Category Archives: National Labor Relations Act

You CAN Ask Your Employees To Be Happy! Federal Appeals Court Reins In National Labor Relations Board (NLRB)

Contributed by Beverly Alfon, August 17­, 2017

Labor LawMuch has been written and discussed about the National Labor Relations Board’s (NLRB) attack on handbook policies over the past several years. The NLRB has found what many consider to be run-of-the-mill, standard policies that have, for many years, raised no issues or controversy, to be violative of the National Labor Relations Act (NLRA).

Last year, the NLRB struck down various policies in a handbook issued by T-Mobile, including one that encouraged employees to be professional and maintain a “positive work environment” in T-Mobile USA, Inc. v. NLRB, No. 16-60284 (5th Cir. 2017). In its decision, the Board reasoned: “[w]e find that employees would reasonably construe the rule to restrict potentially controversial or contentious communications and discussions, including those protected by Section 7 of the [NLRA], out of fear that the [employer] would deem them to be inconsistent with a ‘positive work environment.’” T-Mobile appealed the NLRB’s decision to the U.S. Court of Appeals for the Fifth Circuit.

Specifically, T-Mobile challenged the Board’s determination that the following provisions from its employee handbook violated the NLRA because they discouraged unionizing or other concerted activity protected by the Act. Provision (1) encouraged employees to “maintain a positive work environment”; (2) prohibited “[a]rguing or fighting,” “failing to treat others with respect,” and “failing to demonstrate appropriate teamwork”; (3) prohibited all photography and audio or video recording in the workplace; and (4) prohibited access to electronic information by non-approved individuals.

On July 25, the Fifth Circuit held that the Board erred in finding that a reasonable employee would construe policies (1), (2), and (4) to prohibit protected activity. The Court reasoned:

In this case, where the record does not suggest that the rules have been applied in the context of union or collective activity, the ‘reasonable employee’ is a T-Mobile employee aware of his legal rights but who also interprets work rules as they apply to the everydayness of his job. The reasonable employee does not view every employer policy through the prism of the NLRA. Indeed, ‘[the Board] must not presume improper interference with employee rights.’

The Court did agree with the Board’s finding that a reasonable employee would construe policy (3) to prohibit protected activity. It reasoned that unlike the other policies such as the “workplace conduct” policy and “commitment –to-integrity” policy, the recording policy blanketedly forbids certain forms of clearly protected activity. For instance, it would prohibit an off-duty employee from taking a picture of a wage schedule. Notably, last month, the U.S. Court of Appeals for the Second Circuit upheld a similar NLRB decision on workplace recordings.

Bottom line: This federal appeals court decision in T-Mobile USA Inc. v. NLRB gives employers and their counsel additional basis for defending legitimate personnel policies in the face of numerous NLRB decisions issued over the past several years that have been viewed as an attempt to diminish management’s right to set basic employee standards in the workplace. However, it seems that blanket policies prohibiting workplace recordings continue to require careful wording and business justification.

A Hint of Change: NLRB Allows Employer to Defend Blanket Prohibition on Use of Cameras/Video Recording Devices

Contributed by Beverly Alfon, May 16, 2017

Recently, there has been much discussion about the composition of the five-member board in Washington, D.C., including President Trump’s appointment of Philip Miscimarra as National Labor Relations Board (NLRB) Chairman, and the expected shift from pro-labor initiatives – especially in light of the expiring term of the NLRB General Counsel who was appointed by President Obama. The NLRB recently issued an order that may be a sign of things to come.

No Camera

Camera with a red circle and slash over it

On May 5, a divided NLRB denied the NLRB General Counsel’s motion for summary judgment (a request for judgment as a matter of law where there are no disputed facts) against Mercedes-Benz. Mercedes-Benz U.S. International, Inc. (MBUSI), 365 N.L.R.B. No. 67 (May 5, 2017). The General Counsel argued that legal precedent clearly establishes that a company rule prohibiting any use of cameras and video recording devices without prior authorization interferes with employees’ rights to engage in union or protected concerted activity. The General Counsel relied upon the NLRB decisions in Whole Foods Market, 363 NLRB No. 87 , slip op. at 3-5 (Dec. 24, 2015) (in which a similar rule was found unlawfully overbroad) and T-Mobile USA, Inc., 363 NLRB No. 171 , slip op. at 3-5 (April 29, 2016) (same). These decisions state that blanket bans on workplace photography and recordings generally violate the Act.

