Tag Archives: NLRA

Dust off Those Handbooks: NLRB Restores Sanity to Employment Policies

Contributed by JT Charron, December 27, 2017

Thirteen years ago the National Labor Relations Board issued its decision in Lutheran Heritage Village-Livonia, 343 NLRB 646, which held that facially neutral work rules violated the National Labor Relations Act if employees would “reasonably construe” the rule to restrict the employees’ rights to engage in protected concerted activity under Section 7 of the Act. Following that decision, the Board used the “reasonably construe” standard to invalidate even the most well intentioned work rules. See e.g., T-Mobile USA Inc., April 29, 2016 (finding that employer’s policy requiring employees to maintain a positive work environment violated the NLRA).

On December 14, in The Boeing Company, 365 NLRB 154, the Board overturned Lutheran Heritage and articulated a new test for evaluating the validity of facially neutral work rules. In place of the unworkable “reasonably construe” standard, the Board introduced a balancing test for analyzing facially neutral work rules. Under the new standard, the Board will “evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.” (emphasis in original).

Workplace investigation

Examining Documents

Utilizing this standard, the Board reversed the administrative law judge’s decision that Boeing’s no-camera rule violated the NLRA. Instead, it found that the employer’s legitimate business reasons for the policy — protecting proprietary information and national security interests — outweighed any potential Section 7 violation. The Board also articulated three broad categories of work rules that would result from the new balancing test:

  • “Category 1 will include rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.”
  • “Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.”
  • “Category 3 will include rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.”

Boeing is a big win for employers and represents a clear change in the Board’s attitude towards work rules. While only time — and additional Board decisions — will tell, the new standard should provide “far greater clarity and certainty” to employers in drafting workplace policies. Additionally, employers may want to consider taking a second look at policies previously removed and/or revised in the wake of Lutheran Heritage and its progeny. Finally, as we head into 2018, employers should evaluate all workplace policies in light of the Board’s new balancing test and be prepared with strong justifications for any policies that have the potential to infringe on an employee’s rights under the Act.

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.

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.

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.

Beyond Talking Smack — NLRB Draws the Line at Advocating Insubordination

Contributed by Beverly Alfon

Six months ago, the NLRB held (on remand from the Ninth Circuit) that an employer violated the National Labor Relations Act by firing an employee even though he called his supervisor a “[multiple expletives deleted]“  and even threatened that if he was fired, the boss would “regret it.”  Plaza Auto Center, Inc., 360 NLRB No. 117 (2014).  That decision left many employers exasperated, and still does.  Recently however, the board issued a decision that confirms that even this pro-labor board recognizes that some employee conduct falls outside the protections of the National Labor Relations Act (NLRA).  Richmond District Neighborhood Center, Case 20-CA-091748 (Oct. 28, 2014).

In Richmond District Neighborhood Center, the board upheld an administrative law judge’s ruling that Facebook dialogue between two employees of the center was not protected under the NLRA and the employer did not violate the act by considering that dialogue when it revoked their employment offers for the following school year.  The employees’ expressed their intent to have “field trips all of the time to wherever [ ] we want”, “teach the kids how to graffiti up the walls…” and other similar statements expressing their intent to disregard their job duties and undermine the leadership at the center.  The board agreed that the employees’ statements, which included obscenities and statements regarding how they would “raise hell” at the center, went beyond discussion and complaints about work terms and conditions.  The board further stated that the center was “not obligated to wait for the employees to follow through on the misconduct they advocated” before terminating their employment.

How do we reconcile these two decisions?  In Plaza Auto Center, the employee’s profanity and personal attacks were expressed in the context of a discussion regarding commission rates and break times.  The NLRB reasoned that the discharge violated the employee’s right to discuss terms and conditions of employment.  In contrast, the employees in Richmond District Neighborhood Center went beyond expressing their discontent with their work terms and conditions through “pervasive advocacy of insubordination in the Facebook posts, compromised of numerous detailed descriptions of specific insubordinate acts, constituted conduct objectively so egregious as to lose the act’s protection.”  

Bottom line:  There is no bright-line scope of protected activity versus unprotected activity under the NLRA.  As demonstrated by the board’s decisions, the analysis is very fact-specific.  For both union and non-union employers, before issuing discipline to employees who engage in conduct that involves or is related to an expression of discontent about work terms and conditions, consult counsel to review the particular facts of the case before making a decision.