Labor Relations Update

NLRB Rules Employer’s Handbook Statement That Benefit Available To “Non-Union Employees” Violates Act

During the last decade, a number of NLRB decisions faulted employers for written policies that were considered to be overbroad in violation of the National Labor Relations Act.  These rulings sprang largely from the NLRB’s decision in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), where the Board set forth a standard for evaluating the lawfulness of employer policies that did not directly implicate Section 7 rights.  The Board in Lutheran Heritage held it evaluated otherwise lawful language to determine if the “employees would reasonably interpret the language as restricting Section 7 rights.” Under Lutheran Heritage the Board was supposed to view the totality of the policy and not fragments.  This decision was a well-intended attempt to provide a framework for evaluating the language of employer policies.  In the years after its issuance, however, the Board took to something like a grand inquisition of all employer policies and often expanded the test by replacing the “would” with “could.”  The Board often examined fragments of a policy without regard to the full context. Allegations regarding handbooks became something of a cottage industry as violations were sought to gain leverage in labor disputes.  See here and here, for example.

The Lutheran Heritage standard was discarded by the Board last year.

Since late last year, very few NLRB decisions have issued involving handbooks.  The General Counsel has given a strong indication he is not pursuing an aggressive stance on employer policies. This is not surprising, of course.  The Board, currently anyways, clearly is not receptive to these kinds of violations.  A number of recently issued NLRB decisions note that the involved union withdrew handbook allegations in pending litigation.  This action was taken to avoid getting decisions from the current NLRB finding policies to be lawful.  That just would not do in today’s fractured labor relations climate.  When there is a change in the administration, and the make-up of the Board changes, there is little doubt the handbook-violation industry will ramp-up with a renewed fervor.

This is not to say that all handbook violation cases have gone away.  There are a variety of policies the Board would find in violation of the Act.  One such case is the Board’s recent decision in Constellation Brands, U.S. Operations, Inc., 367 NLRB No. 79 (January 31, 2019).  This case involved a number of allegations stemming from a hard fought union campaign.  In the original complaint there were a few allegations that the employer’s policies were overbroad in violation of the Act.  While the litigation was pending, the Board overruled  Lutheran Heritage, prompting the union and General Counsel to seek withdrawal of all but one of the handbook allegations.

Handbook Stated Benefit Given to Non-Union Employees

The remaining allegation concerned the language in the employer’s incentive plan which stated “All non-union full time and regular part-time employees of the Company are eligible for the incentive plan.”  The General Counsel alleged that this language violated Section 8(a)(1) of the Act because it expressly implicated Section 7 rights.

The Administrative Law Judge agreed, holding:

Board precedent is clear and unmistakable on this issue:  employer rules, statements, provisions or plans that afford benefits to employees contingent on their non-representational status violate Section 8(a)(1) of the Act. . . .Employers can avoid such coercive impression by simply using language that conveys the messages that wages and benefits of represented employees are ultimately subject to what the parties agree to in collective bargaining–without the inference that they are automatically disqualified.

On appeal, the Board affirmed with Member Emanuel observing that the language at issue “conveyed the message that employees choosing union representation are automatically ineligible for the plan.”

Takeaways

The unbridled scrutiny of employer policies is dormant.  For now.  This case is a reminder that that policy language discussing the applicability of benefits to”non-union” employees should be accompanied by a fuller explanation that employees represented by unions are subject to collective bargaining.

The case also is a reminder of how far the law under the National Labor Relations Act can swing in a short period of time.

NLRB Majority: Employer Not Required To Disclose Identity Of Bargaining Unit Informant

An employer’s duty to provide information to the union representing its employees is a frequent of topic of interest to labor relations practitioners because it is very easy to violate the law.  For example, an employer’s assertion that the information is confidential is not enough to justify failing to turn over the information.  And, for a brief period of time we even saw it become unlawful for an employer to fail to respond to an information request even though there was no legal obligation to provide any information.  Finally, we have reviewed how some unions seek to weaponize information requests by asking for information, such as how an employer spent any savings from a tax cut, in a blatant attempt to cause an employer to refuse to respond thereby giving reason to file unfair labor practice charges.

In recent years, the NLRB has even demolished black letter precedent holding that witness statements need not be disclosed pursuant to an information request.

In Michigan Bell Telephone Co., 367 NLRB No. 74 (January 24, 2019),the NLRB addressed a situation where the union had requested the identity of a workplace “informant,” a bargaining unit employee who had reported potential misconduct, and the employer refused to provide the information.

Background – A History of Overtime Disputes

The employer provides telephone service through the use of technicians who are represented by a union.  The employer historically required the employees to work a great deal of mandatory overtime.  A few years ago, union members got together and protested mandatory overtime by holding a “family night,” whereby the employees banded together and refused to work on a certain evening.  Like most collective bargaining agreements, the parties’ agreement prohibited strikes. The union and employer had a dispute over the family night which resulted in a settlement agreement which included discipline for all unit employees who participated in the event.

The employer issued a new mandatory overtime policy which automatically extended the workday until management expressly released the techs.  At a union meeting held shortly after the announcement of the new policy, bargaining unit members expressed their anger, and at least one technician suggested the group engage in another family night.

An informant employee told management that another family night could possibly occur that evening.  Management assembled additional supervision to confront any employees who attempted to leave work without permission.  19 technicians returned without authorization and were questioned by management. All stated they were acting individually and not in a concerted fashion.  The employer ordered all 19 technicians to return to work, and all returned to the job, except for five technicians who refused.  The employer suspended the five technicians.

Union Wants Name of Informant and Other Information

The union learned that an informant had given information to the employer.  The union requested the identity of the informant, a summary of what the informant told the employer, and a list of who in management had received the information.  The employer told the union it did not feel comfortable turning over any of the information requested and refused to do so.

The union filed a grievance alleging that the employer violated a provision of the collective bargaining agreement which states that if any union employees engage in a prohibited work stoppage, “without the authority and sanction of the [union], the Parties shall cooperate to enable [the employer] to carry on its operations without interruption or other injurious effect.”

The General Counsel issued a complaint asserting all the requested information sought by the union was relevant and the employer should have provided it.  The complaint also contained an allegation that the delay in turning over the information was a separate violation of the Act.  After a trial, an Administrative Law Judge dismissed the complaint finding the information was not relevant to the processing of the grievance.