Mercedes-Benz argued that it should be allowed to show that employees did not interpret the rule to restrict protected activity under the National Labor Relations Act (NLRA) and that the rule furthers legitimate business interests, including the protection of proprietary and confidential information, the maintenance of safety and production standards, and open communication. These are nearly identical to the arguments that the board rejected in Whole Foods Market. However, this board majority, including Chairman Miscimarra, agreed that the employer should be allowed to present their evidence at a hearing. Interestingly, they relied upon two decisions in which the employer was ultimately found to have violated the NLRA, including the Whole Foods Market decision.

Bottom line: This NLRB order is notable because it shows some flexibility from the NLRB as to work rules and legitimate business interests – in contrast to recent decisions that many viewed to curb management rights. Ultimately, however, the law has not changed (yet) and the Whole Foods Market decision remains intact. Therefore, before disciplining an employee for taking photos or making recordings in the workplace, you must consider whether the employee’s actions constitute protected activity under the NLRA. Employer policies should remain carefully tailored to specify the restrictions and the business reasons for them. We will be monitoring the developments in this case. Stay tuned.

Are Mandatory Arbitration Agreements Headed for the Supreme Court?

Contributed by Carlos Arévalo, October 25, 2016

This past June, our blog reported on the Seventh Circuit’s decision in Lewis v. Epic Sys. Corp., 823 F.3d 1147 (7th Cir. 2016), which found that the Federal Arbitration Act does not require enforcement of an arbitration agreement based on the employee’s right under the National Labor Relations Act (NLRA) to engage in protected concerted activity. Specifically, in Lewis the Seventh Circuit held that employment arbitration agreements that include class action waivers violate the NLRA and cannot be enforced. This was the first time that a circuit court had adopted the NLRB’s position in D.R. Horton, Inc., 357 NLRB 184 (January 3, 2012).

Gavel2A couple of months later, the Ninth Circuit, in Morris v. Ernst & Young, LLP, (9th Cir. (Cal.) August 22, 2016), followed suit and also found that an arbitration agreement that required employees to bring claims in “separate proceedings,” thereby prohibiting class and collective actions, violated the employees’ right to engage in concerted activity under the NLRAJust like in Lewis, the employees in Morris had to sign arbitration agreements as a condition of employment. Stephen Morris subsequently filed a class and collective action against the company, alleging he and others had been misclassified as employees exempt from overtime under the Fair Labor Standards Act and California state law. In response, the employer filed a motion to compel arbitration pursuant to the agreements the employees had signed. The district court ordered individual arbitration for each and dismissed the complaint. The Ninth Circuit, however, reversed and held that such agreements interfere with the employees’ rights under Sections 7 and 8 of the NLRA regarding concerted activity.

Back in 2013, three circuit courts ruled that the NLRA does not prohibit class waivers. First, the Eighth Circuit ruled that class waivers were appropriate in Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. 2013). The Second Circuit did likewise in Sutherland v. Ernst & Young, 726 F.3d 290 (2nd Cir. 2013).  Finally, the Fifth Circuit reversed the NLRB’s decision that such agreements were unenforceable in D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013). Then, in 2014 the Eleventh Circuit arrived at the same conclusion and upheld class waivers in Walthour v. Chipio Windshield Repair, LLC, 745 F.3d 1326 (11th Cir. 2014).

Certainly, this split among circuits makes it more likely that the Supreme Court will soon address whether employees will be able to waive their right to participate in collective actions if they choose to sign arbitration agreements. Indeed, petitions for writs of certiorari seeking review by the Supreme Court were filed in Lewis on September 2nd and in Morris on September 8th. How this issue is ultimately resolved, of course, depends largely on the outcome of the 2016 election.

Irrespective of who fills the vacancy left as a result of Justice Scalia’s passing, employers should still seek labor and employment counsel’s guidance with respect to arbitration agreements to determine if they are enforceable and/or if necessary revisions and amendments are required. Similarly, employers, with counsel’s assistance, should develop new strategies in light of potential changes that may be in the offing.

NLRB Strikes Down Employee Handbook’s No-Recording Rules

Contributed by Steven Jados

The NLRB has, once again, struck down work rules the Board deemed overly broad. This time, the employer is Whole Foods Market, and the rules at issue essentially barred employees from photographing or making audio or video recordings during working hours—that is, when employees were being paid to do their assigned work. These rules did not apply while employees were on break.

Readers may remember that the NLRB’s rationale for striking down various employer policies in recent years has hinged on protecting employees’ rights under the National Labor Relations Act to engage in “concerted activity for mutual aid or protection.”  For example, the NLRB has struck down rules barring employees from discussing their wages because those discussions, in the NLRB’s eyes, are concerted activity protected by law.

