Tag Archives: Lafe Solomon

Acting General Counsel of the NLRB Under Investigation for Allegations of Improper Conduct

Contributed by Paul Jaquez

Lafe Solomon, acting general counsel for the National Labor Relations Board (NLRB) is under investigation for allegations of improper conduct. Specifically, Solomon is being accused of participating in a case in which he had a financial interest. The investigation began with a “hotline complaint,” and culminated in a report issued by the NLRB Inspector General David Berry, finding that the facts discovered substantiated the allegations.

The controversy surrounds Mr. Solomon’s involvement in a matter pertaining to the alleged over-breadth of Wal-Mart’s social media policy and its ancillary violation of Section 7 of the NLRA.  According to the report, on January 23, 2012, Mr. Solomon met with the Division of Advice to discuss the Wal-Mart matter.  Subsequently, Mr. Solomon then applied for a waiver on January 30, 2012, to participate on the matter, based on his ownership of Wal-Mart stock (valued at roughly $15,000).  Mr. Solomon’s waiver application was denied on February 1, 2012.  Mr. Solomon sold his Wal-Mart stock on February 27, 2012.

To be certain, Mr. Solomon did convey at all material times that he owned Wal-Mart stock.  Nonetheless, Mr. Berry’s report found that Mr. Solomon, by participating in the January 23, 2012 meeting, had violated the prohibition of “participating personally and substantially in an official capacity in any particular matter, in which, to his knowledge, he has a financial interest, if the particular matter will have a direct and predictable effect on that interest.” 

The basis of Mr. Berry’s findings focus on the following:

(1)    Mr. Solomon’s participation was “personal” because he participated directly in the matter;

(2)   Mr. Solomon’s actions were of substantial significance in that he made actual decisions regarding how to proceed, which were “not perfunctory, administrative, or peripheral;” and

(3)   A disqualifying financial interest arose from Mr. Solomon’s ownership of publicly traded stock of a corporate whose value exceeded $15,000.

Mr. Berry’s report found no evidence to support a finding that Mr. Solomon acted with the intent to enrich himself or otherwise achieve any financial benefit.  It is not certain what ramifications Mr. Berry’s report will have on Mr. Solomon.

National Labor Relations Board Attacks Employment At-Will Doctrine

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.

Social Media and the National Labor Relations Act: The Silver Lining In the NLRB General Counsel’s Latest Report

Contributed by Beverly Alfon

When the NLRB General Counsel, Lafe Solomon, issued his third report on social media policies on May 30, 2012, I assumed that it would be in line with the gray doom and gloom of the previous two reports which basically left employers with a faint roadmap of “what not to do” with respect to social media policies. For the most part, my assumption was correct. 

Yes, the General Counsel again relied on Board caselaw which holds that company rules and policy statements are unlawful where employees could reasonably interpret them as limiting their rights under the Act.  And yes, similar to the previous 28 cases that he reviewed, he found another six policies to be overbroad and therefore, unlawful. However, this time, he identified one policy to be lawful in its entirety.  BUT there is the silver lining…until now we have not had a solid example of a what the General Counsel would consider to be a “lawful” social media policy. 

The General Counsel’s approval of the policy is so strong that he attached a copy of the two-page policy to the report.  His opinion is not binding law.  However, his report is issued as an operations memorandum to all NLRB regional directors and officers.  It is also the General Counsel’s office that ultimately decides which unfair labor practice charges warrant the issuance of a complaint. 

In Walmart, Case No. 11-CA-67171, an employee alleged that Wal-Mart’s social media policy violated the Act and that he was unlawfully terminated for comments that he posted on Facebook.  However, after the employee filed the charge, Wal-Mart implemented a revised policy.  The NLRB’s Division of Advice found that the new policy was lawful and negated any need to consider the old policy that the charge was based upon.  In his report, the General Counsel identified what he considered to be the most important elements of the Wal-Mart revised policy:

  • The policy applies to all associates of the corporation and its subsidiaries;
  • The policy forbids “inappropriate postings,” including “discriminatory remarks, harassment, and threats of violence or similar inappropriate or unlawful conduct;”
  • The policy warns that violations of the policy may result in discipline or discharge;
  • The policy only tells employees that they “are more likely” to resolve work-related complaints by speaking directly to co-workers/supervisors – rather “than posting complaints to a social media outlet;”
  • The policy prohibits communications “that could reasonably be viewed as malicious, obscene, threatening or intimidating,” that “disparage individuals on the basis of race, sex, disability, religion or any other status protected by law or company policy,” or other communications that “might constitute harassment or bullying;” and,
  • The policy contains “sufficient examples of prohibited disclosures” (i.e., information regarding the development of systems, processes, products, know-how, technology, internal reports, procedures or other internal business-related communications) for employees to understand that it does not reach protected communications about working conditions.

In sum, the General Counsel stated that the revised policy was lawful because it contained “rules that clarify and restrict their scope by including examples of clearly illegal or unprotected conduct, such that they could not reasonably be construed to cover protected activity, are not unlawful.”

Bottom line:  The Wal-Mart social media policy is worth the read.   Although this example is by no means a “one size fits all” answer or guarantee to saving your company from unfair labor practice charges related to your social media policy – it is a very good place to start.