Tag Archives: National Labor Relations Act

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.

Federal Appeals Court Overrules NLRB: Employers Can Adopt Class Action Waivers Through Arbitration Agreements

Contributed by Jeffrey A. Risch

As previously reported, in January 2012 the National Labor Relations Board (NLRB) held that a nationwide home builder committed an unfair labor practice under the National Labor Relations Act (NLRA) by implementing a mandatory arbitration agreement that waived the rights of employees to participate in class or collective actions through court action.  See D.R. Horton Inc. and Michael Cuda, (357 NLRB 184).  In short, the NLRB held that employers may not compel employees to waive their right to collectively pursue litigation of employment related claims.  On December 3, 2013, the Fifth Circuit Court of Appeals rejected the NLRB’s finding and concluded that the NLRB “did not give proper weight to the Federal Arbitration Act (FAA).”

Michael Cuda, a superintendent for Horton, claimed that he and other similar superintendents for the company were prevented from pursuing a wage and hour class action/collective action under the Fair Labor Standards Act (FLSA); alleging that they were misclassified as exempt employees.  Horton required Cuda and other employees to execute an arbitration agreement whereby they individually agreed to forego class action relief of all types relating to any employee dispute.

The NLRB found that the mandatory arbitration procedure violated Section 8(a)(1) of the NLRA because it interfered with the statutory right of employees to engage in “protected concerted activity for their mutual benefit.”  However, according to the Court, an otherwise valid arbitration agreement (including those in the employment context) must be enforced in accordance with its terms under the FAA.   Additionally, the Court held that absent specific statutory language in the NLRA to override arbitration, an arbitration agreement entered into between two parties should be enforced.  The Court also pointed out that other federal circuits have likewise upheld arbitration agreements containing class action waivers.  See Richards v. Ernst & Young LLP, (9th Cir. 2013); Sutherland v. Ernst & Young LLP, (2d Cir. 2013); and Owen v. Bristol Care Inc., (8th Cir. 2013).

The Court, however, did note that the underlying arbitration agreement could reasonably be understood by employees as precluding them from filing unfair labor practice charges at the NLRB.  It therefore enforced the NLRB’s order that Horton revise the document to allow employees the ability to file administrative charges.

As we have consistently advised clients, an employer may legally compel arbitration (including those that contain class action waivers) through a properly drafted arbitration agreement; but it may not prohibit its employees from filing a charge with the NLRB.  Employers looking to implement or revise employment arbitration agreements should consult with experienced labor and employment law counsel.

The National Labor Relations Board Wants You!

Contributed by Caryl Flannery

Ok, maybe not you, but the Board definitely wants your non-union employees and they’re using Section 7 of the NLRA to get them. 

In the past, Section 7 was looked upon primarily as bestowing the right to formally organize in labor unions.  Over the last few years, however, the Board has been focusing on the section of the law which secures the right to engage in “other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”  NLRA, Sec. 7.  It turns out the NLRB is of the opinion that those “other concerted activities” come under a pretty big umbrella and has been spreading the good news to non-union employees everywhere.  In 2012, the NLRB ratcheted up their campaign by implementing a new page on their website called “Protected Concerted Activity” where they invite non-union employees to read NLRB Section 7 success stories “of workers across the country.” Areas in which the Board has asserted jurisdiction in the last year include:

  • Social media policies – Last month, the Board ordered a private social services agency to reinstate five employees who were terminated for posting comments about their jobs on Facebook.  Although the postings included profanity and criticism of another employee the Board found that the comments were protected because the original post included an invitation for comment from other employees on a work-related issue.
  • Internal disciplinary investigations – Threatening the integrity of employers’ internal investigations of employee misconduct, the Board has held that employers can instruct employees not to discuss matters under investigation only where they can show a specific need to do so.
  • “At will” statements in employee handbooks – The NLRB held that a statement in a handbook declaring that an employee’s “at will” status could not be modified under any circumstances violated the NRLA because it failed to make clear that union organizing and collective bargaining could alter the “at will” relationship.
  • Class action waivers – Although at odds with several courts, the NLRB continues to maintain that waivers of class or collective action in arbitration agreements violate Section 7.
  • Challenges to termination of employment – Disgruntled discharged employees who can’t make out a colorable EEOC claim are now filing unfair labor practice charges alleging termination in retaliation for engaging in concerted protected activity, such as complaining about safety concerns.  The Board obligingly investigates all charges which, even if ultimately dismissed, can be costly to defend in terms of disruption of business and related costs.

What’s an employer to do?  Carefully draft policies and handbooks and review disciplinary practices for language or procedures that could be viewed as chilling or restricting concerted activity.  Focusing on clearly unprotected activity (such as Facebook posts that could constitute unlawful harassment) will deter unwanted attention from the NLRB.

