Bill Johnson'S Restaurants, Inc.

BILL JOHNSON'S RESTAURANTS Bill Johnson's Restaurants, Inc. and Myrland R. Helton. Case 28-CA-5041 July 29, 1988 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN, BABSON, AND CRACRAFT On April 30, 1980, the National Labor Relations Board issued its Decision and Order' in this pro- ceeding finding, inter alia, that the Respondent vio- lated Section 8(a)(4) and (1) of the Act by filing a civil complaint in an Arizona state court with the intent of impeding the Board's processes and pun- ishing the Charging Party and others for exercising their rights guaranteed by Section 7 of the Act. On November 12, 1981, the United States Court of Appeals for the Ninth Circuit issued a judg- ment2 enforcing the Board's Order in its entirety. The Respondent thereafter sought and was granted certiorari in the United States Supreme Court. The Supreme Court issued its opinion on May 31, 1983, vacating the Board's Order and remanding the case to the court of appeals with instructions to remand the case to the Board for further proceedings con- sistent with the Court's opinion.3 The Respondent and the General Counsel then filed statements of position with the Board, and the Respondent filed a supplemental statement in response to the Gener- al Counsel's statement. On consideration of the record and the parties' statements in light of the Supreme Court's opinion, the Board makes the fol- lowing findings and conclusions. I. FACTUAL BACKGROUND Myrland R. Helton, a waitress at the Respond- ent's "Bill Johnson's Big Apple East" restaurant, was discharged on August 8, 1978. She then filed an unfair labor practice charge, alleging that her discharge resulted from efforts to organize a union. On September 20, 1978, the General Counsel issued a complaint alleging that her discharge violated the Act. On that day, Helton, joined by three fellow waitresses and a few nonemployees, picketed the restaurant, carrying signs asking customers to boy- cott the establishment because it had been charged with unfair labor practices. The Respondent's man- ager confronted the picketers and threatened to "get even" with them "if it's the last thing I do." The Respondent's president telephoned the hus- band of one of the picketing waitresses and im- ' 249 NLRB 155 2 660 F 2d 1335 (9th Cir 1981 ) (as modified on denial of rehearing and rehearing en bans Mar 2, 1982) 1 461 U S 731 29 pliedly threatened that the couple would "get hurt" and lose their home if the wife continued to picket. Nevertheless, the picketing continued on September 21 and 22 when the picketers, in addi- tion to carrying signs, distributed leaflets listing the employees' specific complaints regarding working conditions. On September 25, attorneys for the Re- spondent filed a complaint in the Superior Court of Arizona alleging that Helton and the other demon- strators had engaged in mass picketing, harassment, blocking ingress to and egress from the restaurant, and creating a threat to public safety.' A second count claimed that the leaflet was libelous, alleging that it contained false and outrageous statements published by defendants with malicious intent to injure the Respondent. The complaint sought, inter alia, compensatory and punitive damages.5 On September 26, Helton filed an additional unfair labor practice charge with the Board, alleg- ing that the state court suit was filed in retaliation for the employees' protected concerted activities and because she had filed an unfair labor practice charge. The General Counsel thereafter issued a second complaint, asserting that the Respondent's filing of the state court suit violated Section 8(a)(4) and (1) of the Act. The two complaints were con- solidated for hearing. The judge, inter alia, found the 8(a)(4) and (1) violations as alleged and, as noted, the Board thereafter adopted the judge's de- cision, and the Board's decision was subsequently enforced by the Ninth Circuit. Meanwhile, the parties to the state court suit had cross-moved for summary judgment on the claim and counterclaim. On March 15, 1979, the state court issued an order that granted the defendants' motion for summary judgment on the business in- terference claims, but left the libel claim for trial. The order further dismissed the abuse-of-process count in the counterclaim, but left the libel count of the counterclaim for trial. II. THE SUPREME COURT'S OPINION In vacating the Ninth Circuit's judgment, the Court initially acknowledged that Section ^ 8(a)(1) and (4) are broad remedial provisions and that law- suits filed by employers may be powerful instru- ments of coercion or retaliation. Nonetheless, the Court found that overriding these concerns. were the first amendment right of access to the courts and the States' compelling interest in maintaining domestic peace. In light of these overriding inter- ests, the Court ruled that the Board may not enjoin 4 These allegations will be referred to as the Respondent's business in- terference claims S The defendants to this suit thereafter filed a counterclaim accusing the Respondent of, inter, aha, abuse of process and libel 290 NLRB No. 5 30 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD a well-grounded lawsuit regardless of the employ- er's motivation in filing it. Conversely, the Court stated that the Board can enjoin a lawsuit that lacks a reasonable basis if it was filed with the intent