NLRB Settlement With Disneyland for Local 11

United States Government National Labor Relations Board OFFICE OF THE GENERAL COUNSEL

Advice Memorandum FOR DISTRIBUTION DATE: October 14, 2010

TO : James Small, Regional Director Region 21 FROM : Barry J. Kearney, Associate General Counsel Division of Advice SUBJECT: Disneyland Hotel, Disney's Paradise Pier Hotel, and 512-5012-1725-1183 Disney's Grand Californian Hotel 512-5012-1725-2200 Case 21-CA-39262 512-5012-1725-7100

512-5012-6712-3300 This California access case involves handbilling activity at Disneyland Resort's outdoor shopping center, Downtown Disney. The issues submitted for advice involve: 1) the validity of Downtown Disney's rules requiring an application, pre-approval of materials, and prior identification of participants prior to handbilling on the property, and restriction of that activity to designated areas and not on peak days; and 2) the access rights of the resort's hotel employees to handbill in Downtown Disney, where they are not employed, to publicize their labor dispute with the Employer, the resort owner.

We conclude that the Employer's facility is a public forum

within the meaning of Californias constitutional free speech analysis. Under that analysis, its rules requiring an application, pre-approval of materials, and prior identification of participants are valid; however, the Employer's rules regarding designated areas and peak times are invalid time, place, and manner restrictions. They therefore violate Section 8(a)(1) insofar as they restrict protected Section 7 activity by non-employees. We further conclude that, because the hotel employees share the California free speech rights guaranteed to members of the general public, their access rights under that law sufficiently protect their Section 7 rights without further analysis of their access rights to appeal to the public within Downtown Disney under Providence Hospital1 and Jean Country.2

FACTS Walt Disney Company (Disney or the Employer) owns the Disneyland Resort in Anaheim, California. The resort is comprised of two theme parks (Disneyland Park and California Adventure Park), three hotels (Disneyland, Paradise Pier, and

1 285 NLRB 320 (1987). 2 291 NLRB 11 (1988).

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Grand Californian hotels), and an outdoor retail district (Downtown Disney).

UNITE Local 11 (the Union) represents 2,100 hotel and restaurant workers employed at the resort's three hotels. Disney and the Union were parties to a collective-bargaining agreement that expired on February 1, 2008. The parties' negotiations for a successor contract had stalled over Disney's proposals regarding health insurance benefits and wages. To publicize their dispute with the Employer, Union representatives and hotel employees demonstrated and leafleted at the resort's hotels for several months. In June through the beginning of September 2009,3 Union representatives, volunteers, and off-duty hotel employees leafleted in Downtown Disney to further publicize their dispute with Disney. The Employer owns Downtown Disney, the resort's outdoor, open-air retail center. As the name suggests, Downtown Disney is modeled after a downtown shopping district and is open to the public, without admission charge. It has a main interior sidewalk (located within the center's perimeters but still outdoors) that is surrounded by independently owned retail shops, restaurants, bars, nightclubs, and a movie theater. The hotel employees are not employed by Downtown Disney or any of its retail tenants, though all resort employees are called "castmembers."

Ninety-nine percent of visitors to Downtown Disney park free of charge at a Disney-owned parking lot that is adjacent to and located at the west entrance to the retail center. The Disneyland Hotel connects to the west entrance, and the Paradise Pier Hotel is next to that hotel. The Grand California Hotel connects to the east end of Downtown Disney. An exterior sidewalk surrounds the outer perimeter of Downtown Disney. The entire resort is connected by walking bridges and paths, and a monorail system transports ticket-holders from Downtown Disney to the theme parks. Downtown Disney was created to attract local residents and to encourage extended stays at the resort.

