From the looks of it, 2013 was a very rough year for the National Labor Relations Board (Board)! Last year, we reported that the Board would face some serious legal battles in 2013. Some of those battles are over, and there are clear winners and losers. Many more battles are still being waged. All the while, the Board continued to pursue its heavily pro-union agenda.
2013 was another busy year for the Board. In the fiscal year ending September 30, 2013, the Board issued 342 decisions, which included 277 unfair labor practice cases and 65 representation cases. The Board also reported in its annual report that it has nearly 10,000 friends on Facebook and more than 5,000 followers on Twitter. In addition, in August of 2013, the Board launched its new mobile app, which is available free of charge.
For two (2) years now, we have reported on the Board’s aggressive approach to enforcing the National Labor Relations Act (Act), and we indicated that it was unclear how much deference the courts would grant to this new approach. In 2013, the Board faced challenges on a number of fronts, including appeals from its high profile decisions, its attempts at rule-making, and even its very ability to act. Several Federal Courts of Appeals have been hostile to the Board’s actions, and in a number of cases, those courts have emphatically rejected the Board’s initiatives.
The most significant issue facing the Board in 2013 was undoubtedly the challenge to its authority to even act as a Board. As fully detailed below, the validity of hundreds of the Board’s decisions was called into question in Noel Canning v. Nat’l Labor Relations Bd., 705 F.3d 409 (D.C. Cir. 2013), and then later in Nat’l Labor Relations Bd. v. Vista Nursing & Rehab., 719 F.3d 203 (3rd Cir. 2013) and Nat’l Labor Relations Bd. v. Enterprise Leasing Co. Se. LLC, 722 F.3d 609 (4th Cir. 2013). In all three (3) cases, the Federal Courts of Appeals held that President Obama’s 2012 recess appointments to the Board were constitutionally invalid, and therefore, the Board did not have the necessary quorum to issue valid decisions.
Unfazed by these appellate decisions, the Board continued to issue decisions, and the Office of General Counsel continued to issue advice memoranda, actively pursuing the pro-union agenda. For example, the Board continued to aggressively police seemingly lawful and non-controversial employer policies. Please remember that the Board’s decisions interpreting the Act impact all employers, both union and non-union employers alike. More and more non-union employers are finding themselves before the Board defending what seemed to be innocuous employment decisions and policies.
We continue to report on the Board’s initiatives, and the impact these decisions will have on employers, on our blog. Below we have provided an overview of the Board’s more significant decisions and actions in 2013.
Challenges to Board’s Authority To Act – Noel Canning – And the Board Finally Gets Five Confirmed Members
As noted above, it has been alleged that the Board lacked a valid quorum since January of 2012, and that therefore all decisions issued since that date were invalid. At issue was the validity of President Obama’s “recess” appointments to the Board. Ultimately, those appointments were deemed invalid by at least three appellate courts in Noel Canning, New Vista Nursing & Rehab., and Enterprise Leasing Co. The end result of those holdings was that the Board was without quorum to issue valid decisions during the relevant period. In short, hundreds of decisions issued by the Board have been called into question, and employers and unions alike have questioned whether any Board decision issued in 2012 was valid.
Noel Canning was the first case to address the recess appointments. Typically, appointments to the Board are made by the President with the “advice and consent,” i.e. approval, of the Senate, in accordance with the United States Constitution. The Constitution also provides, in the Recess Appointments Clause, that the President is permitted to make temporary appointments to executive branch departments when the Senate is not in session due to a recess, i.e. recess appointments. In Noel Canning, the D.C. Circuit Court of Appeals concluded that the “recess” appointment power is available to the President only when the Senate is actually in recess. The three Board appointments at issue in Noel Canning were declared invalid by the Court of Appeals because the Senate was not in recess at the time the appointments were made. The Court concluded that, since the appointments were unconstitutional and invalid, the Board has been operating without a valid quorum since January 4, 2012. As such, in accordance with the U.S. Supreme Court’s holding in New Process Steel v. Nat’l Labor Relations Bd., 560 U.S. 674 (2010), the Board’s decision in Noel Canning, and in every decision issued by the Board since January 4, 2012, was null and void.
The Court, anticipating the likely impact of its decision on potentially hundreds of decisions, noted that it was not concerned about the repercussions of its holding on the Board. The Board, on the other hand, seemed to take the position that the impact of Noel Canning was limited to only that particular case, and therefore its other decisions remained valid. In a January 25, 2013 press release, the Board made clear its intention to continue to conduct its business, despite the Court’s finding that it lacked a valid quorum.