The Ends Do Not Justify The Means – D.C. Circuit Court Orders NLRB to Explain Itself

Contributed by Beverly Alfon

Over the last several months, the National Labor Relations Board (NLRB) has continued to pick at common employment handbook provisions such as company investigation policies, policies prohibiting defamatory or disparaging comments, confidentiality policies, and social media policies.  Recent Board decisions and various memoranda from the NLRB’s General Counsel have bolstered the perception among employers that anything goes so long as the ends justifies the means. 

Last week, however, the U.S. Court of Appeals for the District of Columbia Circuit had the opportunity to review a Board decision related to an employer’s policy banning insulting, provocative, and confrontational messages on employee clothing and the enforcement of that policy with respect to an employee’s union-sanctioned t-shirt (Medco Health Solutions of Las Vegas Inc. v. NLRB, D.C. Cir., No. 11-1282, 12/14/12).  The Court remanded the case back to the Board, reasoning that the Board failed to explain how the employer violated the National Labor Relations Act.  Specifically, the Court emphasized the Board’s complete departure from the framework that it established in another case, Lutheran Heritage Village-Livonia. In Lutheran Village, the Board held that an employer’s rule that neither expressly nor inherently restricts protected activity violates the NLRA only if: (1) the rule was promulgated in response to union activity; and, (2) a reasonable employee would construe the rule to prohibit protected conduct.  According to the Court, neither factor from Lutheran Village was met here.

As a result, although the Court agreed that the employee was engaged in protected activity when he wore the t-shirt to work, it declined to approve the Board’s failure to respond to the Company’s “straightforward” argument that it prohibited the shirt because it was insulting to the company and harmful to the company’s effort to attract and retain customers and failure to identify what evidence it required from the company to support its position.

Bottom line:  The D.C. Circuit’s remand order in the Medco Health Solutions case sends a clear message to the Board that it must do a better job of explaining and supporting its rulings.  However, it will not curb the NLRB’s active scrutiny of common employment policies and handbook provisions.  Employers must remain alert regarding NLRB determinations in this area and consider the factors set forth in the Lutheran Heritage Village case before disciplining an employee for conduct that may be protected by the National Labor Relations Act.

Election 2012 Fallout

Contributed by Jeff Risch

Elections have consequences. Indeed, there is no question that over the course of 2013, what certain employee-side advocacy groups may not be able to accomplish through federal legislation, will likely be achieved through administrative rulemaking and judicial activism. Of significance, the National Labor Relations Board (NLRB), a 5-member administrative agency comprised of the President’s hand-picked appointees, is set to continue the push for more of a presence in the day-to-day operations of the non-union workforce; regardless of industry. For example, the NLRB is set on pushing through a mandated “Employee Rights Poster.” Although this mandate is currently enjoined by a federal court’s preliminary injunction, the legal battle is far from over. It is anticipated that the NLRB will continue to fight for this mandate which would essentially require most employers to conspicuously post to its workforce their ability to effectively form a labor union.

Additionally, the NLRB will continue to seek a quicker process to administer and hold a union election. Under current administrative processing and legal precedent, a secret ballot union election is typically commenced within 42 days from the time a labor union petitions for recognition. The NLRB seeks to dramatically reduce this time period by as much as 30 days thereby providing employers with a shorter window by which to effectively campaign against the labor organization in the run up to the election. Finally, the NLRB will continue the onslaught attack on an employer’s policies. From “employment at-will disclaimers” to “union access rules” to “social media restrictions,” the NLRB is proactively targeting employers and reviewing any policy that would have any tendency to “chill” the employees’ rights to form a labor union or complain about terms and conditions of employment. Now is the time to review handbooks and all policies with an eye on labor law even in non-union work environments.

The U.S. Department of Labor (DOL) will continue to be well-funded. The DOL has been consistently hiring auditors and investigators to crack down on:

  • The utilization of independent contractors;
  • Failure to pay overtime (especially in the context of exempt vs. non-exempt classification);
  • Non-compliance with mandated affirmative action for employers doing business with the federal government; and
  • Construction contractors’ failure to comply with federal prevailing wage requirements (Davis-Bacon & Related Acts).

Health care reform is here to stay! Mandatory compliance is already underway. Although the specifics will continue to trickle in as time passes and in the run up to January 1, 2014, employers must take note of new mandates. Of particular short-term and long-term significance is that the new full-time employee will be deemed anyone who regularly works thirty (30) hours or more per week. Employers may want to evaluate how they have defined full-time vs. part-time employment and the varying benefit plans that involve the full-time vs. part-time distinction.

The U.S. Supreme Court is set to weigh in on critical issues that will have a profound impact on harassment/discrimination issues as well as wage/hour controversies. The Supreme Court will also likely weigh in on continuous legal challenges and issues dealing with immigration and health care reform for the foreseeable future.

Be assured that SmithAmundsen’s labor and employment practice group will continue to be engaged on the frontline of such developments. In fact, our partners will soon be meeting with NLRB Chairman, Mark Pearce in Washington D.C. to gather additional perspective, and we will continue to participate in local, regional and national initiatives involving key administrative agencies.