At first, Union representatives, volunteers, and hotel employees leafleted at least a couple of times a week throughout Downtown Disney and at Disney-sponsored events in Downtown Disney without interference from the Employer. By letter dated September 8, Disney advised the Union that it was going to enforce its time, place, and manner restrictions on leafleting activity in Downtown Disney. The rules, promulgated in 2001, are entitled "Downtown Disney Rules for Public Use of Common Areas." The Employer later modified the rules by an addendum

3 Dates are in 2009, unless otherwise noted.

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that applies specifically to "Labor Organizations or Employees Engaged in a Labor Dispute."4

Under the rules, those seeking to use Downtown Disney's common areas for non-commercial expressive activity must submit an application (Rule III).5 To be approved, an application must comply with all the rules, including a rule requiring the prior approval of all written materials to be used (Rule XIV) and a rule requiring the identification of all participants in the activity (Rule IX). The rules and addendum restrict non-commercial expressive activities to certain designated locations (Rule II.F in the Addendum and Rule VII). They also ban all non-commercial expressive activity on certain "peak days" (Rule VII), about 50 days out of the calendar year, primarily during the Christmas holiday season.

After receiving Disney's letter, the Union submitted applications and engaged in leafleting activity in Downtown Disney on several dates in October, November, and December. Some of these days were peak days. While it submitted applications for these dates, the Union noted it was doing so under protest and was not waiving its right in the future to challenge the legality of the rules. Disney allowed the Union to leaflet on those dates even though the Union had not fully complied with all the rules. There were no reported incidents during the Union's leafleting activities during this time. Around December 25, the Union ceased all leafleting activity in Downtown Disney.

ACTION

We conclude that complaint should issue, absent settlement, alleging that the Employer violated Section 8(a)(1). We first conclude that the Employer's facility is a public forum within the meaning of Californias constitutional free speech analysis. Under that analysis, its rules requiring an application, pre-approval of materials, and prior identification of participants are valid; however, the Employer's rules regarding designated areas and peak times are invalid time, place, and manner restrictions. They therefore violate Section 8(a)(1) insofar as they restrict protected Section 7 activity by non-employees. We further conclude that, because the hotel employees share the California free speech rights guaranteed to members of the

4 Although it is unclear when the Employer promulgated the addendum, it was in place at the time of the events at issue. 5 The Rules define "non-commercial expressive activity" as activity that has a political, religious, or other non-commercial purpose, such as the request of signatures on petitions, the registration of voters, and the dissemination of non-commercial leaflets or flyers."

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general public, their access rights under that law sufficiently protect their section 7 rights, without further analysis of their access rights to appeal to the public within Downtown Disney under Providence Hospital6 and Jean Country.7 Exclusion of nonemployees

As a preliminary matter, the Union representatives and volunteers here are nonemployees, with limited access rights to the Employer's property. In Lechmere, the U.S. Supreme Court held that, except in narrow circumstances, "Section 7 guarantees do not authorize trespasses by nonemployee organizers."8 However, an employer violates Section 8(a)(1) if it interferes with nontrespassory Section 7 activity. Thus, in order to assert a Lechmere privilege, an employer must have a sufficient property interest under state law to make the presence of nonemployees on the property a "trespass."9 Accordingly, we must look to the law of the State of California to determine the nature and extent of Disney's property interest.10

In Robins v. Pruneyard, supra, the seminal case addressing free speech rights on privately owned California property, the California Supreme Court held that individuals have a state constitutional right to engage in expressive activity in a mall or large shopping center that possesses the characteristics of a public forum. The court in Pruneyard premised its holding on the fact that large retail shopping centers had become the functional equivalent of "miniature downtowns" whose property rights are "worn thin by public usage."11 We conclude that Downtown Disney, which is modeled after a miniature downtown with multiple retail stores, restaurants, and bars, and a multiplex movie theater, is a Pruneyard public forum subject to California's constitutional free speech guarantees.

Pruneyard conclusively establishes that an owner of private property that is a public forum cannot exclude a union or others

6 285 NLRB 320. 7 291 NLRB 11. 8 Lechmere, Inc. v. NLRB, 502 U.S. 527, 537 (1992)(emphasis supplied). 9 See Bristol Farms, 311 NLRB 437, 438-39 (1993); Johnson & Hardin Co., 305 NLRB 690 (1991), enfd. in pertinent part 49 F.3d 237 (6th Cir. 1995). 10 Robins v. Pruneyard, 153 Cal.Rptr. 854 (1979), affd. 557 U.S. 74 (1980). 11 Id. at 907-910 & n. 5.

