Category Archives: National Labor Relations Board

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.

No Joint Employer Liability Found, Despite New NLRB Standard

Contributed by Beverly Alfon

A couple of months ago, we discussed the National Labor Relations Board’s (NLRB) startling decision in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015), in which it determined that a non-union company shared joint employer liability, under the National Labor Relations Act (NLRA), with a labor contractor at one of its recycling plants. The Board held that two or more entities are joint employers if each one possesses sufficient control over employee’s essential terms and conditions of employment. Employers were in an uproar over the decision because of the potential exposure it brings to the use of any subcontractor and the fact that it makes it more difficult for an employer to avoid union organization through the subcontracting of work.

In the first reported decision since Browning-Ferris, the Regional Director for NLRB Region 5 found that in Green JobWorks, LLC/ACECO, LLC, Case No. 05-RC-154596 (Oct. 21, 2015), the union failed to establish a joint employer relationship between a subcontractor and a staffing agency. So, what made the difference in this case? See the chart below. (Click here if chart does not appear) 

BAChart (2)

BOTTOM LINE:  Unlike the Browning-Ferris decision, the Regional Director’s decision in Green JobWorks, LLC is not binding in other cases and the union has a right to appeal it (and we’ll keep you posted). Nonetheless, the decision confirms that the specific terms of the parties’ agreement and their conduct under those terms will be scrutinized.  As we suggested before, now is the time to take action:

  • Analyze all written agreements between your organization and any third party. A user company’s reservation of rights as to contracted employees should be limited and specific. The agreement should clearly indicate that the servicing company maintains exclusive authority to hire, fire, discipline, etc. and the user company reserves no/minimal rights to influence or decide these matters.
  • Carefully evaluate supervisory functions and oversight in practice, training requirements and other day-to-day activities surrounding employee relations (of your own direct employees and 3rd party employees). Consider requiring on-site “lead workers” from the servicing company so that they are responsible for tracking contracted employee hours, determining breaks and removing poor performers. 
  • Determine whether your current business model needs to be tweaked or modified in light of these developments.

Hospital’s Second Bite at the Apple Violated Unionized Employees’ Rights for Open Positions Between Facilities

Contributed by Heather Bailey

Last week, the National Labor Relations Board (“NLRB”) – although divided – affirmed that Southcoast Hospitals Group violated unionized workers’ rights under Section 8(a)(3) and (1) of the National Labor Relations Act when the hospital created an open position hiring and transfer policy that gave unrepresented workers preference over unionized employees at the non-unionized hospitals.

Southcoast, located in Massachusetts, was comprised of 3 hospitals and 20 ancillary locations. The unionized employees made up 215 of the 550 employees who worked at one of the three hospitals, Tobey. The employees, unionized or not, were allowed to cross-pollinate between the three hospitals for open positions.  Since 1996, the parties’ collective bargaining agreement gave unionized employees the leg up when it came to hiring and transferring to open positions at Tobey and were to be given the “most senior qualified” preference for these positions. Somewhere around 1997-98, the hospital tried to negotiate and change this language to the “best qualified” which would have put the unrepresented employees at the same advantage as the unionized workers. This, of course, was rejected by the Union.

In 1999, the hospital decided to unilaterally change its written human resources policy to the following:

  • Upon application, regular status employees who are beyond the introductionary [sic] period will be given first consideration for job postings providing the regular status employee’s qualifications substantially equal the qualifications of external candidates. Employees in a union will be considered internal candidates if the collective bargaining contract provides reciprocal opportunity to employees who are not members of the union for open positions at the unionized site. Temporary and per diem status employees will be considered prior to external applicants . . . . Employees in a union whose collective-bargaining contract does not provide reciprocal opportunity to employees who are not members of the union will be considered external candidates.

The hospital defended its actions by stating 1) it was trying to head off unrepresented employee complaints of being shut out of represented employee positions (yet, the hospital did not bring one complaining employee or applicant forward) and 2) it was trying to “level the playing field” for the unrepresented employees at the other two hospitals to that of the unionized employees at Tobey. However, the underlying judge noted that the union employees only comprised of 215 of the 550 positions. Thus, the unionized employees were discriminated against and hindered in job advancement for being in the union because the unrepresented employees now had a much higher disproportionate amount of open positions that they were getting preferential treatment for over the unionized employees.

