Labor Law Articles

The National Labor Relations Board recently issued a decision narrowing the definition of “concerted activity” under the National Labor Relations Act, Alstate Maintenance, LLC, 367 NLRB 68 (2019). No longer will individual gripes, even if made in a group setting with a manager present, automatically rise to the level of concerted activity protected under the NLRA. Instead, the Board, in reversing WorldMark by Wyndham , 356 NLRB 765 (2011), returns to the standard articulated in the 1980’s under the Myers Industries test, 268 NLRB 493 (1984), which was followed for some three decades before being modified by Wyndham.

Under Myers Industries, concerted activity was defined as (1) group action or action on behalf of other employees; (2) activity seeking to initiate or prepare for group activity; or (3) bringing a group complaint to the attention of management. Wyndham , in interpreting the third prong of Myers Industries , held that lodging a complaint in a group setting and using the term “we” qualified as concerted activity, even if the complaint was essentially an individual gripe.

Under the recent case, the third part of the test returns to the concept that a complaint must be about a workplace issue, and the circumstances must make it clear that the employee was seeking to initiate or induce group action.  Given the facts in Alstate , it will likely be much more difficult to prove concerted activity in some circumstances.

Alstate  provides skycap services at JFK airport in New York. An employee, Trevor Greenidge, worked as a skycap assisting passengers with their luggage. Tips form the primary source of a skycap’s earnings. In July 2013 Greenidge was working with three other skycaps when he was told by his supervisor to assist with the luggage for a soccer team. He replied by stating, “we did a similar job a year prior and we didn’t receive a tip for it.” He then walked away with the three other skycaps. Other baggage handlers from inside the terminal started performing the work, and Greenidge, along with the three other skycaps eventually returned and helped complete the job. All four were terminated for failing to provide acceptable customer service. They filed a ULP claiming they were terminated for engaging in protected concerted activity, a violation of the NLRA.

While some may consider these facts to be a close call, the Board ruled 3-1 that the conduct was unprotected. The majority explained that to be protected the statements must reflect a group complaint regarding a workplace issue and be made to a supervisor. Alternatively, the totality of the circumstances must support a reasonable inference that in making the statement, the employee was seeking to initiate, induce or prepare for group action.

The Board then articulated some factors to help determine if the statement is protected:

1. the statement was made in an employee meeting called by the employer to announce a decision affecting     wages, hours, or some other term or condition of employment;

2.  the decision affects multiple employees attending the meeting;

3. the employee who speaks up in response to the announcement did so to protest or complain about the decision, not merely to ask questions about how the decision has been or will be implemented;

4. the speaker protested or complained about the decision’s effect on the workforce generally or some portion of the workforce, not solely about its effect on the speaker; and

5. the meeting presented the first opportunity employees had to address the decision, so that the speaker had no opportunity to discuss it with other employees beforehand.

Not all factors must be met, and other evidence that the statement was made in front of coworkers to initiate, induce, or prepare for group action, such as an express call for employees to act collectively would also support a finding of concertedness.

Here, the Board found the tipping habits of customers had not been previously discussed by employees, the statement was not made to induce group action (although they all walked away), tipping was a matter between the skycap and customer that the employer is essentially removed from, and there was no evidence that tipping had been a group concern previously.

This case makes it harder for employees to successfully claim concerted activity, and no longer will individual gripes be automatically found to be protected speech, even if made in front of co-workers to a supervisor while using the pronoun “we.” Employers should continue to monitor this area as the current pro-management Board has stated it is not done re-evaluating the parameters of concerted activity, or other areas where Obama era decisions favored workers.  

The National Labor Relations Board, a government agency known for wild interpretive swings, has issued a number of pro-management decisions following years of holdings favorable to union members and non-represented employees.

During the past decade or so, the Board expanded employee rights and greatly diminished the ability of employers to take disciplinary action against sometimes outrageous employee behavior because it was considered “protected concerted activity;” a catchall concept protecting employees who act together for their mutual aid and protection.   The wellspring of expanded employee rights stemmed from the Board’s 2004 decision in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004). In that decision, the Board held (1) that an employer’s facially neutral workplace rule was unlawful if it could reasonably be construed by an employee to prohibit or restrict the employee’s rights under the NLRA. Also, unlawful were (2) any rules promulgated in response to protected activity, or (3) ones that were applied to restrict the exercise of Section 7 rights.

Many who follow this area of the law will recall earlier cases under Lutheran’s expansive interpretation that required employers to reinstate and make whole employees who were fired for extreme profanity and engaging in other behavior bordering on physical assault against supervisors. In addition, employers were forced to change many long-standing policies, including rules requiring respect and civility in the workplace; protecting workplace confidences; limiting employee rights to record conversations and photograph the work environment; prohibiting the use of company equipment and systems, like email, to foster union organizing activities; and limiting the scope of social media postings.

A newly constituted Board recently swept away the first prong of the Lutheran test and replaced it with a balanced approach that evaluates the rights of employers to implement policies, versus the rights of employees to exercise their section 7 protections. More specifically, under the new rule announced in Boeing , 365 NLRB No. 154 (12/14/17), the Board will still look to see if the rule or action, when reasonably interpreted, would potentially interfere with employee rights under the NLRA. If so, the Board will then determine (1) the nature and extent of the potential impact on employee rights protected by the Act; and (2) the legitimate employer justifications associated with the rule or action. If the justification outweighs the impact, the rule is lawful.

For instance, in Boeing an Administrative Law Judge found a no-camera rule could reasonably be construed to chill protected rights. Therefore, under Lutheran , it was unlawful, without regard to any legitimate purpose articulated by the employer.