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entirely from its premises. However, the owner may condition access to its property pursuant to legitimate time, place, and manner restrictions.12 Such restrictions are constitutional to the extent they do not seek to regulate the content of speech, are narrowly tailored to serve significant interests, and leave open ample alternative channels for communication of the information.13

We conclude that Disney's rules requiring an application (Rule III), pre-approval of written materials (Rule XIV), and prior identification of participants (Rule IX) are valid time, place, and manner restrictions. We further conclude that, although Disney has not denied any of the Union's applications to engage in leafleting activity in Downtown Disney, its maintenance of rules restricting the Union's handbilling to designated areas (Rule II.F in the Addendum and Rule VII) and only at peak times (Rule XII) are unlawful time, place, and manner restrictions under California law and, therefore, violate Section 8(a)(1).

Disney's application rule (Rule III) requires the submission of an application before engaging in non-commercial expressive activity in Downtown Disney; the applicant must demonstrate compliance with all other time, place, and manner rules. California courts have held that application rules are not per se invalid, unless they are used to enforce other unlawful rules, thereby enabling the property owner to ferret out conduct it finds objectionable.14 The Union challenges the validity of Rule III based on its enforcement of Disney's Rule XIV "Written Material and Signage" and Rule IX "Identification." Because we conclude below that both Rules XIV and IX are valid, we accordingly find that Rule III is valid.

Disney's Rule XIV provides that ". . . written materials

may not unlawfully interfere with the commercial purpose of Downtown Disney or its tenants . . . ." To ensure compliance with this rule, Disney management pre-screens all of an applicant's written materials, such as handbills. Rules

12 Pruneyard, 153 Cal.Rptr. at 859-860. 13 See Heffron v. International Society for Krishna Consciousness, 452 U.S. 640, 648 (1981), quoting Consolidated Edison Co. v. Public Service Commission, 447 U.S. 530, 536 (1980); Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989), quoting Clark v. Community for Creative Non-Violence, 485 U.S. 288, 293 (1994). 14 United Bro. of Carpenters, Local 586 v. NLRB (Macerich), 540 F.3d 957, 966-967 (9th Cir. 2008), cert. denied 130 S.Ct. 553 (2009) (finding mall's application requirement unlawful because it was used to enforce unlawful identification and commercial purpose time, place, and manner rules).

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allowing for the prior review of written materials are permissible only if the review is limited to objective considerations and does not "confer unbounded discretion permit[ting] a decision to be made impermissibly on the content of the expression."15

In Macerich, supra, the Ninth Circuit held that a

California shopping mall's rule that banned any activity that would "interfere with the commercial purpose" of the mall was a constitutionally defective content-based rule.16 The court found that the rule was entirely motivated by hostility towards any messages critical of the mall or its tenants.17 The court relied on the California Supreme Court's decision in Fashion Valley Mall, LLC v. NLRB,18 that held that, although a privately owned shopping center must, under free speech guarantees, permit peaceful boycott speech against the mall's businesses, the shopping center may prohibit conduct "calculated to disrupt normal business operations or that would result in obstruction of or undue interference with normal business operations."19

Applying those principles here, the distinction between the

commercial purpose rule in the instant case and that in Macerich is the critical inclusion of the word "unlawful" in Disney's rule. Without that qualifier, Rule XIV would clearly be invalid under Macerich. However, the addition of the word arguably inserts an objective standard into the rule, such that the Employer would not have unbounded discretion to prohibit written material purely on the basis of hostility to the message. In the absence of any evidence that Disney has applied this rule unlawfully, and without any decision by a California court addressing the facial validity of such a qualified "commercial purpose" rule, we are not prepared to allege that the rule is unlawful under Macerich.

