A problem that has vexed employers since the inception of the NLRA is the exact contours of employee free speech under the Act.  We know that employees are given a great deal of latitude to express discontent, even to the point where they can wear t-shirts identifying themselves as prisoners to customer homes.  This issue generally has gained additional scrutiny with the attention given to the posts made by employees on social media sites.  At what point do employee statements attacking the employer, even when made in the context of a labor dispute, lose protection of the Act justifying discipline or discharge?  It is not an easy question to answer.

The Board recently ruled in favor of an employer concerning an employee’s false statement to a third party in Dresser-Rand Company, 358 NLRB No. 34 (April 19, 2012).pdf.  The case is interesting not only because of the conclusion, but for the tactics employed by the union to put pressure on the employer.  It was an extension of these tactics that ended up in an employee’s discharge being upheld by the Board as lawful.

In Dresser-Rand, the employer and union had been involved in a protracted labor dispute over the course of a couple of years.  The parties used all manner of economic weapons against each other.  There was a strike by the union; the employer hired replacement workers and continued to operate.  The union picketed on occasion.  Both parties exchanged heated communications about the dispute.

One tactic the union employed was to have employees call investment analysts in an attempt to hold company “executives accountable for their actions.”  The calls were made from the union hall on a Saturday when the analysts would not be “expected to be at work.” The caller would then leave voicemails so as to “avoid creation of a written record of the contents of the representations.”  Incredibly, and despite the foregoing manner in which the calls were made, the union’s stated intention was to “not talk[] the [employer’s] stock price down” and so a written script of the comments was created.

An employee who volunteered to make calls became frustrated by the employer’s proposal in negotiations to eliminate paid time off for union business, something in which the employee, a chief union steward, had a direct interest.  This employee made additional calls from his home, anonymously, to the investment analysts using his own script, part of which made the false statement that the workload at a particular plant “has also dropped off by 50-percent.”  After an investigation, the employer discharged the employee.  The union filed charges.

The basic analysis in these cases is that the conduct must be “concerted” meaning related to or on behalf of other employees.  The statements also must be “protected” meaning they must relate to the dispute at hand. Statements that are indirectly related to the dispute and are “blatantly” or “maliciously” false or defamatory are not protected by the Act.  Applying this analysis, the Administrative Law Judge, found that the employee’s actions were “concerted” because his “calls to investment analysts were designed to apply pressure to the Employer to amelioriate his own terms and conditions of employment and the terms and conditions of employment of his coworkers….”  Thus, even though the employee’s statements were unauthorized by any co-worker, the motivation for making them made them concerted.

Despite the concerted nature of the conduct, the judge found the employee’s statements were unprotected, citing the following factors before evaluating the false statement:

• In the voicemails the employee did not disclose his name, unlike the earlier calls.
• The employee identified himself as “a representative of the union employees” at the employer, which gave the impression that the statements were authorized by the employees’ representative.
• The employee chose to make unduly negative remarks about other employer operations, about which he had no firsthand knowledge.

The judge then addressed the issue of the false statement about the workload “dropping off” by 50 percent.  The judge seriously questioned whether such a statement had any value at all towards putting pressure on the employer in negotiations.  The judge also found the employee’s explanation to not be credible, in part, because the employee asserted his intention was to not harm the employer.  The judge stated:

This is absurd.  No reasonable person could conclude that information regarding a 50 percent drop in production conveyed to investment analysts would not harm the Company.  Indeed, it is evident that the entire purpose of the statement was to harm the Company. . .

In determining that the statement concerning the drop off of workload was “maliciously false,” and not protected by the Act, the judge noted it represented “a four-fold” exaggeration of what actually occurred and that such an “asserted level of decline” would be a “material factor [for investment analysts] in making decisions regarding the Company’s stock.”

The judge also considered the timing of the statements to be relevant. noting that they had been calculated to cause the maximum amount of harm, being made during an economic recession:

Against that backdrop, [the employee] made his reckless and maliciously false statements to the financial community.  Coming during the devastating economic downturn, [the employee’s] fictitious claim that the [plant] workload had dropped in half was surely calculated to cause fear and consternation among those who owned the Company’s stock or were considering such ownership.

The judge found the discharge to be lawful, which was upheld by the Board on appeal.  The decision, weighing in at 34 pages, contains a very thorough collection of Board cases in assessing whether an employee’s statement to a third party loses protection of the Act.