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Employer Beware! Confidentiality and Integrity of Workplace Investigations At Risk

Posted on August 29, 2012 by smithamundsen

Contributed by Beverly Alfon

Whether you are operating with a union workforce or non-union workforce – this warning applies to you. When an employee engages in misconduct, most employers prudently begin an investigation before meting out discipline. These investigations often involve speaking to the alleged offender and other potential witnesses.  In the interest of protecting the integrity of the process, employers routinely ask the interviewees to refrain from speaking with others regarding the investigation or any related matters while the investigation is pending.  The National Labor Relations Board has found that this routine request is unlawful.    

In Banner Health System, d/b/a Banner Estrella Medical Center, 358 NLRB No. 93 (July 30, 2012), an employer’s HR consultant read from a prepared script on an “Interview of Complainant” form that the employer regularly used to begin investigatory interviews of employees. One of the standard statements instructed the witness that s/he was prohibited from discussing matters related to the investigation until the investigation was complete.  The Board found this directive to be a violation of the National Labor Relations Act.  It reasoned that the uniform directive “had a reasonable tendency to coerce employees, and so constituted an unlawful restraint of Section 7 rights” to engage in protected concerted activity.   The employer should have first determined whether or not it had “a legitimate business justification that outweighs employees’ Section 7 rights.”  The Board’s disapproval was focused on the employer’s “blanket approach” of imposing the confidentiality restriction for every investigatory interview.  Instead, the Board explained that an employer must make a determination, on a case-by-case basis:  “(i) whether witnesses [need] protection; (ii) evidence [is] in danger of being destroyed; (iii) testimony [is] in danger of being fabricated; or (iv) there [is] a need to prevent a cover-up.”  If one or more of these conditions exist, then an employer will have a stronger basis to argue that its interest in protecting the integrity of the investigation outweighs the employees’ Section 7 rights.

So, now what?  Review your investigation policies, procedures and forms. They may need to be tweaked to remove any language that may be interpreted as creating a blanket prohibition against the discussion of workplace investigations among employees.  Also, consider the inclusion of a four-point checklist on investigatory forms/documents to document a case-by-case consideration of the Board’s factors – before issuing a confidentiality directive to a witness.  Where a confidentiality directive would not be appropriate, “blitz” interviews or sequestering witnesses may be an option to preserve the integrity of the investigation.

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National Labor Relations Board Attacks Employment At-Will Doctrine

Posted on July 2, 2012 by smithamundsen

Contributed by Terry Fox

In remarks to the Connecticut State Bar Association’s annual meeting on June 11th, the NLRB identified that the next big enforcement focus will be on employers’ “at-will” statements within employee handbooks. Lafe Solomon, acting NLRB General Counsel, stated at the meeting that provisions asserting that employment is “at-will” and can be changed only in writing by a senior company official, violate the NLRA because an employee could reasonably believe that type of clause means even union representation and collective bargaining will not alter his or her at-will status, therefore attempts to organize would be futile. That violates the collective action portion of Section 7 of the NLRA. 

At-will employment, a creature of state law, is the doctrine that provides that the duration of employment is for no particular term and either the employee or employer may end the relationship without notice.  The opposite of “at-will” is employment for a set period, normally requiring termination only “for cause.”

Hyatt Hotels was hit with an NLRB complaint filed February 29th of this year (Case Number 28-CA-061114 filed in Phoenix, Arizona). While it predominantly involved social media issues, the NLRB alleged that the following phrases were discriminatory:

  • I understand my employment is “at-will”               
  • I acknowledge that no oral or written statements or representations regarding my employment can alter my at-will employment status, except for a written statement signed by me and . . . Hyatt’s Executive Vice President . . .
  • The sole exception [to employer’s right to change handbook and other policies] to this is the at-will status of my employment, which can only be changed in a writing signed by me and [Hyatt Executive].

The NLRB alleged that this language constituted the employer interfering with, restraining, and coercing employees in the exercise of rights guaranteed by the NLRA.  It was recently announced that Hyatt agreed to change those polices, in response to the NLRB’s complaint, on a nationwide basis. (http://hr.cch.com/eld/Hyattsettlement.pdf)  The Hyatt action by the NLRB comes after the decision in American Red Cross Arizona Blood Services Region, Case No. 28-CA-23443, decided February 1, 2012. (http://hr.cch.com/eld/RedCrossALJ.pdf). 

