Trader Joe's appeals dismissal of lawsuit claiming labor union violated trademark

Joe Raedle | Getty Images News | Getty Images

Trader Joe's is asking a federal appeals court to reverse a judge's scathing dismissal of the grocery store chain company's lawsuit that alleged trademark infringement by an employee labor union in selling merchandise on its website.

The appeal, filed Thursday, comes nearly a month after the judge accused Trader Joe's of trying to “weaponize the legal system to gain an advantage in an ongoing labor dispute” against the Trader Joe's United union.

Trader Joe's, a lawyer for the company, and a spokeswoman for Trader Joe's United did not immediately respond to requests for comment about the company's filing at the 9th Circuit U.S. Court of Appeals.

The union, which currently represents Trader Joe's employees at two stores in Hadley, Massachusetts, and Minneapolis, is pushing to bargain for and represent employees at other stores, which the company opposes.

Trader Joe's sued the union in mid-July last year in Los Angeles federal court. The suit claimed that the group had infringed on the company's trademarks in producing “union merchandise such as buttons, mugs, t-shirts, and tote bags sold on the Union's website,” Judge Hernan Vera noted in his dismissal ruling in January.

Trader Joe's Union logo pictured on pins.

The suit was filed six days after the National Labor Relations Board issued a consolidated complaint against Trader Joe's that alleged unfair labor practices, which included retaliating against workers, threats and other acts, the judge noted.

“Trader Joe's maintains that this is a purely commercial dispute and that the Union's designs are causing consumer confusion and diluting the Trader Joe's family of trademarks,” Vera wrote.

But Vera wrote that the suit “is undoubtedly related to an existing labor dispute, and it strains credulity to believe” that the complaint would have been filed without the union's organizing efforts.

The judge wrote that the suit “comes dangerously close to the line of Rule 11,” which can result in lawyers being sanctioned if they file legal actions for an improper purpose, or without the claims being warranted.

“The Court dismisses Trader Joe's request for injunctive relief under the Norris-LaGuardia Act, which was passed by Congress precisely to extract courts from the unfortunate business of issuing ostensibly business-related injunctions in pending labor disputes,” the judge wrote.

But Vera went further than just denying the company's request for an injunction to stop the union from selling the merchandise.

Applying trademark laws, Vera said there was “no likelihood of confusion posed by the Union's campaign-related products.”

“The logos used by the Union are in a different font, do not utilize the distinctive fruit basket design, apply concentric rings of different proportions, and are applied to products that no reasonable consumer could confuse as coming from Trader Joe's itself,” the judge wrote.

The Trader Joe's Union LogoTrader Joe's

He also said that the fact that consumers would find the merchandise on sale on the union's website — the only place where it is sold — “minimizes the likelihood the public will mistakenly assume the goods at issue are related” to Trader Joe's products.

“It is simply not plausible to imagine a reasonable consumer going to the Union's website, purchasing a Union-branded coffee mug, and mistakenly believing it to be sold by Trader Joe's,” the judge wrote.

The ruling said that the impact of online sales of merchandise by the union on Trader Joe's market is “undoubtedly” very slight.

But “the potential chilling effect and other collateral impacts on union members resulting from these lawsuits can be significant,” the judge wrote.