Disney's Rule IX requires that an applicant name all

individuals who intend to engage in the non-commercial

15 H-CHH Associates v. Citizens for Representative Government, 238 Cal.Rptr. 841, 852 (Cal. App. 2 Dist. 1987), cert. denied 485 U.S. 1971 (1988). See also UNITE v. Superior Court (Taubman Co.), 65 Cal.Rptr.2d 838, 850 (Cal. App. 2 Dist. 1997) ("Implicit in the right of the mall to regulate the content and style of the signs is the ability to review the signs and reject those which do not meet its objective standards"). 16 Macerich, 540 F.3d at 965. 17 Ibid. 18 172 P.3d 742 (2007). 19 Macerich, at 966, quoting Fashion Valley Mall, 172 P.3d at 751-752..

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expressive activity. Under California Labor Code 1138, unions involved in labor disputes cannot be held liable for the unlawful acts of individual officers, members, or agents, absent "clear proof of actual participation in, or actual authorization of those acts." Thus, under California law, Disney may have a legitimate need for the identities of individual participants, because the Union could not be held liable for property damage or misconduct under apparent authority or ratification theories of agency. For this reason, we conclude that Rule IX is a reasonably tailored time, place, and manner restriction.20

Disney's Rule VII, limits non-commercial expressive activity to certain areas and explicitly bans such activity on "driveways and parking lots." In conjunction with this rule, Rule II.F in the Addendum establishes five designated areas: one outside the ESPN Zone (a restaurant and bar); one outside the Paradise Pier Hotel; and three at baggage check points. The ESPN Zone and Paradise Pier Hotel are located on the west end of Downtown Disney; neither is adjacent to the single parking lot entrance from which 99% of the foot traffic enters the downtown area. Two of the three baggage checkpoints are located at the east end of Downtown Disney, where patrons of the two theme parks enter and exit the retail area. The final baggage checkpoint is located toward the east end of Downtown Disney near the resort's security office and travel information center. None of these five designated areas is located in the parking lot, driveways, or the interior or exterior sidewalks in Downtown Disney.

In Pruneyard, the court held that the exterior areas of shopping malls are public forums, relying upon the California Supreme Court's decisions in Schwartz-Torrance21 and In re Lane.22 In Schwartz-Torrance, the court held that a retail strip-mall could not prevent union organizers from picketing in front of the bakery in the mall where the driveways, sidewalks, stores, and parking lot were generally open to the public, noting that the owner's property rights were "worn thin by public usage."23 In In re Lane, the court enjoined the owner of a free-standing supermarket from excluding from the sidewalk in

20 See also Glendale Associates, Ltd. v. NLRB, 347 F.3d 1145, 1151 (9th Cir. 2003) (court noted and did not disturb the Board's finding that mall's identification rule was a valid time, place, and manner restriction that did not violate the NLRA). 21 Schwartz-Torrance v. Bakery and Confectionary Workers Union, 40 Cal. Rptr. 233, 238 (1964). 22 79 Cal.Rptr. 729 (Cal. 1979). 23 Id. at 238.

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front of the store individuals peacefully distributing handbills concerning a labor dispute. The court there stated: "The more an owner, for his advantage, opens up his property for use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use it."24 Recently, in Macerich, the Ninth Circuit relied upon the principles set forth in Pruneyard, in holding that a shopping mall's rule restricting expressive activity to designated areas was unlawful because it excluded the mall's exterior sidewalks and did not leave open ample alternatives for communication.25 The Macerich court reasoned that by banning expressive activity on sidewalks and confining expressive activity to designated areas which may be hundreds of yards away from its patrons the shopping mall owner "effectively cut off access to the Union's intended audience."26

Here, Disney's designated areas rules (Rule VII and Rule

II.F in the Addendum) together, ban expressive activity on the parking lot, driveways, and exterior sidewalk, thereby effectively banning expressive activity on all of Downtown Disney's exterior areas. Because Disney excluded expressive activity on the parking lot, where 99% of Downtown Disney's visitors park and gain access to the shopping center, and because the designated areas are far removed from Downtown Disney foot traffic, the Union does not have ample alternatives to communicate with the general public.

