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In filing suit against a group of unions, BE&K; Construction Company alleged that the unions had engaged in lobbying, litigation, and other concerted activities in order to delay a project it had been hired for because it employed nonunion workers. After BE&K; lost on or withdrew each of its claims, the National Labor Relations Board issued an administrative complaint, alleging that BE&K;, by filing and maintaining its lawsuit, had violated the National Labor Relations Act (NLRA), which prohibits employers from restraining, coercing, or interfering with employees' exercise of rights related to self-organization, collective bargaining, and other concerted activities. Finding that the lawsuit was filed to retaliate against the unions, whose conduct was protected under the NLRA, the Board ordered BE&K; to cease and desist from prosecuting such suits. In granting the Board's enforcement petition, the Court of Appeals held that because the Judiciary had already found BE&K;'s claims against the unions unmeritorious or dismissed, evidence of a simple retaliatory motive sufficed to adjudge BE&K; of committing an unfair labor practice.

Did the Court of Appeals err in holding that the National Labor Relations Board may impose liability on an employer for filing a losing retaliatory lawsuit, even if the employer could show the suit was not objectively baseless?

Yes. In a 9-0 opinion delivered by Justice Sandra Day O'Connor, the Court held that the Board lacked authority to assess liability under the standard of prosecuting an unsuccessful suit with a retaliatory motive. The Court reasoned that the Board's definition of a retaliatory suit as one brought with a motive to interfere with the exercise of protected NLRA rights covers a substantial amount of genuine petitioning. "Because there is nothing in the statutory text indicating that [the NLRA] must be read to reach all reasonably based but unsuccessful suits filed with a retaliatory purpose, we decline to do so. Because the Board's standard for imposing liability under the NLRA allows it to penalize such suits, its standard is thus invalid," wrote Justice O'Connor.