Board for
further proceedings without deciding the constitutional question.

1

See Thomas v. Collins, 323 U.S. 516, 533—534, 65 S.Ct.
315, 324—325, 89 L.Ed. 430 (1945).

2

Babcock & Wilcox Co., 109 N.L.R.B. 485, 486 (1954).3 NLRB v. Babcock & Wilcox Co., 222 F.2d 316 (CA5 1955).

4

Brief for the NLRB 20.5 439 F.2d, at 1326—1328.

6

For a full discussion of Logan Valley and the
circumstances in which it is applicable, see the decision of the
Court today in Lloyd Corp. v. Tanner, 407 U.S. 551, 92 S.Ct. 2219,
33 L.Ed.2d 131.