In Red Cross, the administrative law judge held that similar language violated the NLRA’s Section 7 rights, although for tenuous reasoning.  The reasoning was based on the government’s argument that the acknowledgement in effect constituted a waiver by which the employee agrees his or her status cannot change, which thereby effects a relinquishment of rights to advocate concertedly, whether represented by a union or not, to change at-will employment status.  This is in light of undisputed testimony that the employee at issue did vehemently engage in concerted activities.

It appears that the NLRB’s focus on social media and altering the employment-at-will doctrine is interjecting federal standards into state contract relationships, with an end game of promoting employee leverage against employers policed by the NLRB.  Notions of “free speech” under Section 7 are being articulated by the NLRB, even in private segment workplaces.  Perhaps for those non-union employees, the NLRB seeks to fill the void created by the free marketplace rejection of union representation – by fiat.  Employers are encouraged to have their personnel policies reviewed by competent legal counsel, to reduce the risk that the NLRB can take issue with the receipt provided by their employees.

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California Court Flat Out Rejects the NLRB’s Holding in Horton and Enforces a Class Action Waiver

Posted on June 13, 2012 by smithamundsen

Contributed by Jill Cheskes

It was only a matter of time before a court was faced with a class action waiver in an arbitration agreement following the conflicting rulings on the issue by the US Supreme Court in AT&T Mobility v. Concepcion and the NLRB in Horton.  In the Supreme Court Concepcion case, the court found class action waivers in arbitration agreements to be valid under the Federal Arbitration Act (FAA).  On the other hand, in Horton, the NLRB ruled that such class action prohibitions violated the NLRA and were, therefore, unenforceable notwithstanding the Supreme Court’s decision in Concepcion.

California was perhaps not the location that was expected to side with the US Supreme Court, and yet that has come to pass in the case of Iskanian v. CLS Transp. Los Angeles LLC.  The California Court of Appeals upheld a lower court’s decision to require a California driver to arbitrate his wage and hour claims and its dismissal of his class claims against his employer based on the AT&T Mobility v. Concepcion case. 

Iskanian worked for CLS as a limousine driver and, during his employment, signed an agreement to arbitrate “any and all claims” arising out of his employment and a waiver of class claims.  Nevertheless, Iskanian filed a lawsuit and, after a long procedural history, the trial court found that the Concepcion case required that the class claims be dismissed and the case be arbitrated. 

While this case was on appeal, the Horton case was decided by the NLRB. The California appeals court decision stated that “If Horton only involved application of the NLRA, we would most likely defer to it,” but the court noted that Horton went “well beyond an analysis of the relevant sections of the NLRA.” 

Further, the court held that since the “FAA is not a statute the NLRB is charged with interpreting; we are under no obligation to defer to the NLRB’s analysis.” The court also pointed to the fact that the U.S. Supreme Court issued another ruling enforcing arbitration agreements a week after Horton was decided, holding that arbitration agreements should be enforced under the FAA absent a showing that this mandate was “overridden by a contrary congressional command”  (CompuCredit v. Greenwood, 132 S. Ct. 665).

Noting that the NLRB’s decision did not identify any such congressional command, the California Court of Appeals found that the NLRB elevated “its interpretation of federal labor law over the FAA.” In short, the court found that Horton did not “withstand scrutiny” in light of the Supreme Court’s decisions and upheld the trial court’s decision.

Time will tell how other courts view this conflict but the California court certainly limits the precedential value of Horton to NLRB cases only.

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The Internet Police Have Arrived

Posted on June 4, 2012 by smithamundsen

Contributed by Terry Fox

While Al Gore may, or may not, have invented the Internet, there has not been any central enforcement body to regulate manners, civility, or professionalism in individual Internet discourse . . . until now. It appears that “regulation” is a misnomer because, in actuality, it is more like de-evolution.  Having read the National Labor Relations Board’s Acting Associate General Counsel’s Report Concerning Social Media Cases released May 30, 2012, I am picturing the NLRB management sitting around wearing red plastic flower pots as hats like the early punk band DEVO as they concoct ways to “whip it into shape” on the world-wide web by gutting employers’ social media policies. These rules and pronouncements govern employee’s postings on social media like Facebook, MySpace, and Twitter.

A rule advising employees not to “release confidential guest, team member or company information” is illegal under Section 7 of the National Labor Relations Act, says the NLRB, because employees would construe this rule to prohibit them from discussing the wages and conditions of employment for themselves and others.  This rule is taken from Target Corporation’s social media policy.  The Acting General Counsel report also took issue with a section of Target’s policy addressing confidential information.  Its rule that employees not discuss confidential information of other employees in break rooms or other open areas, in public or at home was deemed unlawful because it would be [not had been] construed by employees to preclude discussion of terms and conditions of employment.