As noted above, two other Federal Courts of Appeals have also ruled that the President’s recess appointments in January of 2012 were invalid. In New Vista Nursing & Rehab., the Third Circuit Court of Appeals held that the President’s power to make a recess appointment was only available between sessions of the Senate, and therefore, the appointments made by the President while the Senate was on break (but still in session) were not valid. In Enterprise Leasing Co., the Fourth Circuit Court of Appeals conducted a thorough analysis of the Noel Canning decision and adopted its reasoning and holding.
The Board appealed the Noel Canning decision to the Supreme Court of the United States. The Supreme Court agreed to hear the appeal, and oral arguments were held in January 2014. The Supreme Court’s decision will have serious implications for potentially hundreds of Board decisions, and will likely determine important issues regarding separations of power among the judicial, legislative and executive branches of the federal government. It should be a blockbuster decision with implications far beyond labor law!
Until the Court decides the issue, the status of many of the Board’s decisions issued since January 2012 will be unclear. However, employers, both union and non-union, would be wise to proceed with caution in assessing the damage. It is very likely that, even if the Supreme Court affirms the D.C. Court of Appeals’ decision, the Board (now properly re-constituted) will promptly re-issue many of the pro-union and pro-employee decisions it issued last year.
That is because on July 30, 2013, the Senate voted to confirm a full slate of five members to the Board. The Senate confirmed three Democrats (Kent Hirozawa, Nancy Schiffer and incumbent Chairman Mark Gaston Pearce) and two (2) Republicans (Philip Miscimarra and Harry Johnson). It appears that this is the first time in about 10 years that the Board will be acting with a full complement of five members. The decision to confirm the slate was based on an agreement reached in the Senate, whereby the President agreed to withdraw the nominations of incumbent Members Sharon Block and Richard Griffin, who were serving pursuant to the disputed recess appointments referenced above.
Update on the Board’s Rulemaking Initiatives
We provided an overview of the Board’s rulemaking initiatives both in our 2011 and 2012 White Papers, and we have a further update for you: the Board was unsuccessful in pushing through either initiative in 2013. The first proposed Rule, adopted in part by the Board in December of 2011, modified certain procedures governing representation elections. The other Rule, promulgated in February of 2011, would have required employers covered by the Act to post a Notice of Employee Rights, which outlined employee rights under the Act, such as the right to organize, the right to strike, the right to engage in concerted activities, etc.
Both initiatives were challenged in the courts, and the Board’s efforts to defend the rules failed.
a. Proposed Rule Changes to Representation Elections
As noted above, the Board in June 2011 published a Notice of Proposed Rulemaking that would have significantly changed the union representation election process. Employers quickly began referring to the rule changes as the “quickie election rules” or the “ambush election rules.” Many believed that the rule changes were designed to greatly assist labor unions in the Board’s election process. In December of 2011, the Board decided to implement the proposed rule changes, which would become effective in April of 2012. However, the Board’s approval process had failed to include Member Hayes, at that time the sole Republican Member, who was not afforded the opportunity to fully participate in the decision.
The U.S. Chamber of Commerce filed a lawsuit challenging the new election rules. In Chamber of Commerce v. Nat’l Labor Relations Bd., 879 F.Supp.2d 18 (D.D.C. 2012), the District Court for the District of Columbia held that the Board lacked authority to adopt the final rule because a quorum of its members did not participate in the rulemaking process. Under the Labor Management Relations Act and in accordance with the Supreme Court’s New Process Steel case, cited above, three members of the Board constitute a quorum, but only two Members were present during the final vote approving the rule because Member Hayes was not afforded the opportunity to participate.
The Board appealed the district court’s decision in August of 2012 to the Circuit Court of Appeals for the D.C. Circuit. However, on December 9, 2013, the Board voluntarily dropped its appeal. That left standing the district court’s decision invalidating the rule. For now, employers will not be forced to face the quickie election rule; however, the district court’s ruling addressed only the quorum issue, not the merits of the rule. A properly constituted Board was expected to revisit the rule in 2014, and indeed, just as expected, on February 4, 2014, the Board announced it was issuing proposed amendments to its Rules and Regulations identical in substance to the changes first proposed in June 2011. Issuance of the proposed Rule was approved by the three Democratic Members, with a dissent filed by the two Republican Members. Public comments will be accepted through April 7, 2014, and the Board will hold a public hearing on the proposed Rule during the week of April 7.
b. The Notice Posting Requirement
On May 7, 2013, a three-member panel of the U.S. Court of Appeals for the D.C. Circuit vacated the Board’s Notice Posting Rule. The Notice Posting Rule required that virtually all private-sector employers post a Notice to Employees, informing employees of various rights under the Act, such as the rights to engage in union organizing, form or join a union, and strike. The Notice also described various actions by employers that would be illegal under the Act.