NLRB Majority Concludes Informant Identity was Not Relevant, But Summary of Information Triggered Duty to Provide Information

The NLRB majority (Chairman Ring and Member Kaplan) reviewed the law, and noted, “[a]n employer, as part of its duty to bargain, must provide requested information to a union if that information is relevant to the union’s duties as the employees’ collective-bargaining representative, including the union’s grievance processing duties.”  Applying this standard to the case, the NLRB noted that the grievance filed by the union concerned whether the contract’s prohibition against unauthorized work stoppages had been violated.  In particular, the issue in the grievance was whether the employer had an obligation to cooperate with the union over stopping or minimizing such disputes.  The Board concluded:

The summary [of information provided by the informant] is relevant to the Union’s evaluation and prosecution of [its] grievance because it directly answers the question of what the Respondent knew about the potential for a family night ….However, the Informant’s identity and the distribution list are not relevant to the …grievance.  Whether the Respondent had an obligation under [the collective-bargaining agreement] to cooperate with the Union does not depend on the identity of the specific employee informant or the identities of the managers to whom the Respondent disseminated the Informant’s tip.

Thus, the employer’s failure to turn over the summary of information was a violation of Section 8(a)(5) of the Act.  Because the NLRB found the summary of the informant’s tip was relevant, the Board also found the employer violated Section 8(a)(5) by failing to respond to the information request in a timely fashion.

Dissent Would Find All Information Relevant

Member McFerran agreed that the summary of information was relevant but would also have found that the identity of the informant and the list of managers to whom the informant’s information was distributed were also relevant.  In Member McFerran’s opinion, “disclosure of that information would allow the Union to attempt to question the Informant and the people on the distribution list to verify the accuracy of the summary.”

Takeaways

If employer’s had to disclose the names of all witnesses to events in a bargaining unit then it is very likely no one would ever come forward to report misconduct.  Anyone who has ever participated in a labor arbitration knows it is rare for bargaining unit employees to testify against one another.  In this case, the decision of the majority was made easier by the fact it was undisputed the employees did not have a right to refuse overtime, in a concerted or other fashion.  That a family night would violate the no strike provision was undisputed. The issue being litigated in the grievance was fairly novel, and fairly narrow:  whether the employer had an obligation to cooperate with the union in the latter’s attempts to stop an unauthorized walkout.  This dispute did not depend at all on the identity of the informant or the information provided by the informant.  For this reason, it is doubtful this case can be interpreted as a blanket rule that employers must not identify witnesses.  Still, it is instructive, and it again shows the perils of simply not responding to an information request, even when the employer believed the information was not relevant.

Unanimous NLRB: Context Matters – Asking Employee Whether He Saw Union Organizer Not Unlawful Interrogation

How the NLRB treats employer statements made to employees in the context of union organizing or other protected activity has been a frequent topic of discussion.  While the actual case law analyzing the coerciveness of an employer statement has not changed, the lawfulness of the statement often depends on the make-up of the Board at the time the case is reviewed.  In the last few years, we have seen how the NLRB had a tendency to rigidly treat an employer’s statement as coercive if it was made in the context of organizing.  This is true of employer questions to employees that touch on organizing.  For example, in recent past the NLRB found an innocuous question to an open union supporter to be unlawful even if though there was no hint of actual coercion.

In Johnston Fire Services, LLC, 367 NLRB No. 49 (January 3, 2019), the employer fired an employee during an active union organizing drive.  During the termination discussion, the employer asked whether the employee had seen the union organizer.  The Board ruled that this question was not unlawful interrogation given the overall circumstances.

Background – Small Voting Unit – Hotly Contested Organizing

The employer, an installer of sprinkler systems, had six employees performing this work.  The union sought to represent the six employees and filed a petition for a vote.  During the election campaign, the employer terminated two employees.  Although the union filed unfair labor practice charges over the terminations, and despite the fact 33 percent of the voting unit had been discharged, the union went ahead with the election.  The resulting tally of ballots was 2 votes for the union, 2 votes for the employer and 2 challenged ballots (the two discharged employees).

The General Counsel issued a complaint over the discharges and a variety of alleged 8(a)(1) statements, including the employer’s “interrogation.”

Alleged Interrogation Occurred During Termination Meeting

One of the employees in the voting unit had been previously counseled for tardiness.  During the campaign, the employee showed up late to work and encountered the owner of the employer in the parking lot of a job site.  The owner immediately terminated the employee.  The discussion between the owner and the employee was the subject of the unfair labor practice allegation for interrogation.  During the discussion, the employee asked if he was being fired for speaking with the union organizer.  The employer insisted the employee was being fired for his attendance but in the course of the conversation asked the employee if he had seen the organizer.

The General Counsel issued a complaint alleging this question amounted to unlawful interrogation.

ALJ Dismisses

The ALJ ultimately dismissed all allegations in the complaint, primarily because the testimony just did not support unlawful discharges.

As to the interrogation, the ALJ conducted a very thorough analysis of the question using the factors set forth in Rossmore House, 269 NLRB 1176, 1178 (1984), where the Board held that the coerciveness of an alleged statement or question must be evaluated under the totality of circumstances.  Specifically, the Board applies five factors:

  1. The background, i.e., is there a history of employer hostility and discrimination?
  2. The nature of the information sought, e.g., did the interrogator appear to be seeking information on which to base taking action against the individual employees?
  3. The identity of the questioner. i.e. how high was he in the Company hierarchy?
  4. Place and method of interrogation, e.g. was employee called from work to the boss’s office? was there an atmosphere of “unnatural formality”?
  5. Truthfulness of the reply.

Applying these factors, the ALJ found that there was no history of hostility against unions.  The nature of the information sought was not something to be used to take action against the employee because the decision to terminate already had been made and communicated.  While the employer, as the “owner,” was the highest ranking official, the ALJ found this factor did not support a violation because the owner often performed work alongside the employees, and the employer was very small.  The fact the question was asked in the parking lot of a worksite, as opposed to a manager’s office, did not lend itself to being too formal.  The ALJ found the employee answered truthfully, which meant he felt he had nothing to hide.

Board Affirms

The NLRB affirmed the dismissal of the interrogation allegation noting that the employer “had already made the decision to terminate both employees for attendance issues before learning that they had engaged in protected activity.”

Takeaways

An employer’s actions in terminating a substantial percentage of a voting unit during an organizing election campaign are going to be scrutinized very carefully by the NLRB.  In this case, the terminations were deemed to be lawful and so the employer’s question was probably easier to dismiss.

Still, the same analysis should be applied by the Board no matter the circumstances.  The law concerning evaluation of an alleged interrogation is over thirty years old.  The factors set forth in Rossmore House are subject to interpretation, of course, but it is nice to see a thorough analysis of how each factor was applied by the ALJ.  This can give some guidance as to how future such allegations should be analyzed.  Of course, as noted, the make-up of the Board matters.  This is one of those cases where the outcome might have been different if it had reached the Board a couple of years ago.

