NLRA doesn't preempt defamation claim against union, MN court rules

A defamation lawsuit filed by a real estate management company against a union and a security guard isn't preempted by the National Labor Relations Act (NLRA), the Minnesota Court of Appeals ruled in a recent unpublished decision. At least for now, the company's state law claims can move forward.

Facts

Madison Equities, Inc., filed suit against the Service Employees International Union (SEIU) Local 26, the SEIU Minnesota State Council, and security guard Christopher Lewis. The company alleged the parties had posted a press release online titled "Massive Wage Theft Scheme Alleged at Downtown St. Paul Buildings Run by Madison Equities." The document stated:

• Security officers at buildings managed by Madison Equities had made "wage theft complaints" to the Minnesota attorney general; and
• The business "had employees work 40 hours under one company" and then work for a different company "for time that should have been overtime time-and-a-half pay," resulting in the workers being underpaid by thousands of dollars.

Madison Equities alleged the press release (and a flier making similar charges) contained false and defamatory statements that interfered with its business relationships.

In response, the SEIU asserted Madison Equities' state law defamation claims were preempted by the NLRA. Therefore, the union asked the court to rule in its favor. The district court denied the request, concluding the employer's claims weren't preempted by federal law.

Appellate court sides with employer