When adopted, the Rule was immediately subject to legal challenge. The National Association of Manufacturers (“NAM”) challenged the validity of the Rule in the U.S. District Court for the District of Columbia. In March of 2012, the District Court struck down several provisions concerning how the Rule would be enforced by the Board but ultimately held that the Board did have legal authority to promulgate the Rule. Thereafter, NAM appealed the District Court’s decision to the D.C. Court of Appeals. Meanwhile, in April of 2012, the District Court for the District of South Carolina, had declared the Rule invalid in its entirety. The Board appealed that decision to the Fourth Circuit Court of Appeals.
In National Association of Manufacturers, et al. v. Nat’l Labor Relations Bd., 717 F.3d 947, (D.C. Cir. 2013) the Court of Appeals for the D.C. Circuit vacated the Rule. The Court focused on the employer free speech rights under the Act, stating that Section 8(c) of the Act protects not just an employer’s right to state its opinion on whether its employees should unionize, but also protects the right of employers (and unions) not to speak at all on the subject. The Court held that enforcement of the Rule would unlawfully compel employers to speak to its employees about topics they might prefer not to address.
In addition, on June 14, 2013, in Chamber of Commerce v. Nat’l Labor Relations Bd., 721 F.3d 152 (4th Cir. 2013), the Fourth Circuit Court of Appeals affirmed the District Court for the District of South Carolina’s decision, which had also declared the Rule invalid.
In light of these decisions, the Notice Posting Rule remains invalid, and employers are not required to post the Notice. In January 2014, the Board decided not to seek review from the Supreme Court, hopefully ending this particular chapter in the Obama Board’s efforts to re-write the rules.
Important Court Decisions Affecting the Act
a. Neutrality Agreements Violate the Labor Management Relations Act
In Mulhall v. Unite Here Local 355, 667 F.3d 1211 (11th Cir. 2012), the court held that neutrality agreements violate the Labor Management Relations Act (“LMRA”). Neutrality agreements, which are typically contained in a collective bargaining agreement, provide that the employer will remain neutral with respect to the union’s efforts to organize its employees at other locations or in other departments, and that it will allow the union access to its facilities for organizing purposes. Unions will often push for such agreements during negotiations when the union represents employees at only one employer location or in only one area.
With certain exceptions not relevant here, the LMRA prohibits an employer from providing “money or other thing of value” to a union that represents or seeks to represent its employees, and prohibits a union from accepting such “money or other thing of value.” Essentially, the LMRA seeks to prohibit an employer from “bribing” a labor union to the disadvantage of the employees represented by the union. The court in Mulhall held that the employer’s agreement to provide organizing assistance to the union via the neutrality provision was “a thing of value” under the LMRA, and that because the provision was given in exchange for the union’s concessions in bargaining, the agreement violated the LMRA. The court viewed the neutrality agreement as something akin to a “bribe.”
In so holding, the court departed from prior holdings of other Courts of Appeal. When the union appealed the decision to the Supreme Court, the union’s writ of certiorari was granted, on June 24, 2013, presumably to resolve the split among the Courts of Appeal. However, on December 10, 2013, the Supreme Court dismissed the appeal as improvidently granted. Accordingly, the Eleventh Circuit’s decision in Mulhall stands, as does the split among the Courts of Appeal, and employers must therefore be aware of the validity of neutrality agreements in the areas of the country in which they operate.
b. Court Reverses Board’s Decision Finding Employer’s Lawsuit Against Union Unlawful
In Nat’l Labor Relations Bd. v. Allied Mechanical Servs., Inc., 734 F.3d 486 (6th Cir. 2013), the court reversed a Board order finding that an employer’s lawsuit against the union was unlawful and directing the employer to pay the union’s litigation costs as a remedy. The employer had filed suit against certain unions alleging that the unions had interfered with the employer’s agreement with another union, and had engaged in unlawful secondary boycotts. The court dismissed the employer’s complaint, and the Board later found that the employer’s lawsuit itself constituted an unfair labor practice under the Act. The Board ordered the employer to pay the union’s litigation costs incurred to defend against the lawsuit as a remedy. On appeal, the Sixth Circuit Court of Appeals reversed the Board.
According to the Board, an employer’s pursuit of a lawsuit against a union violates the Act when it is (1) objectively baseless, meaning that no reasonable litigant would have expected to be successful; and (2) subjectively baseless, meaning that it was intended to retaliate against the union for protected activity. The Board concluded that the employer’s lawsuit in this case met both prongs of that standard, and was therefore unlawful.