General Motors’ social media policy fared no better.  GM’s policy section requiring posts to be “completely accurate and not misleading” was found overbroad because only maliciously false information lies outside Section 7 of the NLRA.  The admonition for employees unsure of a post’s propriety to check with the company’s corporate communication or legal departments prior to posting is also illegal in the NLRB’s view. 

Most surprising is the trashing of GM’s rules of civility – “treat everyone with respect” – by the NLRB.  “Offensive, demeaning, abusive or inappropriate remarks are as out of place online as they are offline, even if they are unintentional.” What’s the problem with that rule?  “[T]his provision proscribes a broad spectrum of communications that would include protected criticisms of the employer’s labor policies or treatment of employees.”

Privacy gets no respect from the NLRB.  In reviewing McKeeson Corporation’s social media policy, the Board took issue with the provision titled “Respect Privacy.”  McKeeson’s business is to support patient billings for the health care industry.  The “offensive” clause stated “[i]f during the course of your work you create, receive or become aware of personal information about [Employer’s] employees, contingent workers, customers, customer’s patients, providers, business partners or third parties, don’t disclose that information in any way via social media or other online activities.”  Unlawful, said the NLRB, because it would preclude employees from discussing wages and working conditions. 

As shocking as it is that the federal government is enticing employees to talk smack about each other online, the safe haven for employers is uncharted.  Most current social media policies contain a so-called “savings clause.”  Those provisions generally state that the policy is not intended or to be applied to preclude lawful activities under the law, or specifically Section 7 of the NLRA.  A “savings” clause is of no value because it will not save an otherwise unlawful policy because employees would not understand from a disclaimer that protected activities are in fact permitted. 

The Acting General Counsel report trashes the social media policies of other for-profit and nonprofit organizations.  The report does give a pass to Walmart’s revised policies (as of 5/4/12), and provides them as an attachment.  Employers are commended to read the report and strongly encouraged to have trained legal counsel review social media policies.  There appears to be a fair degree of nuance to this, as shown by the report when read in its entirety. What the NLRB appears to be striving for are express carve-outs encouraging employees to discuss wage and working condition issues.  If that is required, it is not clear if having a social media policy is beneficial.  Walmart’s policies, however, find a balance without providing overt encouragement through examples. 

This is an area of rapidly changing laws, rules, and expectations.  The May 30th  report is the third report in less than a year.  Expect more mayhem. . .

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NLRB Continues To Flout Supreme Court on Arbitration Agreements

Posted on May 23, 2012 by smithamundsen

Contributed by Terry Fox

On April 30, 2012, the NLRB filed a complaint against California-based 24-Hour Fitness, based on the company’s use of employment arbitration provisions.  The 24-Hour Fitness written waiver provided that employees would arbitrate employment disputes in a single-employee arbitration. According to the NLRB, that employer policy violates Section 8(a)(1) of the National Labor Relations Act by interference with employees’ rights to collective action provided in Section 7.

24-Hour Fitness is a union-free workplace. It provided an opt-out from the waiver, if the employee provided a signed company form within 30 days of signing the waiver.  Previously, the NLRB filed a complaint against D.R. Horton, Inc., based on the same theory.  The D.R. Horton decision invalidated the arbitration agreement between the employer and employee. D.R. Horton is currently on appeal.  The NLRB’s position is directly contrary to the United States Supreme Court decision in AT&T Mobility v. Concepcion, issued in 2011, upholding arbitration provisions that prohibit collective and class action claims.

The NLRB continues to aggressively insert itself in the non-union workplace by challenging and attacking employer’s policies on arbitration and social media.  Only 7% of private sector workers are members of a labor union.  Perhaps these latest actions by the NLRB are attempts to keep relevant in order to maintain its funding.  Whatever the reason, employers can expect attempts by the NLRB to expand its influence in the private sector.

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NLRB’s Ambush (Quickie) Election Rule No Longer in Effect (for now…)

Posted on May 15, 2012 by smithamundsen

As we previously reported in our blog, the NLRB’s ambush (aka “quickie”) election rule went into effect on April 30, 2012.  The rule sought to dramatically shorten the time frame in which a union representation election will take place. In short, the rule limited the issues employers could raise in the pre-election process (i.e. determining which employees are considered supervisors, and which employees constitute an appropriate bargaining “unit” would no longer be permitted before the election took place) and significantly diminished employers’ ability to appeal unfavorable decision-making at the local board level. The net effect forced employers to counter union organizing campaigns in 14-21 days versus the previously set time frame of approximately 42 days. 

