Labor Relations Update

One of the NLRB's most sweeping decisions in decades, Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (August 26, 2011).pdf, has reached a federal appeals court, as the employer seeks to have the decision overturned.  As we have previously discussed, the Board in this case established the micro union standard, where the bargaining unit sought by a union will be given special deference if the employee grouping selected shares a community of interest.  The significance of this rule is that an employer now may be faced with multiple bargaining units (e,g,, by department or job classificatiion or title) when the standard for 77 years has been to look at the industry involved and the functional integration of the employees.  Now, if an employer seeks to include additonal employees in the bargaining unit, it must demonstrate the larger grouping shares an "overwhelming"community of interest.  In the rule's short tenure, it has become apparent that the undefined new standard is (almost) impossible to reach. 

The case is being heard by the Sixth Circuit Court of Appeals in Cincinnati, Ohio.  As of April 23, 2012, the principal parties and friends of the court have filed their briefs.  Just as with the underlying case, it is anticipated that the court will receive numerous briefs from interested parties. The next step will be for the court to hold oral argument.  A decision is not expected for several months.

We were privileged to file amicus briefs separately on behalf of two distinguished organizations, the Retail Industry Leaders Association ("RILA") and the Coalition for a Democratic Workplace ("CDW").  As the briefs demonstrate, the Board's rule in Specialty Healthcare imposed an entirely new legal framework without proper notice and discussion, as well as violated key provisions of the NLRA.  Those briefs are attached here RILA Amicus Brief (Apr 23 2012).pdf and here Coaliton For A Democratic Workplace Amicus Brief (April 23, 2012).pdf

As always, we will be watching this case very closely and will report significant developments as they occur. 

The slow pace at the NLRB continues this Spring, as only one or two decisions are issued each week.  Recent decisions, one from the NLRB and one from the District of Columbia Court of Appeals, are worth noting because they illustrate recurring themes under the NLRA.

Protecting The Identity Of Employee Informants

In Alcan Rolled Products-Ravenswood LLC, 358 NLRB No. 11 (February 27, 2012).pdf the NLRB addressed a common situation involving employees who report on other employees in a unionized workforce.  A bargaining unit member had two accidents while driving a forklift, both of which caused property damage.  The employee in question was tested for drugs and alcohol; the drug test was negative, while the test revealed the presence of alcohol, but apparently not at high enough levels to warrant action under the policy.  While the employer was investigating the second accident, several bargaining unit members expressed concern for safety working with the employee, with one stating that the employee was in need of help.  The supervisor in charge had assured all bargaining unit members that the discussions were "off the record."

During a meeting about the accidents, the employer informed the union that it intended to discharge the employee for the accidents, and mentioned that some bargaining unit members had expressed concern about working with the employee. The union requested the names of the employees; the employer refused to provide the information.  In doing so, the employer advanced two reasons as to why it did not have to disclose the information.  First, that the employer did not intend to rely on the information because whatever the co-workers had told it was not relevant to the discharge.  Second, that the information was confidential.

The NLRB adopted the Administrative Law Judge's conclusion that the employer violated Section 8(a)(5) of the Act, which requires employers to bargain in good faith, by not trying to reach an accommodation with the union over the provision of the employee names.

The ALJ ruled that employer "did not forswear reliance on the information" obtained from co-workers mainly due to its written responses to the union during the grievance process.  In these letters, the employer stated that the discharged employee's actions "put other employees and you at risk."  The takeaway here is that employers should be very careful what they put in written responses to the union, as it sometimes can be perceived as contrary to a position taken with respect to an information request.

The employer also asserted that it did not have to provide the names of the employee witnesses because the information was "confidential," specifically, that it had given assurances that the conversations were off the record.  In rejecting this assertion, the ALJ noted that an employer's assurances of confidentiality to an employee are not enough to cloak the employee's identity as "confidential."  The ALJ noted in a footnote:

I do not criticize the efficacy of this management approach (although it is worth bearing in mind that confidentiality can also encourage dishonest reports, as the informants need never face scrutiny).  But management's willingness to grant confidentiality cannot, by itself, create a legitimate employer interest in confidentiality for purposes of avoiding disclosure of otherwise relevant information to a union.

Nonetheless, the ALJ deemed the identity of witnesses to be confidential due to a long line of NLRB decisions dealing with the situation.  Employers have legitimate confidentiality concerns to foster employee reporting of safety violations and criminal conduct, and to protect employees from the potential threat of retaliation.  That the information was confidential, though, did not absolve the employer of any responsibility.  If information is deemed to be "confidential" then the employer must attempt to reach an accommodation over the disclosure of the information by bargaining with the union.  The employer in the case asserted that there was no accommodation that would have been acceptable, but the ALJ concluded this was preemptive and that the employer's failure to try was what constituted a violation of the Act.  Thus, the ALJ gave some guidance:

While I agree that is far from clear that the Union would have accepted any offer of accommodation, the Respondent's duty was to make the effort.  It could have, for instance, offered to provide the identities to a designated union official, subject to bargained restrictions on the Union's use and dissemination of the information.  It could have offered to provide the identities subject to a confidentiality agreement to an International Union unaffiliated with the facility for use interviewing the employees.  Certainly there are other potential accommodations that the parties could discuss.

The case does not break any new ground.  It does, however,  illustrate a common problem with the response to an information request made by a union.  An employer should never outright reject an information request.  Information requests can be irksome if for no other reason than it often seems that the union does little or nothing with the information.  Simply denying an information request on confidentiality grounds brings some risk of a violation of the Act.   First, in order for the information to be "confidential" it must be proven that there is a legitimate employer interest in it; we know from this case that merely assuring employees that their identities will remain confidential is not enough.  There must be an articulable basis.  Second, even if the information is confidential, the employer still must bargain over the the circumstances under which it is disclosed.  In other words, just because it is confidential does not privilege an employer from ever turning it over to the union.  There is no requirement that the parties actually reach an accommodation, just that they try.  

Supervisors And The Representation Election Process

A recent DC Circuit Court of Appeals case illustrates another recurring theme under the NLRA: the importance of understanding which individuals in a workforce are supervisors within the meaning of the Act.  As a general rule, supervisors are excluded from the voting unit.  Individuals who fall within the statutory Section 2(11) definition of "supervisor" often possess enough authority over employees that they can violate the Act.  It is important to understand which folks are supervisors before organizing occurs as the employer in  Veritas Health Services, Inc. v. NLRB, No. 11-1107, (DC Cir. March 13, 2012).pdf recently found out.

in Veritas, the employer hospital underwent an organizing drive targeting the nursing staff.  At least some of the union adherents were "charge nurses" (the equivalent of leadpersons or forepersons in other workplaces), with two in particular, who "actively encouraged subordinate registered nurses to support the Union."  These activities included telling nurses that they "need" to attend union meetings and "need" to sign an authorization card.

The union gained enough support to file a petition for an election.  During the processing of the petition, the parties agreed that the charge nurses were supervisors and removed them from the voting unit.  The charge nurses then switched sides and campaigned for the employer.  The employer lost the election and challenged the results based on the charge nurses/supervisors pro-union conduct.  The DC Court of Appeals rejected this claim, finding that under NLRB authority the conduct did not interfere with the freedom of choice.  Specifically, the Court found that the passage of time (the pro-union conduct was pre-petition) and the fact that the charge nurses campaigned for the employer such that "registered nurses would have no reason to feel pro-Union coercion or interference from the [charge nurses'] prior conduct."  