to retaliate against employees exercising their rights under the Act. The Court indicated that when confronted with the allegation that the filing and prosecution of a lawsuit violates the Act, the Board must first deter- mine whether the suit has a "reasonable basis" in law or fact.6 If the suit lacks a reasonable basis, the Board may proceed with the unfair labor practice proceeding and determine whether the suit was filed with a retaliatory motive. Should the Board determine that a reasonable basis for the suit exists, however, then the Board may not enjoin the suit, but must stay its unfair labor practice proceeding until the state court suit has been concluded. If the state court ultimately finds merit in the employer's suit, the Court stated that the employer should also prevail before the Board because the filing of a meritorious lawsuit, even with a retaliatory motive, is not an unfair labor practice. The Court further indicated, however, that when the state court judg- ment goes against the employer or the suit is withdrawn or is otherwise shown to be with- out merit, the employer has had its day in court, the interest of the State in providing a forum for its citizens has been vindicated, and the Board may then proceed to adjudicate the § 8(a)(1) and § 8(a)(4) unfair labor practice case.7 The Court further noted that if the Board found a violation it could order the employer to reimburse the employees for their attorneys' fees and other expenses, as well as any other proper relief that would effectuate the policies of the Act. We shall apply these principles enunciated by the Supreme Court in resolving the unfair labor practice case before us. III. THE SETTLEMENT AGREEMENT Subsequent to the Supreme Court's opinion, the parties to the state court lawsuit entered into a set- tlement agreement that dismissed all remaining claims and counterclaims in the lawsuit with preju- dice.8 That agreement, in pertinent part, provided: 1. All parties, by and through their attorneys, agree to execute a stipulation to dismiss with 6 The Court indicated that the Board could apply the "genuine issue" test used in adjudging motions for summary judgment when making its reasonable basis determinations 461 U.S at 745 In 11 7 461 U.S. at 747. 8 As noted above, the only remaining issues in the lawsuit were the Re- spondent's libel claim and the employees' libel counterclaim prejudice all claims and counterclaims in the lawsuit entitled Bill Johnson's Restaurants v. Helton et al., Civil No. C-375470, now pending in Maricopa County Superior Court. Each party agrees to bear its own costs and ex- penses; provided however, that Bill Johnson's Restaurants, Inc. shall pay the reasonable at- torneys' fees and costs incurred by defendants in the subject lawsuit, not to exceed the total sum of $8,000.00, as previously required by the NLRB, if and to the extent approved by the Supreme Court of the United States when it renders a decision in Bill Johnson's Restaurants, Inc. v. NLRB, No. 81-2557. The settlement agreement, by its terms, did not settle the instant unfair labor practice charge, nor did it discuss the effect of the Supreme Court's holding on the unfair labor practice issue.9 IV. THE PARTIES' POSITIONS Following the remand of this proceeding to the Board, the parties submitted statements of position. The General Counsel argues that the Respondent's settlement of the libel claim is equivalent to a with- drawal of that suit. She argues, therefore, that, pur- suant to the Supreme Court's decision, withdrawal may be viewed as establishing that the libel suit lacked merit. Alternatively, the General Counsel contends that the Board should now make factual findings in order to determine whether the libel claim had merit because the parties' settlement agreement has precluded a state court adjudication of that claim's merits. She argues that in making these factual findings, the Board should affirm the judge's earlier finding that the statements in the leaflet were true and therefore that the libel claim was without merit. The General Counsel also re- quests that the Board order the Respondent to make the Charging Party and her fellow employees whole for all legal and other expenses incurred by them in defending against the Respondent's lawsuit, including expenses incurred in relation to their answer and counterclaims. The Respondent, on the other hand, urges the Board to dismiss the relevant allegations of the complaint and to deny the state court defendants any reimbursement of their legal expenses. Noting that the state court denied the defendants' motion for summary judgment on the Respondent's libel claim, the Respondent argues that it would be inap- propriate, in light of the Court's decision, for the Board to find that its suit lacked merit and to order 9 The agreement is drafted as if the Court's opinion had not issued, even though the agreement was signed by the parties in June 1983 and the Court had issued its opinion on May 31, 1983 BILL JOHNSON'S RESTAURANTS reimbursement. The Respondent also rejects the General Counsel's argument that the settlement agreement demonstrates that its suit lacked merit by noting that a settlement agreement may not be used as evidence of the validity or invalidity of a claim under the Federal Rules of Evidence. It fur- ther argues that the General Counsel's alternative argument that the Board should adopt the