Yesterday, May 14, 2012, a U.S. District Court ruled that the NLRB’s Ambush Election Rule is invalid and no longer in effect because no proper quorum of members existed when the rule was voted on and passed.  U.S. Chamber of Commerce et. al. v. NLRB (D.C. Cir. 1:11-cv-02262). 

Effective immediately, NLRB election procedures revert back to how they had been prior to this April 30, 2012 rule making, which means employers can expect an approximate 42 day window before an election, as opposed to 14-21 days.  We expect the NLRB will likely appeal this decision. 

SmithAmundsen’s Labor & Employment Practice Group recently received one of the first quickie election petitions in the United States, and the new rule was indeed decidedly working against employers.  Unfortunately, this issue isn’t quite over… but this is a significant victory for employers who prefer to remain union free in whole or in part.  As always, more detail will follow as new developments arise.

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NLRB’s “Quickie” Election Rule Effective Today – April 30, 2012

Posted on April 30, 2012 by smithamundsen

Contributed by Jeffrey Risch

Today’s the day that the NLRB’s controversial rule to dramatically shorten the time frame in which a union representation election takes place goes into effect. The new rule radically changes the procedures by which the NLRB administers the union election process in the private sector. Through this new rule, union elections will take place in roughly half the time that they have in recent decades.  

In short, the rule limits the issues employers can raise in the pre-election process (i.e. determining which employees are considered supervisors, and which employees constitute an appropriate bargaining “unit” are no longer permitted before the election takes place) and significantly diminishes their ability to appeal unfavorable decision making at the local board level. The net effect will force employers to counter union organizing campaigns in 14-21 days versus the current time frame of approximately 42 days.  

Readers can find more information about the new rule on the NLRB’s official website at: http://www.nlrb.gov/news/board-adopts-amendments-election-case-procedures

Needless to say, this move is extremely controversial within the business community. Anticipating the move, on December 20, 2011, the U.S. Chamber of Commerce and the Coalition for a Democratic Workplace filed a federal lawsuit seeking to enjoin the NLRB from enforcing the rule.   

The rule was published in the Federal Registry on December 22, 2011 by Chairman Mark Gaston Pearce (D) and outgoing Member Craig Becker (D) without the agreement of Member Brian E. Hayes (R).   

Because of these new time restraints, employers (who prefer to remain union-free) should immediately contact their labor law counsel and discuss implementing an IMMEDIATE RESPONSE PLAN if and when a labor union petitions for recognition.  Despite legal actions filed to prevent this rule from going forward, this rule is in place for now…

SA’s Labor & Employment Law Group will keep its clients and contacts updated on any significant future developments.

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NLRB Blocked from Requiring Employers to Post “Employee Rights” Poster!

Posted on April 17, 2012 by smithamundsen

Contributed by Jon Hoag

The U.S. Court of Appeals for the District of Columbia ordered an emergency injunction to prevent the NLRB from issuing a rule requiring employers to post a notice about collective bargaining rights.  The rule was to go into effect April 30th and now will be delayed until the appeal is decided.

In related news, last Friday, a federal district court in South Carolina decided that the NLRB went beyond its legal authority when issuing the poster rule.  The appellate court noted the South Carolina decision when it issued today’s injunction.  The South Carolina decision raised questions about whether the NLRB would stick with its April 30, 2012 posting deadline, but now employers have clear direction that no posting is required until the District of Columbia matter is resolved.

Read our previous post on this subject:

http://laborandemploymentlawupdate.com/2012/03/05/federal-court-allows-new-labor-poster-requirement-to-go-into-effect-april-30-2012/

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Just Your Monthly Reminder…Social Media is Where the Action Is

Posted on April 4, 2012 by smithamundsen

Contributed by Brandon Anderson

As you may have gathered from the nearly monthly blogs on the issue (see blogs such as Friend Me?? and the three NLRB-related postings), labor and employment attorneys are fascinated and maybe slightly obsessed with the potential impact of social media on the employment relationship and labor and employment laws generally.  As these prior posts have indicated, the hot-off-the-press news has focused on our state governments’ view that employers should not request access to job applicants’ social media websites and the federal government’s view, per the National Labor Relations Board (NLRB), that employers cannot have social media policies that restrict employees’ rights to engage in concerted activity.  And due to these positions that our governments are taking, we have been advising employers that they need to have their social media policies reviewed by an attorney (and will continue to do so!).