On appeal, the court noted that employers have First Amendment rights that are entitled to protection, including the right to petition the government for the redress of their grievances. The court also stated that it is the function of the courts, not the Board, to protect these rights. The court concluded that it need not address the line between First Amendment rights of employers and the rights protected by the Act in this case, because the Board’s decision was not supported by the evidence. While implicitly adopting, or at least accepting, the Board’s two part test for examining the validity of employer lawsuits, the court found that the employer’s lawsuit was both objectively and subjectively reasonable, and therefore was not unlawful. Accordingly, the court reversed the Board’s order directing the employer to pay the union’s litigation costs.
c. Court Reverses Board’s Finding that Employer Unlawfully Withdrew Recognition
In Tenneco Auto. Inc. v. Nat’l Labor Relations Bd., 716 F.3d 640 (D.C.Cir. 2013), the Board’s tough luck in the appellate courts continued. In Tenneco, the court reversed a Board decision, which held that an employer unlawfully withdrew recognition from the union. The Board also found that the employer committed multiple unfair labor practice charges. The union had been in place for over 60 years, but following failed negotiations for a successor collective bargaining agreement, the union went on strike. After the strike, a significant majority of the employees filed a decertification petition, seeking to have the union removed. Based on the petition, the employer notified the union that it would no longer recognize the union.
The union filed multiple unfair labor practice charges, including a charge alleging that the unilateral withdraw of recognition was unlawful. Board case law holds that when an employer has objective evidence that a union has lost majority support, the employer may unilaterally withdraw recognition of the union. A petition signed by a majority of the unit employees is the type of objective evidence that an employer can typically rely upon in making this decision. However, an employer may not rely on such an employee petition when the employer’s own unfair labor practices have significantly contributed to the loss of majority status by eroding the employees support for the union. If there is a showing that an employer’s unfair labor practice conduct significantly contributed to the erosion of majority support, the employer’s unilateral withdrawal of recognition will be deemed unlawful.
In Tenneco, a Board Administrative Law Judge (ALJ) initially dismissed all of the unfair labor practice charges against the employer. However, the Board reversed, finding that the employer committed several unfair labor practices. The Board also found that the decertification petition was “tainted” by these unfair labor practices. The Board concluded that there was a causal connection between the unfair labor practices and the employees’ decision to seek decertification of the union. Accordingly, the Board held that the employer’s unilateral withdrawal of recognition was unlawful.
The court reversed the Board, finding that there was no substantial evidence that the unfair labor practices significantly contributed to the employee petition. The court noted that, while there was evidence that the employer committed unfair labor practices, there was no evidence to support a connection between those practices and the employees’ petition seeking decertification. Therefore, the employer’s withdrawal of recognition based on the petition was not unlawful.
Update on Arbitration Agreements
Last year we reported that the Board had concluded that arbitration provisions in employment agreements that prohibit class or collective action claims violate the Act. In D.R. Horton, Inc., 357 NLRB No. 184 (2012), the Board found an employer policy that required mandatory arbitration of employee claims on an individual basis, and specifically prohibited class or collective actions, unlawful. The Board held that the policy could be construed to prohibit employees from engaging in concerted activity in violation of the Act, and as such, the policy was unlawful. The Board noted that its decision does not require class arbitration, as long as the policy or agreement leaves open a judicial forum for class or collective claims.
The employer in the D.R. Horton case appealed the Board’s decision to the Fifth Circuit Court of Appeals. On December 3, 2013, the court reversed the Board’s decision, holding that the decision failed to give proper weight to the Federal Arbitration Act (FAA). In D.R. Horton, Inc. v. Nat’l Labor Relations Bd., ___ F.3d ___ (5th Cir. 2013), the court stated that the FAA states a congressional intention to favor and support arbitration as a means of dispute resolution. The court held that Board’s decision inappropriately relied on the Act over the FAA.
Interestingly, the court began by avoiding the quorum issue that was at the heart of the dispute in Noel Canning. The court stated that the Board was not free to ignore other laws when advancing the principles of the Act. The court also pointed out that no court has ever held that the Act prohibits class action waivers, and that class or collective action procedures are a procedural issue not a substantive right under the law. The court also pointed to the Supreme Court’s holding in AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011), in support of its finding that the Act did not fit any exception to the arbitration-favoring principles of the FAA.
The court did uphold a portion of the Board’s decision, which required that the employer clarify that the arbitration provision did not prevent employees from pursuing unfair labor practice charges with the Board.