judge's factual findings that the claim lacked merit must be rejected because the Court specifically found that the judge had improperly decided that issue instead of leaving it for the state court to resolve. V. CONCLUSIONS A. Business Interference Claimsio We conclude that the Respondent violated Sec- tion 8(a)(4) and (1) by filing and prosecuting the business interference claims. As noted above, the state court granted the defendants' motion for sum- mary judgment on that claim. That judgment con- stituted a final adjudication establishing that that claim lacked a reasonable basis in law or fact. The Supreme Court has advised that we should defer to the state court judgment unless we can provide a cogent explanation for refusing to do so. 461 U.S. at 749 fn. 15. The Respondent has not presented any argument why we should not defer, nor does the record suggest any reason for not doing so. Furthermore, we find that the record establishes that the Respondent filed its suit in retaliation for the employees' exercise of their Section 7 rights. The administrative law judge considered the intent question and concluded that the Respondent had filed its lawsuit to retaliate against Helton for filing the 8(a)(3) charge and to punish the picketers for engaging in protected concerted activity. 249 NLRB at 165. This conclusion was based on his finding that the Respondent 's manager had threat- ened to "get even" with the picketers." Based on his assessments of demeanor and credibility, the judge also found that the Respondent's president called the husband of one of the picketers and re- ferred to the couple losing their new home and to In determining whether the filing of the Respondent's lawsuit was an unfair labor practice, we find it necessary to analyze the two claims contained in that suit separately This approach is suggested in the Su- preme Court's opinion, when, after noting that the state court had denied the defendants' motion for summary judgment on the libel claim, the Court indicated with respect to the business interference claims that "if [they] have been finally adjudicated to be lacking in merit , on remand the Board may reinstate its finding that [the Respondent ] acted unlawfully by prosecuting these unmeritorious claims " 461 U S at 750 fn 15 The libel claim was still pending in state court when the Court issued its opinion, thus indicating that the Board might arrive at a different conclusion with respect to its reasonable basis and ultimately its merits i i The Respondent's manager also asked for and recorded the names of the picketers who were present , and these individuals were among those named as defendants in the state court suit 31 "getting hurt by all this." 249 NLRB at 161-162. We have carefully reexamined the record and now reaffirm the judge's findings and conclusions re- garding the Respondent's retaliatory motive in filing the suit. Accordingly, we find that the two requisite ele- ments of a meritless suit and a retaliatory motive exist for establishing a violation. Pursuant to the Supreme Court's decision, we shall therefore order appropriate relief to remedy the unlawful filing and prosecution of the business interference suit. B. Libel Claim The resolution of whether the Respondent's filing and prosecution of its libel claim violated the Act presents a more troublesome issue . The state court's denial of the defendants' motion for summa- ry judgment established that this claim had a rea- sonable basis.' 2 Pursuant to the Supreme Court's decision, the Board was therefore required to stay the unfair labor practice proceeding until the state court suit had been concluded. The state court suit has been concluded through the parties' settlement of that claim. The Supreme Court, however, did not address the effect of a settlement as a means of concluding a suit. Rather, it discussed only the effect of the state court reaching a decision on the claim's merits, the employer withdrawing its suit, or the claim otherwise being shown to be lacking in merit. As explained below, we find that the Gen- eral Counsel has failed to establish that the Re- spondent's libel claim was baseless and we will therefore dismiss the complaint as it applies to the filing and prosecution of the libel claim. We reject the General Counsel's argument that the settlement of the libel claim is equivalent to the withdrawal of the claim and thereby establishes that the claim lacked merit. That result is contrary to Rule 408 of the Federal Rules of Evidence, which states that a settlement agreement may not be used as evidence to establish the validity or in- validity of a claim. Furthermore, finding a viola- tion where the parties have settled the claim would discourage settlements, particularly in situations like this one where the state court had found that the claim presented a genuine issue of material fact. We next address the General Counsel's alterna- tive contention that as the state court has been pre- cluded from deciding the merits of the libel claim, we should now do so. Contrary to the position of the Respondent, we find nothing in the Supreme Court opinion that precludes us from deciding the 12 We find that the Respondent did not waive consideration of the state court 's denial of summary judgment on this claim by failing to bring the state court's ruling to the attention of the administrative law judge prior to his decision See 461 U S at 749 fn 15 32 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD merits of this claim in order to resolve the unfair labor practice allegation.'s Nor does the parties' settlement agreement, which settled only the state suit, preclude us from determining the state suit's merits solely for the purpose of resolving the unfair labor practice case.' 4 Nonetheless, we decline the General Counsel's invitation to enter that thicket. Our expertise lies in resolving labor law questions that arise under the Act, rather than deciding claims that arise under state law.' 5 Moreover, our limited resources do not permit us to engage in the resolution of state law claims.' 