The Board, in reversing the ALJ under its new test, held that the rule was facially neutral, it was not made in response to protected activity, nor was it applied to restrict such activity. Therefore, it was subject to the balancing test weighing each party’s rights. In applying the new test, it found Boeing’s argument that its policy of prohibiting the use of cameras by employees performing military related work was based on legitimate national security concerns, and had relatively minor impact on employee rights, to be persuasive. Therefore, it was legal.

To assist with future compliance, the Board will place employer rules or actions into one of three categories, and the Board’s General Counsel has issued GC Memo 18-04 (6/6/18), which provides some initial guidance.

The first category covers rules that the Board generally considers legal because when reasonably interpreted they do not prohibit or interfere with the exercise of NLRA rights, or the potential adverse impact on such rights is outweighed by legitimate business justification. The Boeing no-camera rule falls here as do policies encouraging harmonious interactions and relationships, and those prohibiting insubordination, disruptive behavior, defaming company products or services, and disclosing proprietary information such as financial data or other non-public data.

  The second covers rules that require individualized scrutiny to determine whether the rule prohibits or interferes with NLRA rights, and if so, whether any adverse impact is outweighed by legitimate business interests. Examples cited in the GC Memo include, broad conflict of interest rules that do not specifically target fraud and self-enrichment, confidentiality rules that broadly protect employer business or employee information (as opposed to narrower confidentiality rules regarding customer or proprietary information), rules regulating the use of the employer’s name (as opposed to regulating use of the employer’s logo or trademark), and rules generally restricting the right to speak to the media (as opposed to those restricting the right to speak to the media on behalf of the employer).

The third category covers rules that are always illegal because they interfere with employee rights in a way not outweighed by business interests. These include rules that prevent employees from discussing wages, benefits, or terms and conditions of employment, and rules against joining outside organizations or voting on matters concerning the employer. These rules will always be unlawful.

The Memo also makes clear that rules should no longer be found unlawful just because the rule could be interpreted as covering protected activity, and instead should be examined to see if it does in fact cover such activity. Further, ambiguities in a rule may no longer be interpreted against the drafter, and generalized provisions should not be interpreted as banning all activity that could conceivably be included. It is expected that future cases will determine in which category other particular rules or actions fall.

Employers should review their handbook and policies to insure they take advantage of the Board’s newly formulated enforcement policy.

For those who follow the NLRB’s expansive take on protected concerted activity, a recent case continues to push the boundaries.  The Second Circuit affirmed a NLRB decision upholding an employee’s right to curse out his supervisor on Facebook because the language was part of a statement concerning workplace concerns, and occurred just days before a union representation vote.  NLRB v Pier Sixty, LLC., 855 F. 3d 115 (2d Cir, 2017).

The employee, Hernan Perez, worked for an event catering firm, Pier Sixty.  The employees employed by Pier Sixty were in the process of organizing a union and were scheduled to vote on the representation issue.  Two days before the vote, Perez was working an event and his supervisor told him and some other employees to stop chitchatting, spread out, and attend to the guests.  These comments were made in a tone that Perez described as harsh, and perceived as part of an on-going show of disrespect toward employees generally.

In response, Perez took to Facebook and called his boss who made the comments a nasty motherfu**er who doesn’t know how to talk to people.  He went on to say f**k his mother and his entire f**king family. He’s a loser, and vote yes for the union.

When management became aware of the comments, it fired Perez.

Mr. Perez then filed an unfair labor practice charge with the NLRB, claiming he was terminated in retaliation for engaging in protected concerted activity.  He alleged it was protected because it dealt with workplace matters, including the upcoming election, and was concerted, because 10 of his Facebook friends were co-workers.

The issue boiled down to whether these comments, made in the name of protected, concerted activity, were so “opprobrious” that they lost protection under the Act.  

In evaluating the use of obscenities in the workplace the NLRB historically followed a four-factor test enunciated in Atlantic Steel, 245 NLRB 814 (1979).  The test considers (1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice.  

The Atlantic Steel test had already come under some scrutiny by the Second Circuit in 2012 for its failure to adequately consider employer interests when outbursts occur in a public place, and in the presence of customers.  See NLRB v Starbucks, 679 3d 70 (2d Cir, 2012).

In addition, and around the same time, the NLRB was also trying to evaluate the proper test to apply to social media based comments, which are not made in the workplace, but concern workplace issues.  Such Internet based comments are not made in the traditional and direct presence of customers; however, they are often viewed by customers, or potential customers, through social media interaction.

In trying to deal with the use of this evolving medium, the NLRB issued Guidance in 2011 and 2012 that outlined a 9 factor, totality of the circumstances test to address worker comments made on social media, and employer rules used to limit such statements.  These factors include, but are not limited to: (1) any evidence of antiunion hostility; (2) whether the conduct was provoked; (3) whether the conduct was impulsive or deliberate; (4) the location of the conduct; (5) the subject matter of the conduct; (6) the nature of the content; (7) whether the employer considered similar content to be offensive; (8) whether the employer maintained a specific rule prohibiting the content at issue; and (9) whether the discipline imposed was typical for similar violations or proportionate to the offense.