Again, not anything new, however it does illustrate the importance of understanding which individuals in a workforce are supervisory.  As the Court noted:

 ...supervisors do not usually engage in pro-union activities against the wishes of management.  But the issue of pro-union conduct by a supervisor sometimes arises when it was unclear or disputed at the time of the pro-union activity whether the employee was a statutory supervisor.

It is often the case that employers do not know (and have not considered) whether certain classifications within a workforce are supervisory until an NLRB petition is filed.  By that time, however, it is often too late.  If an employer grants a particular classification authority over employees, it should also do an analysis of whether such position would be considered supervisory under the Act, and understand the potential consequences.

It's been a quiet few weeks for the NLRB.  Since January 1, the NLRB has issued only a small number of decisions, none of which appear to be noteworthy.  There are, of course, many developments that are in process.  For example, we still do not know the full effect of the NLRB's decision in Specialty Healthcare, where the NLRB adopted the micro union standard, and which has since been applied in an alarming way.   The NLRB also has pending its new election regulations, which although under challenge, could bring major changes to the way bargaining units are established.

The fact is the NLRB's micro union standard and election procedure regulations are probably only the tip of the proverbial iceberg.  These are the changes the NLRB could accomplish; remember, the NLRB's original proposed election regulations were much broader in scope, and were only scaled back after a wave of intense opposition.  So, the NLRB clearly is receptive to more sweeping change. 

A recent decision demonstrates just how receptive the agency could be in the coming months.  In the final hours of 2011, the NLRB issued 2 Sisters Food Group, Inc., 357 NLRB No. 168 (December 29, 2011).pdf, which to date has gone unnoticed.  This decision, however, provides us with substantial evidence of NLRB mission creep.

The facts in 2 Sisters are fairly basic.  The union lost a representation election by a vote of 66 to 87, with more than enough challenged ballots to alter the outcome.  The union then filed numerous objections, some of which were sustained, some of which are rejected.  The employer was found, for example, to have unlawfully terminated a union adherent during the election campaign.  Standing alone, an unlawful termination would be enough to warrant a rerun election (indeed, Chairman Pearce and Members Becker and Hayes all agreed to sustain the finding that the termination was unlawful, which means the election would be thrown out in any event). 

The truly remarkable aspect of the 2 Sisters decision is that the vast majority of it deals with issues that had no effect whatsoever on the election.  These issues show how unions will attempt to cash in on the NLRB's receptivity to change by bringing challenges asking the agency to overturn or alter existing law.  Here are a few examples-

Handbook violations.  As we have previously detailed, the NLRB has been finding that the mere existence of "overbroad" handbook violations may be enough to overturn an election even when there is no evidence the policy was enforced, let alone that employees were even aware of it.  In 2 Sisters, Chairman Pearce and Member Becker found that the employer's rule subjecting employees to discipline for "inability or unwillingness to work harmoniously with other employees," was an unfair labor practice (and, therefore, also grounds for an objection) because "it was sufficiently imprecise that it could encompass any disagreement or conflict among employees, including those related to discussions and interactions protected by Section 7, and that employees could reasonably construe the rule to prohibit such activity."  The NLRB also ruled the requirement that employees arbitrate all disputes violated the Act.

The problem with these kinds of violations is twofold.  First, there is no evidence that the rules were actually construed to prohibit protected union activity (or any other activity for that matter).  Indeed, the election seems to have been hotly contested, which is actually proof the "harmonious" and "arbitration" handbook policies had no effect on the election.  One can see how important the handbook rule might be if that was the only objection to an election:  the NLRB would be nullifying free choice based on a purely theoretical impact of a policy found in a multi-page handbook odds are the employees received, yet never actually read.  Second, and more important, this finding shows that since the NLRB is more receptive to such charges, employers can and should expect unions to raise more of these challenges.  The ruling creates an incentive for the union to scour the employer's handbook in search of some innocuous phrase, such as a requirement that employees work "harmoniously."   No proof other than the policy is required because the NLRB decides what the employee would "reasonably construe" a rule to mean.  So, the union will hold onto the issue until after the results of the election are known.  If the union loses, then it will simply file objections asking the results be overturned based on some obscure policy buried in the handbook.  While this is an area of law that changes, and will continue to change, each employer should review its handbook in an attempt to remove such hidden land mines.

Employer Meetings.  The union in 2 Sisters objected to the employer's holding of mandatory meetings during the campaign to discuss its views on the union.  Even though the union acknowledged that the employer's meetings were not objectionable under the law, it still asked for the rule to be changed.  Although the NLRB did not reach this issue, Member Becker, in a three page dissent, left a parting shot, which is sure to set the stage for the next few months.  

Since 1953, it has been the law that the employer may hold mandatory meetings in which it expresses its view on the union.  The employer is prohibited from holding such meetings during the twenty-four hour period prior to the election.  Member Becker made clear his view that such rule should be discarded. and employers should be prohibited from holding any mandatory meetings to discuss the union:

Board-supervised elections have been called the 'crown jewel of the Board's accomplishments' under the Act. . .By continuing to permit employers to require that employees attend campaign meetings as a condition of continued employment, the Board does not simply tarnish that jewel, it fractures it.  I would not continue down this long but fundamentally misguided path.

So, the rule of the last 59 years has been wrong, despite the make-up of the NLRB changing from pro-labor to pro-management numerous times.  Member Becker would have it that an employer may not call a meeting to discuss with its own employees a matter that concerns everyone at the workplace just because the topic is the union.  As extreme as the view may sound, we can expect the issue will be raised again in the coming months, and the NLRB likely will have some receptivity to it.

Site of the election.  Having secured a rerun election, the union in 2 Sisters requested that the second election be held off-site away from the employer's premises.  The NLRB did not grant the request yet expended five pages of the decision noting that the Regional Director has the ultimate authority to direct an election to be held at a place other than an employer's premises.  The opinion sets out guidelines the Regional Director should consider in making his or her decision on the site of an election.  Why spend so much time talking about this issue?  Clearly, the NLRB is sending a signal.  There is enough language in these pages that indicates a new tactic may be for the union to request a location for an election other than an employer's workplace, and if its request is denied, create yet another issue to attack the results.  Thus, the NLRB seemed to be setting this issue up for the future:

While the existing empirical work on this subject is not definitive, it is persuasive and creates concern that holding representation elections on premises controlled by one party without the consent of all other parties is inconsistent with the Board's obligation to insure[] that no party gains last minute advantage over the other.

With the exception of mail ballot elections, the representation election is almost always held at the employer's premises.  This is not for any nefarious reason, but a more fundamental, logical one inherently tied to the NLRB's mission:  the employer's premises is where the employees are most likely to be located and where the NLRB can ensure the greatest turnout. 

Calling the majority's discussion of the election site "unwarranted" and "unprecedented," Member Hayes, summarized the issue succinctly in his dissent:

To some, myself included, it may seem surpassingly strange to premise a change in the requirements for resolving disputes about where to hold a Board election on the prospect that an employer might exercise its right to communicate with employees on a question concerning representation.  By now, however, we should be accustomed to my colleagues' concern that this should happen.  Time and time again, they have demonstrated a willingness, if not open zeal, for limiting employer communications. . .