Are Charter Schools Covered by the National Labor Relations Act? NLRB to Reconsider Its Jurisdiction over Charter Schools

On February 4, the NLRB granted United Federation of Teachers, Local 2, AFT, AFL-CIO’s (the “Union”) request for review of the Regional Director’s Decision and Direction of Election concerning a decertification petition filed by several teachers at a charter school.  In so doing, the Board invited filing of briefs regarding whether the Board should decline jurisdiction over charter schools as a class under Section 14(c)(1) of the Act and modify or overrule its prior precedent on this issue Hyde Leadership Charter School-Brooklyn, 364 NLRB No. 88, (2016) and Pennsylvania Virtual Charter School, 364 NLRB No. 87 (2016) – which held that the Board should exercise jurisdiction over charter schools.

In a sharp dissent, Member McFerran argued that a change in the composition of the Board is not a reason for revisiting precedent, which she observed was the only basis for the Board’s departure here.  Member McFerran recently complained in a separate dissent about overturning precedent.

Briefs will be filed over the next several weeks, and it appears the Board is seriously considering the Union’s petition requesting that the Board decline to exercise jurisdiction as to all charter schools, which would have serious ramifications for employees at these institutions.

Background

The Kipp Academy Charter School (“KIPP Academy”) serves elementary and middle school students in Bronx, New York. On January 25, 2017, two teachers filed a decertification petition seeking to decertify the Union as the collective bargaining representative for all full-time and regular part-time teachers, deans, counselors, social workers, teaching fellows, team leaders, specialists, and the director of support services, excluding all other employees, including substitute teachers, clerical, maintenance, supervisors, managers, and guards. The Union moved to dismiss the petition on three grounds:

  • KIPP Academy is not an “employer” under the NLRA;
  • the petitioned-for bargaining unit is not appropriate because the group shares a community of interest with Department of Education teachers; and
  • the NLRB should exercise discretion and decline to assert jurisdiction in the matter.

The Regional Director directed an election in the petitioned-for bargaining unit after ruling against the Union on all three issues.

  • First, he found KIPP Academy was an “employer” under Section 2(2) of the Act and not an exempt state or political subdivision because the charter school failed each prong of the Supreme Court-established test for this inquiry: (1) whether the employer was created directly by the state, so as to constitute departments or administrative arms of the government or (2) administered by individuals who are responsible to public officials or to the general electorate.  See NLRB v. National Gas Utility District of Hawkins County, 402 U.S. 600 (1971).  The Regional Director found that KIPP Academy failed both prongs of the test.
  • Second, applying the community-of-interest factors, the Regional Director found the petitioned-for bargaining unit was appropriate.
  • Third, he found asserting jurisdiction was supported by policy reasons that far outweighed those supporting the Union’s argument that jurisdiction should be declined under Section 14(c)(1). Section 14(c)(1) of the NLRA provides the Board may decline to assert jurisdiction over labor disputes involving any class or category of employees where the effect of the dispute on commerce is not sufficiently substantial to warrant jurisdiction. The Union argued jurisdiction should not be asserted because the New York State Public Employment Relations Board (“PERB”) asserted jurisdiction over KIPP Academy in the past and KIPP Academy is heavily regulated by the Board of Regents and the Department of Education, analogizing charter schools to state-regulated industries, such as horse racing and dog racing (the majority in Hyde Leadership found this argument unavailing).  However, the Regional Director found that since Hyde Leadership was decided, PERB has uniformly declined jurisdiction over New York State charter schools, which has left the KIPP Academy employees in “jurisdictional limbo.”

Three-Member Board Majority Grants Review

In its February 4 Order, the majority first acknowledged the Regional Director correctly applied the two-pronged test established in National Gas Utility District of Hawkins County, as described above.

However, the majority found review was warranted by simply stating the case raised “substantial issues whether the Board should exercise its discretion to decline jurisdiction over charter schools as a class under Section 14(c)(1).”  In a footnote, the majority pledged to “keep an open mind with respect to final disposition of the issues presented here,” an acknowledgement of the charge made by the dissent that the Board’s conclusion essentially was essentially predetermined.

The Dissent Argues there is No Need to Disturb Precedent

In her dissent, Member McFerran stated she would deny the Union’s request for review, as the jurisdictional question was correctly decided under well-settled Board law, which is rooted in the Supreme Court’s Hawkins County decision.  Stating the Hawkins County test was straight-forward and had been consistently applied by the Board to charter schools, the Board should properly assert jurisdiction. The dissent stated there was no new policy justifications or legal grounds to revisit the Board’s approach to analyzing jurisdictional questions involving charter schools and efforts to not apply Hawkins County were inappropriate in this instance. Further illustrating her opposition to the majority’s ruling, she continued to say “a change in the composition of the Board is not a reason for revisiting precedent” and “the majority’s notice is a solution in search of a problem” – a strong admonition of the concerns the majority expresses, as well as the veracity of its motivations.

Hyde Leadership Charter School—Brooklyn and Pennsylvania Virtual Charter School Decisions

On August 24, 2016, in two separate cases, Hyde Leadership Charter School-Brooklyn and Pennsylvania Virtual Charter School, the NLRB relied on the Hawkins County test to hold charter schools in New York and Pennsylvania, respectively, were not political subdivisions within the meaning of Section 2(2) of the NLRA and were subject to the Board’s jurisdiction. The Board found the entities were founded by private individuals, despite the fact that the Board of Regents approved the Hyde Leadership Charter School charter and the Pennsylvania Secretary of the Department of Education signed the Pennsylvania Virtual Charter School charter. Stating that the Pennsylvania Virtual Charter School decision “was based on the facts of this case,” the Board made it clear that a bright-line rule over jurisdiction over charter schools nationwide was not created from its decision.

Takeaways

Charter schools have been in the press a great deal lately.  The Board’s potential consideration of its jurisdiction over charter schools on a class-wide basis has significant consequences.  If the Board ultimately declines to exercise jurisdiction over charter schools, then unionized employees would fall outside of the protection of the Act, which, unlike many state laws, allows for employee choice of union representation through a government supervised secret ballot election.  Under many state laws governing public schools, such safeguards are not present.

However, as the Regional Director observed, in the event the Board declines to exercise jurisdiction, then charter schools like KIPP Academy may be left in “jurisdictional limbo” if PERB (or another corollary to the NLRB at the state or public employer level) also declines to exercise jurisdiction, which apparently has been the case for several years.

While the Board’s Order was brief, Member McFerran’s dissent stands as a clear rebuke of the majority’s efforts to revisit precedent in the lack of new policy justifications, which has been a consistent theme of Member McFerran’s recent dissents.

Briefs by the parties are to be filed with the Board by February 19 and briefs by amici by March 6, 2019. The parties will then have until March 20, 2019 to file responsive briefs. The case is KIPP Academy Charter School, 02-RD-191760. A copy of the Board’s announcement  can be found here.  We will keep you posted as the Board revisits this issue.