In deciding the instant case, the Second Circuit relied on the new 9-factor test, but again expressed concern that employer interests were not adequately addressed by it.  In analyzing the facts and law, it found that although the message was dominated by vulgar attacks on the supervisor and his family, the subject matter included workplace concerns, including alleged management disrespect of employees and the upcoming union election.  It also considered the context of the comments and found management had demonstrated hostility toward employees’ union activities in the period immediately prior to the election and Perez’s posting. As such, it stated that Perez’s outburst was not an idiosyncratic reaction to a manger’s request, but part of a tense debate over managerial mistreatment in the period before the election.  It also found that management’s toleration of profanity among its employees, and the use of the same offensive words by management officials in common discourse with employees, contributed to the finding that firing Perez for the use of the same language went too far. Further, no other employee was ever terminated for using similar language. Finally, it addressed the location of the statement, and found that an online forum is a key medium of communication among co-workers and a tool for organization in the modern era.  While the comments were available for the world to see, the statement was not made in the immediate presence of customers, nor did they disrupt the catered event.

Based on its analysis, the Second Circuit concluded that Pier Sixty failed to prove that Perez’s behavior was so egregious as to lose the protection of the Act.  It did, however, expressly state that the case sits at the outer bounds of protected, union-related comments, and remined the NLRB that any test for evaluating “opprobrious conduct” must be sufficiently sensitive to employers’ legitimate disciplinary interests.

This decision should once again make it abundantly clear to employers that statements most managers would consider firing offenses will often be protected when they concern workplace matters, and are shared with co-workers. The NLRB has provided employees with a wide berth of protection, and it is unclear what, if any, comments would be coarse enough to warrant discipline, let alone discharge.  Employers should consult with counsel prior to taking action in such cases, as the content and context of such speech must be carefully analyzed to insure that any discipline can be sustained.

Many non-union employers are becoming increasingly familiar with their obligations under the National Labor Relations Act (NLRA) as the National Labor Relations Board (NLRB) continues to widen the definition of permissible employee conduct under the Act.  Ostensibly, behavior that most employers would have considered unacceptable several years ago is now routinely found by the NLRB to be proper in today’s workplace.

Non-Disparagement

Companies historically had non-disparagement policies to prevent conflicts at work and maintain a level of decorum.  Those days are gone, except where statements threaten violence or directly violate discrimination laws.

In one recent decision, the NLRB found that fast food workers who were engaged in union organizing were operating lawfully when they posted signs on community bulletin boards within the employer’s establishment, and in public places close to such establishments, putting customers on notice that store employees do not get paid sick leave, and therefore, customers are taking a risk eating at the stores because sick workers may be preparing their food.  When the employer fired those behind the posters, the NLRB found the firings to be violative of the NLRA and ordered reinstatement and back pay. Miklin Enterprises,  361 NLRB No. 27 (2014).  The Board’s decision was affirmed by the Eighth Circuit Court of Appeals,  Miklin Enterprises, Inc., v. NLRB (2016).  

In doing so, both the Board and Court found that the employees’ conduct was part of an on-going labor dispute, and that the posters were not disloyal, reckless or maliciously untrue.  In essence, the implication that customers will fall ill by eating at the restaurants was considered “exaggerated rhetoric which is common in labor disputes and protected under the Act,” as opposed to disloyalty.

In a second case, the NLRB ruled it is also okay to post that your boss is a “nasty mother****er on Facebook, along with similar comments regarding the boss’ family.  Pier 60,  362 NLRB, No. 59 (2015).  The post was in response to the boss telling several catering servers working an event to “spread out, and move” when they were standing around.  The employer fired the worker who posted the comments, but the NLRB reinstated him because “the comments were directed at the manager’s treatment of the servers, and were part of a sequence of events involving the employees’ attempts to protest and ameliorate what they saw as rude and demeaning treatment by their managers.”

Separation Agreements

The Board continues to focus on the contents of separation or settlement agreements containing provisions it believes chill section 7 rights to work collectively in addressing workplace concerns.  In one recent case, an Administrative Law Judge found that the confidentiality, return of property, and non-solicitation of employees provisions in a severance agreement violated the NLRA.  Quicken Loans, Case 28-CA-146517 (Mar. 17, 2016).

The confidentiality clause was found to be overbroad because it protected certain documents the employer did not take adequate steps to keep secret, and the non-disclosure requirements extended to workplace matters such as wages, work rules, and other terms of employment that employees have a right to publically communicate.  

In addition, a requirement that employees return copies of the employee handbook was found unlawful as such materials are normally widely distributed within the workplace and therefore lose their protected status.

Further, a non-solicitation provision that prevented solicitation “for any reason” was found to be overbroad as it could be interpreted as preventing former employees from speaking with current employees about section 7 rights, which would violate the Act.

When writing policies or agreements, the devil is in the detail as the Board continues to dissect employer documents for any potential sign that the wording could be interpreted as restricting employee rights to ban together for their mutual aid and protection.

Workplace Recordings

Rules limiting workplace audio and video recordings have also been subjected to scrutiny.  Unless an employer can show recordings will violate customer or patient privacy concerns, or reveal trade secrets, employees will often be permitted to record workplace interactions.

For instance, Whole Foods had a policy against workplace recordings, unless the consent of all participants was obtained.  The Board found the rule violated the Act because employee section 7 rights outweighed the company’s interest in promoting open and free discussions.  It stated, “photography and audio or video recording in the workplace, as well as the posting of photographs and recordings on social media are protected by section 7 if employees are acting in concert for their mutual aid and protection and no overriding employer interest is present….” Protected employee conduct may include, for example, recording images of protected picketing, documenting unsafe workplace equipment or hazardous working conditions, documenting and publicizing discussions about terms and conditions of employment, documenting inconsistent application of employer rules, or recording evidence to preserve it for later use in administrative or judicial forums in employment-related actions.”  Whole Foods Market Inc., 363 NLRB No. 87 (2015).