Again, 2 Sisters issued in the final days of 2011 and has received no attention. The arguments made by the union in the case are telling, however, about some of the strategies employers are likely to see in the very near future as unions continue efforts to curtail employer communication.  Of course, the make-up of the NLRB has changed recently, so no one knows what will happen, but it is a safe guess the agency will at least be receptive to the change. 

The NLRB announced today that it was going to hold a vote on its proposed regulations to upend the well established and longstanding representation case procedures.  According to the NLRB's announcement today, the vote is over "whether to adopt a small number of amendments" proposed earlier this year. This may well be the understatement of the year as very few people, if any, believe that the NLRB will do anything short of adopting all of the proposed changes, not just a few unidentified amendments.

In fact, Member Hayes, in a scathing letter to Congress, also dated today, asserts his two colleagues are determined to issue a final rule before the expiration of Member Becker's term at the end of the year. In this letter, Member Hayes levels pointed criticism of the agency's rulemaking process as contrary to precedent and practice:

In my dissent to the Notice of Proposed Rulemaking, I criticized the majority's use of 'a rulemaking process that is opaque, exclusionary, and adversarial,' in contravention with the Administrative Procedure Act, the Government in Sunshine Act, and President Obama's January 21, 2009, Memorandum of Transparency and Open Government, and in sharp contrast to the Board's procedural practice during the 1987-1989 rulemaking for appropriate bargaining units in the healthcare industry.  That criticism apparently made no impression on my colleagues, who have continued this process in the same manner, and without my participation; and who now have made it unequivocally clear that they intend to publish a final rule before the expiration of Member Becker's without regard to Board tradition or rule.

One wonders what the environment must be on the 11th floor of the NLRB where all the Members have their offices.  

Of course, this latest news, while hardly surprising, makes one wonder the thought process of the NLRB. As noted earlier here, the NLRB postponed the requirement that all employers under its jurisdiction post rights notices after a public firestorm, accompanied by several lawsuits challenging the rule.  That outcry was over a notice posting; what will the public's response be to this seemingly predetermined outcome?   Litigation is certain to be filed.  The NLRB's own public divisions are unlikely to calm the debate.

The NLRB's vote will be made at a public meeting and streamed live on the internet.  More to come. . .

Since the NLRB’s Office of the General Counsel (“OGC”) issued the first “Facebook” complaint in American Medical Response of Connecticut, Inc. in October, 2010, dozens of unfair labor practice charges involving social media have been filed, the Acting General Counsel has identified social media cases as a priority, and gallons of electronic ink have been spilled by commentators and the OGC, itself, trying to help employers and their counsel make sense of it all.  The law is still developing – it has only been a few weeks since an ALJ rendered the first decision in a Facebook case – but thus far, social media cases have been evaluated and decided on the basis of existing legal principles.  There has been no indication that existing rules will be modified or adapted to meet the realities of the digital world, despite fundamental differences in the character of on-line communications versus more traditional forms of employee communication.  Though the rules may be familiar, applying them to social media cases is a challenge.

The majority of cases generally fall into two categories, with some overlap: (1) those involving discipline based upon employee conduct on social media sites and (2) those challenging employer social media policies as overbroad and unlawful restrictions on employees’ rights under the NLRA.  With the stated intention of offering assistance to labor law practitioners and HR professionals, NLRB Acting General Counsel Lafe Solomon issued a report this past August explaining the rationale underlying the OGC’s decisions in a sampling of the key social media cases within the last year (OM 11-74 Report of the Acting General Counsel Concerning Social Media Cases). 

When is employee conduct on social media sites protected by the NLRA?

The cases to date make clear that existing standards defining protected concerted activity will be used to evaluate employees’ social media activities.  Non-union employers must not lose sight of the fact that their employees are also protected by the NLRA and these standards apply whether or not employees are represented by a union. 

• An employee’s activity is concerted when the employee: 
  • acts with or on the authority of other employees;   
  • seeks to initiate or to induce or to prepare for group action;
  • brings “truly group complaints” to management’s attention. 
• Discussions between or among employees must be “a logical outgrowth” of group action or collective goals. 
• An employee’s activity is not concerted when the employee acts alone or on behalf of him or herself, regardless of whether other employees may benefit and regardless of whether the object of the employee’s action is something about which other employees would be concerned.   
• Disparaging comments about an employer, including supervisors, are generally protected, but they may lose the Act’s protection when they: 
  • are unrelated to a dispute over working conditions; 
  • focus only on the employer’s products or business policies, particularly if the criticism comes at a “critical time” for the employer 
  • are reckless or maliciously untrue; 
  • are appeals to racial, ethnic or similar prejudices; o 
  • are insulting or obscene personal attacks that cross an ill-defined “I know it when I see it” line of propriety.

The difficulty of applying these principles to social media cases is aptly illustrated by the first “Facebook” case to be decided by an ALJ, Hispanics United of Buffalo, Inc., which was decided on September 2, 2011.  In that case, the ALJ found that a nonprofit, non-union employer violated the NLRA by terminating five employees who had engaged in protected concerted activity.  Specifically, they had engaged in a Facebook discussion concerning another employee’s criticism of their job performance that included vulgar language.  In so ruling, the ALJ recognized that individual action can be protected as concerted action as long as it is engaged in with the object of initiating or inducing group action.  The facts of the case, however, indicate that there was no evidence of the terminated employees’ intent to take group action beyond their Facebook postings.  The ALJ nonetheless concluded that the terminated employees were “taking a first step towards taking group action,” and by terminating them, the employer prevented them from taking any further group action.  

Distinguishing Hispanics United from cases in which no concerted activity was found -- e.g., where an individual employee posted a complaint that received supportive messages from co-workers but did not otherwise manifest any intent to induce group action -- can be challenging.  For example, in another case discussed in the Acting GC’s report, Wal-Mart, No. 17-CA-25030, the OGC declined to issue a complaint where an employee was disciplined for posting vulgar comments to his Facebook page that were critical of local store management.  Although other employees submitted supportive comments, the OGC found that the postings were an expression of an individual gripe that was not protected concerted activity.  In so finding, the OGC noted that the Facebook posts contained no indication of the employee’s intent to initiate or induce group action – just like the Facebook posts in Hispanics United.  

Though the Wal-Mart case and several others described in the Acting GC’s Report manifest the OGC’s recognition that there are limits to the scope of protected concerted activity in the social media context, the conclusion by the ALJ in Hispanics United that the terminated employees’ Facebook posts were protected because they were “taking a first step towards taking group action” presents employers with the difficult task of deciding when to infer an individual employee’s intention to take group action and when to treat a post as an individual complaint.  In this regard, the fact that all five employees who participated in the Facebook exchange were terminated was significant.  The ALJ specifically found that the employer’s termination of all five employees for their Facebook postings established that the employer viewed the five as a group and that they were engaged in concerted activity.  