In this climate where the barometer suggests an employer’s ability to rely on social media to get to know “the real applicant” or to ensure that an employee isn’t dragging an employer’s name through the mud might be limited, I read the following headline on MSNBC: “Bartender Fired Over Racist Facebook Post.”  In a nutshell, the bartender posted blatantly racist and extremely offensive comments about bar patrons.  The bartender was subsequently fired.  The lawyer in me immediately wondered whether the bartender would sue.  I then kicked a couple of theories around in my head.  There is the “go-to” First Amendment right to free speech—sometimes people are surprised to learn that, to some extent, employees sacrifice this right when they enter into an employment relationship.  A more “novel” theory might be whether the bartender’s rant could be considered “concerted activity”—the “I was just complaining about my job with my co-workers and that’s protected concerted activity” defense.  This probably won’t pass the smell test either, especially if the employer maintained a social media policy that prohibited “Disparagement of any race, religion, gender, sexual orientation, disability or national origin.”  As some of our blogs have indicated, the NLRB has indicated that such discriminatory activity can be prohibited and is not considered protected concerted activity. 

In this day and age, it is critical that employers create and enforce a social media policy.  As we blogged in January, February, March, and now in April, it is also critical that employers ensure that their policies are drafted in a way that will be best positioned to withstand the possible legal challenges.  Remember, defending against a weak but “novel” legal theory still costs you time, effort, and money.  As promised: employers really should consult with an attorney and have an attorney review their social media policies.

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You Say Tomāto, I Say Tomäto: Federal Appeals Court Upholds NLRB Ruling That ‘Landfill Supervisor’ Was Not a Supervisor

Posted on March 14, 2012 by smithamundsen

Contributed by Beverly Alfon

On March 8, 2012, the Seventh Circuit Court of Appeals upheld a National Labor Relations Board ruling that a “landfill supervisor” was unlawfully fired in retaliation for engaging in union organizing activities.  Rochelle Waste Disposal LLC v. NLRB, 7th Cir. No. 10-3212 (3/8/2012).  This is significant because supervisors are excluded from the protections of the National Labor Relations Act.

The court agreed with the NLRB that despite his title, Jeff Jarvis was not a supervisor as defined by Section 2(11) of the Act because he lacked the authority or “responsibility to direct” the work of other employees.  In its analysis, the court referred to the NLRB’s holding in Oakwood Healthcare, Inc, 348 NLRB No. 686 (2006), where it held that an employee has supervisory authority if s/he can take action to correct other employees’ work and can be held accountable for how they perform. 

No authority to take corrective action:  The court noted that ability to take corrective action is not enough.  Such corrective action “must have some force behind it or place some ‘small burden on the employee’” – i.e. something more than telling an equipment operator that his machine was idling too long – as Jarvis did on one occasion.  Jarvis claimed that he only monitored other employees’ work when their performance affected his work.  Accordingly, the court found that the record did not show that Jarvis took actions to correct other employees’ work. 

No accountability for other employees’ performance:  The court agreed that Jarvis had no supervisory authority because he was not accountable for other employees’ performance. Jarvis was never at risk of experiencing “adverse consequences” based on the actions of others and “[r]egardless, the Board has specifically held that ‘paper accountability,’ (accountability in name or job description only), is by itself insufficient to establish supervisory authority.”

As a non-supervisory employee, the NLRB and the court concluded that Jarvis fell within the protections of the Act.  The court upheld the Board’s finding that the employer violated the Act by firing Jarvis in retaliation for his union organizing activities.  It relied upon the employer’s knowledge of Jarvis’ union activity, the timing of the discharge (8 days before a representation election), the employer’s failure to investigate the events allegedly leading up to the discharge, and the employer’s change in rationale for the discharge (from unsatisfactory work performance to a reduction in force). 

BOTTOM LINE:  If you are going to rely on an employee’s supervisory status to save you from potential unfair labor practice charges, be sure that you can demonstrate the employee’s authority to responsibly and meaningfully direct employees.  You also want to be able to provide evidence of the employee taking corrective action with regard to others’ work and show that the employee was at risk for adverse consequences himself as a result of subordinate employees’ work.

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