Clearly, the Board has taken a strong position that total recording bans are improper, and that any ban must be narrowly tailored to show its purpose is to protect trade secrets or other privacy rights.  

Given these developments, employers should review their policies and handbooks to make sure they are compliant with the Board’s ever more aggressive posture.

The General Counsel for the National Labor Relations Board issued a report providing guidance to employers when drafting employee handbooks.  Report. (GC 15-04).  Over the past few years many standard handbook provisions have been found to violate section 7 of the National Labor Relations Act.  That section allows both union and non-union employees to engage in protected concerted activity for their mutual aid and protection.  Employers have struggled to keep current with the rapidly changing requirements, and have often found that their good faith efforts to comply fall short of the Board’s expectations.  The new report sheds greater light on what has become an extremely nuanced approach to handbook drafting.

The report dissects numerous case decisions and tries to explain the subtle differences between lawful and unlawful language. It covers the major areas which have been the focus of recent litigation.  These include confidentiality rules, employee conduct toward the company and supervisors, employee conduct toward co-workers, employee interaction with third parties, use of company logos and trademarks, restrictions on video and audio recordings at work, restrictions on leaving work, and conflict of interest rules.  Non-union employers in particular will likely be astonished when reading the Board’s position on these issues, but failure to comply can lead to serious repercussions.

While lengthy, employers are encouraged to read the full report, however, the following summary provides a flavor for the types of issues companies need to be aware of when drafting employee handbooks.  Further, if your handbook has not been reviewed in the last year, it is likely to be out of compliance.

The general rule is that any policy violates the NLRA if it has a chilling effect on section 7 rights, even if it doesn’t explicitly prohibit section 7 activity.  The test is whether employees would reasonably construe the rule as prohibiting their section 7 rights. Of course rules or policies written in response to union organizing activity, or to expressly restrict employee rights is illegal per se.  

With this background in mind, the Board’s position is that employees have a section 7 right to discuss wages, hours, and other terms and conditions of employment with fellow employees and outsiders.  Any attempt to restrict such discussion through a confidentiality provision is unlawful. Confidentiality provisions must be limited to protecting other forms of proprietary information unrelated to wages, hours and conditions of employment.

Perhaps the most alarming area is the scope of conduct employees may engage in when criticizing supervisors and management.  The Board has found that rules prohibiting disrespectful, negative, inappropriate or rude conduct toward management are generally unlawful.  Even if such statements are false or defamatory they are protected, unless they are made with “malice,” Under the malice standard, an employer must prove the statement was knowingly false, or was made with reckless disregard for the truth.  With the rise of social media, many of the offensive statements are now made online and reach an audience far greater than the water cooler talk of the past. Under the Board’s rules, however, such statements are equally protected.

Employers have more leeway in prohibiting negative statements regarding co-workers, clients and competitors.  Also, truly insubordinate statements are also prohibited, but given recent rulings it is very difficult to determine when such statements may in fact be found lawful.  In addition, rules limiting criticism of the employer’s products are generally permitted.

Further, rules limiting the right to communicate with third parties, including government agencies, unions, or the press are generally illegal.  Employees also have the right to use company names and logos in protest information such as signs and leaflets, provided they fall under the non-commercial fair use doctrine.

Another puzzling position is the right of employees to photograph, videotape and record activities in the workplace. Employers often prohibit such activity, but now do so at the risk of violating the NLRA.  The Board takes the position that such recordings are permissible during non-work time if done in furtherance of section 7 rights. To defend such policies, employers must be able to show some strong privacy interest, and the example provided is patient privacy in a medical setting.

While the information above summarizes some of the Board’s positions, it is critical that a careful review of the specific language used in handbooks be undertaken by labor counsel prior to publication in order to avoid unfair labor practice charges.

In its relentless pursuit of expanding non-union employee rights, the National Labor Relations Board (“NLRB” or “Board”) overturned past precedent by ruling that employees can now use their company email accounts to communicate about union organizing activities, and their terms and conditions of employment.  Purple Communications, Inc., and Communications Workers of America, 361 NLRB no. 126 (Dec. 11, 2014).  Just seven years earlier, the NLRB had ruled that employers could prohibit employees from using company email systems for non-work related purposes, including collective workplace concerns, as long as any prohibitions were not limited to banning protected activities under the National Labor Relations Act (“NLRA” or “Act”).  Register Guard, 351 NLRB 1110 (2007).

For instance, employers were permitted to have policies that allowed the use of its email systems for charitable solicitations while banning its use for non-charitable purposes, including union organizing.  Also, systems could be used for personal solicitations while prohibiting ones of a commercial nature. These rules effectively prevented company systems from being used against the employer during union organizing campaigns, or for employees to air their collective concerns.

In reversing itself, the Board stated that its past precedent focused “too much on employer’s property rights and too little on the importance of email as a means of workplace communication, [therefore] it failed to adequately protect employees’ rights under the Act and abdicated its responsibility to adapt the Act to the changing patterns of industrial life.”  It went on to say that email has “effectively become a natural gathering place pervasively used for employee to employee conversations” and the fact that this gathering place is virtual does not undermine the role that email plays in Section 7 protected workplace discussions. Further, given the rise in telecommuting, email has become an even more important tool for co-worker communications.

Under its new interpretation, employees who are granted the right to use an employer’s email system for business purposes, now also have a presumptive right to use their account to communicate about issues protected by Section 7 of the NLRA, including union organizing.  Such emails, however, must be drafted and sent during non-work hours. Also, there is no requirement that all employees now be given access to an employer’s email system, if they would not otherwise be given an account for work related purposes.