Though these cases are highly fact-specific, and though application of the operative legal principles to the facts of each case can be difficult, a few guidelines do emerge from the body of cases reported thus far: 

• Employee conduct on social media sites that expressly engages co-workers or seeks to promote group action with respect to an issue related to terms and conditions of employment will be protected.
• An individual employee’s social media post will likely be protected if it suggests implicitly or explicitly an intention to promote group action or support, particularly if it solicits co-worker comments.
• An individual employee’s social media post that does not expressly solicit co-worker input but nonetheless generates co-worker comments that grow into a substantive conversation concerning terms and conditions of employment may well be protected.
• An individual employee’s social media post that is neither directed to co-workers nor engages co-workers, or a post that does not address issues of mutual concern to other employees will likely be treated as an unprotected individual gripe or complaint.
• Disparaging comments concerning the employer and/or supervisors will be protected, even if they include vulgar or rude language, unless they are so outrageous or offensive as to lose the protection of the NLRA.
• Discriminatory comments or posts that advocate unlawful action will not be protected.

In applying these guidelines, employers are well advised to consider the NLRB’s renewed emphasis on protecting employee rights to engage in protected concerted activity, as well as its general interest in expanding employee access to digital media and facilitating employee communication.  They should also be mindful of the Acting General Counsel’s aggressive posture in these cases.  Accordingly, before implementing disciplinary action, employers should consult with counsel and carefully weigh the risks of running afoul of the emerging law in this area.

What is the lawful scope of a social media policy?

As in the employee discipline cases, cases involving challenges to employers’ social media policies as overbroad and unlawful restrictions on employee rights under the NLRA have also, thus far, applied well-established legal principles without modification or adaptation to any particular attributes of social media communications: 

• An employer violates NLRA Section 8(a)(1) through the maintenance of a policy that “reasonably tends to chill” employees in the exercise of their rights under Section 7 of the Act to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. 
• If the policy does not explicitly restrict Section 7 activities, it is unlawful only upon a showing that (1) employees would reasonably construe the language to prohibit protected activity, (2) the policy was promulgated in response to union activity, or (3) the policy has been applied to restrict the exercise of Section 7 rights.

As in the social media disciplinary cases, the cases involving challenges to social media policies are highly fact-specific.  Examples of unlawful policies addressed in the Acting GC’s Report include:

• Prohibition against posting pictures that depict the company was unlawfully overbroad because it would prohibit employees from engaging in a protected activity like carrying a picket sign or wearing a t-shirt portraying the company’s logo in connection with a labor dispute.
• Prohibition in hospital social media policy against communications that compromise privacy, embarrass or defame the hospital or its staff, or damage the goodwill of the hospital was unlawfully overbroad where the policy did not define what the hospital considered to be private or confidential, nor did it contain a disclaimer informing employees that it did not apply to protected Section 7 activity.
• Prohibition against posting anything that would disclose “inappropriate or sensitive” information about the employer was unlawful in the absence of any definition or guidance as to the nature of the prohibited subjects.
• Prohibition against using the company name, address or other information in employees’ personal profiles was unlawfully overbroad because it interfered with employees’ ability to find and communicate with their coworkers on-line and was not narrowly drawn to protect a legitimate interest of the employer.
• Prohibition against revealing personal information regarding co-workers without their consent was unlawfully overbroad and could be reasonably interpreted as restraining employees’ Section 7 right to discuss wages and other terms and conditions of employment.
• Prohibition against “disrespectful conduct” or “rude or discourteous behavior,” was unlawfully overbroad where the policy did not contain a disclaimer informing employees that it did not apply to protected Section 7 activity.

Two unifying themes emerge from the unlawful policies summarized in the Acting GC’s Report:

1. They were not narrowly tailored to serving a well-defined, legitimate business need; and
2. Their broadly worded prohibitions could reasonably be read to restrict employees’ exercise of protected Section 7 rights and they did not disclaim any such unlawful intention. 

Indeed, one of the lawful policies addressed in the Acting GC’s Report aptly illustrated these points.  That policy instructed employees to respond to all media inquiries by (i) replying that that they were not authorized to comment for the employer or did not have the information being sought, (ii) taking the name and number of the media organization, and (iii) relaying the information to the employer’s public affairs office.  The OGC concluded that this policy was lawful because it served the employer’s legitimate business interest of communicating to the media with one voice, and it was not so broadly worded as to lead employees reasonably to think they were prohibited from exercising Section 7 rights to talk to the media on their own behalf about their working conditions.

Employers are well-advised to implement and enforce social media policies.  Whether the workplace is unionized or not, however, such policies must not be so broadly worded as to explicitly or implicitly restrict employees’ right to engage in protected concerted activities or to discourage (or “chill”) employees’ exercise of their rights.  Policies should clearly articulate the legitimate business interests sought to be protected or achieved through the policy, and the restrictions should be narrowly tailored to serve those legitimate interests.  Though disclaimers are not required, and though they do not, in and of themselves, provide an absolute defense, the inclusion of express language disclaiming any intention to restrict employee rights under the NLRA can be helpful to defeat claims that employees may reasonably interpret the policy to restrict their rights.

This is a rapidly evolving area, and with so many cases in the pipeline, the law is sure to continue to develop.  We will keep you posted on those developments.

The scope of the blizzard is becoming more defined as the NLRB rolls out decisions it reached in the waning days of Chairman Liebman's term. 

As previously reported on this blog, the NLRB was considering reversing Dana Corp, 351 NLRB 434 (2007) where it held that employees who become represented by a union pursuant to a voluntary recognition agreement must be given an opportunity, after notice, to reject that representation through a government supervised secret ballot election.

Concluding that "Dana represented a major change in Board law" that was "unwarranted," a sharply divided Board in Lamons Gasket Company, 357 NLRB No. 72 (August 26, 2011).pdf did as predicted and reversed Dana.  In the process it dismissed a timely petition filed by an employee, Michael Lopez, who obviously disagreed with his employer's voluntary recognition of a union.  Note that the petition was filed December 9, 2009 and a decision to hold an election was not rendered until July 21, 2010.  The actual election was held on August 26, 2010, more than eight months after the filing of the petition.  (It is typical in decertification elections for there to be delays such as occurred in this case, something you don't often hear about when discussing how difficult it is for employees' voices to be heard by secret ballot).  Unfortunately for Mr. Lopez, the ballots were impounded and now will never be counted. 

Thus, the so-called "recognition bar" has been restored to the rules in place prior to 2007, meaning "a reasonable period" of time must pass before such recogntion can be challenged.  The Board did seem to recognize the definition of "reasonable period" has been elusive and provided some clarity:

[W]e define a reasonable period of bargaining, during which the recognition bar will apply, to be no less than 6 months after the parties' first bargaining session and no more than 1 year.

The Board held it would apply the "multifactor analysis" for evaluating whether a reasonable period after six months had elapsed as set forth in Lee Lumber & Bulding Material Corp., 334 NLRB 399, 402 (2001) "which considers (1) whether the parties are bargaining for an initial contract; (2) the complexity of the issues being negotiated and of the parties' bargaining processes; (3) the amount of time elapsed since bargaining commenced and the number of bargaining sessions; (4) the amount of progress made in negotiations and how year the parties are to concluding an agreement; and (5) whether the parties are at impasse."  The burden would be on the General Counsel to prove that a reasonable period had not elapsed after the initial six months of bargaining.

The decision is hardly a surprise, but the majority did go to great lengths to discuss the history of voluntary recognition, and to assert its differences with the Dana majority.