The Internet Police Have Arrived

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. . .

Employers Beware: NLRB Issues Second Report Confirming Employees Have Broad Protection when Complaining on Facebook

Contributed by Jon Hoag

On January 24, 2012, the NLRB’s Acting General Counsel, Lafe Soloman, issued his second report regarding how the Board interprets social media cases.  The previous social media report issued by Mr. Soloman on August 18, 2011 sent shockwaves throughout the employment world – union and non-union employers alike.  The August 18, 2011 report provided examples of the Board granting protection to employees that engaged in outrageous and disparaging conduct because other employees shared in the online complaining and commiserating.  Unfortunately for employers, this second report only confirms that the NLRB intends to maintain broad protection for employees who use Facebook and other social media to complain about their job or employer.

The recent case summaries overwhelmingly show that the NLRB will find that an employee’s online posting is “protected concerted activity” (i.e. covered by the Act’s protections) as long as there is some indication that the employee’s social media posting had to do with terms and conditions of employment and at least one other coworker responded and shared in the concern.  For example, the Board found that one employee’s complaint on Facebook about the employee’s dispatcher not responding and related employment concerns was just a gripe and not protected by the Act because none of his co-workers responded to the post.  In a separate case, however, the Board found that an employee’s Facebook post that said her Employer had messed up (certain expletives were included in the posting) and she was done with being a good employee was protected concerted activity because some of her coworkers (who were also Facebook “friends”) responded by stating, among other things, “I’m right behind you.”  The bottom line seems to be that if an employee’s Facebook gripe generates a lot of responses from coworker “friends”, the NLRB will find the conduct is protected by the Act.

Of equal concern is that the NLRB is steadfast that employers are significantly limited from applying professional conduct work rules and non-disparagement rules to an employee’s use of social media.  The NLRB’s recent guidance shows that in case after case, the NLRB found employer work rules and anti-disparagement policies to be a violation of the employees’ Section 7 rights.  The primary concern expressed by the NLRB is that the policies did not contain any limiting language to expressly state that the policy was not intended to apply to Section 7 rights and/or that the policy does not prevent employees from discussing wages, working conditions, or other terms and conditions of employment.  As such, all employers – union and non-union – are encouraged to review policy manuals and employee handbooks to make the necessary revisions to come into compliance with the NLRB’s wild interpretation and application of law. 

The following is a link to the NLRB’s second report:  http://www.nlrb.gov/news/acting-general-counsel-issues-second-social-media-report.

Pro-Union NLRB Contradicts U.S. Supreme Court: Declares Employee Class-Action Waivers Violate Labor Law

Contributed by Jeff Risch

On January 3, 2012, the NLRB held that a nationwide home builder committed an unfair labor practice under the National Labor Relations Act (NLRA) by implementing a mandatory arbitration agreement that waived the rights of employees to participate in class or collective actions (D.R. Horton Inc. and Michael Cuda, 357 NLRB 184, 1/3/11). In short, the NLRB held that employers may not compel employees to waive their right to collectively pursue litigation of employment claims in all forums, arbital and judicial.

Michael Cuda, a superintendent for Horton, claimed that he and other similar superintendents for the company were prevented from pursuing a wage and hour class-action/collective-action under the Fair Labor Standards Act (FLSA); alleging that they were misclassified as exempt employees.  Horton required Cuda and other employees to execute an arbitration agreement whereby they individually agreed to forego class-action relief of all types relating to any employee dispute.  NLRB Chairman Mark Gaston Pearce (D) and Member Craig Becker (D) found that this mandatory arbitration procedure violated Section 8(a)(1) of the NLRA because it interfered with the statutory right of employees to engage in “protected concerted activity for their mutual benefit.”

In so holding, the NLRB took issue with the U.S. Supreme Court’s recent decision in AT&T Mobility LLC v. Concepcion, U.S., No. 09-893, 4/27/11.  In Concepcion, the court, in a 5-4 decision, enforced AT&T’s customer cellular telephone contract that provided for mandatory arbitration on an individual basis and prohibited class action proceedings despite conflicting California state law.  The court essentially held that the Federal Arbitration Act (FAA) preempts state laws that prohibit contracts from preventing class-action lawsuits.  In judicial decisions that have since followed Concepcion, courts throughout the U.S. have concluded that employees may waive class-action rights by agreeing to individualized arbitration through employment arbitration agreements.  

In distinguishing Concepcion, the NLRB held that employment arbitration agreements (unlike consumer contracts) cannot prevent employees from waiving their rights protected by the NLRA (i.e. collectively pursue wage/hour claims and/or disputes over terms and conditions of employment). The NLRB also reasoned that Concepcion involved a conflict between the FAA and a California state law, which implicated the U.S. Constitution’s Supremacy Clause; whereas in D.R. Horton the Supremacy Clause was not called into question as the issues involved purely federal statutes (FAA vs. the NLRA).