Employers wishing to overcome the presumptive right of employees to use their systems for collective action must show that “special circumstances” necessitate a ban in order to maintain production or discipline.  More specifically, employers must “articulate the interest at issue and demonstrate how the interest supports the email restrictions it has implemented.” Employers may also place certain restrictions on the use of its systems, shy of a total ban, if it can show such controls are necessary to maintain production and discipline.  For instance, employers can limit the size of attachments or audio/video files if such data would lead to network damage or system overloads, provided the same restrictions apply to non-section 7 related communications. The Board, however, strongly suggested that a total ban, or set of controls, will be found lawful only in rare situations, with the burden placed on the employer to justify its rules.

The decision also leaves open the possibility that the concepts applied to email systems could be expanded to the use of other company equipment and systems.  The Board noted that past decisions prohibiting non-work related access to bulletin boards, telephones, faxes, copy machines, public address systems, and teleconferencing systems may eventually be reversed.  It expressly stated that “broad pronouncements in the [past] equipment cases, to the effect that employers may prohibit all non-work use of such equipment…are best understood as dicta…. [and] nor is it clear that the Board endorsed those broader statements.”  It went on to say that “the supposed principle that employees have no right to use, for Section 7 purposes, employer equipment that they regularly use in their work is hardly self-evident. We reject its application here, and we question its validity elsewhere.”

The decision also leaves unclear how past decisions regarding the right of employers to ban distribution of literature in work areas will now be affected.  The traditional rule permitted employees to engage in oral solicitation during non-work time, in work and non-work areas. Distribution of literature was permitted during non-work time, but only in non-work areas.  To overcome the apparent problem of permitting employees to write, read and print emails in work areas, the Board conveniently stated that emails are neither solicitations or distributions, but merely “communications,” and that the space where they would be written, read or printed are neither work or non-work areas, but “mixed-use” areas where the work area restrictions prohibiting literature distribution generally will not apply.  This newly created fantasy zone within the workplace indicates the lengths the Board is willing to go to expand non-union worker rights at the expense of the employer’s.

An additional complication is that under the NLRA surveillance of organizing efforts by employers is generally unlawful.  However, employers currently have the right to monitor their systems and eliminate any privacy rights for employees using their systems.  While the ruling stated that such monitoring could lawfully continue, and employees would not enjoy greater privacy rights when communicating about collective concerns, given the Board’s aggressiveness, this fine line may become blurred over time.  Already, the Board has stated that employers may not change their monitoring policy in response to union organizing activity, or target protected conduct or union activists. Therefore, having a policy in place in advance of any such activity is critical.  

Employers should review their handbook, and email and equipment use policies, as the Board has long held that just having an express rule that violates the NLRA is unlawful, even if the rule is never used to actually discipline an employee.  Also, employers should carefully analyze any disciplinary or termination decision that involves use of its systems, as at-will employees will now have greater latitude to claim the adverse decision violated their section 7 right to engage in protected concerted activity.  Such a finding can result in reinstatement and back pay.

Finally, this latest ruling coupled with another recent Board decision to speed up the election process once a union files a petition for recognition will make it much easier for employees to unionize.  By aiding their communications effort, and significantly reducing a company’s reaction time from about 38 days to between 10-20 days, the NLRB has tipped the balance significantly in favor of employees seeking union representation.  As such, employers may want to consider implementing a more robust preventive employee relations strategy, and developing a rapid response plan in the event of union organizing activity, often referred to as a “campaign in a box.”

The National Labor Relations Board (NLRB or Board) continues to scrutinize non-union employer practices for compliance with the National Labor Relations Act (NLRA or Act).  Under Section 7 of the Act, employees have the right to engage in concerted activities for their mutual aid or protection. Section 8(a)(1) of the Act makes it unlawful for an employer through statements, conduct, or adverse employment actions to interfere with, restrain, or coerce employees in the rights guaranteed by Section 7. The test for evaluating whether an employer’s conduct or statements violate Section 8(a)(1) is whether the statements or conduct have a reasonable tendency to interfere with, restrain, or coerce union or protected activities.  If the work rule expressly restricts Section 7 activity, it is unlawful. However, even if the rule does not explicitly restrict Section 7 activity, it is unlawful if employees would reasonably construe the language of the rule to prohibit Section 7 activity.

While the NLRA’s first significant attempts to involve itself more deeply in the non-union workplace manifested itself in the review of company social media policies a couple of years ago, it has now expanded its reach into almost every employment policy and practice area.  These include non-disparagement clauses, confidentiality restrictions, misconduct investigations, at-will provisions, dress codes, off-duty access, and even the use of profanity. Some recent decisions impacting these areas are discussed below.

Social Media Policies

In Lily Transportation Corp ., CA-108618 (2014) the employer’s social media policy stated the following:

“Employees would be well advised to refrain from posting information or comments about the company, the company’s clients, the company’s employees, or employees’ work that have not been approved by the company on the Internet . . . . The company will use every means available under the law to hold persons accountable for disparaging, negative, false or misleading information or comments involving the company or the company’s employees and associates on the Internet . . . .”

In Durham School Services , 369 NLRB No. 85 (2014), an employer who operates a fleet of school buses maintained a social networking policy that urged employees who use social media to “limit contact with parents or school officials, and keep all contact appropriate.”  It also required employees to keep “communication with coworkers. . . professional and respectful, even outside of work hours.” The policy also threatened discipline for “[e]mployees who publicly share unfavorable written, audio or video information related to the company, or any of its employees or customers.”