It is unclear at this time whether the Board intends to appeal the D.R. Horton decision to the Supreme Court, and if it does, whether the Court will grant the appeal. In the meantime, employers with arbitration provisions in handbooks or employment agreements may wish to review those provisions with counsel to evaluate their validity under D.R. Horton.
The Board Continues its Social Media and Employer Policy Agenda
For the past two (2) years, we have detailed the Board’s aggressive social media agenda. Unfortunately, the Board’s rigorous review of cases involving discipline for social media has continued unabated. The Board has made clear its position that discussions among employees on Facebook are the equivalent to discussions among employees around the water cooler but that analogy ignores the fact that water cooler discussions do not have a worldwide audience. The Board has also continued to actively police employer policies. As noted previously, the Board has moved beyond social media policies to police various other employer policies seemingly whenever the opportunity presents itself.
a. Some Facebook Posts Lose Protection of the Act
The good news is that even representatives of the Board concede there are some limits to the protections of the Act. On November 15, 2013, an ALJ found that although two employees were engaged in concerted protected activity when the employees discussed workplace issues on Facebook, their comments lost the protection of the Act. Richmond District Neighborhood Ctr., 360 NLRB No. 6 (2013) involved a small, nonprofit, non-union organization that provided youth and family programs. After the organization discharged two employees because of a conversation the two had on Facebook, the employees brought a complaint alleging that their discharge violated Section 8(a)(1) of the Act.
The employees’ Facebook pages were set to the privacy setting “Just My Friends,” which means that only the employees’ Facebook friends, and not the general public, could view the page. However, the employees’ friends included other employees, managers and former participants in the Center’s youth programs. The employees engaged in a profanity laced discussion on Facebook, which was generally derogatory toward the Center, and indicated that they planned to not follow policies or procedures, would party and play loud music, etc. Toward the end of the discussion, a former youth participant joined in the discussion.
The Center learned about the discussion and terminated the employees for insubordination. The ALJ found that the discussion, which generally focused on the employees’ dissatisfaction with the workplace, was concerted, protected activity under the Act. However, the ALJ also found that the employees subsequently lost the protection of the Act because they stated that they would be uncooperative and insubordinate towards their employer.
Recall that certain conduct may be so egregious that it loses protection of the Act. This is a high threshold however, and the ALJ noted that even repulsive, abusive and insulting conduct will be protected, as will conduct that lacks merit or accuracy as long as it is not deliberately false. However, in this particular case, the ALJ found that the comments crossed that very high threshold for losing protection. The ALJ found that the comments could jeopardize grant funding and private donations for the Center, and therefore lost the protection of the Act. As we have noted in the past, the protections of the Act are expansive. However, as this case demonstrates, there are limits (however flexible) to the protections of the Act.
b. Discussion about “Street People” is Protected Activity
In another decision involving employee social media activity, the Board held that a high-end clothing boutique in San Francisco violated the Act when it terminated employees who complained on Facebook about working late at night in an unsafe neighborhood. The Board also found that a policy in the employer’s handbook prohibiting disclosure of wage and compensation information was unlawful.
The employees at issue in Bettie Page Clothing, 359 NLRB No. 96 (2013), raised concerns to a store manager and others about the store’s hours, which required that the employees close the store after dark. The employees were concerned about being harassed by “street people” after closing up. When the employees’ internal complaints were not successful in having the store hours changed, the employees criticized the store manager during multiple discussions on Facebook. Shortly after the posts, the employees were terminated.
The employees filed a complaint with the Board challenging their terminations. The Board affirmed the decision of an ALJ, holding that the employees’ complaints and sarcastic remarks about the store manager on Facebook were a discussion about the terms and conditions of employment. The Board stated that the discussions about the manager’s refusal to address their concerns over store hours were “classic” concerted protected activities, and therefore, the employees’ terminations based on those discussions were unlawful. The Board ordered the employees reinstated.
In addition, the Board affirmed the decision of the ALJ finding that the policy in the employer’s handbook that prohibited the disclosure of wage and compensation information violated Section 7 of the Act. The Board ordered the employer to rescind the policy.
Please keep in mind that the Board has been reviewing employer policies with increased scrutiny. If you haven’t done so already, it is a good time to proactively review your policies to ensure compliance with the Act.
c. Confidentiality Policy Update
In April, the Board’s General Counsel followed up the controversial Banner Estrella Medical Center decision with some further guidance regarding the confidentiality of workplace investigations. Last year we reported that the Board issued a shocking decision regarding workplace investigations. In Estrella Medical Center, 358 NLRB No. 93 (2012), the Board held that an employer violates the Act by establishing a blanket workplace investigation policy that prohibits employees from discussing ongoing workplace investigations with their coworkers. Specifically, the Board concluded that such a rule violates Section 7 of the Act, which protects employees’ rights to engage in concerted activities, including the right to discuss with each other their terms and conditions of employment.