The Board asserts Dana "compromises" its neutrality because it calls for employees to be informed via NLRB notice of their right to rid themselves of the union

In no other context does the Board require that employees be given notice of their right to change their minds about a recent exercise of statutory rights....

This is somewhat ironic given the NLRB's recent requirement that all employers post notice of the rights under the Act.

The Board majority also took aim at a major underpinning of Dana that voluntary recognition was somehow a lesser method for employees because of the potential for abuse in getting employees to get employees to sign recognition cards.  Here the Board majority cited some interesting statistics.  That "as of May 13, 2011" (four years after Dana became law) "the Board had received 1,333 requests for Dana notices."  Of those, 102 elections petitions were filed (7.6% of the cases), and 62 elections (55% of the petitions) were held, but that in only 17 cases did employees vote against representation.  The Board concluded, "Those statistics demonstrate that, contrary to the Dana majority's assumption, the proof of majority support that underlay the voluntary recognition during the past 4 years was a highly reliable measure of employee sentiment." 

It is unclear how these statistics are a highly reliable measure of employee sentiment.  The issue in these cases is what were the employees told when they signed an authorization card.  Were they told the truth? Were they promised anything?  Were they threatened?  Did the notices employees were given about their rights make any difference at all?  One simply cannot tell from these numbers.

The Board majority was clear on what it was not deciding:

While we overrule Dana, we have made no changes to established law regarding secret-ballot elections.  An election remains the only way for a union to obtain Board certification and its attendant benefits.

 The "attendant benefits," of course, are a 12-month bar for holding a decertification election.  The Board undoubtedly will leave the changes to "established law" for its pending rulemaking.

What would a Board decision these days be without a dissent?  Probably not a decision at all.  Member Hayes did his usual thorough job of providing the "other side" of this issue. Member Hayes takes issue with the use of statistics, stating:

As for the 1231 cases in which Dana notices were requested, but no petitions were filed, we know nothing about the reasons for this outcome.  To be more specific, we do not know anything about the reliability of the proof of the majority support that underlay voluntary recognition in each of these cases, nor do we know the reasons why no petition was filed.

As to the legal underpinnings of the pre-Dana recognition bar doctrine:

The majority also mischaracterizes statutory and judicial support for imposition of an election bar following voluntary recognition.  The Act itself does not impose such a bar in the wake of voluntary recognition.  It imposes an election bar only after there has been a valid Board election. . . .In other words, in the Taft-Hartley Act, Congress, undisputedly cognizant of the practice of voluntary recognition that the majority portrays as "fully woven into the very fabric of the Act" since its inception, chose not to give voluntary recogntion either election bar quality or the special protections of 9(a) certification status.

 

UGL-UNICCO Service Company

In UGL-UNICCO Service Company, 357 NLRB No. 76 (August 26, 2011).pdf, a case involving similar legal principles to Lamons Gasket, the Board reversed MV Transportation, 337 NLRB 770 (2002) which had thrown out the so-called "successor bar" whereby employees who become represented by a union through recognition as part of a merger can challenge that recognition. 

The Board held that while it was reversing MV Transportation, "we do not simply return to the" prior rule set forth in St. Elizabeth Manor, Inc., 329 NLRB 341 (1999).  The Board then proceeded to describe three situations and the rules associated with each:

Scenario 1:  Successor employer adopts existing terms and conditions of employment as starting place for negotiations

In this situation, the "reasonable period of  bargaining" will be "6 months measured from the date of the first bargaining meeting. . ."  The Board held this shorter insulated period was mandated because "the impact on the union and the employees it represents is significantly mitigated, because the new employer has accepted the collectively bargained status quo (if not the predecessor's contract, assuming one was in effect).

The Board described this as a "bright-line rule for such cases."  As such it was not necessary to apply the multi-factor test set forth in Lee Lumber.  And, it clearly rewards successor employers who agree to adopt existing terms and conditions of employment.  Of course, as anyone who has practiced in this area knows, it is virtually impossible for a successor to adopt all terms and conditions of employment of the predecessor.  There are always differences in health plans,  retirement benefits,  and company policies, which, try as one might, cannot be made exactly the same no matter the effort.  So, while the idea of a "bright-line" sounds good, it seems illusory and subject to attack in this case despite a successor's good faith efforts.

Scenario 2: Successor employer sets initial terms and conditions of employment

The Board also modified the prior successor bar rules to "address the situation where the successor employer recognizes the union, but unilaterally announces and establishes initial terms and conditions of employment."  Acknowledging that such a successor has acted "lawfully" the Board held "there is no reason to believe that the actual impact of these changes on the bargaining relationship and on employees is somehow lessened because they are legal."

The Board held:

In these cases, because the destablizing factors associated with successorship are at their height a longer insulated period is appropriate.  The period we have chosen corresponds to the period adopted in Lee Lumber . . .

So, six months is the minimum period and one year is the maximum.

Scenario No. 3:  Successor employer reaches agreement but no open period occurred

The Board made "one further modification" to the successor bar doctrine, holding that where: "(1) a first contract is reached by a successor employer and the incumbent union within a reasonable period of bargaining during which the successor bar applied, and (2) there was no open period permitting the filing of a petition during the final year of the predecessor employer's bargaining relationship with the union, the contract-bar period applicable to election petitions filed by employees or rival unions will be a maximum of 2 years, instead of 3."

This appears to be an effort to provide some clarity to a "what-if" situation described in MV Transportation. 

Member Hayes provided a spirited and entertaining dissent, which provides a detailed and clear discussion of the law of successorship, something that vexes even veteran practitioners.  Member Hayes flatly disputes the legal underpinnings and asserts the majority has a whiff of arbitrariness about it when setting its new rules:

Undeterred by this precedent, my colleagues reimpose their successor bar, giving it the additional twist of defining a reasonable bar period as dependent upon whether a successor has exercised its legal right under Burns to set initial terms and conditions of empoyment different from those that existed under the predecessor employer.  If the employer exercises this legal right, the irrebuttable presumption of the incumbent union's majority status could last for as much as a year, thus imposing by decisional fiat a bar of the same length that Congress stautorily provided for only following a free and fair secret ballot Board election.

The entire dissent is well worth the read.

Stay tuned.  This is only the start of th storm.  More is sure to be coming.

Concluding that "many employees protected by the NLRA are unaware of their rights under the statute," the NLRB today issued a Final Rule today on Notification of Employee Rights under the National Labor Relations Act.pdf.  As of November 14, 2011, all employers falling under NLRB jurisdiction will be required to post a notice the content and size of which has tentatively been decided to be the same as the notice currently required to be posted by federal contractors.pdf pursuant to Executive Order.  The NLRB says it will make the notice available at no cost to employers who will be able to get it from the NLRB offices or electronically through the NLRB's website.

There is no recordkeeping requirement; however, failure to post a notice would be considered an unfair labor practice.  Although the Board has indicated such a violation would be technical, in reality a failure to post could have serious implications.  As the Board noted in its FAQs on this issue:

The Board expects that, in most cases, employers who fail to post the notice are unaware of the rule and will comply when requested by a Board agent.  In such cases, the unfair labor practice cases will be closed without further action.  The Board may extend the 6-month statute of limitations for filing a charge involving other unfair labor practice allegations against the employer.  If an employer knowingly and willingly fails to post the notice, the failure may be considered evidence of unlawful motivation in an unfair labor practice case involving any other alleged violations of the NLRA.