Employee’s Complaint About Low Tippers Not Protected Concerted Activity, NLRB Majority Rules

The right of employees to band together for purposes of bringing grievances to their employer is at the very core of the National Labor Relations Act, as embodied in Section 7. This right is called protected concerted activity.  In order to determine whether an employee is, in fact, engaged in protected concerted activity, it is necessary to evaluate the factual circumstances surrounding the conduct.  As we’ve discussed, a single employee’s actions could  be deemed to fall within the definition of protected concerted activity. In other cases, we’ve seen actions that are not protected (see here, here, and here).

In Alstate Maintenance, LLC, 367 NLRB No. 68 (January 11, 2019), a divided (is there any other?) NLRB considered the actions of a single employee who eventually was terminated for his conduct.

It Started With A Gripe

The charging party employee was a skycap working for a contractor at JFK International Airport.  The bulk of a skycap’s income comes from customers tipping for assistance with their luggage.

On the day in question, a supervisor told four skycaps at the terminal that an airline had requested skycap assistance with a soccer team’s equipment.  The employee stated, in front of the other skycaps, “We did a similar job a year prior and we didn’t receive a tip for it.”  When the soccer team arrived, the skycaps walked away.  When a manager questioned the employee, he stated that the skycaps did not want to do the job because of the anticipated small tip.  Other skycaps were summoned and they started helping the soccer team.  When the skycaps who walked away saw this, they and the employee who complained, returned to help.  The tip for the effort was $83.

The airline complained about the treatment of the soccer team by the skycaps.  The contractor fired all four of the skycaps.

The employee who made the comment about tipping filed charges.

Administrative Law Judge Dismisses Complaint – Finds No Protected Concerted Activity

The narrow allegation in the complaint probably proved fatal to the charging party’s case.  The complaint alleged the only protected concerted activity was the skycap’s comment about poor tipping.  There was no allegation that the four skycaps were engaged in group action.  The ALJ confirmed the narrowness of the theory on the record at the beginning of the case.  After hearing testimony, the ALJ found the employee’s statement was not protected concerted activity, ruling:

This single statement by [the employee] did not call for or request the other skycaps to engage in any type of concerted action or to otherwise make any kind of concerted complaint to their employer about their wages.  In my opinion, this was simply an offhand gripe about his belief that French soccer players were poor tippers.

Board Upholds Dismissal on Appeal – Concludes Complaint Not Protected Concerted Activity

The Board majority (Ring, Emanuel, Kaplan) started their decision by setting forth the general analysis of whether certain employee conduct is protected concerted activity as found in the decisions commonly known as Meyers I and II.   Meyers Industries, 268 NLRB 493 (1984) (Meyers I), remanded sub nom. Prill v. NLRB, 755 F.2d 941 (D.C. Cir. 1985), cert. denied 474 U.S. 948 (1985); Meyers Industries, 281 NLRB 882( (Meyers II), enf’d 835 F.2d 1481 (D.C. Cir. 1987), cert. denied 487 U.S. 1204 (1988).  The principles of these decisions were summarized by the Board:

  • “[i]n general, to find an employee’s activity to be ‘concerted,’ we shall require that it be engaged in with or on the authority of other employees, and not solely by and on behalf of the employee himself.”
  • Concerted activity could be found where an individual, not a designated spokesman, brought a group complaint.  “Meyers I recognizes that the question of whether an employee has engaged in concerted activity is a factual one based on the totality of the record evidence.  When the record evidence demonstrates group activities, whether ‘specifically authorized’ in a formal agency sense, or otherwise, we shall find the conduct concerted.”
  • A single employee’s effort to “induce group action” is also considered to be concerted activity.

The Board majority then applied these principles to the case and concluded that the charging party did not engage in concerted activity.  The Board noted that the case was not about group action,–the General Counsel had advanced in its complaint that the concerted activity occurred when the employee made the remark about tipping.

Turning to the statement itself, the Board stated, “we easily find [the employee] did not engage in concerted activity.”  The Board’s rationale was that the General Counsel did not contend the employee was bringing a group complaint and the record was “devoid of evidence” of group activities upon which to base such a finding. The Board concluded the employee’s use of the pronoun “we” in his remark did not “supply the missing ‘group activities’ evidence.”  Rather, the use of “we” showed only that the skycaps had been stiffed as a group by a soccer team in the prior year.

Also, there was nothing in the employee’s statement that suggested he was seeking to initiate group action.  In fact, the employee himself did not claim his remark was aimed at inducing group action.  The employee testified at trial that his remark was “‘just a comment’ and was not aimed at changing [the employer’s] policies or practices.”  The ALJ credited the employee’s testimony.

The Board addressed the contention of the General Counsel that the employee’s remark was concerted because it took place in a group setting, that is, because the remark was made in front of other employees.  The Board distinguished cases cited by the General Counsel as having earmarks of group activity.  In two of the cases, the remarks by the employee occurred in a context that clearly indicated group activity, such as when the employer called a meeting to announce a negative change to a term or condition of employment, and an employee in attendance expressed a complaint of the group.  By contrast, the Board noted, “Here, there was no meeting, no announcement by management regarding wages, hours or other terms and conditions of employment, and absent such an announcement, no protest, that under the totality of the circumstances, would support an inference that an individual employee was seeking to initiate or induce a group action.”

The Board noted there was only one case that was contrary to the existing law, WorldMark by Wyndham, 356 NLRB 765 (2011), where the Board, over dissent, deviated from the law by concluding that “an employee who protests publicly in a group meeting is engaged in initiating group action.”  The Board concluded that WorldMark was unsupported by past precedent and overruled that decision.

The Board reiterated the standard for finding concerted activity as:

[T]o be concerted activity, an individual employee’s statement to a supervisor or manager must either bring a truly group complaint regarding a workplace issue to management’s attention, or the totality of circumstances must support a reasonable inference that in making the statement, the employee was seeking to initiate, induce or prepare for group action.

Finally, the Board noted that even if the employee’s statement constituted concerted activity, the statement still would not be protected because it was not for the “mutual aid or protection” of the employees.  In this regard, the Board agreed with the judge that the employee’s statement concerned a customer’s tipping habits as opposed to the wages, hours, or other terms and conditions of employment of the skycaps.

Dissent Takes Issue With Majority Overturning Decision

Member McFerran dissented to the Board’s ruling, and in an extensive opinion, took issue with the majority’s analysis of the employee’s statement in relation to the tipping.  McFerran also objected to the circumstances under which the Board undertook to overrule WorldMark:

In order not to find concerted activity here, the majority chooses, without any request by a party or invitation for briefing, to unnecessarily overrule a recent Board decision….and to improperly recast settled Board precedent.

Takeaways

The Board’s decision is not really a change in the law.  The principles of Meyers I and II are now three decades old, and those cases contemplated a case-by-case analysis of whether the conduct at issue was protected concerted activity.  The Board overruled a decision, WorldMark, a case issued over dissent, which expanded the definition of protected concerted activity to include activity occurring in front of other employees, regardless of whether there was any real attempt to induce, initiate or inspire group action.