This decision was quite troubling because it seriously jeopardized an employer’s ability to conduct a thorough investigation, and contradicted guidance provided by other federal agencies, such as the Equal Employment Opportunity Commission. Employers were hopeful that the April 2013 Advice Memorandum issued by the Board’s General Counsel would soften the Board’s decision.
Unfortunately, the additional guidance offered by the General Counsel did not provide much solace to employers. The advice memorandum again stated that a blanket policy requiring confidentiality during a workplace investigation violated the Act. The guidance stated that a confidentiality requirement must be determined on a case-by-case basis. The guidance stated, consistent with Banner Estrella, that in order to justify a confidentiality request, it is the employer’s burden to show that there was (1) a need to protect witnesses from harassment; (2) to keep evidence from being destroyed; (3) to ensure that testimony was not fabricated; or (4) to prevent a cover-up in order.
The advice memorandum made clear that any written policy should not be so rigid as to require confidentiality in all cases, but should provide that the employer “may” require confidentiality during an investigation when the circumstances dictate. Many employers believe that confidentiality is appropriate in any investigation, but unfortunately, the Board does not agree.
d. No Gossip Policy Found to be Unlawful
On December 11, 2013, an ALJ found that a technical school violated the Act by implementing a “no gossip policy” and by firing an employee who violated the policy. Laurus Technical Institute, No. 10-CA-093934 (Dec. 11, 2013).
The “no gossip policy” was implemented to address a number of workplace problems, and provided that gossip would not be tolerated. The policy prohibited employees from engaging in gossiping about the company, other employees or customers and stated that employees who violated the policy would be subject to disciplinary action. The policy also defined gossip in a number of different ways.
The ALJ found that the policy violated the Act on its face because it was overly broad and essentially banned any discussion of an employee’s personal or professional life and negative comments and criticisms of other employees. The ALJ found that these prohibitions covered activities, such as discussing terms and conditions of employment, which are clearly protected by the Act. The ALJ concluded that because the policy contained no narrowing or clarifying language, and did not further define terms, the policy was unlawful.
The ALJ also concluded that, because the employee in question was terminated for violating the policy, her termination was also a violation of the Act. The ALJ ordered that the employee be made whole.
e. Policy Unlawful, but Attorney is a Supervisor and therefore Not Protected by the Act
That’s right, even law firms are not immune from unfair labor practice charges. In The Martin Law Group, LLC, 10-CA-078395 (Div. Judges May 6, 2013), an ALJ examined claims that an attorney’s discharge for violating a rule that prohibited employees from discussing compensation and benefits with other employees was unlawful. The ALJ ultimately concluded that although the maintenance of the rule was a violation of the Act, the attorney’s termination was not, because the attorney was a statutory supervisor, as defined by the Act, and therefore was not an “employee” protected by the Act.
The ALJ first held that the rule, which prohibited the attorneys and the staff at the firm from discussing compensation with each other, violated the Act because it was overly broad and prohibited Section 7 activity on its face. As we have discussed many times in the past, employees are permitted to discuss the terms and conditions of employment, including compensation and benefits, and any rule that prohibits such discussions or that could reasonably be construed to prohibit such discussions will be deemed unlawful by the Board.
There was no dispute that the attorney was terminated for violating the unlawful rule, and therefore, if she was an employee covered by the Act, her termination would be unlawful. However, the law firm argued that the attorney was a supervisor, and therefore, not protected. The ALJ started by discussing the statutory definition of supervisor, which states:
An individual having the authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.
The ALJ noted that because the list of supervisory duties is stated in the disjunctive, the party asserting supervisory status need only show that the individual exercised at least one of the enumerated functions. Board case law holds that to establish supervisory status, the person must show (1) the individual engaged in one of the 12 functions listed in the statutory definition; (2) the exercise of that authority required the exercise of independent judgment; and (3) the individual holds such authority in the interest of the employer.
In this case, the ALJ found that the attorney worked closely with a case manager who assisted her with her case load, and was responsible for a number of the enumerated factors with respect to the case manager. He noted that, although there were no cases addressing an attorney in private practice, there were cases examining the supervisory status of attorneys in the nonprofit and government sector. The ALJ concluded that the attorney initially approved leave for the case manager, ensured the case manager’s compliance with the rules of professional responsibility, effectively recommended the hire of the case manager, assigned tasks, and was accountable for the case manager’s work, i.e., the attorney responsibly directed the case manager. As such, the attorney was a supervisor under the Act.