Now, no employee was actually disciplined for violating the rules at issue in this most-recent case—and there is no accusation that the rules actually infringed on any employee’s right to engage in concerted activity for mutual aid or protection.  There also was no evidence that any employee even believed that the rules prohibited protected concerted activity.  Nevertheless, the NLRB felt it necessary to ban these rules based on the possibility that employees might believe the rules prohibited the recording of, for instance, picketing or unsafe working conditions—things that may generally be considered protected concerted activity.

No CameraOne of the more interesting aspects of the decision, aside from the fact that no one was harmed by the rules at issue, is that the NLRB dodged the issue of whether the rules would be enforceable in states in which at least some of the prohibited recording is illegal under state law. Whole Foods argued that in some of the states in which it does business, it is illegal to record a private conversation without the consent of the parties involved in the conversation. The NLRB, apparently having no interest in issuing a decision with any nuance, rejected that argument (with no acknowledgement of the irony) because such laws were not in effect in all of the states in which Whole Foods operated.

Also interesting is the fact that the NLRB did not overrule prior precedent in which no-camera rules were upheld in a hospital setting.  The rationale for that prior precedent was essentially that the privacy of hospital patients and their medical information outweighed potential concerns over employees’ protected concerted activity.

With all of that in mind, it is likely that some no-recording rules could survive NLRB scrutiny.  The key to drafting enforceable rules will be making them apply to a narrow set of circumstances—circumstances that, ideally, are already protected by existing laws on consent for recording, or which can be tied to significant privacy interests, like medical patient privacy or, perhaps, the protection of trade secrets—although the NLRB’s decision is unclear as to whether the protection of trade secrets would be a valid basis for a no-recording rule.

The bottom line is that employers implementing broad no-recording policies that could be misconstrued to cover protected employee activity face a considerable risk that those rules will be deemed unenforceable by the NLRB.  As such, we recommend that employers work closely with experienced legal counsel to craft no-recording rules that closely align with operational needs and other applicable laws, and at the same time make clear that the rules will not infringe on employees’ rights under the National Labor Relations Act.

Finally, we note in closing that Whole Foods appealed this decision to the U.S. Court of Appeals for the Second Circuit on January 5, 2016.  We will monitor that action closely, and provide updates here with any further information as it becomes available.

Tips For Drafting Severance Agreements To Avoid Scrutiny From The EEOC and NLRB

Contributed by Debra Mastrian

The EEOC and NLRB continue to actively review severance agreements, in addition to social media policies and employee handbooks. The provisions that draw the most scrutiny are waivers or releases of claims, confidentiality and non-disparagement provisions.

18108277_sAny attempt to interfere with an employee’s right to file an administrative charge, communicate with the agencies, or participate in agency investigations, are troublesome. Remember that while an employee can waive or release an EEOC or NLRA claim, the employee can still file a charge of discrimination or an unfair labor practice charge. You can, however, require that the employee waive any right to individual relief in the event a charge is filed. You should always include appropriate carve out language and the language should not be limited to just the EEOC and NLRB, but should apply to any other federal, state or local agency charged with enforcement of any laws. You should consider using a separate, bold paragraph (omnibus carve out) and then refer to that carve out paragraph in each provision that may restrict the employee’s rights. Do not condition payment of the severance on a withdrawal of a pending agency charge, but instead require the employee to complete and return an appropriate agency withdrawal form and notify the agency of the agreement.

Confidentiality and non-disparagement provisions can run afoul of Section 7 and 8 of the National Labor Relations Act (NLRA). The NLRB is concerned with broad provisions that may prohibit employees from discussing the terms and conditions of their employment or saying anything about their employer. Any provision that requires an employee to keep company information confidential should be carefully defined and limited to trade secrets and other non-public proprietary business information and should not be so broad as to cover all company and employee information. A provision that requires the employee to keep the severance agreement confidential should be limited to disclosure of the severance payment or specific terms, rather than the entire agreement. A non-disparagement provision that applies to statements about an employer should be limited to false statements that are willfully, maliciously or knowingly made. You can still prevent an employee from disparaging customers, suppliers and vendors.

You should add a savings provision that nothing in the severance agreement is intended to prohibit the employee from exercising his or her rights under the NLRA.

Employers should have their severance agreements reviewed on a regular basis to ensure they are current.

“No, You Can’t Wear That”—D.C. Circuit Sets Important Limitation On Union Apparel in the Workplace

Contributed by Steven Jados

In the opening sentence of its recent decision, Southern New England Telephone Co. v. NLRB, the federal D.C. Circuit Court of Appeals stated: “Common sense sometimes matters in resolving legal disputes.” If only that were always true in labor disputes.