The fact the charging party employee himself stated under oath at trial that his comment was “just a comment” and was not intended to spur group action or make a change to employer policy made this case somewhat easy to decide.  Even if the charging party had asserted his intention was to spur group action, the case would have had issues.  The skycaps who walked away from a work assignment were not engaged in protected activity because employees cannot pick and choose which tasks to perform.  Indeed, the other skycaps who were fired as part of this event apparently did not contest their terminations by filing NLRB charges.  There was no evidence to support any group action.

Finally, the dissent’s complaint about precedent being overruled without being asked by a party or without an invitation for briefing is certainly a curious statement.  There are plenty of examples of longstanding Board precedent, some 50 years or older,  being overruled in the last few years with little or no notice.  See here, here, here and here.

Another Obama-Board Decision Overturned: NLRB Reverts to Traditional Common-Law Agency Independent-Contractor Test and Foreshadows Potential Rulemaking

On January 25, 2019, in a long-anticipated decision, the NLRB overturned another Obama-Board decision, FedEx Home Delivery, 361 NLRB 610 (2014), which modified the test for whether an individual is an “employee” or an independent contractor under the NLRA (read about that decision here).  The Board, in a 3-1 decision (Chairman Ring and Members Kaplan and Emanuel joined the majority; Member McFerran dissented), rejected the standard established in 2014 that limited the import of an individual’s entrepreneurial opportunity for purposes of the independent contractor analysis, and returned to the traditional common-law agency test.

This holding represents another decision that reverts Board law to long-standing precedent that predated the Obama administration, and casts doubt on independent contractor decisions applying the FedEx test since 2014.

Just a few short days later, on January 28, NLRB Chairman John Ring stated in an interview that the Board could provide greater clarity as to the independent contractor analysis by providing specific examples through the rulemaking process, and could also use rulemaking to tackle other hot button areas of federal labor law.

SuperShuttle Holding

In SuperShuttle DFW Inc., 367 NLRB No. 75 (2019), the NLRB found that franchisees who operate shared-ride vans for SuperShuttle Dallas-Fort Worth are independent contractors, not “employees” covered under the NLRA.  The Board affirmed the Acting Regional Director’s August 16, 2010 decision, in which she found that the franchisees were independent contractors based upon a traditional common-law agency analysis.

The Board overturned its earlier decision in FedEx Home Delivery, holding that FedEx impermissibly altered the traditional common-law agency test and long-standing precedent by holding that entrepreneurial opportunity represented just “one aspect of a relevant factor that asks whether the evidence tends to show that the putative contractor is, in fact, rendering services as part of an independent business” – as opposed to “an ‘animating principle’ of the inquiry.”  The Board reaffirmed the traditional common-law agency test that it had applied prior to FedEx.

Application of Common-Law Agency Independent-Contract Analysis in SuperShuttle

In applying the traditional common-law test, the Board noted that franchisees own (or lease) and thus control their vans; retain complete control over their daily work schedules and working conditions; and pay a monthly fee to the franchisor, while keeping all collected fares.  The Board held that these facts provided franchisees with significant entrepreneurial opportunity and control over how much money they made each month.

The Board also noted that, by sharp contrast, SuperShuttle has little control over the franchisees’ performance while driving and that SuperShuttle’s compensation is unrelated to the franchisees’ collected fares.  Finally, the Board found that the absence of supervision of franchisees and the understanding between the parties that franchisees are independent contractors (per the express language of the “Unit Franchise Agreements,” which provides in bold and capital letters that the franchisee is “NOT AN EMPLOYEE OF EITHER SUPERSHUTTLE OR THE CITY LICENSEE”) weighed significantly in favor of the franchisees’ status as independent contractors.

Impact of SuperShuttle Decision

The holding in SuperShuttle is noteworthy for several reasons.

  • First, in overruling FedEx, the Board rejected a decision that blurred the long-established lines between employees with NLRA rights, such as engaging in protected concerted activity and unionizing, and independent contractors who lack those rights. The Board, in SuperShuttle, indicated its desire to provide greater clarity to employers and workers alike on this issue, which has been recently emphasized by Chairman Ring.
  • Second, the Board overturned a holding that moved away from a common-law test, which put the Board’s jurisprudence at odds with other federal statutes, such as ERISA. Now, the standard under the NLRA falls more squarely in line with other federal laws.
  • Finally, given the D.C. Circuit’s focus on common-law principles in its recent decision in Browning-Ferris Industries of California, Inc. v. NLRB, Cases 16-1063 and 16-1064 (D.C. Cir. December 28, 2018), the SuperShuttle decision also indicates where the Board likely would come out on the joint-employer question if given the chance to handle it judicially, rather than through rulemaking.

Potential Rulemaking

Speaking of rulemaking, just a few days after the SuperShuttle decision, on January 28, 2019, NLRB Chairman Ring made a statement to Bloomberg Law, stating that the Board may propose a new regulation to further clarify whether an individual is an independent contract or employee:  “That’s the type of area where we could be able to clarify the law by using specific examples.”  Examples would provide helpful guidance to employers, particularly given the fact-intensive nature of the independent contractor inquiry.  Chairman Ring also expressed an interest in relying upon the rulemaking process to update other aspects of federal labor law in the future.  So stay tuned!

New Joint-Employer Standard Properly Developed But Improperly Applied, Rules Federal Appeals Court

There have been many precedent changing decisions coming from the NLRB in the last few years.  Few of these changes were more hotly contested, or farther reaching, than the Board’s decision in Browning-Ferris where it altered its longstanding joint employer test.  The new joint-employer test made it much more likely for a joint-employer relationship to be found to exist.  The decision was fairly rare (at least for the last few years) because it actually involved 5 members (voting 3-2), instead of the much more common three person panel (when the Board actually has three valid members, unlike the now infamous “two member” and “recess appointment” eras).

The Board in Browning-Ferris ruled that the principal employer’s “actual” control over the employees of the contractor was no longer necessary.  Under long established common law principles of agency, joint-employer status could be found by indirect means, such as the existence of a contractual provision between the principal and contractor stating that the principal has control over the work of the contractor, even if such control is not exercised.  Two years later, a newer NLRB promptly reversed Browning-Ferris in Hy-Brand Industrials, but then had to reverse its reversal due to allegations that one of the majority Board members should have recused himself.  The NLRB  then announced that it was going to engage in rule-making over this issue.

The original Browning-Ferris case was appealed after it issued.  Given that the NLRB intended to change the rule, the agency initially requested that the case be dismissed.  Ultimately, the NLRB asked the federal appeals court to rule on the case because the common law principles upon which the decision rested were purely a matter of law to which the Court owed the agency no deference.

