Tag Archives: National Labor Relations Board

Decision Reminds Employers to Think Before Speaking to Employees About Union Issues

Contributed by Suzanne Newcomb

On September 4, a Federal Appeals Court upheld a National Labor Relations Board (NLRB) decision finding management comments to employees during the early stages of a union organizing campaign unlawful. Section 8(a)(1) of the National Labor Relations Act makes it unlawful “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.” Section 7 rights include “the right to self-organization, to form, join, or assist labor organizations.” The NLRB and the Courts interpret this language broadly.

people shaking handsBack in 2011 rumors about a possible unionizing campaign prompted an in house attorney and regional HR director to meet with employees, one of whom secretly taped the meeting. Comments made during that meeting were found to unlawfully: (1) threaten by suggesting unionizing was futile; (2) imply a promise of pay increases if the employees did not vote for a union; (3) threaten that unionization would result in demotion for some employees; and (4) threaten blacklisting of union supporters.

The following comments by management officials during the meeting were found to unlawfully imply that unionizing was futile and would not produce the benefits sought:

  • Be “very careful” when listening to the union’s “sales pitch.”
  • “In many cases, when you enter these negotiations, if you ever get there, employees tend to lose things.”
  • Negotiations are “a wide open game of uncertainty” in which “nothing is guaranteed” even if the union wins the election.
  • Answering “it’s possible” when asked if unionizing would cause wages to decrease adding, “we start from scratch…we don’t start with what you guys are making today.  Everything goes to zero.”
  • Employees at a unionized location have gone nearly three years without a bargaining session or contract. The bargaining process is “never automatic” and employees might never see the benefits they seek.

The finding of an unlawful implied promise to raise wages arose when, in response to an employee’s specific request, management agreed to review the current pay structure to ensure it was fair and competitive adding, “we want a chance to address … [your concerns] before you pay somebody else to address them.”

Management’s answer to questions about the apprentice and journeyman system was found to be an unlawful threat to demote certain employees if the workforce unionized. Finally, reference to union membership as a “scarlet letter,” and suggestions that other employers might be less inclined to hire job applicants who had worked in a union shop, were deemed unlawful threats to blacklist employees for union activity.

As the Court stated, “the underlying message…is that an employer…needs to take care in the rhetoric it uses when discussing union issues with its workers.” Employers must be very careful when discussing union related matters with their employees. Special and careful considerations must be paid to developing labor law. Detailed scripts, approved through seasoned labor counsel, should be in place to ensure appropriate language is being communicated.

“We Recommend Keeping This Confidential” Still Violates the Law According to the NLRB

Contributed by Jamie Kauther

Over the last few years the National Labor Relations Board (“NLRB”) has been cracking down on employee confidentiality mandates. An employer can legally require employees to keep trade secrets and legally protected information confidential, but according to the NLRB’s most recent ruling on August 27, 2015 an employer cannot even “recommend” that employees keep internal investigations confidential  (Boeing Co., 362 N.L.R.B. No. 195, 8/27/2015). The Board ruled that Boeing Company’s revised policy that “recommends” employees refrain from discussing HR investigations was unlawful as it violates employee’s rights to engage in concerted activity under Section 7 of the National Labor Relations Act (“NLRA”).

Confidential StampThe Board explained that although employers may “legitimately require confidentiality in appropriate circumstances” the impact of any confidentiality policy must be limited. Essentially, the Board created an individualized balancing approach that requires an employer to weigh its interests in confidentiality against employees’ Section 7 rights. Although it laid out examples of what situations would tip the scales, the Board did not set a clear standard. The examples provided include instances of likely witness intimidation or harassment, destruction of evidence or other misconduct that could jeopardize the investigation’s integrity. However, no specific examples were provided as to when these issues can occur. This standard imparts on employers a requirement to tailor-fit their confidentiality policies to be enforced on a case-by-case basis. As the Board explained, “generalized concern” about the integrity of all investigations is “insufficient to justify [a] sweeping policy,” including one that simply “recommends” confidentiality.

This new individualized balancing standard is a bit of a head scratcher. However, the Board did identify some bad practices that would not pass muster. It expressly pointed out Boeing’s requirement to have employees sign a policy notice without a Section 7 disclaimer in the policy or notice that the employee could disregard the confidentiality recommendation. The Board held that this clearly communicated Boeing’s improper desire for confidentiality.

So what is a best practice in light of this decision? Remove sweeping confidentiality policies pertaining to internal investigations and eliminate requirements that when employees sign notices they understand the confidentiality recommended. Instead, discuss with the employee during an investigation the desire for confidentiality based on the facts of the specific investigation. Remember this ruling only applies to what limits can be placed on employees with knowledge of the investigation. It has no bearing on a company’s approach or handling of an investigation – meaning the company can and should still clearly reiterate in its policies that it will handle all investigations with discretion and will preserve the confidentiality of all involved persons to the extent possible. Essentially, an employer can still control the information it relays, just not what other involved employees communicate.

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.

Sign of the Times 2014: NLRB and DOL Are Poised to Proceed With Pro-Labor Rules

Contributed by Beverly Alfon

Employers have been playing a game of wait-and-see for the past couple of years.  In 2011, the National Labor Relations Board (NLRB) and the Department of Labor (DOL) simultaneously introduced proposed rules that would have a severe impact on employers:  the NLRB “quickie” election rules and the DOL persuader activity reporting rule.  Although the NLRB adopted the ambush election rules in 2012, they were immediately sidetracked in litigation and have not been in effect.  Similarly, the DOL never issued a final rule on persuader activity reporting.  Now, with a complete five-member NLRB and a new Secretary of Labor, these two agencies have made clear that these pro-labor rules are a priority for 2014.