6 Because we decline to act as state court triers of fact and because the General Counsel has not oth- erwise shown, as required by the Supreme Court's decision, that the Respondent's libel claim lacked merit or was withdrawn, we conclude that no vio- 19 The Court found that the judge had erred by determining that the libel claim lacked merit instead of deciding whether the claim presented a genuine issue that the state court should decide . It further found that the Board must stay its unfair labor practice proceeding until the state court action had concluded The opinion , however, does not say that the Board should refrain from deciding the merits of the claim when , as here, the state court action has concluded and the state court has not rendered a judgment on the merits of the claim. Our determination of the merits would have no legal effect on the state forum , of course, and would be undertaken solely for the purpose of resolving the unfair labor practice allegation. 14 By the same token, we find nothing in the Court 's opinion that re- quires us to decide the state court suit in the event that the parties settle the suit. The Court did find that when the state court initially decides that the employer's suit presents triable issues but ultimately determines that the suit lacks merit , the Board can proceed to adjudicate the unfair labor practice. We do not agree with our colleague's assertion in the second paragraph of fn. 2 of his dissent that this finding means that the Board can disregard the trial court's interlocutory determination and sub- stitute its judgment on the suit 's merits. Rather, that finding simply re- flects the Court's conclusion that the Board is bound by the state court's ultimate determination of the suit's merits. In the same way, the Court clearly held that the Board is bound by the state court's determination that the suit has merit because the Board must then dismiss the unfair labor practice complaint even if the suit was filed with a retaliatory intent. 461 U.S. at 747. In sum, we do not believe that the Court indicat- ed anywhere in its decision that the Board should decide the merits of the employer's lawsuit filed in the state court 13 In this regard, we note the distinction that exists between a reasona- ble-basis determination, which the Court specifically authorized us to un- dertake, and a determination of the merits of a state claim The former involves the limited inquiry of whether a genuine issue exists, whereas the latter requires the Board to conduct a trial on the merits under the legal standards and procedures that the state court would apply. 16 Although "willing to entertain the possibility that the Board might someday be presented with a case so fraught with complex state law issues [that the Board] should decline to give relief," our dissenting col- league states that the determination of this libel claim is not beyond our expertise because it is a state claim governed by a Federal standard He then concludes that we should therefore decide the merits of the libel claim by relying on the findings of the administrative law judge, which were adopted by the Board and enforced by the Federal circuit court. We question the wisdom in doing so Although we may be able to decide certain state law claims, the fact remains that the Board is not a court of general jurisdiction. We do not decide cases that are pursued through the state court systems . Rather, Congress has delegated power to us to decide cases that arise under the Act. That is where our expertise lies We also note that our colleague's standard, that the state suit be "so fraught with complex state law issues" before the Board would not decide it, provides insufficient guidance to the parties in determining whether the Board will or will not hear such cases . Conversely, our deci- sion not to decide these state law claims provides the parties in future cases with the necessary guidance to aid their resolution of those cases lation of Section 8(a)(4) and (1) of the Act has been proven." Accordingly, we will dismiss the com- plaint insofar as it applies to the filing and prosecu- tion of the libel claim. VI. REMEDY Having found that the Respondent's filing and prosecution of the business interference claims vio- lated the Act, we shall order the Respondent to cease and desist from engaging in such conduct. In accordance with the Supreme Court's decision, we shall order the Respondent to reimburse the em- ployees for all attorneys' fees and other expenses that they incurred in defending against the wrong- ful business interference suit . Those expenses were incurred solely because the Respondent instituted its lawsuit, an action that we have found