The designated areas at the ESPN Zone and the Paradise Pier

Hotel are on the west end near the main public entrance, which is out of reach from the foot traffic that enters the center from the parking lot. The two designated areas at the baggage check points located near the theme park entrances allow the Union to reach only the limited portion of Downtown Disney visitors who are entering the theme parks directly from the retail area. The fifth designated area is located near Disney's administrative offices. Again, the majority of members of the general public visiting the downtown area would not have much reason to visit its administrative offices. By confining the Union's activity to these areas, which are removed from main foot traffic, and none of which are located on or adjacent to the parking lot or the exterior sidewalk, the Union was only able to reach a small fraction of the number of people it had contact with before the restrictions. And, as a result, the Union claims it was only able to hand out 300 handbills, whereas it had distributed 1000 handbills prior to being limited to the designated areas. In these circumstances, we conclude that Disney's Rule VII and Rule II.F in the Addendum are unlawful

24 In re Lane, 79 Cal.Rptr. at 732. 25 Macerich, 540 F.3d. at 971. 26 Ibid.

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because they exclude access to exterior sidewalks and parking lots and the designated areas fail to provide ample alternative means for the Union to deliver its message.27

Lastly, we note that none of the designated areas are

located on Downtown Disney's interior sidewalk - the mall's main sidewalk located within the center's perimeters. While such a sidewalk is exterior in the sense that it is outdoors, there is no California case that addresses whether the sidewalk here is more akin to the interior corridors of a shopping mall, where the owner may impose reasonable time, place, and manner restrictions,28 or exterior sidewalks, where the owner's property interest is generally outweighed by the public nature of the property.29 Having concluded that the designated areas rules are unlawful because they exclude the parking lot and exterior sidewalk, it is not necessary to address them as they apply to Downtown Disney's interior sidewalk.

Finally, Disney's "peak days" rule (Rule XII) bans non-

commercial expressive activity in Downtown Disney on approximately 50 specific days per year. Disney will not accept applications for these dates. In support of this rule, Disney claims that the resort receives the highest volume of visitors on these days, most of which are during the Christmas holiday season.

In Macerich, the court found unlawfully overbroad a similar rule prohibiting expressive activity throughout almost the entire Christmas holiday season.30 The court noted that during that time mall traffic doubles and tenants make 75% of their sales. It reasoned that a complete ban on those days foreclosed any chance of reaching a large percentage of the target audience and thus failed to provide the required opportunity for ample alternatives for communication. The court also noted that there were numerous less restrictive alternatives that would aid with the congestion concerns proffered by the mall owner, such as limiting the number of participants.31

27 See Macerich, 540 F.3d at 971. Bristol Farms, 311 NLRB at 43 ("an employer's exclusion of union representatives from private property as to which the employer lacks a property right entitling it to exclude individuals . . . violates Section 8(a)(1)"). 28 See Pruneyard, supra, 153 Cal.Rptr. 854. 29 See In re Lane, supra, 79 Cal.Rptr. 729. 30 Macerich, 540 F.3d. at 971. 31 Ibid.

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As in Macerich, the peak days rule here serves as a

complete ban on all expressive activity for almost the entire holiday season when the resort's attendance is the highest and when such activity would be most effective. Further, the peak days ban, in conjunction with the ban on activity on the exterior parking lot and sidewalk, effectively eliminates any opportunity for the Union to communicate its message to the public at a time when it could reach its widest audience. Thus, we conclude that Rule XII is overly broad. Exclusion of employees Employees share the rights of the general public to access under California constitutional law as analyzed above. In addition, as employees, they have heightened rights under Section 7 to access to their workplace. As detailed below, however, those rights would not grant them greater access than that provided under California constitutional law. We note that, although the hotel employees do not work in Downtown Disney, Downtown Disney is part of a single interconnected resort of which the hotel is also an integral part.32 In similar circumstances, the General Counsel has taken the position33 that off-duty employees Section 7 right to access exterior nonwork areas to appeal to the public would be governed by Providence Hospital.34 In Providence Hospital, the Board