NLRB “Quickie” or “Ambush” Election Rules

On November 26, 2013, the NLRB issued its semiannual regulatory agenda.  It focused on the quickie election rules that were invalidated by a federal district court less than one month after issuance on the basis that they were adopted without a proper Board quorum.  Those rules were suspended pending appeal of the case and the U.S. Supreme Court’s consideration of Noel Canning (the case regarding the validity of President Obama’s recess appointments of NLRB members in January 2012).  However, on December 9, 2013, the NLRB voluntarily dismissed its appeal – removing the quickie election rules from the litigation track and repositioning it on the fast track toward agency adoption and implementation.

Among other things, the 2012 ambush election rules cut in half the time between a union’s filing of a representation petition and an election – the crucial period for an employer to counter a union’s organizing efforts – from a 42-45 day period to a 10-21 day period.  They also limited the scope of pre-election hearings and provided the agency with the discretion to review post-elections decisions, rather than automatically requiring such review.  It will be interesting to see if this time around, the NLRB will again propose more severe rules like the ones that it ultimately did not adopt in 2012 – including requiring the employer to produce a voter list with employees’ phone numbers and email addresses prior to the pre-election hearing (which would give a union direct employee access before any unit disputes are determined) and speeding up the timing of a pre-election hearing, further shortening the pre-election period.

DOL Persuader Rule

On November 26, 2013, the DOL also issued its semiannual regulatory agenda. It indicated that the final persuader rule will be issued in March 2014.   The proposed persuader rule interprets a part of the Labor Management Reporting and Disclosure Act of 1959 (“LMRDA”) that requires employers and their labor relations consultants to report any arrangement between them involving the consultants’ attempt to, directly or indirectly, persuade employees to exercise or not to exercise their rights to organize.

Historically, lawyers have been excluded from this reporting requirement provided that they limit their activity to providing the employer with advice or materials for use in persuading employees and avoid direct contact with the employees.  That interpretation has allowed employers to seek labor advice without fear of potential disclosure of attorney-client privileged information (e.g., the very fact that the company has hired an attorney to assist with counter-organizing campaign).  In contrast, the proposed rule would blanketly require attorneys and employers to report “all actions, conduct, or communications that have a direct or indirect object to persuade employees,” including among other things:

  • drafting, revising, or providing materials or communication of any sort to an employer for presentation, dissemination, or distribution to employees; and,
  • developing employer personnel policies or practices designed to persuade employees.

This is significant because it could require an employer who seeks any advice on a labor issue to disclose the relationship, including fees paid and the purpose of the arrangement, to the DOL.  Such sensitive information would be available to unions, customers, competitors, financial institutions, etc.  Many critics believe that the rule will dissuade employers from seeking professional counsel regarding any labor related matter – which will inevitably lead to gains for unions.

Bottom Line:  It is clear that the NLRB and DOL are quickly moving towards severely limiting an employer’s ability to counter union organizing efforts.  If union avoidance is your company’s goal – now is the time to evaluate your company’s efforts to reach or maintain that goal.

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.

Class Waivers for Unfair Labor Practice Claims? — Maybe

Contributed by Suzanne Newcomb

In August, we wrote about Court decisions expanding the reach of the Supreme Court’s American Express v. Italian Colors decision to allow employers to force employees to arbitrate FLSA claims individually rather than collectively.  Earlier this month, an Administrative Law Judge ruled that the AmEx decision also means that the National Labor Relations Board can no longer prohibit class waivers.

Spurred by a single employee’s unfair labor practice charge, the Board challenged Chesapeake Energy’s policy mandating that all employees agree to binding individual arbitration for all employment related disputes, including unfair labor practice allegations arising under the National Labor Relations Act.  Relying on the Board’s 2012 D.R. Horton decision, General Counsel for the National Labor Relations Board pressed the Administrative Law Judge to strike down the program claiming the right to engage in collective legal action was itself “protected concerted activity” and therefore, any agreement to waive collective action was invalid on its face.  The Judge disagreed, concluding that the Board’s prohibition of class waivers could not be sustained in light of the AmEx decision.

Still, we urge caution.  How the full Board will address this issue is yet to be seen.  At least one other of the Board’s Administrative Law Judges reached the opposite conclusion in August despite the employer’s counsel urging that AmEx controlled.  Moreover, despite his conclusion that the NLRB could no longer prohibit class action waivers, the Judge did find Chesapeake guilty of an unfair labor practice.  He ruled the arbitration policy at issue invalid as written and ordered Chesapeake to rescind the policy or revise it to exclude unfair labor practice allegations.  He also ordered Chesapeake to specifically notify its employees that they have the right to file charges at the NLRB.  The distinction here is subtle, but important.  An employer may legally compel arbitration through a properly drafted and implemented arbitration agreement; it may not prohibit its employees from filing a charge with the NLRB.  Moreover, if an arbitration agreement tends to cause employees to conclude that they cannot file NLRB charges as the Judge concluded the Chesapeake agreement did, there is a very real risk it will be struck down.

Incidentally, the same reasoning applies to EEOC charges.  An employer may not prohibit its employees from filing EEOC charges, nor can it prevent the EEOC from bringing an enforcement action in Court based a charge filed by an employee who has signed a binding arbitration agreement.  A binding arbitration agreement will operate to force the employee to adjudicate claims through an arbitration proceeding, rather than a court action.  However, should the EEOC decide to file its own enforcement action, all bets are off.  The EEOC can maintain a Court action and can even seek individual remedies on behalf of an employee even if that employee signed a binding arbitration agreement.