The ALJ’s analysis is a thorough and helpful analysis of the issues that arise in determining whether an individual is a supervisor or an employee.
Administrative Law Judge Decisions to Watch
It seems that a lot of the decisions we have reviewed over the past few years have involved individuals working for non-union employers. This trend tells us that employees are much more aware of their rights under the Act than ever before. It used to be that the Act was primarily, if not overwhelming, an issue for unionized workplaces, but not anymore. It now presents another forum for disgruntled employees during or after employment. Therefore, the nuances of the Act are something of which all employers must be aware.
Below are a few cases that were issued by Administrative Law Judges in 2013, which, if appealed, may serve as vehicles for the Board to address larger issues or reverse employer-friendly case law in 2014.
a. Employee Discipline for Email Policy Violations Unlawful
In a case with a long and contentious history, an ALJ examined allegations that an employer’s email policy and employee discipline pursuant to the policy were unlawful under the Act. The employer was the California Institute of Technology (CalTech), Jet Propulsion Laboratory (JPL). CalTech operates the JPL for the National Aeronautics and Space Administration (NASA). Apparently, NASA informed CalTech that it would be required to implement additional security procedures, as required by the Department of Homeland Security, which were applicable to all federal facilities.
Under the new security procedures, employees would be required to complete a questionnaire as part of a background check process. Several JPL employees objected to the background check procedures, which they alleged were a violation of their right to privacy, and filed a lawsuit seeking to block the implementation of the security procedures. Ultimately, the Supreme Court of the United States held that JPL had the right to implement the security procedures. The plaintiff-employees in the litigation were not pleased with that result, and sent out various emails via the JPL email system criticizing the security procedures and the JPL’s conduct during the litigation. The email messages, sent by various employees reached approximately 7200 individuals, some of whom were JPL employees and some of whom were not.
The employees were disciplined for sending the messages, which JPL had determined violated various policies, including the Email policy, JPL’s Endorsement and Conflict of Interest rules, and its Ethics and Business Conduct policy.
The ALJ found that the concerted nature of the employees’ activities was obvious, and that JPL’s knowledge of the concerted activities was also obvious. The ALJ found that employee complaints about the alleged privacy intrusions associated with the background checks were clearly complaints regarding terms and conditions of employment. Therefore, the ALJ held the employees’ activities constituted concerted protected activity under the Act.
The ALJ stated that employees do not “currently” have the right to use employer electronic resources, including email, to engage in concerted protected activity. The ALJ stated that, under Board caselaw, and specifically Registered Guard, 351 NLRB 110 (2007), if an employer allows use of its electronic resources for non-business purposes, it may not discriminate against employee use of the electronic resources for protected activities.
The ALJ also explored JPL’s “past practices” with respect to the enforcement of the policies at issue, and found that several employees were not disciplined in the past even though it appeared that those employees had violated one or more of the policies. On the flip side, it was also clear that JPL had disciplined other employees for violating the policies. The ALJ concluded that JPL had allowed use of email for a wide range of non-job related purposes, many of which were similar in kind, length and scope to the email messages related to the privacy litigation. The ALJ found that JPL had implemented its policies in a discriminatory manner in violation of Registered Guard, by targeting the employees for engaging in protected activity. The ALJ found that the explanations that JPL offered for its allegedly inconsistent policy enforcement was created “after the fact” and therefore not credible. Accordingly, the ALJ concluded that the discipline issued to the employees was unlawful.
Exceptions have been filed to the ALJ’s decision, which means the Board will have the opportunity to weigh in on the decision. This case may afford the Board the opportunity to revisit the Registered Guard decision, and address the “current” rights that employees have with respect to the use of an employer’s email system as foreshadowed by the ALJ. Stay tuned.
b. Employer Solicitation Policy Lawful, Email Policy Unlawful
A Board ALJ found the University of Pittsburgh Medical Center (UPMC)’s Solicitation policy (which prohibited solicitation via email) was lawful, but found that its Electronic Mail and Message policy was unlawful. The ALJ examined three of UPMC’s policies in conjunction with multiple labor disputes with the Service Employees International Union: the Solicitation policy, the Email policy and the Acceptable Use of Information Technology Resources policy. Hopefully, all of you have such policies in place, because with careful drafting and implementation, these policies can be both lawful and powerful tools in an employer’s toolkit.