32 Disney, the hotel employees' Employer, owns not only the hotels, but also Downtown Disney and the theme parks and they are all interconnected by walkways and rail transportation and held out as parts of a single resort. In addition, every resort employee, including the hotel employees, are called "castmembers" regardless of where they work within the resort. Also, Downtown Disney was created to encourage extended stays at the resort's hotels, which further supports the interrelated nature of the hotels, the theme parks, and Downtown Disney to the resort experience. 33 New York New York Hotel and Casino, Case 28-CA-14519 et al., Pre-Argument Brief of the General Counsel (October 2, 2007), at pp. 4-14. 34285 NLRB 320, 321-22, n. 8 (1987). See also Seton Medical Center-Coastside, Case 20-CA-34191, Advice Memorandum dated April 29, 2009. Compare Tri-County Medical Center, 222 NLRB 1089 (1976) (articulating limits of valid rule denying off-duty employees access to the outside non-work areas of its property for communicating with fellow employees, explaining that, employees must be able to "freely communicate their interest in union activity to those who work on different shifts." Id. at 1089-1090.

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applied Fairmont Hotel,35 the then-current formulation of the Babcock & Wilcox36 balancing test for access rights to private property, which includes an evaluation of whether the employees have a reasonable alternative means of communicating their message to the public. The Board concluded that the public areas near the driveway entrances to the hospital were sufficient alternative means of communication. Accordingly, it found the employer was not obligated to allow off-duty employees access to its property to picket.37 The Board subsequently modified the Fairmont Hotel test in Jean Country,38 which continues to balance the employees' Section 7 rights against the employer's property rights, with the key issue being whether the employees have a reasonable alternative means of communicating their message.39

Applying these principles in determining here the

employees' right of access to Downtown Disney to publicize the dispute with their Employer, we are cognizant that, unlike nonemployees, employee access rights to an employer's private property to engage in Section 7 activity may be broader under Board law than those afforded under the laws of certain states. However, as discussed above, Pruneyard conclusively establishes that, in California, individuals employees and nonemployees alike have a state constitutional right to engage in expressive activity in a privately-owned shopping mall when it possesses the characteristics of a public forum. And, as further discussed above, under Pruneyard, Downtown Disney's parking lot should be treated as public property for purposes of access to engage in free speech activity. Therefore, at a minimum, the off-duty hotel employees would have the same rights as the general public under California law to engage in expressive activity on Downtown Disney's parking lot. The Pruneyard analysis would give the off-duty hotel employees access to the parking lot the entry point for 99% of Downtown Disney visitors. Accordingly, we conclude that no additional access is warranted under Jean Country because access to the parking lots would provide the employees a reasonable means to communicate their message to the public.

35 282 NLRB 139 (1986). 36 NLRB v. Babcock & Wilcox Co., 351 U.S. 105, 112 (1956) (requiring accommodation of Section 7 and property rights with "as little destruction of one as is consistent with the maintenance of the other"). 37 Providence Hospital, 285 NLRB at 322. 38 Jean Country, supra, 291 NLRB at 13. 39 See Providence Hospital, 285 NLRB at 321-322, n. 8. See also Seton Medical Center-Coastside, Case 20-CA-34191, Advice Memorandum dated April 29, 2009.

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Accordingly, we conclude that the Employer's application

requirement (Rule III), and the rules requiring pre-approval of written materials (Rule XIV) and the prior identification of participants (Rule IX) are valid time, place, and manner restrictions. We further conclude that the Region should issue complaint, absent settlement, alleging that the Employer's maintenance of its designated areas rules (Rules II.F in the Addendum and Rule VII) and its peak days rule (Rule XII) violate Section 8(a)(1).

B.J.K.

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NLRB Settlement With Disneyland for Local 11