The legal dispute in this matter centered on the fact that the company prohibited publicly visible employees—those who had direct contact with customers or the public—from wearing union t-shirts that said “Inmate” on the front and “Prisoner of AT$T” on the back. These shirts were part of a campaign by the union representing certain company employees to apply bargaining pressure in the midst of contentious contract negotiations. Notably, the company did allow the shirts to be worn by employees who were not publicly visible.

Common sense says it is less-than-ideal to have your customers and prospects think that you imprison your employees—metaphorically or otherwise.

43200054_sGenerally speaking, however, the National Labor Relations Act protects union members’ rights to wear clothing with union logos and slogans in the workplace. In light of the NLRB’s efforts to expand its reach into non-union workplaces, that same protection conceivably extends to articles of clothing linked to concerted activities relating to wages and working conditions, regardless of whether the clothing is worn by union or non-union employees.

Relying on that generalized protection, prior to this matter reaching the D.C. Circuit, the NLRB ruled that the company acted unlawfully by prohibiting employees from wearing the “prisoner” shirts, and suspending employees who refused to comply with the prohibition.

The D.C. Circuit, however, cited the “special circumstances” exception to the generalized protection favoring union apparel, and stated that this exception allows employers to stop employees “from displaying messages on the job that the company reasonably believes may harm its relationship with its customers or its public image.” In applying that exception to the union’s “prisoner” shirts, the court reinforced the strength and significance of an employer’s concerns of potential damage to customer relationships. Such concerns may outweigh employees’ rights on the subject of union apparel.

All of that said, the bottom line here is that companies do have some rights when it comes to limiting union apparel in the workplace. However, companies must tread carefully when attempting to impose apparel rules because the “special circumstances” exemption will not apply in every case. Common sense eventually prevailed in this matter, but that happened only after a lengthy legal battle that lasted more than five years.

For Every Employer Action, There Is a NLRB Reaction: Board Expands Scope of Protected Concerted Activity Again

Contributed by Beverly Alfon

In a recent decision, Central States Southeast and Southwest Areas, Health & Welfare and Pension Funds, 362 NLRB No. 155 (Aug. 4, 2015), the National Labor Relations Board (NLRB) held that an employee’s posting of a written warning at his cubicle was protected, concerted activity. The employee, Frederick Allen Moss, received the written warning from his supervisor for refusing to stop using his electronic tablet during a work meeting. In response, Moss laminated a copy of it and posted it next to his computer so that it was visible to anyone who entered his cubicle or stood at the entrance of his cubicle.

During a grievance meeting between management and Moss’ union, the supervisor complained that Moss was being disrespectful and insubordinate. The director of Moss’ department (the supervisor’s boss) told Moss that if he did not remove the posting, he would suspend Moss for three days. Moss took down the posting after the union advised him to do so. However, the director’s threat landed the employer before the NLRB.

The administrative law judge who heard the case found the employer’s threat to be an “overreaction” – but not any violation of the National Labor Relations Act. He found no evidence that Moss sought the support of other employees in the grievance process or that his posting advanced his cause in the grievance process. He found no evidence that Moss was seeking the support of other employees because they wanted to be able to use their electronic devices freely while at work or to protest unfair discipline in general. He found no common cause to bring Moss’ conduct under the protection of protected, concerted activity. Nonetheless, the Board in Washington D.C. reversed the ALJ and found violations of the Act.

9637576_sThe Board reasoned that the posting was protected because it was related to other means of communicating with other employees about discipline. Without reasoning, however, the Board dismissed the uncontested fact that Moss and the employees continued to openly discuss the written warning before and after the posting. The Board rejected the employer’s argument that it had a legitimate business justification to “remov[e] open displays of insubordination because such displays are disruptive and undermine management’s authority,” concluding that the employer had no factual basis for deeming the posting to be insubordinate.

Notably, the Board also found that the direction for Moss to remove the posting amounted to an unlawful work “rule” because it was communicated in the presence union stewards who could reasonably interpret that direction as a rule against any discussion of discipline through the physical posting of the discipline.

Bottom line:  Whether or not you have a unionized workforce, this decision serves as a reminder that when an employee responds to discipline – comparative choices for any employer reaction should be carefully evaluated in light of the real potential for substantial and expensive litigation before the NLRB. Also, if you have not done so already, train your managers and supervisors regarding the NLRB’s increased scrutiny of employer work rules.