Although unstated, the failure to post could have serious consequences in representation campaigns and elections as well.  As we previously noted, the NLRB has held that an overbroad handbook provision could result in the results of an representation election being overturned, even when there is no evidence the employees even were aware of it.  The same reasoning would apply here:  a violation of the law, even a technical and arguably inconsequential one, could be deemed enough to overturn an election.

Overall, the rulemaking itself is not terribly surprising.  The NLRB recevied 7,034 comments (some of which it acknowledges were counted twice because they were filed electronically and by mail), which, in today's labor relations climate, ran along the spectrum of "You should do more" to "You can't do it because it you don't have the authority."  Weighing in at 194 pages, the bulk of the final rule is made up of the NLRB discussing the comments it received.  For example:

The contention that the right to refrain from union activity is "buried" in the list of affirmative rights or that the Board is biased in favor of unionization because of the choice of placement is with out merit.  The list of rights in the proposed notice is patterned after the list of rights in Section 7 of the NLRA. . .

The takeaways for employers:

• Unless successfully challenged, the notice must be posted as of November 14, 2011.
• The notice must be posted where other notices for employees are customarily posted.  If the employer makes such notices available on an intranet, it must do so in this case as well.
• There is no recordkeeping requirement, but failure to post is an unfair labor practice.
• The failure to post could have implications on other unfair labor practice situations and representation elections.
• The notice must be posted even in places where a union is already in place.
• Post it.  It is not worth the hassle to not do so.

The mid-point of Summer has passed.  Although the NLRB has not issued a major decision in several weeks, the agency has not been slacking off this Summer.  In a typical year, August and September are the busiest months for the NLRB, because the federal government's fiscal year ends September 30.  During the final weeks of the fiscal year the NLRB attempts to push out as many decisions as it can.  The agency is largely statistically driven, and so more decisions means a greater justification for a renewed or increased budget.

This, of course, is not a typical year.  The current NLRB has a very active, if not activist, agenda.  There not only are a number of potentially far-reaching cases it has yet to decide, but the agency also has proposed rulemaking to drastically upend the current manner in which representation elections are held.  Add into the mix Chairman Liebman's appointment is set to expire on August 27, one can expect a storm of activity from the NLRB in the coming weeks.  Here is a snapshot of the important cases and the rulemaking initiatives currently pending: 

• Speciality Healthcare (NLRB Case No. 15-RC-8773).  In this case, the NLRB wondered aloud whether it could set a presumptive rule for the appropriateness of bargaining units in certain segments of the healthcare industry. The problem, of course, is that anyone who has worked in business environment knows that there is no uniformity to how an employer structures its business, even within industries.  A decision holding otherwise will make it much easier for unions to organize because it will remove Section 9(b) of the Act's requirement that the NLRB actually decide, on a case by case basis, the appropriateness of a unit.  We posted in detail on this important issue in March after we filed a brief on behalf of Retail Industry Leaders Association. 
•  Lamons Gasket Company (NLRB Case No. 16-RD-1597).  In this case the NLRB may revisit (read- overturn) the exception to the voluntary recognition bar set forth in Dana Corp Metaldyne, 351 NLRB 434 (2007).pdf.  In Dana, the NLRB set a rule where employees may challenge voluntary recognition of a union by their employer by filing a petition for an election within a certain period of time.  With all the discussion about the NLRB's processes, the NLRB in Dana pointed out something that sometimes gets lost in the debate.  "Finally, although critics of the Board election process claim that an employer opposed to union representation has a one-sided advantage to exert pressure on its employees throughout each workday of an election campaign, the fact remains that the Board will invalidate elections affected by improper electioneering tactics, and an employee's expression of choice is exercised by casting a ballot in private.  There are no comparable safeguards in the voluntary recognition process."  Id. at 439. 
• Hawaii Tribune Herald (NLRB Case No. 37-CA-7043 et al.).  This is another case where the NLRB invited interested parties to file briefs about whether it should it should change its 32 year rule that witness statements made to the emloyer need not be turned over to the union prior to an arbitration hearing. As noted in the previous post on this issue, the NLRB's rule is designed to protect the witnesses from intimidation.  A reversal of this decades old rule will change the way arbitration cases are handled.
• D.R. Horton (NLRB Case No. 12-CA-25764).  The NLRB invited briefs on the issue of whether an employer's requirement that each employee sign an arbitration agreement which expressly waives the right to class action relief violated Section 8(a)(1). We previously posted on this important issue. The issue in this case really comes down to whether "all" group activity, no matter what the nature, is also "protected, concerted" activity under Section 7 of the NLRA.  We filed a Brief for the Retail Industry Leaders Association -- Amicus Curiae.pdf on this issue.  While one can certainly see the similarities between Section 7 activity and employees who wish to bring a class action against their employer, there are also important distinguishing factors.  The entire NLRA concept of group activity is designed to have employees acting in concert toward a common goal; there is interaction and cohesiveness. Under the NLRA, the group must achieve majority status before it can act on behalf of the whole.   In many class actions, the opposite is often true.  The vast majority of employees are not even aware the lawsuit is pending.  In many cases the "class representatives," often a tiny fraction of an overall workforce, can settle the entire matter (for their own benefit, of course), and then notify the rest of the employees what happened.  There are great differences between the two types of activity.
• Rulemaking. Of course, the NLRB has moved forward with its efforts to force "quickie elections" on employers through rulemaking.  The NLRB held hearings on the matter on July 18-19.  The changes, if promulgated, would reduce the amount of time between the filing of a petition and the election from about 42 days now to far fewer days.  The need for such drastic change is mystifying.  The NLRB itself in its own  Performance and Accountability Report FY 2010.pdf stated that it met or exceeded its strategic goals for processing representation petitions, which raises serious questions of the necessity for such drastic changes.  The U.S. Chamber of Commerce has drafted a very good Fact Sheet On Quickie Elections.pdf detailing the proposed rules, and how they would change the current process.  Comments on the rulemaking are due August 22, 2011, so employers who wish to get involved should draft comments to the NLRB (there is a draft letter in the U.S. Chamber's materials).

As one can see, a storm of NLRB activity is headed this way.  We will certainly be monitoring it as its clouds continue to gather.  Employers need to prepare for the possibility that many areas of NLRB law and process, some decades old, will be changed in the coming weeks.  We will, of course keep you posted on all developments as they occur.

The NLRB continued its efforts to poke employers who discipline or discharge employees who make disparaging comments on Facebook.  According to a May 24 press release, the NLRB issued yet another Complaint against an Illinois car dealer, Knauz BMW, after it terminated a salesman for content he posted on Facebook.  The press release states the salesman "posted photos and commentary on his Facebook page critical that only hot dogs and bottled water" were being served at a dealer sales event.  The press release notes further that some of the salesman's co-workers "had access" to the comments.  A trial date has been set for July 21.

By now these cases seem fairly routine, innocuous almost.  This is because there are so many out there now.  Anecdotally, labor law practitioners now report dozens of Facebook related cases are pending in various Regions of the NLRB.  We know the legal principles are straightforward:  as a general matter employers may not punish employees who discuss working conditions with other employees  We also know that the NLRB Acting General Counsel takes the position that comments made on Facebook are akin to a discussion among employees at a "watercooler." 