The Court of Appeals accepted the case and recently issued a decision in Browning-Ferris Industries of California, Inc. v. NLRB, Cases 16-1063 and 16-1064 (D.C. Cir. December 28, 2018).  The decision provides an excellent summary, both of the history of the joint-employer standard under the National Labor Relations Act, and also of the practical and legal issues related to finding of joint-employer status.  The Court does a great job of articulating what can be a complicated issue in simple terms.

Board Not Entitled to Deference on Issue of Common Law Employer Status

As to whether the underlying Board decision was entitled to deference, the Court ruled that Board was not entitled to deference and that it could consider the issue as a purely legal one.  The Court also noted that its decision was appropriate despite the fact the Board was engaged in rule-making over this issue stating, “we see no point in waiting for the Board to take the first bite of an apple that is outside its orchard.”  That apple being an analysis of common law agency.

Board’s Joint-Employer Test Finds Support in Common Law Principles

The Court then concluded that the Board’s analysis in  Browning-Ferris was a correct reflection of the law.  The Court noted, the Board’s “conclusion that joint-employer status considers not only the control and employer actually exercises over workers, but also the employer’s reserved but unexercised right to control the workers and their essential terms and conditions of employment, finds extensive support in the common law of agency.”

Board Failed To Articulate Facts Supporting its Conclusion of Joint-Employer Status

Despite its approval of the standard developed by the Board, the Court refused to enforce the ruling and instead remanded the case to the Board.  The Court explained that the Board had failed to properly apply the standard to the facts of the case:

The problem with the Board’s decision is not its recognition that indirect control (and certainly control exercised through an intermediary) can be a relevant consideration in the joint-employer analysis.  It is the Board’s failure when applying that factor in this case to hew to the relevant common-law boundaries that prevent the Board from trenching on the common and routine decisions that employers make when hiring third-part contractors and defining the terms of those contracts.

The Court ruled that the Board’s decision “failed to differentiate between those aspects of indirect control relevant to status as an employer and those quotidian aspects of the common-law third-party contract relationships.”  In other words, the Board provided no “blueprint” for what counts as indirect control in its decision.  The Court held that the “[G]lobal oversight *** is fully compatible with the relationship between a company and an independent contractor.  Wielding direct and indirect control over ‘essential terms and conditions’ of employees’ work lives is not.”  The Court ruled that because it could not tell which facts the Board relied upon in making its decision, it could not enforce the decision.

Board Failed to Identify Terms and Conditions of Employment Subject to Bargaining.

The Court also found fault in the Board’s new test regarding bargaining and joint employers.  The Board held that even if under common law principles joint-employer status would be found, the Board will also ask “whether the putative joint employer possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining.”  To this end, the Board required bargaining “but only with respect to those terms and conditions over which it possesses sufficient control for bargaining to be meaningful.”  The Court found that the Board “did not meaningfully apply” this portion of its test because it did not identify which terms and conditions were “essential” to make bargaining “meaningful.”  The Court noted that if the Board were to find the employer and its contractor were joint-employers that it would explain which terms and conditions are meaningful to bargaining and “clarify what ‘meaningful collective bargaining’ entails” and how it works in this setting.

Rule-Making Probably Will Be Final Say (Until A Different Board Changes the Standard in the Future)

In sum: the Court found that the Board properly concluded that indirect control could be considered as part of a common law analysis but that the Board failed to articulate how the two employers at issue were joint-employers, and, if they were joint-employers, how bargaining could be conducted and over what terms and conditions of employment.  This case probably has very little implication in the short term because the current Board is unlikely to further the Browning-Ferris standard.  The Court’s decision does give some important context to the practical issues faced by contracting employers alleged to be joint-employers.  We will have to wait and see how the Board addresses this case in the rule-making.  The Board extended the period to file comments in the rule-making in response to the Court’s decision.  Comments are now due on February 11, 2019.

NLRB Majority: Unqualified Notice to Picket Jobsite Where Neutrals Are Present Violates Act

We recently saw interesting decisions from the NLRB including cases about the employer’s duty to provide information about tax cuts, the lawfulness of litigation holds, and the validity of decertification petitions.

At the end of December, a divided NLRB took on a case involving a union’s threat to picket a work location where multiple employers are present.

In IBEW Local 357 (Convention Technical Services), 367 NLRB No. 61 (December 27, 2018), the Board addressed the legality of threats made against neutral employers.  These are secondary boycott cases implicating Section 8(b)(4) of the Act.  A secondary boycott case involves a union with a dispute with one employer (the principal), seeking to target the principal and also broadly publicize the dispute to the public, landlords where the work is being performed, and other employers (secondary targets).  The aim of these protests unquestionably is to enmesh as many other secondary targets as possible.  Secondary activity is very common and is lawful in a variety of contexts.  Anyone who has encountered a banner on the street which states “shame on x company” is viewing secondary activity.  The company named in the banner may have nothing at all to do with the hiring of the targeted employer but is being publicly shamed in the hopes that it will exert pressure on the actual target to resolve the dispute.  Another fairly common example of lawful secondary activity is the placement of a large, inflatable rat at the jobsite.  These publications of a dispute generally have been deemed to be lawful because they do not contain coercive elements, such as picketing.

Secondary boycott activity can be unlawful if the picketing (or other activity with coercive elements) is aimed at  neutral employees or companies.  These cases usually involve picketing of a construction site.

What made this recent case notable is that the General Counsel and the Respondent union, although usually opponents in litigation, both sought the same result–to overturn Board precedent finding certain threats to picket to be unlawful in violation of Section 8(b)(4).

Background

The charging party is a contractor furnishing portable electrical services in the convention industry.  A union targeted the contractor in a dispute over “area standards” (which, ostensibly, is a protest that the contractor does not pay wages and benefits in accordance with similar jobs in the area, usually union, but is widely regarded as code for “non-union”).  The contractor was performing some work at the Las Vegas Convention Center.  The union sent a letter to the area Trades Council seeking a “strike sanction” against the contractor for “any and all jobs because of not paying area standards.”  The letter was copied to the Las Vegas Convention and Visitors Authority, the governmental agency managing the convention center where the work is located.

Charging party filed charges alleging that the union’s letter violated Section 8(b)(4)(B) of the Act because the threat to picket did not state that it would be limited to the charging party in accordance with the standards set forth in Sailors Union of the Pacific (Moore Dry Dock), 92 NLRB 547 (1950).  Moore Dry Dock held that picking at a common situs (one where multiple employers are present) is presumptively lawful if:

  • “(a) the picketing is strictly limited to times when the situs of the dispute is located on the secondary employer’s premises.” So, no picketing when the target is not present, which helps explain why a banner, which is not inherently coercive, can be displayed any time.
  • “(b)  at the time of the picketing the primary employer [the target] is engaged in its normal business at the situs.”  That is, the target is performing the disputed work.
  • “(c) the picketing is limited to places reasonably close to the situs”; thus, if the worksite has a gate “reserved” for the target employer, then the picketing must be limited to the reserved gate;  and
  • “(d) the picketing discloses clearly that the dispute is with the primary employer.”  The picket signs must identify which company is being targeted.  Again, contrast this with the banner, which can identify a company with a tenuous connection to the dispute and not mention the target at all.