The NLRB found these two policies violated the NLRA because they were overbroad.  In particular, they:

Failed to adequately specify the types of information employees were prohibited from posting;

Failed to adequately distinguish between information employees could not post and protected speech; and/or

Failed to provide examples of social media content the employer would consider “appropriate,” “professional,” respectful,” or “unfavorable.”

These decisions demonstrate that employers cannot ban all negative comments about their organization, or establish subjective standards that give employers complete discretion to decide which negative comments will result in discipline. Instead, employers must draft narrowly tailored policies that employees could reasonably read as permitting social media discussions about wages, hours, and others terms and conditions of employment, regardless of how negative the posted comments are.

Non-Disparagement Clauses

In a similar vein, employers must carefully construct handbook policies that govern behavior beyond the sphere of social media.  In Hills and Dales General Hospital , 360 NLRB No. 70 (2014), the NLRB found the hospital’s workplace policies banning "negativity" and "negative comments" to be unlawful.  The specific language the Board found offensive included:

11) We will not make negative comments about our fellow team members and we will take every opportunity to speak well of each other;

16) We will represent Hills & Dales in the community in a positive and professional manner in every opportunity; and

21) We will not engage in or listen to negativity or gossip. We will recognize that listening without acting to stop it is the same as participating.

The Board found all three statements to be unlawful because employees could reasonably view the policies as preventing them from engaging in concerted, protected activity with co-workers by prohibiting negative statements about their employer, its managers, or any other concerns regarding terms and conditions of employment.

In Quicken Loans Inc. , 359 NLRB No. 141 (2013), the Board held a non-disparagement provision in an employment agreement was unlawful because employees would reasonably construe its provisions as restricting Section 7 activity. The provision stated:

"You agree that you will not (nor will you cause or cooperate with others to) publicly criticize, ridicule, disparage or defame the company or its products, services, policies, directors, officers, shareholders, or employees, with or through any written or oral statement or image (including, but not limited to, any statements made via websites, blogs, postings to the internet, or emails and whether or not they are made anonymously or through the use of a pseudonym). You agree to provide full cooperation and assistance in assisting the company to investigate such statements if the company reasonably believes that you are the source of the statements. The foregoing does not apply to statutorily privileged statements made to governmental or law enforcement agencies."

The Board found that an employee reading this policy could reasonably construe it as restricting their right to engage in protected concerted activities, including the right to criticize their employer and its products, or to appeal for public or co-worker support regarding their concerns.

In Karl Knauz Motors Inc. , 358 NLRB No. 164 (2012), a handbook provision that stated: "Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the dealership."  The language was found to be unlawful because it could reasonably be construed as prohibiting employee statements about objectionable working conditions, or seeking the support of others in improving them.

Confidentiality Provisions

In Design Technology Group LLC d/b/a Bettie Page Clothing , 359 NLRB No. 96 (2013), the Board held that an employer violated the NLRA by maintaining a rule in its handbook prohibiting the disclosure of wages or compensation to any third party or other employee. The rule stated: "Compensation programs are confidential between the employee and the company. Disclosure of wages or compensation to any third party or other employee is prohibited and could be grounds for termination."

The Board found that Section 7 of the Act protects the right of employees to discuss wages and other benefits with each other and with non-employees, and an employer may not prohibit employees from doing so.

Likewise, in MCPc Inc. , 360 NLRB No. 39 (2014), the Board held that an employer violated Section 8(a)(1) of the Act by maintaining the following language in a confidentiality rule in its employee handbook: "Dissemination of confidential information within the company, such as personal or financial information, etc. will subject the responsible employee to disciplinary action or possible termination."

The NLRB found that employees would reasonably construe this language to prohibit discussion of wages or other terms and conditions of employment with their coworkers.

Further, in Quicken Loans , in addition to striking down the non-disparagement provision, the Board found it was unlawful to prohibit employees from disclosing: (1) non-public information relating to personnel; and (2) personnel information including personnel lists, rosters, personal information of co-workers, handbooks, personnel files, home phone numbers, cell phone numbers, addresses, and email addresses.

The Board found these restrictions would substantially hinder employees in exercising their Section 7 rights because employees could not discuss with others, including fellow employees or union representatives, the wages and benefits they receive, or the names, wages, benefits, addresses or telephone numbers of other employees.

Investigations

In addition, the Board has held that companies may not require employees to keep information provided in an internal investigation confidential, unless they can prove some legitimate business justification.  Such justification may include concerns over the destruction of specific evidence, or the protection of specific witnesses. A generalized concern with protecting the integrity of the investigation is not enough.  As such, employers should express any special need for confidentiality, and state its needs at the commencement of the investigation. Adding more complexity is the EEOC’s position that any investigation of matters within its jurisdiction should be conducted as confidentially as possible.

At-Will Provisions

About two years ago the Board began questioning standard at-will provisions found in virtually every non-union offer letter and handbook in the United States.  In particular, the NLRB found that language stating the at-will relationship cannot be amended, modified or altered under any circumstances was unlawful because employees could reasonably think it would be useless to form a union and bargain a change to the at-will relationship.  The Board has since clarified that language clarifying that an at-will policy can be amended through the agreement of particular officials will overcome its earlier concerns.