The ALJ began by noting that bans on employee Section 7 activity at an employer’s facility that apply to nonworking areas during nonworking times are presumptively unlawful. The ALJ also noted that in accordance with Registered Guard, an employer can prohibit all non-business use of its email system. The ALJ also pointed out that an employer may permit widespread personal use of email by employees but can draw the line and prohibit employees from engaging in solicitation on behalf of other organizations, including unions. In accordance with Registered Guard, an employer can ban the use of equipment, including email and electronic resources, for Section 7 purposes as long as it does not single out Section 7 activities for discrimination. In other words, if the policy bans all use of email and electronic resources for all forms of solicitation and distribution, such a policy is lawful.
With this background, the ALJ concluded that the solicitation policy at issue was lawful because it was carefully crafted to prohibit solicitation and distribution of materials only during working times and in working areas, and it lawfully prohibited all forms of solicitation via email.
The ALJ then turned to the email policy. The email policy did not prohibit all non-work use of email, but rather permitted non-work related usage unless the usage was disruptive, offensive or harmful to morale. The ALJ found this qualification vague and overly broad, and concluded that it could be reasonably understood to prohibit the expression of certain viewpoints including those in favor of union organizing. Thus, the ALJ concluded that the email policy was unlawful. The ALJ also found that another provision in the policy, which prohibited the use of the email system for solicitation on behalf of groups or organizations unless approved by UPMC, was also unlawful. The ALJ concluded a rule that provides for management approval for expression of viewpoints was “antithetical” to Section 7, and would chill an employee’s exercise of such rights. Accordingly, the ALJ found that this provision was also unlawful, even though he previously noted that the solicitation policy itself was lawful.
Finally, the ALJ turned to the Acceptable Use of Information Technology Resources policy and concluded that that policy, too, was unlawful. The ALJ found that the policy used overly broad language, and did not affirmatively exempt Section 7 activity from its coverage. The ALJ also noted that the provision allowing an employee to avoid the prohibitions in the policy by seeking management approval were unlawful as was the case with the email policy.
This decision demonstrates the importance of careful crafting in employer policies. As with the decision in JPL, this decision could serve as a vehicle for the current Board to undermine or even reverse the Registered Guard decision, which currently provides employers some control over its electronic resources.
c. Employer Prohibition of Audio Recording in the Workplace Lawful
An ALJ decided a case involving an allegation that Whole Foods violated Section 8(a)(1) of the Act by maintaining a rule prohibiting the recording of conversations with a recording device. The rule provided that it was a violation of company policy to record conversations with a tape recorder or other device, including a cell phone, unless prior approval was received by the company. The rule was carefully crafted to apply only during working times.
Whole Foods defended the rule, arguing that the policy was necessary to eliminate any chilling effect recording might have on the expression of ideas, because recording can inhibit honest and open dialogue, which Whole Foods fully encouraged. The company argued that its core values encouraged employees to speak up and speak out, and it desired to allow employees to feel comfortable voicing opinions.
The ALJ ran through the familiar test for determining whether a policy violates the Act, and noted that the policy did not prohibit Section 7 activity on its face. The ALJ stated that recording in the workplace is not a protected right. The ALJ also found that the rule was not adopted in response to union activity and had not been enforced in violation of the Act. The only question then, was whether the rule could be reasonably construed to prohibit Section 7 activity.
The Board’s General Counsel had argued that the rule could be construed to prohibit the use of social media in the workplace. The ALJ disagreed, holding that the rule could not be reasonably interpreted to prohibit Section 7 activity. The ALJ also noted that the Act protects organizational rights, not the means by which employees communicate. The ALJ stated that the policy clearly stated its purpose, to encourage open dialogue, and its purpose was logical and legitimate. The ALJ ultimately concluded that the rule prohibiting recordings in the workplace was valid. The decision is solid guidance for employers seeking to draft lawful recording policies, but its value may be short lived if the Board reviews and reverses the ALJ decision. (It should be noted that in some states, such as Pennsylvania, it is a crime to record a conversation without obtaining consent of the other party.)
In the early part of 2013, it appeared that the Board was, in some respects, “on the ropes.” Indeed, it was handed defeats in several high profiles cases and the validity of hundreds of its decisions has been called into doubt. However, the Board is now properly constituted and poised to push through its agenda, despite some of the major setbacks it faced in 2013 and even if it has to do it twice.
With one or more decisions from the Supreme Court likely, 2014 could be another big year for the Board. In addition, there are several interesting ALJ decisions that will likely reach the Board, in its newly constituted form. We believe undoubtedly that the Board’s pro-union, pro-employee agenda will continue unabated!