The General Counsel and Respondent union sought reversal of Board case law holding that threats to picket multi-employer job sites violate the Act if they do not contain assurances that the picketing will be limited to the targeted employer.  An example of the case law the parties sought to overturn was Sheet Metal Workers Local 15 (Brandon Regional Medical Center), 346 NLRB 199, 202 (2006), enf. denied 491 F.3 429 (D.C. Cir. 2007) where the Board held that the purpose of the Board’s requirement that a union give Moore Dry Dock assurances is to “assure the secondary employer that the picketing will be confined to the primary employer.”

The ALJ held that although both the D.C. and 9th Circuit courts of  courts of appeal had criticized the Board’s rule, he was constrained by the existing precedent and issued a decision finding a violation of the law.

The ALJ’s Decision issued in 2014.

The General Counsel and Respondent appealed.

Divided Board Sticks With Rule

Chairman Ring and Member Kaplan upheld the violation, noting “[f]or over 50 years, the Board has held that if a union notifies neutral employers at a common situs that it intends to picket the primary employer, the union” has an affirmative obligation to qualify its threat by clearly stating its action will conform to the Moore Dry Dock standards.  The Board majority concluded that “a union’s broadly worded and unqualified notice, sent to a neutral employer, that the union intends to picket the worksite the neutral shares with the primary employer is inherently coercive.”  In this case, the union’s letter stated that the union would seek a strike sanction against “any and all jobs” without any attempt to narrow the scope of the protest.

The Board, anticipating further challenge to its rule on appeal, noted that it was not presuming that the union’s threat was to picket in an unlawful manner.  The Board held that the following circumstances, taken together, violated Section 8(b)(4)(B):  “the locale of the threatened picketing (a worksite shared by the primary employer and one or more neutral employers), the target of the picketing (one of the neutrals), and the threat’s unqualified and therefore ambiguous nature (leaving the neutral uncertain whether picketing at the common situs will be lawfully confined to the primary or will unlawfully enmesh the neutral)…”  Indeed, the letter was copied to the manager of the convention center, the representatives of which might read the threat as an intent to engage in picketing designed to disrupt all of its operations not just the work engaged in by the charging party.

The Board emphasized that it was merely “prohibiting unions from issuing an unqualified threat to engage in common situs picketing” and that it did “not expect unions to necessarily cite Moore Dry Dock or use any specific legalese.”  Rather, the union must make clear “in some manner that it will comply with legal limitations on common situs picketing so as to not entangle neutrals.”

Dissent Sees It Differently

Member McFerran dissented, noting that her colleagues missed an “opportunity to revise the Board’s Moore Dry Dock -assurances doctrine in response to the thoughtful criticisms brought by both the courts of appeals and the General Counsel.”

Takeaways

The Board has decided to continue its policy of holding an unrestricted threat to picket as unlawful.  Most threats of a job action aimed at a contractor usually contain language limiting the nature of the coercive activity (such as picketing) to the target.  Even if this case represented a big change to the law, which it most certainly does not, the requirement to issue a qualified as opposed to an unqualified threat to picket hardly seems onerous.

The real story in this case is its backstory.  It does seem unusual that the General Counsel and the Respondent would be aligned on seeking the same outcome.  One can imagine that the charging party wondering why, after filing an unfair labor practice charge, participating in an investigation of the charge, and having a complaint issue and proceed to litigation, have the NLRB side with the respondent.

Seeking to change existing precedent is fairly common and not confined to any particular ideology.  The General Counsel in office in 2014 wanted to change this precedent due to the criticisms of various federal appeals courts.  We have discussed how the current General Counsel has stated that one of his priorities is to seek out cases in litigation that can be used to change the law.

Just as the General Counsel has changed since 2014, so has the make-up of the Board.  There is little doubt that the outcome of the case would have been different had the Board reached a decision on this case in the two plus years between the ALJ’s Decision in July 2014 and the change in administration.

Decertification Petition Was Improperly Dismissed, NLRB Rules

Recently, we explored how the NLRB’s rules for determining the timeliness of a representation can be confusing.  Another area of complexity comes from whether a decertification petition will be processed in the face of unfair labor practice charges filed by the incumbent union.  This implicates the Board’s “blocking policy,” which is a set of guidelines designed to address circumstances where allegations of unlawful acts by the employer have been made during the pendency of a representation petition.  Under the NLRB’s rules, the Regional Director possesses a tremendous amount of discretion to determine whether a petition will proceed in the face of unproven allegations.  It is not uncommon to see decertification petitions,- actions brought by an employee or employees seeking to end union representation,– blocked for years with little or no explanation due to the mere presence of unfair labor practice allegations.

Critics of the blocking policy have claimed that it is too easy for an opposing party to obstruct the processing of a petition, particularly a decertification petition, merely by filing charges.

On December 19, 2018, the Board issued a decision clarifying one aspect of how decertification petition should be treated,–that when the underlying unfair labor practice allegations disappear through settlement.  In Cablevision Systems Corp., 36 7 NLRB No. 59 (December 19, 2018), the Board addressed a decertification petition filed in 2014.

Background

In 2012, the union was certified as the bargaining representative. Starting in 2013, the union filed two sets of charges alleging bad faith bargaining, discrimination and coercion in violation of Section 8(a)(5), (3) and (1) of the NLRA.  The Regional Director found merit to the allegations and issued two complaints.

The complaints proceeded to hearing before two separate Administrative Law Judges. Before either ALJ issued a decision, an employee filed a decertification petition seeking to end the union’s representation.  The employee managed to collect signatures sufficient to support the petition despite the union having unlawfully threatened to sue employees who distributed decertification petition (oddly, and despite the fairly transparent nature of the agency, neither the ALJ or the NLRB decision in the case against the union is published on the agency’s website; the NLRB provided WestLaw citations to each decision).  The Regional Director administratively dismissed the petition, subject to reinstatement, pursuant to the Board’s blocking policy.

The two Administrative Law Judges eventually issued decision, each of which ultimately found the employer to have committed unfair labor practices.  The employer appealed the matters to the Board.

Parties Settle, Regional Director Denies Request To Reinstate Petition

Before the Board issued a decision in either unfair labor practice case, the employer and the union agreed to settle the matters on a non-Board basis.  The settlement included backpay to some employees and a three year collective bargaining agreement with an effective date of June 15, 2016.  The settlement also included a non-admissions clause. The Board approved the settlement and the unfair labor practice charges were withdrawn.