Ultimately, the NLRB agreed that neither of the reasons gave the hospital a “legitimate and substantial business justification” to thwart the unionized employees’ Section 7 NLRA rights that would outweigh the impact this HR policy had against unionized employees who had collectively bargained for rights at their hospital. Among other edicts of back pay and tax consequences and the requirement to reconsider passed over unionized employees for the positions at the non-unionized hospitals, the hospital was ordered to rescind its HR policy and notify all of the employees of same.

Practice Tips: NLRB scrutiny of employer policies is at an all-time high. Any employment policy or practice that makes a distinction between employees based on union member status must be scrutinized for any potential (or actual) adverse effect on the union members and potential (or actual) advantage provided to the non-union employees. If the change is going to give the unionized employees less rights, less opportunities, etc., it is better to be creative and think of a different approach (or get the union’s blessing before making the change). Whenever going against a collective bargaining agreement, it is best to run the change by your labor counsel first.

Temporary Staffing Agencies & User Companies Deemed “Joint Employers” By the NLRB

Contributed by Jeffrey Risch

As we anticipated and previously discussed, on August 27, 2015, the National Labor Relations Board (NLRB) issued its ruling in the closely watched Browning-Ferris Industries of California, Inc. (BFI) case (Case 32-RC-109684). In rejecting over 30 years of precedent and the underlying Administrative Law Judge’s ruling on the issue, the NLRB’s pro-union majority established a new standard for determining joint-employer status. While the decision related to a company’s engagement of a subcontractor supplying workers, the NLRB’s new joint-employer standard will certainly have a direct impact on franchisor/franchisee relationships, temporary staffing and leased employee business models as well as all aspects of employment outsourcing. In short, it lays the groundwork to overturn other past NLRB decisions and will, if left unchecked, alter how two or more independent businesses conduct business in the United States.

The underlying case: Teamsters Local 350 filed an organizing petition seeking to represent employees of Leadpoint who were placed at BFI’s facility. BFI and Leadpoint objected to this organizing attempt and ultimately prevailed before the NLRB’s assigned Administrative Law Judge. The ALJ, in applying decades of precedent, ruled that BFI and its subcontractor, Leadpoint, were not joint employers because BFI did not share “immediate and direct control” over the terms and conditions of Leadpoint’s employees working at the BFI facility. The Teamsters appealed the decision and urged the NLRB to adopt a new standard to allow the representative process to move forward. The NLRB’s General Counsel advanced the Teamsters’ position as well as a host of pro-union organizations — once invited to do so by the NLRB.

The new standard: According to the NLRB’s majority, two or more entities should be deemed joint employers of a single workforce under the Act when (1) they are both employers within the meaning of the common law; and (2) they directly or indirectly share or codetermine essential terms and conditions of employment. In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the NLRB will now consider whether an employer has exercised or reserved ANY control over terms and conditions of employment (directly or indirectly). Suffice to say… it’s now a very low standard. According to the majority, the new standard is designed “to better effectuate the purposes of the Act [National Labor Relations Act] in the current economic landscape.” However, make no mistake… this means exactly what the union, pro-union organizations and the NLRB’s own General Counsel advanced — which was essentially: if business conditions make it more difficult for unions to organize workers or collectively bargain, then the standards must be lowered to allow such.

Board Chairman Mark Gaston Pearce was joined by Members Kent Y. Hirozawa and Lauren McFerran in the majority opinion; Members Philip A. Miscimarra and Harry I. Johnson III dissented. Interestingly, and fodder for future legal challenges, the 2-member dissent stated: “…our colleagues have announced a new test of joint-employer status based on policy and economic interests that Congress has expressly prohibited the Board from considering.”

The impact: Two separate and distinct legal entities could now be embroiled with one another’s alleged unfair labor practices, union organizing drives, strike activities and picketing disputes as well as mandatory bargaining obligations. Further, this decision lays the groundwork for the NLRB to overturn other key decisions and continue its recent actions to provide unions with life-support. For instance, in July 2015, the NLRB invited briefs in the Miller & Anderson, Inc. matter (05-RC-079249), to help determine if the NLRB should overturn its decision in Oakwood Care Center (343 NLRB 659), which disallowed inclusion of solely employed employees or jointly employed employees in the same unit absent consent of both employers. Have no doubt, the writing is already on the wall here. Additionally, this decision will certainly be used by the EEOC, U.S. DOL and other federal agencies in their ongoing efforts to increasingly regulate the workplace.