violated the National Labor Relations Act. In order to vin- dicate our interest in enforcing the Act, we have the statutory authority pursuant to Section 10(c) to authorize such relief. That authority does not exist, however, with respect to the counterclaims filed by the employees. In filing those counterclaims, the employees sought to avail themselves of those rem- edies that the State has provided to compensate the injuries suffered as a result of abusive process and libel. The issue of whether to award legal expenses associated with those counterclaims is therefore solely one for the state forum to decide in enforc- ing the laws of its State . No Federal interest is im- plicated. Consequently, we deny the General Counsel's request to order the Respondent to reim- burse the employees for those expenses incurred in filing their counterclaims. ORDER The National Labor Relations Board orders that the Respondent, Bill Johnson's Restaurants, Inc., Phoenix, Arizona, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Filing or maintaining a baseless lawsuit against employees in retaliation for their engaging in protected concerted activities. (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. 17 In light of our finding that the General Counsel has not shown that the Respondent's libel claim lacked merit or that the Respondent with- drew that claim, we need not decide whether the Respondent filed its libel claim with a retaliatory motive BILL JOHNSON'S RESTAURANTS (a) In the manner set forth in the remedy portion of the Supplemental Decision, reimburse the Charging Party, Myrland R. Helton, and all other named party defendants, for legal expenses up to a maximum of $8000 incurred in defense of the busi- ness interference claim of its lawsuit styled as Bill Johnson's Restaurants v. Myrland R. Helton, No. C- 375470, in the Superior Court of the State of Ari- zona, in and for the county of Maricopa. (b) Post at each of its restaurants located in Phoenix and Mesa, Arizona, copies of the attached notice marked "Appendix.""' Copies of the notice, on forms provided by the Regional Director for Region 28, after being signed by the Respondent's authorized representative, shall be posted by the Respondent immediately upon receipt and main- tained for 60 consecutive days in conspicuous places including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. CHAIRMAN STEPHENS, concurring and dissenting in part. When, as a consequence of employees exercising their rights under Section 7, their employer files a suit in state court against them, the Board may enjoin the prosecution of that suit only on a two- fold finding that (1) the employer is acting out of retaliatory motives, and (2) there is no reasonable basis in fact or law for the suit. This is the holding of the Supreme Court's opinion which remanded the instant proceeding back to us for further con- sideration. At that time, the Respondent's suit was still pending in an Arizona superior court. Al- though the Respondent's business interference claim against its employees had been dismissed on a motion for summary judgment, its libel claim, as well as the employees' counterclaim for libel, was awaiting trial, the state court having denied the parties' cross-motions for summary judgment. Events, however, soon overcame the case. Within the month following the Supreme Court's May 1983 decision, the parties executed a settle- ment agreement that provided for dismissal with prejudice of the entire state proceeding and for the payment of up to $8000 by the Respondent to the employees to compensate for attorney's fees and 18 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading "Posted by Order of the Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board " 33 court costs. Interestingly, the settlement did not at- tempt to dispose of the Board proceeding. Thus, as of this juncture, the question before the Board is no longer whether we should enjoin a pending state court suit, but whether the Board can order reme- dial relief against the Respondent for a retaliatory suit which was terminated, not by a final adjudica- tion by a state court, but rather by a settlement. I agree with my colleagues that the record indis- putably supports a finding of retaliatory motive by the Respondent in filing suit on the business inter- ference count, and I further find such a motive in its filing of the libel claim. I also join my col- leagues in concluding that the business interference claim, which did not survive a motion for summary judgment, was baseless and was therefore an unfair labor practice which we should remedy. However, I part company with the majority's conclusion that we should refrain from considering whether the libel claim lacks merit. The Board should address the question and on finding that the state claim was groundless and filed for retaliatory motives, an ap- propriate remedy should be ordered. Furthermore, while I concur with my colleagues on the effect to be given to the settlement agreement, I believe some elaboration is warranted. As my colleagues properly concede, there is nothing in the Supreme Court's opinion that pre- cludes us from considering the libel issue. Indeed, the Court held that the Board could "proceed to adjudicate" the unfair labor practice issues if "judg- ment goes against the employer in the state court . . . or if his suit is withdrawn or is otherwise