Dress Codes

In World Color (USA) Corp., Subsidiary of Quad Graphics Inc. , 360 NLRB No. 37 (2014), the NLRB held that an employer's policy of prohibiting employees from wearing any baseball caps other than company caps violated Section 8(a)(1) of the Act. The Board stated that the policy prohibited employees from engaging in the protected activity of wearing caps bearing union insignia. The board has long held that in the absence of “special circumstances,” employees have a Section 7 right to wear insignia referring to unions, or other matters pertaining to working conditions, for the purpose of mutual aid and protection.  Restrictions are only permissible when the employer can prove substantial evidence of “special circumstances” that would outweigh the employees’ Section 7 rights. Examples of “special circumstances” include a threat of violence, interference with training or production, disparagement of the employer’s products or services, safety concerns, and interference with the image the employer desires for its employees to project to its customers or suppliers. Employers have the duty to prove “special circumstances,” and the exception has been interpreted narrowly.

Likewise, in Target Corp. , 359 NLRB No. 103 (2013), the board affirmed an ALJ's finding that a retail store violated the Act by maintaining a dress code policy, which stated: "Don't wear any buttons or logos on your clothing (unless approved by your team leader)."  The employer argued that because its established brand was "red and khaki," the code permitted an employee to be identified as a team member, and any button or logo that detracted from that identification interfered with its carefully crafted public image and business plan.  However, the ALJ stated that the employer failed to meet the "special circumstances" test.

Off-Duty Access Policies

In American Baptist Homes of the West d/b/a Piedmont Gardens , 360 NLRB No. 100 (2014), the Board held that a nursing home violated Section 8(a)(1) of the NLRA by maintaining a policy prohibiting employees from remaining on its premises after their shift "unless previously authorized by" their supervisor.  While the Board has said that a rule restricting off-duty access is valid if (1) it limits access solely to the interior of the facility and other work areas, (2 )is clearly disseminated to all employees, and (3) applies to off-duty employees seeking access to the plant for any purpose and not just to those employees engaging in union activity.  Here, the third prong was not met because it gave management unlimited discretion to decide when and why employees may re-enter the facility. The NLRB disregarded the employer's actual practice of allowing off-duty access only in three limited circumstances: when an off-duty employee picked up her paycheck; attended a scheduled meeting with human resources; or arrived early for the night shift.

Prior Board decisions have also struck down rules that barred access except for employer sponsored events, or access without prior approval.  Given this history, employers should consider either having a broad rule prohibiting all access, or not have any access rule.

Restrictions on Profanity

In Plaza Auto Center Inc. , 360 NLRB No. 117 (2014), the employee worked as a car salesman. While employed, he discussed the employer’s policies on breaks, restroom facilities, and compensation practices with other employees. After the employee complained to a sales manager about the employer’s calculation of sales commissions, the owner called him into a meeting in the sales manager’s office. During this meeting, the employee was told that he needed to follow the employer’s policies and procedures, that he should not be complaining about his pay, and that he did not need to work for the employer if he did not trust them. The employee then lost his temper, yelling at the owner and calling him a “f**king mother f**ker,” a “f**king crook,” and an “a**hole.” He also told the owner he “was stupid, nobody liked him, and everyone talked about him behind his back.” The employee also stood in the small office, pushed his chair aside, and warned the owner that if the owner fired him, the owner would regret it. The business owner did not intend to fire the employee at this meeting, but he did so following the employee’s outburst.

The Board initially concluded the employee’s conduct was not egregious enough to lose protection of the Act. In reaching that decision, the Board considered the following factors from Atlantic Steel Co. , 245 NLRB 814 (1979): (1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by the employer’s unfair labor practices. The Board concluded that all four Atlantic Steel factors weighed in favor of protection, and therefore, the employer violated the Act by firing the employee.

On appeal, the Ninth Circuit agreed with the Board on three of the Atlantic Steel factors, but remanded the case because it found that the Board erred in its assessment that the nature of the outburst weighed in favor of protection. On remand, the Board agreed with the Ninth Circuit’s finding that the nature-of-the-outburst factor weighed against protection. Even so, the Board concluded that the other three Atlantic Steel factors weighed in the employee’s favor, because: (1) the outburst occurred in a closed-door meeting in a manager’s office away from the workplace; (2) the discussion concerned the employee’s protected conduct; and (3) the outburst was provoked because it would not have occurred but for the employer’s unfair labor practice of inviting the employee to quit if he did not like the employer’s policies.

Additionally, despite the employee’s outrageous conduct, the Board concluded that the employee did not engage in menacing, physically aggressive, or belligerent conduct, because he made no specific threats of physical harm, had no history of committing or threatening violent acts, and did not hit, touch, or attempt to hit or touch the owner. In doing so, the Board applied an objective standard and disregarded the owner’s testimony that he feared for his personal safety, and for the safety of other employees. Instead, the Board concluded that the employee’s “you will regret it” statement was a threat of legal consequences and not of physical harm.  

The dissenting opinion noted that under the standard articulated by the Board, employees “will be permitted to curse, denigrate, and defy their managers with impunity during the course of otherwise protected activity, provided they do so in front of a relatively small audience, can point to some provocation, and do not make overt physical threats.” Employers, both union and non-union, should proceed with caution when disciplining employees who might be engaged in concerted activity, as the Board’s decision comes close to issuing employees a carte blanche in such circumstances.

Take-Aways

Because the law in this area remains very fluid employers should be cautious when developing policies, or taking disciplinary action that may be protected by the NLRA.  Policies should objectively define permissible and impermissible conduct as clearly as possible in a manner easily understood by employees. When analyzing policy provisions for compliance with the NLRA, employers should consider whether employees would reasonably understand that the policy does not prohibit them from discussing wages, performance evaluations, workplace safety, discipline, or other legally protected terms and conditions of employment with their co-workers, or outsiders.  Also, when a policy statement in a handbook is an abbreviated version of a longer policy found elsewhere, the more formal policy should be cited. Most importantly, employers must realize that behavior that historically triggered discipline or discharge may now be protected under the NLRA.