The real question is whether any or all of these cases are an expansion of the rights of employees to discuss workplace issues.  In this most recent case, the employer was confronted with a salesman, the public-facing representative of its workforce, posting pictures and commentary that showed its business in a negative light.  The details of the case are largely unknown, but the way it is portrayed in the press release simply seems to be a stretch that there is a "discussion" among employees because other employees "had access" to the Facebook page. One hint that this particular case may be less compelling than others is the fact the employee was terminated almost one year ago, so the case has been pending for quite a while.

We will never know if these cases truly represent an expansion of what is considered protected activity until some get tried before an Administrative Law Judge.  It will be interesting, for example, to see if the "watercooler" argument can, well, hold water.   Is a Facebook posting truly just a modern day discussion among employees that moved from the watercooler to social media?  Frankly, that seems to blow the concept of such a discussion out of proportion.  Facebook's own statistics show that an average user has 130 friends.  If we take this as a baseline for the salesman discharged in this case, then the negative comments about the employer potentially reached 16,900 people, some of whom may be customers, potential customers and competitors.  At what point does a comment made by a salesperson, a person hired to espouse the postive nature of the service and product the customer will receive for his or her patronage, become unprotected because it was blasted to the entire world?  Would it be protected activity for an sales employee to rent a billboard (one of those electronic ones, mind you, we are in the 21st century) on a street where fellow employees have "access" that states "hot dogs and bottled water" is insufficient for a sales event?  One would think not, but there really is little difference between that and a posting on Facebook, a social media tool that has 500 million users. 

We'll keep you posted on further developments, but given the latest trend, employers need to continue to be mindful of the NLRB's position on such postings.

In a May 17 memorandum, NLRB Acting General Counsel Lafe Solomon furnished guidelines to Regional Directors concerning parties’ obligation to provide information in collective bargaining negotiations. 

GC Memorandum 11-13  traces the development of two different analytical frameworks for assessing a party’s obligation to provide requested information to its bargaining counterpart.  The first applies to cases involving a union request for financial information in response to an employer’s general claim of inability to pay certain wages or benefits.  The second applies to cases involving a party’s request for specific information related to more limited bargaining claims by its bargaining counterpart.  The principal purpose of the memo is to stress the importance of distinguishing between these two types of cases and applying the proper analytical framework to each. 

General Principles

Basic principles governing both parties’ obligation to produce requested information in bargaining include the following.

• The duty to bargain in good faith imposes on both parties a parallel obligation to provide relevant information upon request. 
• Information concerning employees’ terms and conditions of employment is presumptively relevant. 
• The party making the request bears the burden of demonstrating the relevance of the requested information. 
• The threshold for relevance is a liberal, discovery-type standard; the requested information must merely have some bearing on the issue between the parties, and the requesting party need show only potential or probable relevance.

In NLRB v. Truitt Mfg. Co., 351 U.S. 149 (1956), the U.S. Supreme Court  held that an employer violated Section 8(a)(5) of the Act by refusing to provide the union with financial information relevant to the employer’s claim that it could not afford a wage increase sought by the union.  In so ruling, the Court also emphasized more broadly that, when either party makes factual assertions in bargaining, it may be obligated to share information relevant to those specific factual assertions.

Analysis of Union Requests for General Financial Information

Truitt made clear that the assessment of whether an employer has exposed itself to a union request for financial information by claiming an inability to pay -- as opposed to an unwillingness to pay -- turns on the particular facts and context of each case.  No “magic words” are required for an employer to be deemed to have claimed financial hardship.  The obligation to provide general financial information arises whenever an employer’s statements and actions convey an inability to pay, and the Board and courts will evaluate an employer’s statements in the context of the particular case at hand.  GC Memorandum 11-13 observes that such case-specific analysis has led to seemingly inconsistent results, but it also recognizes that there is no bright-line test to clarify the fact-intensive analysis mandated by Truitt.

Analysis of a Party’s Request for Specific Information Related to Bargaining Claims

At times, an employer may base a bargaining position on factors that are related to certain business conditions but do not constitute an inability to pay, e.g., a need to maintain competitive pricing.  In such cases, the Acting General Counsel notes that the Board and the courts have not always been consistent in their analytical approach.  These are the types of cases with which GC Memorandum 11-13 is most concerned, and the memo advises Regional Directors not to overlook the significance and relevance of information requested in response to bargaining claims that do not rise to the level of a claim of inability to pay.  Such limited claims may well trigger a valid request for information specific to the particular claim at issue.

In this regard, the memo takes issue with the Board’s 2006 decision in North Star Steel Co., 347 NLRB 1369-70 (2006), in which the Board found that a union’s request for information regarding the employer’s competitors was not relevant because the employer had not claimed inability to pay.  Instead, the employer claimed an inability to compete.  In ruling that the employer had no obligation to produce a list of competitors, the Board restricted its analysis to whether or not the employer had claimed an inability to pay.  The memo criticizes the Board for not considering the employer’s claim of competitive disadvantage, and instead, confining its analysis to whether the employer had claimed financial hardship.

The memo cautions Regional Directors not to evaluate all claims for requested information on the basis of whether an employer has claimed financial hardship.  Rather, it advises the Regions to differentiate between requests for general financial information made in response to claims of an inability to pay from other more limited information requests made in response to bargaining claims that may be subject to specific evaluation.

Conclusion

The GC’s memo sensitizes Regional Directors to:

1. the importance of evaluating requests for information on the basis of a fact-specific analysis of the requested information’s relevance; and
2. the distinct analytical frameworks to be applied to cases involving an employer’s asserted inability to pay and those involving more limited justifications that do not rise to the level of financial hardship. 

Employers confronted with union information requests must evaluate the specific relevance of the request to bargaining issues on the table or to bargaining positions that the employer has taken in the course of negotiations.  The union bears the burden of demonstrating the relevance of any requests it makes, but in evaluating any such explanation, the employer should apply a liberal, discovery-like standard of relevance.  If the employer does not do so, the Board will, and the employer will be exposed to the risk of an 8(a)(5) charge.

The NLRB made good on its January 13, 2011.pdf threat to sue individual states that enact legislation that it believes are solely within its province.  In a complaint filed against the State of Arizona.pdf today, the NLRB asserts that voter enacted Arizona Constitutional Amendment Article 2 § 37 is preempted by the National Labor Relations Act, and therefore inoperable.  Article 2, § 37, which passed after an election held on November 2, 2010, provides, "The right to vote by secret ballot for employee representation is fundamental, and shall be guaranteed where local, state or federal law permits or requires elections, designations or authorizations for employee representation."

The NLRB complaint alleges

The NLRA permits but does not require secret ballot elections for the designation, selection, or authorization of a collective bargaining representative where, for example, employees successfully petition their employer to voluntarily recognize their designated representative on the basis of reliable evidence of majority support, in accordance with Sections 7 and 9 of the NLRA, 29 U.S.C. §§ 157 and 159. . .

Essentially, the NLRB's position is that the State of Arizona's guarantee of a secret ballot election is preempted by the NLRA, which allows employers to voluntarily recognize a union in certain circumstances. 