shown to be without merit." Bill Johnson's Restaurants v. NLRB, 461 U.S. 731, 747 (1983) (emphasis added). They stay their hand, however, because of the fear that we would be entering a "thicket" of state law claims. I am willing to entertain the possibility that the Board might someday be presented with a case so fraught with complex state law issues we should decline to give relief even though the possibility exists that the respondent's lawsuit is both baseless and unlawfully motivated. But that is surely not this case, and I cannot conclude that we should de- cline to consider the issue here simply because we can speculate that other very different cases might arise in the future. Although the libel claim at issue here is a claim under state law, it is one that-as a substantive matter-is governed by Federal standards rooted in a Federal labor policy that has been defined in part by Board decisions. Thus, in Linn v. Plant Guard Workers, 383 U.S. 53 (1966), the Supreme Court held that the National Labor Relations Act did not completely preempt state court libel actions arising out of labor disputes; but the Court set out a Fed- 34 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD eral standard for determining whether a particular libel could be found to be actionable in such cases. This standard-a requirement that the statements in question be found to have been made with actual malice in the sense that they were "published with knowledge of their falsity or with reckless disre- gard of whether they were true or false"-was based on the Court's earlier first amendment deci- sion in New York Times Co. v. Sullivan, 376 U.S. 254 (1964), and on the standards that the Board has applied in determining whether alleged defamations constitute conduct unprotected by the Act. Linn, supra, 383 U.S. at 61 , 65.' A state court that substi- tutes state common law principles for that standard and permits a state law remedy for speech that would be protected under Federal law is properly reversed. Letter Carriers v. Austin, 418 U.S. 264, 281-287 (1974). Thus, I cannot see any basis for concluding that the determination whether the Re- spondent's libel claim has merit is beyond our "ex- pertise," as my colleagues suggest. In fact, because the administrative law judge lacked the guidance subsequently provided by the Supreme Court in this case concerning when the Board may consider the merits of a retaliatory state court suit, the judge has already effectively decid- ed the merits of the libel claim. He found that the allegations that the Respondent claimed were libel- ous were, in fact, true. 249 NLRB at 162-163.2 Af- ' The Court has since clarified Linn by explaining that it was "ground- ed in federal labor policy, though the suit had constitutional overtones" Babbitt Y. Farm Workers, 442 U S 289, 309 fn . 16 (1979) 2 It is true that the Supreme Court declared that here "[ilt was not the ALI's province to make . factual determinations" regarding the meri- toriousness of the libel claim as well as the one for business interference. See part V of the Court 's opinion, 461 U.S at 748. But, contrary to the Respondent, I do not read the Court 's restriction on the scope of the Board's factual inquiry in deciding whether to enjoin a pending state suit (i.e, limited to whether the employer's evidence raises a genuine and ma- terial issue of fact) to be applicable once the suit is settled. Similarly, while the Court also suggested that the decision of a state court on the question whether a lawsuit presents triable factual issues is entitled to deference, 461 U.S at 749 fn. 15, 1 do not believe that the Arizona superior court's finding of triable issues on the libel claim at the summary judgment stage precludes the Board from finding that the suit lacks merit. Again, the reason turns on the status of the state litigation at the time the Board proceeds with the unfair labor practice case: When the Board seeks to enjoin a pending state suit, the trial court 's finding of a triable issue should normally lead the Board to suspend its own pro- ceedings, as the Court said. However, once the state action is concluded either by a final judgment or withdrawal of the suit , the General Counsel may then consider whether to continue prosecution of the Board case. As the Court itself stated, "If judgment goes against the employer in the state court . . . the interest of the State in providing a forum for its citi- zens has been vindicated, and the Board may then proceed to adjudicate the § 8(a)(1) and § 8(aX4) unfair labor practice case ." 461 U.S. at 747. It is entirely conceivable that the employer may have initially withstood a defense motion for summary judgment by establishing existence of triable facts, only to have final judgment entered against the employer . The fact that the Court would still allow the Board to proceed against the em- ployer in such a case must logically mean that the Board can at some point disregard a trial court's interlocutory determination that the suit may have merit and make its own determination of the merits of the em- ployer's state suit. firming the decision that the prosecution of the libel claim was an unfair labor practice , the court of appeals held that, although there was some am- biguity in the picketing waitresses ' leaflet concern- ing whether all their listed grievances against the Respondent had been made the subject of Board charges, there was no evidence at all to show that "the picketers made the statements with reckless disregard for the truth or falsity of the statements." 