According to the U.S. Bureau of Labor Statistics union membership continued to decline in 2012.  Last year 11.3% of wage and salary workers belonged to a union, down from 11.8% in 2011, and 20.1% in 1983.  In looking at just the private sector, only 6.6% of workers are unionized. In comparison, some 35.9% of public employees are represented.

The study  also revealed that private sector unions were most prevalent in the transportation, utilities, telecommunications, and construction industries while teachers, police officers and firefighters were most likely to be represented in the public sector.  Conversely, agricultural and finance employees were least likely to be organized.

Representation, however, has its benefits.  Union workers earned an average of $943 per week compared to their non-union brethren who earned $742.

Workers most likely to be union members included those over 55, African Americans, and males.  New York had the highest percentage of union workers (23.2%) followed by Alaska (22.4%) and Hawaii (21.6%).  California, however, had the greatest number of union workers, 2.5 million out of a total of 14.4 million total U.S. union workers.  North Carolina had the lowest percentage (2.9%) followed by Arkansas (3.2%), and South Carolina (3.2%).

In Connecticut the percentage of union workers slipped from 16.8% in 2011 to 14% in 2012, even though total employment remained constant at about 1.5 million workers.

In February 2012 a NLRB Administrative Law Judge ruled that an employer’s at-will language contained in its employee handbook violated the National Labor Relations Act (NLRA).  The violative language stated, “I further agree that the at-will employment relationship cannot be amended, modified, or altered in any way.” American Red Cross, 28-CA-23443.  The judge found the language restricted an employee’s section 7 rights to organize a union and bargain collectively.   The ruling left many employers concerned and uncertain whether, and to what extent, traditional at-will concepts still applied.

Even though the NLRB has become increasingly aggressive in applying the NLRA to non-union workplaces, especially in the areas of social media, investigations, and confidentiality language, it appears to have taken a step back in its at-will position.  On October 31, 2012, the NLRB’s Acting General Counsel (AGC) issued two  Advice Memos  that clarify the contours of an acceptable at-will provision.

In Mimi’s Café, 28-CA-084365, the AGC found the following language to be acceptable:

“The relationship between you and Mimi’s Café is referred to as employment at-will.  This means that your employment can be terminated at any time for any reason, with or without cause, with or without notice, by you or the Company.   No representative of the Company has authority to enter into any agreement contrary to the foregoing employment at-will relationship.  Nothing contained in this handbook creates an express or implied contract of employment.”  (emphasis added).

At issue was the bolded language that indicates no member of management has the authority to change the at-will nature of the relationship, and whether such language was overbroad and would chill employees in their exercise of section 7 rights.  In making that determination the AGC relied on a two step test. First, a rule is unlawful if it explicitly restricts section 7 activities. Second, if not, it will still violate the Act if employees would reasonably construe the language to prohibit section 7 activities, or if the rule was promulgated in response to union activity, or if the rule has been applied to restrict section 7 rights.  Further the rule must not be read in isolation, but must be read in its proper context.

With regard to the specific language at issue, the AGC found the rule did not explicitly restrict section 7 activity.  Nor was it promulgated in response to union or other protected activity, or applied to restrict section 7 rights. His analysis thus boiled down to whether employees could reasonably construe the language to prohibit section 7 activities.  In effect, would employees read the language in a way that may reasonably lead them to think they were restricted from trying to form a union or engage in concerted activity to change their at-will status?

In finding no such restrictive interpretation, the AGC stated the language simply highlights the employer’s policy that its own representatives are not authorized to modify an employee’s at-will status.  Further when read in the proper context, the purpose of the sentence was to reinforce the concept that nothing in the handbook creates an express or implied contract of employment.

At first blush, the language in both American Red Cross and Mimi’s appear to equally foreclose a change in the at-will nature of the employment relationship; however, the AGC distinguished the two.  The former required the employee to agree that there would be no change to the at-will relationship, and effectively forced him to waive any right to act in concert with others to seek a change.  The latter simply clarified that no member of management had the right to make a change. This subtly based on whose actions were being restricted was apparently enough to make the difference.

In Rocha Transportation, 32-CA-086799, the handbook language in dispute read, “No manager, supervisor, or employee of Rocha Transportation has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will.  Only the President of the Company has the authority to make any such agreement and then only in writing.” The handbook also contained an Acknowledgment of Receipt that the employee was required to sign that reiterated the disputed language, and further stated that employees understood they are being hired at-will, and that nothing in the handbook creates or is intended to create a contract or representation of continued employment.  

In using the same test outlined above, the AGC found this language lawful, and commented positively on the provision that permitted the President to change the at-will nature of the employment relationship.  This language is at least more distinguishable than American Red Cross, and is probably safer to use.

These Memos provide significant guidance for drafting at-will language.  Employers have the right to clearly state the at-will nature of the employment relationship.  They also have the right to state that no member of management has the authority to change the relationship, or alternatively they can designate particular officials who are vested with the right to do so.  Employers should not require employees to affirmatively agree that the at-will relationship cannot be changed under any circumstances, but they can be asked to acknowledge they understand they are being hired at-will, and that nothing in the handbook creates or is intended to create a contract or representation of continued employment.  As this area of the law is still unsettled, it would be prudent to have counsel review any at-will language and acknowledgments currently being used, or contemplated in the future.