Conclusion: Take action now! Don’t wait. First, immediately review and analyze all written agreements in place between your organization and any 3rd party. Whether you are a franchisor, franchisee, user company, general contractor, subcontractor, supplier company, temporary staffing firm…. It does not matter. Review all agreements through the lens of the NLRB and its bent towards finding joint-employer status. Second, carefully review and evaluate actual supervisory functions and oversight, training requirements and other day-to-day activities surrounding employee relations (of your own direct employees and 3rd party employees). Finally, perhaps its time to sit down and determine whether your current business model needs to be tweaked or modified in light of these disturbing developments.

“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.

Too Little Too Late: NLRB Rejects Employer’s Attempt To Repudiate

Contributed by Beverly Alfon

In a 2-1 decision, the National Labor Relations Board (NLRB) issued a decision against an auto dealer, finding that the company violated the National Labor Relations Act (act) by implementing and maintaining: (1) a 2010 social media policy that required employees to identify themselves when posting comments about the company, its business, or a policy issue and prohibited employees from using the company’s logo in any manner; and (2)  a 2010 dress code policy that prohibited employees from wearing pins, insignia or other message clothing.  Boch Imports, Inc., 362 NLRB No. 83, 4/30/2015.  In light of the NLRB’s aimed campaign to attack what it characterizes as “overly broad” work rules, these findings are not all that surprising.  What makes this decision a brow-raiser is the fact that the NLRB rejected the company’s attempts to correct these policies – even though the company did so with the assistance and approval of the NLRB regional office that investigated the unfair labor practice charge.

Notice PostingIn 2013, the company replaced the 2010 policies with lawful language (except for the dress code provision) and distributed a new employee handbook to every employee.  The purpose was clearly to achieve compliance with Section 7 of the act.  Nonetheless, the board found violations by the company for its 2010 policies – regardless of the company’s rescission of those policies.  The board found the revised policies to be an inadequate remedy and ordered the company to post a notice to employees that enumerated the various overbroad policies and rules that were contained in the 2010 handbook.

This decision is troublesome for employers because although the board acknowledged that an employer may repudiate its unfair labor practices, it would have required the company to provide notice of the unfair labor practices to the employees, an admission of wrongdoing, even before an administrative law judge ruled on the merits of the charge.

Bottom line:  The region’s informal blessing of your attempts to correct the conduct at issue in an unfair labor practice charge, does not amount to an effective repudiation.  Before you decide to correct a policy or procedure that is the subject of an unfair labor practice charge, explore the possibility of a non-board settlement with the charging party – one that would not require a notice posting or admission of fault.

NLRB Weighs In On Dispute Over Kentucky County’s Right-To-Work Laws

Contributed by Julie Proscia and Steven Jados

Last week, the National Labor Relations Board (board) filed a legal brief in an ongoing federal lawsuit over the viability of a multi-part right-to-work law implemented through a county-wide ordinance in Hardin County, Kentucky.  Among other things, the ordinance at issue prohibits the use of union-security provisions in collective bargaining agreements, and also regulates hiring halls, dues check-off, anti-coercion and discrimination provisions, and the penalties for violations of Section 8 of the National Labor Relations Act.  The board’s central argument is that federal law preempts the county’s legislation on those issues.

This action by the board (which is not actually a party to the lawsuit at issue) in support of the plaintiff unions is indicative of the board’s unprecedented and aggressively pro-union agenda.  The underlying lawsuit was filed by the United Auto Workers and other unions in a Kentucky federal district court to challenge the legality of the county’s ordinances.  That said, the board’s brief indicates that this likely will not be a precursor to challenges to right-to-work laws that have been implemented on a state-wide level across the country.  In that regard, the board’s brief references the statutory basis for states’ right-to-work laws, but then argues that that statutory text should not be applied to local government entities for reasons that include the possibility that county-wide legislation could result in a “crazy-quilt” of varying regulations that could make it impossible to administer industry-wide labor agreements.

While the Kentucky district court’s jurisdiction is obviously limited, local governmental bodies around the country are certain to be watching the outcome of this decision, and an opinion favoring Hardin County is likely to spur more legislation of this sort on the local government level all across the country.

The NLRB Issued Employee Handbook Guidance With All You Need To Know In A Single Source?