660 F.2d at 1343. It further held that the Respond- ent's suit lacked any "reasonable basis in fact." Ibid. It is clear to me, therefore, that although there is no state court adjudication either for or against the Respondent, and although the Respondent settled, rather than withdrew, its libel claim, that claim is one that has been "otherwise shown to be without merit." Bill Johnson 's, supra, 461 U.S. at 747. The General Counsel has therefore met the require- ments approved by the Court for finding that the filing and prosecution of a lawsuit is an unfair labor practice: it was brought for a motive unlawful under the Act and it is lacking in merit. I would find the violation and provide the appropriate remedy, i.e., reimbursement for the costs of defend- ing against the claim. On the separate issue of what effect to give to the parties' settlement, I agree with my colleagues in striking a middle ground that rejects both the General Counsel's and the Respondent's respective contentions, but I would make some additional ob- servations. First, to hold, as the General Counsel asserts, that a settlement is tantamount to an admis- sion of nonmerit (particularly on the heels of a ju- dicial finding that material issues of fact or law exist) would, as the majority reasons, tend to dis- courage the resort to settlements as a means to re- solve disputes. However, I would suggest that the rule we announce today, which rejects the Re- spondent's argument that the settlement of the state suit should automatically be given preclusive effect regarding the Board proceeding, does create a cer- tain disincentive to settlement. A Board respondent may well ask itself what advantages there are to settle its state claims short of final adjudication if it must face further litigation of the matter before the Board. Perhaps the way around this problem is to pursue a strategy which the Respondent here curi- ously did not follow : attempt to resolve both the state court litigation and the Board proceeding in one fell swoop, taking into account the standards which the Board applies in approving settlements.3 Consideration of the state and Federal claims to- gether, for settlement purposes, not only recognizes ' See, e.g., independent Stave Co., 287 NLRB 740 (1987). BILL JOHNSON'S RESTAURANTS the State's interest in resolving private disputes short of full-blown litigation, but also protects the important and distinct interest that the Federal Government has in enforcing its labor laws. It is, of course, arguable that the Board's action against the Respondent is similar to the common law action for malicious prosecution available under state law.4 The general rule applied in such actions is that a settlement of the underlying suit will auto- matically bar the malicious prosecution action.5 The theory is that, in settling the initial suit, the plaintiff in the malicious prosecution case is pre- sumed to concede the existence of probable cause for the former action and therefore is not entitled to prevail on his or her action. Whatever the valid- ity of that rule in the state law context (and how- ever the Board action may resemble one for mali- cious prosecution), it should not be applied in the instant case to foreclose the Board from vindicat- ing the Act's policies against an employer's taking coercive, retaliatory action against its employees for the exercise of their statutory rights. As appears to be borne out by the void in the settlement agree- ment here, there is no assurance that this Federal interest will be taken into account when the parties agree simply to dismiss the claims and possible counterclaims in the employer's state lawsuit. A de- fending employee may well be glad simply to see the state suit dismissed, without regard to the Labor Act's policies of deterring such misconduct 4 See Bill Johnson's Restaurants, supra, 461 U S at 747 fn 14, noting that "[t]he Board's power to take such action [against retaliatory law- suits] is not limited by the availability to injured employees of a state- court malicious prosecution or other action - ' 5 See cases cited in 52 Am Jur 2d, Malicious Prosecution,' § 43 at 211- 212 (1970) 35 in the future and of making the aggrieved employ- ee whole for his or her losses. Thus, the result that we reach in this case today with respect to the set- tlement issue, does not represent a retreat from the Board's strong policy favoring settlements. I would view it as simply insisting that all the appropriate interests be consciously considered in compromis- ing the claims. 'APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT file or maintain baseless lawsuits against employees in retaliation for their engaging in protected concerted activities. WE WILL NOT in any like or related manner interfere with, restrain , or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL reimburse Myrland R. Helton , and all other named party defendants, for legal expenses up to a maximum of $8000 incurred in defense of the business interference claim of our lawsuit styled as Bill Johnson's Restaurants v. Myrland R. Helton, No. C-375470, in the Superior Court of the State of Arizona, in and for the county of Maricopa. BILL JOHNSON'S RESTAURANTS, INC. 1