There is, of course, a much broader context to this issue.  The debate over how employees select unions has been the subject of intense public debate over the last three and a half years.  From mid-2008 until last year, there was a strong effort to pass federal legislation in the form of the oddly named Employee Free Choice Act ("EFCA"), which would have required an employer to recognize a union on the basis of signed authorization cards alone, without recourse to a secret ballot election.  The fervor to get EFCA passed caused a large public outcry that likely resulted in Arizona's efforts to pass this constitutional amendment.

EFCA died with the shift in Congress, starting with the election of Senator Scott Brown who effectively ended the super-majority needed to get the legislation passed.  Since then, of course, the pendulum has swung even further with a Republican majority taking firm hold of the House of Representatives.  Several state legislatures, including those in Arizona, South Dakota, and Utah have seized on the public opinion to enact guarantees of their own.

It is expected that South Dakota will be the next state to have to defend against an NLRB lawsuit.

These days, one can start almost any conversation about an NLRB decision with the words, "Under vigorous dissent by Member Hayes. . ."  The NLRB's recent decision in AT&T Connecticut, 356 NLRB No. 118 (March 24, 2011).pdf is no exception.  In AT&T Connecticut the NLRB ruled that the employer violated the NLRA when it suspended some 183 employee technicians who wore "Prisoner" shirts to the homes of customers to publicize a labor dispute.  The white t-shirts worn by the technicians said "INMATE #" on the front.  On the back with two sets of black vertical stripes appeared the words "Prisoner of AT$T" with the dollar sign meant to protest the alleged money-grubbing ways of the employer.  The employer did not take kindly to the actions and prohibited the wearing of the prisoner shirts.

The law governing this type of issue, while seemingly straightforward, can be extremely difficult to apply. Generally, the legal standard arose out of employers prohibiting employees from wearing "union insignia" at the workplace (union buttons, t-shirts, hats, etc.), and the NLRB has ruled that an employer may not ban such insignia absent "special circumstances." The term "special circumstances" has come to mean, generally, where the apparel can cause internal dissension or "unreasonably" interferes with the employer's public image.  Over the years the meaning "union insignia" has been expanded to include other statements about protest activity which, like this case, do not involve any actual union insignia; rather, the cases concern statements and conduct which don't mention a union, but do attack the company. The standard also has been applied to statements made to the public or customers.

There is no suprise that the NLRB majority of Chairman Liebman and Member Becker found that no special circumstances existed to justify prohibition of the prison inmate shirt.  The NLRB majority reasoned that it was unlikely the shirt would cause "fear" in customers because it could not be "reasonably mistaken for prison garb."  The majority also believed that no special circumstances existed to ban the shirts because the customers initiated the service calls, received confirmatory calls from the employees, and the employees wore employer ID badges and drove employer trucks.  

Member Hayes disagreed, pointing out that the front of the shirts themselves contained only "INMATE #" and there was no identification of a labor dispute or even the employer's name.  Mr. Hayes immediately put the focus on what the customer saw upon opening the front door

Imagine that you are a customer of AT&T Connecticut awaiting a service call.  The doorbell rings. You open it, and the first thing you see is someone wearing a T-shirt bearing only "INMATE #" on its front.  Would you hesitate to let that person in your home, particularly if you live in a state where there had been a highly publicized and horrific home invasion and murder?

One can debate the legal points forever.  It is always amazing to learn that conduct like this, which is designed to harm a company by sullying its reputation in the community, can somehow be considered "protected" under the law.  Except in rare situations (that is, special circumstances) such conduct has been endorsed by the NLRB.  As a result, employers now face inflatable rats, banners that target customers, and silly t-shirts with messages likening employment to imprisonment. 

These sorts of tactics are designed to provoke a reaction, but not necessarily from the public.  It is certainly understandable why an employer would want to prohibit this kind of conduct.  Employees visit valuable customers while wearing a shirt identifying them as a prisoner.  The shirt is designed to provoke discussion of the labor dispute, a conversation which necessarily must take place during working hours, so the employer is paying for the protest.  Management would be concerned that the company could lose business when customers get drawn into labor disputes.  It is all very grating.

This was, of course, the purpose:  annoy management.  Provoke a reaciton.  The union wanted to do what it could to get some leverage in the underlying labor dispute.  The unfair labor practice charges distract the employer during the dispute, and in cases like this, could cost a fair amount of money to compensate the employees found to have been unlawfully suspended.

The decision illustrates the peril employers face when trying to protect the business during a labor dispute.  In order to prohibit the employees from wearing apparel such as the prison garb here, the statements must be of a character that, standing alone, would be considered objectionable.  So, when an employer prohibited employees from wearing t-shirts that said, "Ma Bell is a cheap mother," the NLRB found no violation.  Similarly, when the employer prohibited employees from stating "Don't cheat the meat" in a dispute involving a grocery store, the NLRB found that the statements raised the issue (wrongly) that the employer was selling tainted meat. 

In this case, the statements are not so clearcut.  The assertions made by both NLRB majority and Member Hayes about whether customers feared employees wearing the t-shirt were speculative.  There was no evidence in the record to support either assertion.  The conclusion in this case probably would have been different had a customer complained.  The truth is, however, the public rarely cares about such "publicity." 

Consider this:  if such tactics fail to provoke public reaction from the public and from  management, would labor abandon them?

What a difference a few months can make.  Last December, in Specialty Healtcare and Rehabilitation of Mobile the NLRB invited interested parties to file briefs to consider a number of questions about whether it should consider adopting a new "one size fits all" rule for bargaining units in nursing homes (called "nonacute care" facilities).  The case is of critical importance to all employers falling under jurisdiction of the NLRA, however, because it could be a sign of a shift to ignore traditional "community of interest factors" in favor of rules which presume a unit is appropriate based solely on "employees performing a job" or a unit "proposed by the union."  For over 75 years, Section 9(b) of the NLRA has mandated that the NLRB "decide in each case whether, in order to assure employees the fullest freedom in exercising the rights guaranteed by this Act, the unit appropriate for collective bargaining shall be the employer unit, the craft unit, plant unit, or subdivision thereof. . ."  Section 9(c)(5) prohibits the NLRB from giving controlling weight to the extent to which employees have been organized.  For years these provisions meant the NLRB carefully considered whether a unit was "appropriate" for purposes of collective bargaining by, among other things, analyzing  how the employer has organized its business, how employees interact with one another and other factors to determine whether a unit is in fact appropriate.

The NLRB's consideration of a presumptive rule is based on Member Becker's failed attempt in Wheeling Island Gaming, 355 NLRB No. 127 (August 27, 2010).pdf to adopt as appropriate a unit of "poker dealers."  Member Becker stated in his dissent, "From the perspective of the employees, this is one of the most logical and appropriate units within which to organize. . ."

Not so fast.  It seems clear a rule based on "employees performing a job" or on a "proposed unit" (meaning the group sought by the union in its petition) violate the NLRB's mandate.  We filed our Brief of Amicus Curiae Retail Industry Leaders Association.pdf detailing the legislative history history and relevant case law demonstrating that such presumptive rules under consideration are contrary to the Act.  We think it is clear Congress intended the NLRB to consider how an employer has organized its business, and not allow bargaining based on a multitude of smaller units.  One can imagine that the rules under consideration could mean employers would be faced with dozens of potential bargaining units, each with conflicting interests and demands

Responsive briefs are due March 22.  After that, we will see what whether the NLRB will follow the Act's mandates or not.

We will, of course, keep you posted.