Contributed by Steven Jados

Not exactly—but it is quite useful, nonetheless.

Recently, the Office of the General Counsel for the National Labor Relations Board issued a report on lawful and unlawful employee handbook rules.  And while the information provided in the report does not have the force of law, the guidance is quite detailed and it provides insight into what, for the moment, is the board’s approach to enforcement on employee handbooks.

What the report makes clear is that context is key to determining whether an employee handbook provision will be considered lawful or not.  For instance, it is perfectly acceptable to have a policy that states: “Do not make negative comments about our customers in any social media.”  However, if an employer prohibited “negative” comments about the employer, itself, or its management personnel, that would almost certainly be considered unlawful.

Similarly, while a policy that generally prohibits “derogatory comments” is likely to be found unlawful, a ban on derogatory comments that is included within a policy prohibiting sexual harassment is likely to be acceptable.  The report includes guidance like this on several categories of employee handbook policies, including: treatment of customers, competitors, and the public; treatment of confidential and proprietary business information; harassment in the workplace and online; and employee communication with the media.

The report also provides specific examples of actual employee handbook language that the NLRB considers unlawful, along with a brief explanation of why the language is considered unlawful.  Following that, the report then provides examples and explanations of similar policies that are facially acceptable.

As one would expect, the report is not perfect, and it does not have the force of law—which is to say that reliance on the report will not be an absolute defense to an unfair labor practice charge.  This is especially so in light of the fact that the acceptable policies included in the report are considered “facially” lawful, which means, essentially, that the board believes those policies can and should be interpreted in a way that does not unlawfully restrict employee rights.

However, if an employer enforces what would be a facially valid policy in a way that is unlawful (e.g., enforcing a facially valid confidentiality policy by terminating employees who discuss their pay rates), the employer should not be surprised to find itself charged with an unfair labor practice.

That said, despite any flaws the report may have, the report is the most comprehensive and extensive guidance issued by the NLRB on this subject, and it is a good starting point for employers who have not yet revised their policies in response to the NLRB’s increased enforcement in this area over the past several years.

Non-Union Employers Should Act Now as Washington Addresses Quickie Election Rule

Contributed by Jamie Kauther

Ever since the NLRB attempted to put into effect its ambush (aka “quickie”) election rule on April 30, 2012, we have addressed its back and forth. As a reminder, this rule required employers to counter union organizing campaigns in 14-21 days versus the previous 42 day requirement.  The first action to block this new rule occurred on May 14, 2012 when a U.S. District Court ruled the rule was invalid because improper procedure had been used to pass it.   U.S. Chamber of Commerce et. Al. v. NLRB (D.C. Cir. 1:11-cv-02262).   However, the court did not clarify if the rule itself was enforceable, only that the proper procedure wasn’t followed.  On February 5, 2014, the NLRB announced that it was re-proposing the quickie rule.   In December 2014, it issued its final rule.   The rule was adopted by a 3-2 vote and is set to take effect on April 14, 2015.

On February 9, 2015, republican lawmakers moved to halt the rule and issued a resolution stating “Congress disapproves the rule……and such rule shall have no force or effect.”   The resolution was discussed on February 11th before a Senate subcommittee and was placed on the full Senate calendar on February 23rd.  It went before a congressional subcommittee on March 3, 2015 and a preliminary vote shows the resolution will pass.   If a majority of each the House and Senate pass the resolution, the President can override it with a veto.   However, such veto can then be overridden by Congress with 2/3 vote.   The President hasn’t yet publicly addressed whether he’d veto the resolution or not, but in April 2012 the White House stated it was “strongly” against any possible resolutions and the President’s advisors have recently indicated a veto is imminent.

While the political machine is churning, numerous business groups, including the U.S. Chamber of Commerce, have rigorously been challenging the rule in the courts.  On February 5th, a district court judge was asked to order the rule was illegal as a First Amendment violation and contrary to the NLRA.   The court’s decision is still pending and will likely be appealed well after the rule gets implemented.

As our various posts have explained, the quickie rule could be disastrous to employers and employees if implemented.   Under the rule, after a union petition is filed employers will likely not have the time to fully inform their employees about their rights in the workplace.   Absent such vital information, employees will not receive a full picture and will be unable to make a well-informed personal decision to vote the union in or not.   It is imperative that employers start implementing preventative measures now in the event the rule challenges are unsuccessful.