The employee-Petitioner requested that the decertification petition be reinstated because the unfair labor practices had been resolved.  The Regional Director denied this request solely on the basis that two administrative law judges had found violations of the Act which established a “causal connection” between the unfair labor practices and the erosion of employee support.

The employer requested review of this decision.

Three Member Board Majority Reinstates Decertification Petition

Three members of the NLRB (Ring, Kaplan and Emanuel) voted to reverse the Regional Director’s decision and ordered reinstatement of the decertification petition. The Board held that the allegations addressed in the Administrative Law Judge Decisions “were settled by agreement of the parties with no admission of wrongdoing by the Employer..” and therefore “furnish no basis for refusing to reinstate the petition.”  This holding was based on the fact neither ALJ Decision was a “final decision” because they had not been acted upon by the Board.  The ALJ decisions became a “nullity” upon withdrawal of the charges.

The Board held that denying the processing of a petition when there has been no final finding of a violation of the law would:

[C]ontravene due process to give determinative effect to these allegations, which the Employer merely agreed to settle, ‘nothing more and nothing less’. . . The implications for the decertification petition would be especially harsh:  her petition would be dismissed based on findings that she will never have any opportunity to challenge in any forum.  Accordingly, rather than ‘abdicat[ing]’ our duty to determine the validity of election petitions, as the dissent charges, we are safeguarding employees’ Section 7 rights by reinstating the decertification petition after allegations potentially tainting it have been settled.

The Board also noted that the Regional Director’s decision, if allowed to stand, would mean that the employee would have to wait until the expiration of the collective bargaining agreement before being able to file a timely petition.

Dissent Says Regional Director Acted Properly

Member McFerran issued a dissent arguing that the Regional Director correctly concluded the decertification petition was tainted by the employer’s unfair labor practices:

Contrary to the majority, the fact that the parties had settled the allegations against the Employer before final action by the Board does not compel a different result.  To be sure, the settlement (absent an admission of wrongdoing) precludes any legal conclusion that the Employer violated the Act.  But that is not the issue here.  Rather, as recognized by the Regional Director, there remains the separate statutory question whether the Employer’s conduct tainted the decertification petition.

Takeaways

This case provides some clarification as to the appropriateness of dismissing a decertification petition after the resolution of unfair labor practice charges.  In this case, the resolution involved the total withdrawal of charges, which had to be approved by the agency.  While the agreement to settle the unfair labor practices is not set forth in the case, one can presume the agreement did not address the decertification petition.  With the charges being withdrawn, and the employer not admitting to any wrongdoing, the Board found there was no legal basis to dismiss the petition.  The case signals that this Board is going to look more closely at whether there exists a causal connection between any alleged unfair labor practices and employee sentiment with respect to continued union representation.

It is apparent from reading this case that the union and the employer were locked in a difficult struggle. What seems to be missing is any direct connection between the alleged unlawful acts and the employee efforts to decertify.  Parties seeking to continue processing petitions in the face of unfair labor practice charges should ask the Region for the reasons why a petition is blocked or dismissed.

Of equal importance:  this case illustrates the need for the Respondent in any unfair labor practice proceeding to insist on a non-admissions clause in any settlement, regardless of whether the settlement is taken through the Board’s procedures or not.  Without a non-admissions clause provision, the case could have had a different outcome.

Employer’s Litigation Hold Not Unlawful, NLRB Division of Advice Concludes

Last year about this time, the NLRB changed the standard for reviewing handbook rules.  The new standard takes into consideration the fact  there are many other interests other than the NLRA at play in a workplace, and seems to have quieted the frenzied scrutiny of employer policies. Over the years, the heightened scrutiny of employer policies has resulted in some interesting results in cases, as seen here, here and here.

There have been few cases decided by the NLRB using the new standard, and this is likely due to the fact fewer such charges are being filed over these types of issues.

On December 17, 2018, the Board released a Division of Advice Memorandum from October 2018 which evaluated an employer’s directive that employees preserve all communications related to a wage and hour class action.  In Uber Technologies, Inc., 19-CA-199000, Adv. Mem. (October 2, 2018), Advice addressed two allegations stemming from the employer’s defense of a lawsuit by one of its drivers.

The facts were simple.  An employee filed a federal and state class action alleging compensation issues.  The employer emailed several employees, including the plaintiff/employee, notifying them of the lawsuit and directing them not to comment on the lawsuit, and further, that if anyone contacted them about the lawsuit, they should contact the in-house attorney.

The employer also sent out an internal litigation hold and document preservation email, which informed employees they must “preserve and protect” any information they possessed related to the case, including:

  • All documents which contain communications pertaining to any allegation by Plaintiff that [employer] treated him unfairly in regards to his employment;
  • All communications with Plaintiff; and
  • All communications concerning Plaintiff.

Plaintiff filed a Section 8(a)(1) charge against the employer, alleging the two directives restrained and coerced him and other employees in violation of their Section 7 rights to discuss matters related to compensation.

Advice Concludes Directive Not To Comment on Lawsuit Was Unlawful

Advice concluded the employer’s directive to employees that they not comment about the lawsuit violated Section 8(a)(1) because it “prevents employees from discussing the lawsuit or the common grievance from which it sprang with one another, with the media or third parties.”  Advice directed the Region to issue complaint on this allegation because the employees’ “right to communicate with one another and with third parties and the media about grievances and potential remedies to those grievances, including lawsuits, is a significant Section 7 interest.”

This is not a surprising conclusion given that workplace discussion is a core aspect of Section 7.  Rules prohibiting discussion of compensation and other workplace issues also violate some state laws.

Litigation Hold Not Unlawful

Advice next analyzed the litigation hold and concluded it was not unlawful.  First, Advice noted the litigation hold did not “explicitly address protected concerted activity” but instead addressed “all communications” and thus it was facially neutral.

Second, Advice stated that while employees would “reasonably understand the hold to include protected concerted activities” of the plaintiff/employee, the “rule does not require employees to produce the communications,” merely to preserve them.

Finally, Advice noted the employer had significant interests in issuing the litigation hold:

Like all parties to a lawsuit, it is legally compelled to preserve evidence.  Adherence to this duty is key to avoiding liability for damages for spoliation of evidence.  While we have found no cases specifically holding that an employer must produce the private communications of its employees, this area of law is far from settled and it is appropriate for the Employer to err on the side of caution in complying with its legal obligation to preserve all documents that may constitute evidence in the ongoing litigation.  Moreover, broad litigation holds serve not just employers’ interest in avoiding penalization for spoliation of evidence, but also the interests of plaintiffs, intervenors, and the courts.

Because the broad litigation hold is “not focused on employee protected concerted activity” it was lawful.

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